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

The more divided they get, the more desperate they get. The point that I'm making is those opposite have tried to conflate two very different things. The idea that public demand is part of the calculation of aggregate demand is not contested by anyone, and that's what they're pretending that we are contesting. We are not. The question isn't whether public demand is part of aggregate demand; it's whether public demand was responsible for the bigger than expected tick-up at the end of last year, and plainly it wasn't. Those opposite should stop verballing the governor of the Reserve Bank and look at what the governor actually said.

The governor said, on Friday, that she was surprised how quickly public demand retreated and how much private demand accelerated. That's the same factual point that they made in the statement on Tuesday and is the same factual point that I have been making during the course of last week, yesterday on Insiders and this week. In fact, the budget has improved in both updates last year—quite significantly in the December update and there was a budget improvement in March as well.

I remind the member again—as I had to remind the shadow Treasurer—by his own logic, there would be more inflation and higher interest rates if they'd won the election and implemented the member for Hume's policy for higher deficits this year and next year at the same time as he wanted to increase income taxes on all 14 million Australian taxpayers. In a lot of organisations, that would get you marked down; in that one, it gets him promoted.

The same people who say now that inflation and rates are determined primarily by budgets weren't saying that last year when inflation was falling and rates were cut three times. They should stop conflating two very different things. I don't expect much better from the member for Fairfax, but we should expect better from the member up the back.

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