Tracey Roberts (Pearce, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Treasurer. What progress has been made in the fight against inflation?

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

I'm grateful to the member for Pearce for her question but even more grateful to her community for sending her here to represent them in this place. The member for Pearce is an absolute champion from and for the west. Tomorrow we will get new inflation numbers for the June quarter and the month of June, and they'll attract a lot of attention and analysis. But what we already know is that we have made very substantial and now sustained progress together as Australians in the fight against inflation.

When we came to office, headline inflation was multiples of what it is now. It was much higher; it was accelerating, and interest rates were already rising. Inflation had a six in front of it under those opposite, and now it has a two in front of it. Whatever the quarterly or monthly fluctuations, the direction of travel for inflation has been really clear. Both headline and underlying inflation are now back in the Reserve Bank's target band for the first time since 2021, and this progress has given the Reserve Bank the confidence to cut interest rates twice already this year. The Reserve Bank governor has said that more rate relief is a question of timing, not a question of direction. Underlying inflation in our economy is already half or almost half of what we inherited, and any headline inflation number tomorrow with a two in front of it will confirm that we have been in the Reserve Bank's target band for a full year.

Unlike other countries, we've made this progress on inflation without paying for it with substantially higher unemployment. In fact, this government has been able to get inflation down while presiding over the lowest average unemployment rate in the last half a century. No major advanced economy has achieved what Australia has—inflation in the low twos, unemployment in the low fours and three years of continuous economic growth. While inflation has been coming down in Australia, it's been going up in the US, Canada, the UK and New Zealand.

Inflation is down; real wages are growing again, and unemployment is low. We've delivered two surpluses; we've got the debt down, and interest rates have come down twice already this year. We know there is more work to do. We know the global environment is uncertain. We know that there are persistent structural issues in our economy, and we know that people are still under pressure. That's why we're rolling out more cost-of-living relief this month. It's why we're legislating help with student debt this week, and it's why responsible economic management has been and will continue to be a defining feature of this Albanese Labor government.