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

Thank you to the honourable member for her question. As I said yesterday and again today, I take responsibility for all aspects of my job, including my part in the fight against inflation. I dispute the characterisation of comments last year. I think I've been saying for the last couple of years that budgets aren't the primary determinant of prices in our economy. I've been saying that, really, for some time now, and that's because it's true. I know that we've got a job to do to roll out cost-of-living help in the most responsible way that we can to and to make the budget even more sustainable. I take responsibility for that as well.

When it comes to the points that those opposite have been making about yesterday's decision by the Reserve Bank to increase interest rates, I think it's really important to recognise that the points that I have been making yesterday and today are in lockstep with the points that were made by the Reserve Bank governor. This is what the Reserve Bank governor said in the press release announcing the decision:

Growth in private demand has strengthened substantially more than expected …

…   …   …

… private demand is growing more quickly than expected …

In the Statement on monetary policy, they said:

Private demand was much stronger than expected …

…   …   …

The near-term upward revision is driven by private demand …

These are just the economic facts that the Reserve Bank governor and I have been pointing out. In the Reserve Bank governor's press conference, she said:

… private demand has turned out to be much stronger than we had been forecasting.

But, perhaps most importantly when it comes to refuting some of the rubbish that has been peddled by those opposite, this is in the Statement on monetary policy issued yesterday by the independent Reserve Bank, and I'm quoting here:

The contribution of public demand to year-ended GDP growth has continued to ease in recent quarters …

That's because what's been happening in our economy is an important transition over the course of the last year or so, where the public sector, measured by public final demand growth, has been retreating—last year it was less than a third of what it was the year before—and that slack has been taken up by the private sector, which is a good thing so long as the economy can accommodate it. That's why the work that we're doing on productivity and lifting the speed limit of the economy is such important work. So we're seeing that transition in our economy. We've seen it over the course of the last year or so. So these are the points that I've been making and the points that the RBA governor has been making.

We know that there's more work to do on inflation and on productivity against the backdrop of global economic uncertainty, and that's the government's focus.

See this speech in context