James Paterson (Victoria, Liberal Party, Shadow Minister for the Public Service) Share this | Link to this | Hansard source

My question is to the Minister representing the Treasurer, Senator Gallagher. Moments ago, the Reserve Bank confirmed its decision to keep the cash rate unchanged at 3.6 per cent, meaning there will be no rate relief for Australian homeowners. What does the government say to millions of Australians who continue to pay higher interest rates because of inflation fuelled by this government's out of control spending, as Professor Richard Holden warned last week?

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

The decision was half an hour ago, so it is good to see a nimble opposition getting the question. Well, I disagree with the economist you cited. I think I would say to households that inflation is much lower than what we inherited. It had a six in front of it and was rising. It is now half of that. I would say we have created 1.1 million jobs. We have got inflation down. We have got debt down. We have got real wages going for the first time, which makes a difference, of course, to living standards, which Australians did not receive when you were in government. Unemployment is low, and interest rates have been cut three times. But I certainly understand that—

Jane Hume (Victoria, Liberal Party) Share this | Link to this | Hansard source

They've done it 12 times.

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

Order! Senator Hume and Senator Ruston.

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

That is not the point I am making, Senator Ruston. You can interject that, but that is not the point I am making. I would also suggest that it might benefit those opposite to read the statement for the monetary policy decision by the Monetary Policy Board which has been released alongside that today. In that statement, it goes to a number of different pressures, including uncertainty around international developments, and that that the bank is taking a cautious approach. That is my reading of their statement. We will continue to work to get inflation down. We will make sure that we will keep unemployment low, that the economy continues to grow and that we are seeing good growth across the private sector, having resumed its rightful place as a key driver of growth across the economy.

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

Senator Paterson, first supplementary?

James Paterson (Victoria, Liberal Party, Shadow Minister for the Public Service) Share this | Link to this | Hansard source

In the accompanying monetary policy statement, the RBA board noted:

Underlying inflation is expected to be higher over the forecast period relative to the August Statement.

Year-ended trimmed mean inflation is expected to be above the top of the 2-3 per cent range until mid-2026

And headline inflation is forecast to rise to 3.7 per cent year ending 2026. Does the government admit that its record spending has put the Australian economy at risk of continued higher inflation and higher interest rates?

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

No, the government doesn't accept that, nor does the statement of the Monetary Policy Board say that. I would say again that this is the opposition putting down a marker because they want to cut pensions, they want to cut energy bill relief, they want to cut cheaper child care and they want to cut cheaper medicines. All the work we've done to repair aged care and to repair Medicare bulk-billing is what they call wasteful spending. That's what they are saying is wasteful spending. We think that supporting aged pensions, making sure energy bill relief is provided and other cost-of-living measures are funded properly have been an important part of supporting households when inflation has been higher than we would like.

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

Senator Paterson, second supplementary?

James Paterson (Victoria, Liberal Party, Shadow Minister for the Public Service) Share this | Link to this | Hansard source

The government has already achieved the trifecta of higher spending, higher inflation and higher unemployment, putting Australia at risk of stagflation, if these trends continue. Should Australians now be worried the government will soon be adding higher interest rates to this list of economic failures?

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

The opposition have never not liked an approach to talk down our economy. At any opportunity they get, nothing gives them greater pleasure than to stand up and try to start a scare campaign. That's what they love. That's what they live for. When they're not killing themselves running to give an interview up in the press gallery to do over the person that sits next to them in question time, when they're not doing that, they're starting a scare campaign. What I would say is to Senator Paterson is inflation is down, debt is down, wages are growing, unemployment is low and interest rates have been cut three times. There is more work to do, and this government is doing it.

Penny Wong (SA, Australian Labor Party, Minister for Foreign Affairs) Share this | Link to this | Hansard source

I ask that further questions be placed on the Notice Paper.