Cassandra Fernando (Holt, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Treasurer. How is the Albanese Labor government responding to the cost-of-living pressures facing Australians, and what steps is the government taking to address the inflation challenge that the government has inherited in the economy?

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

I thank the member for Holt for her question. That is the third question that the member for Holt has asked me since November. That means three times more questions than the shadow Treasurer has asked me over exactly the same period. So I thank the member for Holt for her question. Even with the big boss away, I can't get a question from the shadow Treasurer. I thought today might have been the day. But, alas, today is not the day. We know that the interest rate rises which began before the election and continued afterward are really tightening the screws on household budgets, which are already tight enough. We know that there are global issues at play here, but we also know, understand and accept that some of the issues in our own economy, particularly in our supply chains, which have been neglected for too long, are also part of the inflation challenge. The Reserve Bank governor has said that something between half and three-quarters of the inflation in our economy is from pressures in our supply chains. That's why the bills before the parliament, whether it's the National Reconstruction Fund, the housing fund or the safeguard mechanism, are all designed to lift the speed limit on the economy and to make the economy more resilient so that it can grow without adding to these inflationary pressures. That's an important part of our plan.

An equally important plan is cost-of-living relief for Australians who are doing it tough and providing that in a responsible, methodical and affordable way so that we don't add to these inflationary pressures in our economy, whether it is cheaper early childhood education, expanded parental leave, cheaper medicines, more affordable housing, getting wages moving again or the energy bill relief that those opposite voted against.

We need to provide this cost-of-living relief, like we did in the October budget and like we will in the May budget as well, in the most responsible way, and that means finding room for cost-of-living relief in a budget which is designed with spending restraint at the same time. That's why we were so pleased to see the Reserve Bank governor, for example, when he was before the parliamentary committees here in this building last month, was talking about how welcome it was that we banked 99 per cent of the upward revision to revenue in the budget over the two years where inflation was most acute. Showing restraint in the budget at the same time as we find room to invest in our economic capacity, at the same time as we provide that cost-of-living relief—these are all equally important parts of our three-point plan to get on top of this inflation challenge in our economy.

We expect that inflation has already peaked, but it will be higher than we'd like for longer than we'd like. It is the defining feature of the economy right now. It is the main reason why Australians are feeling such pressure. That's why it is the highest priority when it comes to our economic policies.