Claire Clutterham (Sturt, Australian Labor Party) Share this | Hansard source

Inflation is a huge challenge. There is no doubt about it. We have not shied away from this at any stage. We have an inflation challenge in our economy, likely to be exacerbated by the conflict in the Middle East, and that requires action. It has a three in front of it now, but without a dedicated focus on utilising all available mechanisms it is likely to increase. It may increase anyway because of the myriad factors that are beyond the control of the government and beyond the control of business, of the RBA, of industry and of individual Australians.

The volatility in the global economy and the escalation of tensions in the Middle East could add further pressure to inflation in the coming months. We know this. We've been clear with the Australian people about this. We haven't just started the work on meeting the inflation challenge because of the recent conflict. We've been doing the work and implementing policy to support Australians through this inflation challenge since we came to government.

There are a number of parts to the Albanese Labor government's response—firstly, the forthcoming May budget, which will be underpinned by restraint, reform and measures to increase productivity. The Treasurer has been absolutely clear on this. We must take steps to reform in order to put a bomb under productivity growth, to encourage it to further stimulate the private sector, to encourage investment and innovation, and to cement and then further grow our economic prosperity. The budget bottom line has also been improved through the finding of efficiencies. The MYEFO illustrated that we are $233 billion better off than when we came to government, and $144 billion in savings were found in the budget through finding more-efficient ways to provide services and do business.

Budget savings cannot just be implemented by cutting services and cutting support to Australians who need it. Finding more-efficient ways to provide services and support, more-efficient ways to do business, is what our policy agenda is focused on, such as asking APS departments to examine their operational discipline in order to find five per cent of savings. The policy mistake of only cutting services and only cutting support in order to improve the bottom line means that the first objective of structural budget repair and economic reform must be carefully balanced against the second, which is to help working Australians, individuals, families, young people and retirees—a complex web—deal with the cost-of-living challenge that inflation can present. The government acknowledge that people are under pressure, and we're doing something about it, with tax cuts for every taxpayer, more bulk-billing and cheaper medicines, and by backing higher wages and slashing student debt.

The third lever is the labour market. A focus on low unemployment, sustainable wages growth, stimulating private sector growth and investment, and a continued emphasis on a framework where governments, business, unions and workers partner and walk forward together to ensure these goals are not only met but met in a way that benefits all stakeholders as much as possible is the Albanese Labor government way. These goals are complicated and challenging, but it is necessary to strive towards them. The country needs people who are working hard to boost productivity and to contribute to the economy.

We need policies that are designed to increase wages sustainably—not a deliberate policy of low wages, which was the policy agenda of the previous government. In this respect, we are seeing results, with the overwhelming story being one of stronger wage growth and rising living standards. Annual nominal wages have grown above three per cent for 14 quarters in a row, the longest streak in more than a decade and a half. The national accounts for the December quarter showed that real incomes per capita grew two per cent through the year to the December quarter and are growing at more than twice the average of other comparable major advanced economies.

We have also seen more than 1.2 million jobs created under the Albanese Labor government. This is stronger growth than any major advanced economy, with more than four out of five of these jobs having been created in the private sector, which has been and always will be the engine room of our economy.

Our economic policy agenda is underpinned by a focus on good jobs, higher wages and increased productivity. This must always be at the heart of decisions we make in the course of the fight against inflation.

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