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

I thank Senator O'Neill for the question, particularly on this really important question that I think is concerning so many Australians. This conflict is a defining influence on global growth and inflation this year, and that's why it'll be a defining influence on our budget in May. As the Treasurer has said, this budget will be focused on resilience and reform. The war in the Middle East is the most pressing problem confronting the global economy, but it reinforces the three core challenges shaping this budget. Before the war, inflation was too high, productivity growth had been too weak for two decades and, while Australia and the Australian economy had held up remarkably well, the global environment was already highly volatile.

The government is responding to all of these challenges now, but we will also do that in the upcoming budget. As I've said in previous answers, it's adding to the inflation challenge, which we acknowledge was too high before the conflict. It's intensifying uncertainty when it's already elevated and straining our productive capacity when it's already close to the limit.

As the Treasurer has said, we're approaching these challenges from a position of relative strength. Unemployment remains historically low. We've created 1.2 million jobs, and we have seen consistent wages growth above three per cent for many quarters now. That is good news, but there is more work to do. The savings that we've found in the budget and the work that we are doing around continuing to look at every dollar we spend to make sure it's going to where it needs to go, to look at how we return revenue, to lower debt, to lower those deficits and to find savings over time will be a continued focus for us over the next month.