Wednesday, 2 August 2023
Questions without Notice
My question is to the Minister representing the Treasurer, Senator Gallagher. There have been 11 rate rises since Labor came to government just over a year ago, but core inflation remains higher than all of the G7 nations except the United Kingdom. Yesterday the RBA announced that it doesn't expect higher inflation to return to band until late 2025, meaning interest rate will be higher for longer. After an additional $185 billion of spending in your last budget, which economists described as unambiguously expansionary and likely to add to inflation, will you finally admit that your fiscal policy is keeping inflation higher for longer and fuelling the cost-of-living crisis?
The short answer is no. Given that I have longer to expand on that I'll say about our budget, which included $40 billion worth of savings across October and May, which was approximately $40 billion more than the last budgets of your government, the peak of inflation in the quarter was in March 2022, which was under your government's economic policies. We have said for some time that inflation remains the major challenge across our economy and that it is staying higher for longer than we would like. Our budget has been calibrated to ensure that fiscal policy is working hand in hand with monetary policy and that the decisions we took didn't make the bank's job any harder.
We acknowledge that people are doing it tough, which is why we showed the restraints we had in our budget by banking the revenue, by banking 87 per cent of the upward revisions to revenue, by finding $40 billion worth of savings, by ending the waste and rorts and by rebuilding the Public Service so that it can deliver the services that the Australian people expect. We still found room, as we should have, for $14.6 billion worth of cost-of-living measures. They go to investments in Medicare, investments in cheaper medicines, investments in child care and investments in people relying on payments because they're doing it tough. We made investments in energy bill relief, in investing in skilling the workforce for the future, in ensuring that we're dealing with the energy transition and in making sure Australia is positioned to grab the opportunities that are coming from the decarbonisation that we're seeing across the global economy. We are doing all that, and we still have the bank and the Treasury secretary confirming that our budget was not inflationary. (Time expired)
Before the election the Prime Minister claimed that Australians would have cheaper mortgages under Labor. With inflation remaining higher for longer under Labor, an average family with a $750,000 mortgage will have to find more than $22,000 each year to pay that mortgage. Is this what the Prime Minister meant by cheaper mortgages?
My recollection of the reference to the Prime Minister's comments is that they were in relation to the release of our housing policy during the election, where we released a number of policy areas to generate and deal with the housing challenge that we have inherited from the former government, which was there for a decade but disengaged from any role in housing policy. That is what we are fixing. Not only do you see us having to deal with the energy failures that we inherited, but there is a whole litany of areas we have to deal with. May I remind the party of robodebt, may I remind the party of aged-care failures, may I remind the party of housing failures. We inherited a situation where the Commonwealth had completely disengaged, and we went to the election with a comprehensive housing policy, which we would deliver if the Senate would get out of the way and stop blocking one of those signature policies.
Last month in Hobart the cost-of-living committee heard evidence from Foodbank Tasmania that it was preparing for even more people needing its services as fixed mortgage rates fall away over the coming months. Is the increased demand on charities what the Prime Minister meant when he said that Australians would be better off under Labor?
I preface this by acknowledging that Australians are doing it tough, which is why our budget has been focused on making room for investments where we are able to afford it and to target those investments to areas of high need. In relation to the community sector, which does do an incredible job in relation to emergency provision of services, whether it be food relief or, indeed, housing, the government has fixed another one of the areas of your failure, which is the indexation rate, where you didn't even bother to index the community sector in a way where they could afford to continue their provision of services and pay their staff. We have come in and lifted that rock up and had a look at where you placed that rock—
and we have fixed that as well, so that the community sector is able to meet some of those increasing costs. And we will work with them hand in hand, as you would expect, to see if there are any further areas of support we can provide.