Senate debates

Wednesday, 23 November 2022

Questions without Notice

Cost of Living

2:08 pm

Fatima Payman (WA, Australian Labor Party) Share this | | Hansard source

My question is to the Minister representing the Treasurer, Senator Gallagher. Can the minister outline how the Albanese government is supporting Australian households during these challenging economic times?

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

I thank Senator Payman for the question. Senator Payman is right: in these challenging times, what Australians needed from their government was a budget that was responsible, that was right for the times and that readied us for the future. The primary focus of the budget, aside from delivering on our commitments to the Australian people, is managing the inflationary pressures that Australians are experiencing right now. That's why at the heart of the budget is our five-point plan for cost-of-living relief to provide some support which delivers an economic dividend but doesn't put extra pressure on inflation. The hard reality is that, after nearly a decade of division, denial and delay, our economy isn't as strong or resilient as we need it to be for the challenges we face.

But our budget begins to turn that around by investing in the capabilities of our people and the capacity of the economy, with fee-free TAFE and more university places; the National Reconstruction Fund for new, well-paid jobs in new industries; and by investing in cleaner, cheaper and more reliable energy to deal with the extraordinary energy market mess that we inherited. And the budget pays for things that Australians value the most: better health care, better Medicare and better aged care.

Above all, the budget marked the end of a wasted decade—a decade where we saw energy chaos, an aged-care crisis, a skills shortage, stagnant wages and a trillion dollars of debt with nothing to show for it. That's the mess that we inherited and the mess we're cleaning up in this budget with those key measures which will go to investing in the productive side of our economy by training people in the skills they need for the future, by creating opportunities, by supporting new industries where they need an extra hand and by getting the transformation to a decarbonised economy on the right foot.

Photo of Sue LinesSue Lines (President) Share this | | Hansard source

Senator Payman, a first supplementary question.

2:10 pm

Fatima Payman (WA, Australian Labor Party) Share this | | Hansard source

Can the minister outline how the budget will ease cost-of-living pressures for households?

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

We are easing the cost-of-living pressure on households by investing in cheaper child care for more than 1.2 million families, important legislation that passed this chamber yesterday and which has also been dealt with in the House this morning. This will help more people, overwhelmingly women, back into the workforce if they choose to do so. It's enough to increase the number of full-time workers by an extra 37,000.

We're expanding paid parental leave to 26 weeks by 2026 and making medicines cheaper with the biggest cut to the cost of medicines in the 75-year history of the PBS. We're investing in more affordable housing, with tens of thousands of new social and affordable homes, more support for people to buy their own home and a new National Housing Accord. This will bring governments and the private sector together to build the homes that we desperately need. Again, after a decade of neglect the Commonwealth is back at the table on housing and wanting to work in partnership with state and territory colleagues and private proprietors to deliver the housing options that Australians need.

Photo of Sue LinesSue Lines (President) Share this | | Hansard source

Senator Payman, a second supplementary question.

2:12 pm

Fatima Payman (WA, Australian Labor Party) Share this | | Hansard source

Can the minister outline why it's important that the government provides support that is responsible and which does not put additional pressure on inflation?

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

I thank Senator Payman for her supplementary question. The budget was calibrated carefully to deal with the inflation challenging our economy. We knew we had to act differently from our predecessors to avoid making the inflation problem in our economy worse and forcing the RBA to go even harder on interest rates.

The October budget returned $114 billion of tax upgrades to the budget over the forward estimates. This is the government making a decision to return 99 per cent of the upward tax revisions for the next two years, when the inflation challenge is most severe, and 92 per cent over the forward estimates. This compares to the Howard-Costello government's average of around 30 per cent of the tax upgrades, and the former government's average of around 40 per cent. It was an important decision that we made. Treasury has analysed the economic impact of the overall revenue upgrades in the October budget—instead of being transferred to households rather than being returned to the budget—and that would have put significant pressure on inflation.