Bridget McKenzie (Victoria, National Party, Shadow Minister for Infrastructure, Transport and Regional Development) Share this | Link to this | Hansard source

My question is to the Minister for Finance, Senator Gallagher. Banks are passing on interest rate rises, and families today are making more sacrifices to afford higher home loan repayments as a result of Labor's rising inflation. A family in Bendigo with a $500,000 home loan on a medium-priced property faces an extra $950 a year on repayments, and under Labor's big spending inflation is likely to remain above target for some time, with the risk of further increases in rates coming months. When will the government accept responsibility for its contribution to rising inflation, which will cause millions of Australian families, homeowners and small businesses financial pain?

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

It's a very similar question to the one Senator Scarr asked; obviously, you hadn't shared those questions. My answer is that yesterday's news will be very difficult for those households on mortgages, and we acknowledge that and we are acting upon it.

In relation to the claim that government spending, specifically the claim about the federal government—when the bank looks at all governments across Australia and the decisions they're taking—it was not cited as a reason for the decision yesterday. That is just a fact.

Bridget McKenzie (Victoria, National Party, Shadow Minister for Infrastructure, Transport and Regional Development) Share this | Link to this | Hansard source

It's always someone else's fault!

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

I'm not trying to shift accountability or responsibility here. I'm standing and answering it. The point is, if you read the statement on monetary policy, the pressure that is adding to inflation in the economy in the latest data, as the bank outlined, has been the upside on private demand. That is just the reality.

On the budget handling, we have found $114 billion worth of savings. Frankly, when you were in government, you didn't come anywhere near that—nowhere near it. We got rid of the buckets of funds and waste that you had buried into your budget as payoffs to the Nationals at that point in time—regional buckets of funding that were buried in the budget as wasteful spending. We got rid of it. We have cleaned up the budget. We have got it in much better shape, with lower deficits, lower debt and lower interest. We delivered two surpluses, which the governor herself has pointed to as being very helpful, and we will continue that approach in the budget in May.

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

Senator McKenzie, a first supplementary?

Bridget McKenzie (Victoria, National Party, Shadow Minister for Infrastructure, Transport and Regional Development) Share this | Link to this | Hansard source

The Reserve Bank said 'some of the increase in inflation reflects greater capacity pressures'. This is a clear shot at your government's failure to address the productivity crisis. Industrial relations laws, failure to reform tax or reduce red tape, high-cost green policies that you said would be cheap but are not, runaway spending on the $52 billion—and climbing—NDIS. When will the government take action to reduce the percentage of government spending across our economy that is now at a 40-year high? (Time expired)

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

():  I don't accept a lot of what was in that question at all, and it was factually incorrect. The highest-spending government was the Howard government, and it was not to be outdone by the COVID spending that occurred. Let's be honest here: in relation to government spending, we have found $114 billion dollars worth of savings. When you sat in the cabinet room, Senator McKenzie, I don't think you found 20 cents, to be honest.

Bridget McKenzie (Victoria, National Party, Shadow Minister for Infrastructure, Transport and Regional Development) Share this | Link to this | Hansard source

Proportionate to the economy.

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

Senator McKenzie!

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

I don't think you found a cent that went into savings. You spent a lot. The Nats spent a lot. I can see ministers and, yes, they're nodding. Liberal ministers are nodding because they know what the story was. There were buckets of cash that went out to the regions without any detail. You didn't find a cent. We found $114 billion, and there is more work to do. (Time expired)

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

Senator McKenzie, second supplementary?

Bridget McKenzie (Victoria, National Party, Shadow Minister for Infrastructure, Transport and Regional Development) Share this | Link to this | Hansard source

Yesterday's statement on monetary policy was a warning to the government. It sits alongside warnings from the IMF, the OECD and international ratings agencies that speak to your government's spending. With inflation likely to remain high for some time, what changes in policy will the government now adopt to protect families from the threats of further rate increases and cost increases as a result of inflation?

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

The government will continue its responsible budget management. We will continue to look at how we provide effective cost-of-living support. If you read all of the statement on monetary policy, you would have seen that the governor herself pointed out that the economy has a lot going for it. It's growing faster than other economies, other than the US.

Bridget McKenzie (Victoria, National Party, Shadow Minister for Infrastructure, Transport and Regional Development) Share this | Link to this | Hansard source

It's not working. It handbrakes the government.

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

Senator McKenzie!

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

Unemployment is low. When you look at comparable countries—

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

Minister Gallagher, please resume your seat. Senator Wong?

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

I appreciate always—well, not always—Senator McKenzie's contribution to the chamber, but it is becoming somewhat repetitive. I would ask you to draw her to order. She is interjecting without a break.

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

Senator Wong, before you stood, I did call Senator McKenzie to order. Senator McKenzie, you are currently doing a running commentary alongside the minister. I ask you to sit in silence for the remainder of her answer. Minister Gallagher?

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

We have low unemployment. We've managed to keep unemployment lower than comparable countries. That matters. People have stayed in employment, earning wages—and we are supporting wage increases. There are strengths in our economy. Business investment is rebounding. We're seeing all of those things. Yes, we have to manage the inflation challenge, and the government will do that in the budget.