Jim Chalmers (Rankin, Australian Labor Party, Treasurer) Share this | Hansard source

As honourable members would be aware, today the independent Reserve Bank kept interest rates on hold at 3.6 per cent. I acknowledge that many Australians would have wanted to see more rate relief at this meeting, but this decision was widely anticipated by markets and widely expected by economists. It is the case that inflation is much lower than we inherited from those opposite, and that has given the Reserve Bank the confidence to cut interest rates three times already this year.

Those three interest rate cuts reflect the very substantial progress we've made in our economy together. When we came to office, headline inflation was 6.1 per cent and rising; it's now around half of that. When we came to office, trimmed mean inflation was almost five per cent and rising; it's now been within the target band for three consecutive quarters, albeit at the top of the target band now. If you look around the world, inflation ticked up in September for every major advanced economy except the UK, where it was flat but much higher than it is here.

Once again, as I did in the answer a moment ago, I acknowledge—we acknowledge—that, even with this progress we've made, Australians are still under pressure. Those three interest rate cuts are providing a bit of relief, but we know that many Australians would have preferred to see more relief delivered today. We've got inflation down, we've kept unemployment low, the economy has continued to grow, the private sector is recovering in welcome ways, we've got real wages growing and interest rates have fallen three times this year. But we always know that there is more work to do.

If you have a look at the forecasts which were also released with the Reserve Bank's decision today, you will see that, when it comes to government spending, in the Reserve Bank's own forecasts they've actually downgraded the contribution made by public spending in our economy. I think that does torpedo some of this dishonesty that comes from those opposite about the role of government spending. I point that out, acknowledging the usual politics will be played by those opposite. But, if those opposite want to claim that budgets are the decisive factor in interest rate decisions, then they've got to explain those three interest rate cuts this year, including two interest rate cuts which came after the budget in March.

We will continue to work through the issues in our economy, the challenges in our economy, in the most responsible, considered and methodical way. We've made a lot of progress together in our economy. We know there's more work to do, and we've acknowledged that throughout.

See this speech in context