Rowan Holzberger (Forde, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Treasurer. What is the impact of the conflict in the Middle East on Australia's economy? How is the Albanese Labor government approaching this challenge?

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

The member for Forde is already an outstanding local member in our part of South-East Queensland—and, while I'm talking about outstanding local members, I also acknowledge Joe Kelly up there in the gallery with Dave McDermott. It's nice to see you too, mate. The conflict in the Middle East is weighing heavily on global markets today and on the global economy more broadly as well. Our own Australian economy is very well placed, but we're not immune to these pressures. We've got faster economic growth than any major advanced economy. We've got low unemployment and lower public debt than the major advanced economies as well. But we do know and we do understand that Australians are feeling the pressure around the kitchen table and especially at the petrol bowser. The two key considerations here are how long the war drags on for and how long it takes for supply chains to normalise afterwards.

I asked Treasury to model a number of scenarios. I released them publicly last week. They are conservative, but they still show a hit on growth and substantial pressure on prices. These pressures don't replace the challenges that we had before the war, but they do exacerbate them, and that's why we are taking a number of steps, as the energy minister and the Prime Minister have already mentioned in today's question time. We are releasing hundreds of millions of litres of fuel, temporarily amending the fuel standards, working with international partners and also empowering the ACCC to go after any suppliers or retailers who are doing the wrong thing, with the tougher penalties that I'll introduce to this parliament later this week. We're also working with the industry to get supply where it is most needed.

I also want to alert the House to a meeting I convened on Friday of the Council of Financial Regulators, which was to ensure that our markets are operating properly and that they are working through and thinking through all of the risks. We do have a strong, well-regulated and resilient market, but we are not complacent about that, and nor are the financial regulators.

This conflict that we're seeing in the Middle East is the major influence on our economy, and it will be a major influence on the budget as well. We will continue to work through these issues in a considered and methodical way but also in an urgent and decisive way. We know that Australians are feeling the pressure at the petrol pump and around the kitchen table. That's the government's focus as we work through the decisions and deliberations that lead up to the budget in May.