Michelle Ananda-Rajah (Higgins, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Treasurer. What are some of the challenges facing the economy, and how does the Albanese Labor government's budget respond to those challenges?

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

I thank the honourable member not just for her question but also for all of the incredibly important work that she does in our team. Australians understand that while our economy is growing the challenges facing the economy are growing as well. The budget that we handed down last night was framed against the backdrop of a serious deterioration in the global economy—global energy and price shocks in particular—and damaging and devastating natural disasters here at home. People can see the impact that that's having on the cost of living in particular but also on energy prices. These pressures are primarily coming at us from around the world, but we understand that they're felt most acutely around the kitchen table. That's why inflation, which has been higher than we would like for longer than we would like, is the primary influence on the budget that I handed down from this despatch box last night. That's what makes it so absolutely crucial that the budget that we handed down was a responsible budget and right for the times, but at the same time will ready us for a better future.

The best evidence of the responsible approach we took to the budget is that, when we got the substantial and very welcome boost to revenues in the near term from higher commodity prices, we returned that boost to the budget. Ninety-nine per cent of the temporary revenue boost over the next two years was returned to the budget to help rebuild our buffers against global uncertainty and also to ensure that there's less debt in our budget than there was in the last budget presented by those opposite over the forward estimates. So we returned 99 per cent of it over two years. We returned 92 per cent over four years. On average, our predecessors returned about 40 per cent of these temporary upgrades.

Real spending growth in the budget averages 0.3 per cent over the forward estimates. The member for Hume was on Insiders on Sunday, and he was asked what was the test for the budget. He said that real spending growth had to be lower than real economic growth. Well, we passed that test with flying colours—0.3 per cent real spending growth in the budget. That's much less than growth in the economy.

We've made hard decisions for hard times in this budget. Twenty-two billion dollars in savings and $6½ billion in tax changes mean $28½ billion in budget improvements. There are $22 billion in savings. We looked in the last budget from the former member for Kooyong, and we couldn't find a dollar of savings on the expenditure side. So that's the difference.

So what we released last night was a responsible budget. The defining feature was spending restraint in the budget when we've got this inflation challenge—a responsible budget distinguished and defined by its restraint. That's why those opposite don't recognise it.