I think we can all agree in this House that households are struggling. This is a tough time for a lot of people. Driving past the fuel station, they see those prices have skyrocketed, approaching $3, and thinking how they're possibly going to pay for that and all the other expenses they have to cover in the week. But what most Australians know is fuel costs have been driven by a global oil shock. There are lots of drivers of inflation. It's true. We've got a persistent set of capacity constraints in our economy, which is largely service driven now. We've had global cost pressures, and we've had an increase in aggregate demand, or total demand.

The member for Barker is quite right—that consists of private sector demand as well as government demand. Where we've seen the big uptick is in private demand. He's also right in that what we have more control of is government spending, and that's why we've taken serious decisions to find savings in the budget and reduce those demand drivers as much as we responsibly can. But we know that, when we recalibrate a budget, it has real human consequences in our community. When you cut social programs, families suffer and household suffer in communities like those we all represent. So these decisions have to be taken very seriously. Cavalier lines about slashing and cutting are easy and that you don't have to think too much about it are simply irresponsible. Careful, responsible, considered decisions have to be made, and we haven't walked away from that.

Earlier today the Treasurer was speaking about how more savings measures will be announced in MYEFO, coming up very soon, and you've seen across all budgets delivered by this government that savings have been found budget after budget. Then, when we've had upward revisions in revenue, they've been mostly banked because we know that paying down debt is really important at this point in time, because the more debt we leave undealt with higher the interest costs that we find ourselves spending.

We're also dealing with the challenge of higher global bond yields. That often has two effects. The first is that it means a lot more of a budget has to be put towards paying debt. It also means that there's often a competing force that sees a pressure on interest rates as well. You almost never see a bond rate higher—in fact, I've never seen a bond rate higher—than the bond yield. So you've never seen interest rates lower than the bond yield. That has a significant effect as well. That goes to global confidence and various drivers in the global economy. So a lot of very considered and serious decisions have to be made at this point in time.

I noticed one of the earlier speakers spoke of the member for Moreton talking about the need to throw the kitchen sink at spending. She was absolutely right to say that. Of course we are looking at government spending, and we are taking very tough decisions. The private health insurance rebate, removing the age based loading, was a very significant decision. It was a difficult one. It affected people in all of our communities, but it was a taxpayer funded spend, which is not well targeted and not well calibrated towards need. There were other ways that that money could be redeployed to assist with aged care, which is chronic and serious in our community. These are not easy decisions. They're not consequence free. You don't have decisions in these matters where no-one suffers or it's not challenging. We don't take them lightly, but this is a time when we do have to make tough calls.

Criticising every spending reduction is not being part of the solution to this very serious set of economic circumstances in which we find ourselves. As a government, we do have to respond to the fiscal and economic circumstances in which we find ourselves. So, when I saw the MPI today, where the shadow treasurer was talking about inflation faced by businesses and families in Australia and didn't even mention the global fuel crisis, didn't even mention productivity and opportunities to increase the productive capacity of our economy, didn't mention the investments in manufacturing and in supply chain resilience in this country as a necessary foundation for our economy going forward—global shocks, not only economically but politically, mean that we do have to be ready to look after ourselves in times of crisis. We need to be making very serious calls. What we've seen is a little bit of theatre from the other side, hoping to pin all the blame on one factor or another. The truth is these things are complex, so we do need to deal with the nuanced complexity.

If you don't understand the basis upon which we have inflation, then we are not going to be able to have realistic expectations. One thing we know about inflation is that inflation expectations are themselves a driver of inflation. So, if we're not having a real conversation and if we're not talking about all the facts, we can find ourselves in a very misguided set of conversations which can themselves have an economic effect. What I would ask, when we have these very serious conversations, is that we get all the facts on the table. We can have debates about where the best parts in the budget are where we should recalibrate or taper out spending. That's entirely reasonable. We can have reasonable disagreements on that. But to suggest that this is some kind of a spending addiction or a deliberate inflation is just nonsense, and they know that. Let's have a real debate about policy. Let's have a chat about those tough decisions that need to be made. Let's carefully critique all the numbers being presented.