Deborah O'Neill (NSW, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister representing the Treasurer, Senator Gallagher. Can the minister update the Senate on some of the challenges facing the country and how the government is responding with responsible economic management?

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

I thank Senator O'Neill; I acknowledge her length of service in the economic portfolio and all the achievements she has made there.

This is an important question, and an opportunity to update the Senate on global conditions impacting Australian households. Last week, the OECD released its updated outlook and it outlined some of those tough challenges ahead. The report showed that the global economy is experiencing the most profound energy crisis since the 1970s, while also dealing with the continued impact of the COVID-19 pandemic. Russia's war in Ukraine is driving significantly higher energy prices all around the world. In the report, the OECD is predicting global growth to slow from 3.1 per cent 2.2 per cent next year.

We know that the economic pressures coming at us from around the world are felt most acutely around the kitchen table. Australian households are more exposed to these global conditions than they should be, due to the wasted decade of the Liberal and National government's policy failures. While the government cannot control many of the global pressures that will impact on Australian households, we are working to clean up the mess left behind by those opposite and to take control of what we can. We're responding to the legacy of a wasted decade in energy, in skills, in productivity and in real wages growth. We're taking a responsible approach; that's why our budget was the most responsible budget in years, returning 99 per cent of the tax revenue upgrades over the next two years to the budget in comparison with the Liberal and National average of around 40 per cent. This is responsible budget management which puts no extra pressure on inflation. We are absolutely determined to get wages moving because we know that a strong economy has to mean strong wages for workers, otherwise the economy is not delivering for the working people like it needs to.

Sue Lines (President) Share this | Link to this | Hansard source

Senator O'Neill, a first supplementary question.

Deborah O'Neill (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Thank you very much, Minister, for your kind words and for your excellent response about responsible economic management. Can the minister outline what assessment the International Monetary Fund recently made of the government's economic management?

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

I thank Senator O'Neill for her supplementary question. Yes, I can. The IMF's recent statement confirms that the Albanese Labor government's budget was responsible, right for the time and readies Australia for the future. This is a ringing endorsement of the government's approach to responsible economic management. The IMF states that the government's near-term fiscal restraint will support monetary policy in addressing demand pressures. This is an endorsement of our fiscal strategy, which puts a premium on restraint. As a result of our spending discipline, payments will fall in real terms over the next two years and real spending growth will average just 0.3 per cent over the forward estimates. The October budget introduced responsible spending measures to provide cost-of-living relief, alleviate skill shortages, promote productivity growth and facilitate the climate transition. The IMF notes that the budget's streamlining of spending should help avoid adding to aggregate demand pressures in the economy.

Sue Lines (President) Share this | Link to this | Hansard source

Senator O'Neill, a second supplementary?

Deborah O'Neill (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Minister, can you also detail what the IMF had to say about the government's plan to boost inclusion, to encourage female workforce participation and to tackle skill shortages?

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

I thank, again, Senator O'Neill for that excellent question. Under those opposite our economy wasn't delivering like Australians needed it to. The IMF praised the government's policy that tackles skill shortages and boosts workforce participation, including key outcomes of the Jobs and Skills Summit. Our budget delivered quality investments in the capacity of the Australian economy and the capabilities of the Australian people. This includes our fee-free TAFE, more university places, delivering cheaper child care for 1.26 million families and expanding paid parental leave to 26 weeks for working parents. The IMF's independent assessment confirms that, despite a difficult international outlook and significant economic and budget challenges here at home, Australians should be optimistic about the longer term future of our economy and our country.