James Paterson Victoria, Liberal Party, Shadow Minister for the Public Service
2:51 pm
My question is for the Minister representing the Treasurer, Senator Gallagher. Minister, this afternoon the Reserve Bank board increased interest rates by 25 basis points. How much will this rate rise increase monthly repayments for someone on an average mortgage of $600,000, and how much extra is this a year?
Katy Gallagher ACT, Australian Labor Party, Minister for the Public Service
I thank Senator Paterson for the question. I am not here to give individual mortgagees financial advice on how much—
It depends on the terms of the mortgage and the amount of the mortgage, clearly. What I would say is that no-one with a mortgage will be happy with the decision of the bank today. I'm just reading through the statement by the Monetary Policy Board, which I'm sure you've all read as well. It does go to the issues that have fed into making their decision today.
James Paterson Victoria, Liberal Party, Shadow Minister for the Public Service
On direct relevance, the question was about how much more someone on an average mortgage will pay. If the minister doesn't know, she should just say so.
Sue Lines President
Senator Paterson, the minister is being relevant.
Minister Gallagher, please continue.
Katy Gallagher ACT, Australian Labor Party, Minister for the Public Service
That wasn't what I said, Senator Cash. But anyway—on the issue of the bank and their decision today, my quick reading of this, as it's come into question time, is that a lot of the concerns of the bank, in making this decision, have related to private demand growing more quickly than expected. That's why the decisions this government's taken, about how we can provide cost-of-living help to households, much of which you've opposed—whether it be in Medicare, in cutting student debt, in tripling the bulk-billing rate or in some of the energy rebates, which have come off now. This has been our entire strategy: to manage some of the inflation challenge and provide cost-of-living help to households to help them deal with some of that cost-of-living pressure that they've been under. That is the strategy that we had when we came to government, when inflation was running at six per cent and accelerating. It's the strategy that we continue to focus on as we deal with the inflation challenge across the economy.
James Paterson Victoria, Liberal Party, Shadow Minister for the Public Service
2:54 pm
IFM Investors chief economist Alex Joiner said today:
We already have fiscal policy getting looser, but it could be even looser than we expect. The fiscal guard rails have come off.
Minister, if even industry super thinks you have a problem, isn't it clear that the government's arrogant and stubborn refusal to even acknowledge the problem of government-spending fuelled inflation means every Australian mortgage holder and renter will today pay the price?
Katy Gallagher ACT, Australian Labor Party, Minister for the Public Service
I also note that economists, if you got them all in a room—I think, if you got 10 economists in a room, you'd have 10 different answers. What I would also say back to you—
Unidentified interjection - Hansard doesn't record who said this
Opposition Senators:
Opposition senators interjecting—
Sue Lines President
Order! Senator Paterson was heard in silence, and the minister will also be heard in silence with her answer. Minister Gallagher, please continue.
Katy Gallagher ACT, Australian Labor Party, Minister for the Public Service
What this government has done is improve the budget by $233 billion. We've found $114 billion in savings, something that those opposite were never able to do. And your plan, going into the last election, was higher taxes, lower wages, bigger deficits and more debt to build those nuclear power stations. Aren't we lucky that that plan wasn't pulled off?
Opposition senators interjecting—
Penny Wong SA, Australian Labor Party, Minister for Foreign Affairs
I'd ask you to call Senator Ruston to order.
Sue Lines President
I did call Senator Ruston. There were quite a few interjections, so she may not have heard me. I repeat once again: please allow the minister to answer, with silence from the chamber.
Katy Gallagher ACT, Australian Labor Party, Minister for the Public Service
James Paterson Victoria, Liberal Party, Shadow Minister for the Public Service
2:56 pm
HSBC chief economist Paul Bloxham said:
… the primary driver of the pick-up in inflation is not strong demand. To the extent that demand is playing much of a role, it is that public demand growth has been strong, due to government spending.
Given the Prime Minister and the Treasurer took credit for rate cuts, do you now accept responsibility for this rate rise?
Katy Gallagher ACT, Australian Labor Party, Minister for the Public Service
On government spending, we have delivered the first back-to-back surpluses in almost two decades, something that the governor herself has drawn attention to as being helpful. We have returned 70 per cent of all tax receipts to the bottom line, when you only returned around 40 per cent. Debt is $188 billion lower in 2024-25 than what was forecast prior to the 2022 election, saving $60 billion in interest costs. And we have managed to restrain average real annual spending growth to 1.7 per cent over the seven years to 2028-29. That is the budget doing what it needs to do. Responsible budget management—
Sue Lines President
Senator Ruston, that was extremely rude. You're not at a football match. If I haven't seen the senator on his feet, the clerk would advise me. Senator Paterson.
James Paterson Victoria, Liberal Party, Shadow Minister for the Public Service
On direct relevance, the minister has not yet said whether the government accepts responsibility for the rate rise.
Sue Lines President
There was more to your question than that, and the minister is being relevant.
Katy Gallagher ACT, Australian Labor Party, Minister for the Public Service
We have taken decisions in the best interests of the economy, to manage the budget in a responsible way, to find savings and to make investments where we need to make those investments—in areas like health, in areas like payments for people on low incomes, in areas like housing and dealing with climate change. (Time expired)