Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | Hansard source

I thank Senator O'Sullivan for the question and the focus on cost of living, because the government has acknowledged that many Australian households are doing it tough right now. We are in an inflationary environment. The highest inflationary quarter, of course, was under the former government's watch—2.1 per cent in the March quarter of last year. We are seeing inflation moderate, which is pleasing, but it's staying higher for longer than we would like.

In relation to the budget and the cost-of-living initiatives which we have put in place, they are precisely to deal with those pressures that households are under. Whether it be child care, cheaper medicines, the energy bill relief, the investment in Medicare or the investment in fee-free TAFE, these are all areas that the government has identified where we can invest to make a real difference in people's household budgets but not add to inflation.

I note Senator O'Sullivan selectively quoted from an economist in his question. I think if you put 10 economists in a room you might likely get a few different opinions. But I, and the government, will take the advice of the Treasury secretary and the Governor of the Reserve Bank, who have both confirmed that the government's budget actually put downward pressure on inflation through the energy bill relief and the price caps that we put in place that those opposite opposed. Had they had their way and we weren't able to progress that important form, it would have kept prices up higher for longer and that would have affected household budgets. So we have done the responsible thing. We've targeted our cost-of-living relief but not in a way that adds to inflation that will hurt households in the long term.