Ted O'Brien (Fairfax, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

My question goes to the Treasurer. Shane Oliver, AMP chief economist, said, 'The best thing that Australian governments can do to help bring down inflation would be to cut government spending'. When will the Treasurer finally admit he must control his spending to prevent the 14th interest rate rise under Labor?

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

Once again leaving out that interest rates started going up on their watch and there were three interest rate cuts last year—but, more broadly, in terms of the points made by Shane Oliver, as I said yesterday in this place and on other occasions as well, that is a view that is not unanimously shared amongst economists. The AMP economists said government spending has peaked and that growth in government spending is going to add less to inflation. Commonwealth Bank economists said the public sector's contribution to growth has eased significantly. Westpac economists said public sector demand growth is slowing and, indeed, was negative over the first half of 2025.

Now, if his question is, 'Will the government be looking to make more savings in its fifth budget, in May?' the answer is yes. The fact is that we've made savings in all of our budgets and budget updates. That's why we've found $114 billion in savings, including $20 billion in savings in the midyear budget update less than two months ago. To give the shadow Treasurer and shadow Assistant Treasurer a sense of the magnitude of that, it took the previous government seven budget updates to find anything like $20 billion in savings, so I won't be taking lectures from those opposite when it comes to responsible economic management.

Milton Dick (Speaker) Share this | Link to this | Hansard source

Order! The deputy leader will cease interjecting, or he'll be warned.

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

This government has helped engineer the biggest nominal improvement in the budget in the history of this country—a $233 billion improvement in the budget. We've paid down $176 billion in Liberal debt, which saves us $60 billion in interest costs. We've delivered two surpluses. They promised a surplus every year and went none for nine, so we won't be taking lectures from them.

Now, I want to finish on this important point that was missed yesterday in the back and forth on this question. By the shadow Treasurer's logic, every extra dollar in government spending puts pressure on inflation. Those opposite took to the election bigger deficits this year and next year. So the onus is on the shadow Treasurer to inform the House: if this is his logic about government spending and pressure on inflation, he should tell the House how much higher inflation would be as a consequence of the member for Fairfax and the member for Hume taking to the last election a bigger deficit this year and a bigger deficit next year as well. As always, they've set a little trap for themselves on this question.

We know responsible economic management is paramount. We've found savings to date, there'll be more in the May budget, and that's consistent with the approach we've taken to managing the budget and the economy in the most responsible way. (Time expired)