Mary Doyle (Aston, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Treasurer. What does the Reserve Bank's decision on interest rates today mean for Australia's economic outlook?

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

I thank the wonderful member for Aston for her question. The Reserve Bank has just announced its decision to keep the cash rate unchanged at 4.1 per cent. As honourable members would be aware, this is the third month in a row that rates have been kept on hold, a third moment of relief and reprieve for many Australians and small businesses that we know are already under the pump, particularly for those who have come off fixed rates and the half a million more who will transition before the end of the year. We understand that Australians are still under pressure even after this decision today. That's why we are working for Australia to roll out billions of dollars in cost-of-living relief in ways that take the edge off inflation rather than add to it. This is our major focus.

We are pleased to see that, in the most recent inflation data and in today's uptick in confidence, our energy plan is helping, as the Prime Minister said. In the statement today, the Reserve Bank makes it clear that higher interest rates are biting and impacting our economy. It talks about a painful squeeze on finances. It also talks about the uncertainty coming out of the Chinese economy. What we've seen in recent data is the impact of higher interest rates, high but moderating inflation and this continuing global uncertainty on our economy. We expect to see that, in one way or another in the national accounts, which will be released tomorrow. Consumption is half of our economy, so, as these higher rates take a toll on households, they're also taking a toll on the economy. We anticipated this in the budget forecasts, and economists are expecting some of this in the national accounts tomorrow.

China's economy is slowing as well, this adds to the uncertainty, and Australia is not immune from it. We know that there are challenges ahead, but we are well placed to deal with them—half a million jobs in the first 13 months of this government, the beginnings of decent wages growth and the first surplus in 15 years. Services exports in today's numbers show that education and tourism are making important contributions to our economy. With our carefully calibrated plan, we are working for Australia to shepherd our people and our economy through difficult times at the same time as we lay the foundations for a stronger economic future.

I also want to say that today is Governor Lowe's final Reserve Bank board meeting. As we've said before, he leaves that important role with the government's respect and the government's gratitude, and he leaves with dignity. His replacement, Michele Bullock, is an outstanding economist and a leader with a deep understanding of the RBA. She will be the first female governor in its 63-year history, and I'm sure that the whole House joins me in wishing incoming Governor Bullock all the very best.

Honourable members: Hear, hear!