My question is to the Minister for Finance, Senator Gallagher. The IMF has downgraded global growth and upgraded global inflation due to the war in the Middle East, with energy prices and supply chains the main drivers. Australians are feeling the impact of these global pressures at the checkout and the fuel pump. Can the minister update the Senate on the global conditions and what they mean for the Australian economy?

I thank Senator Darmanin for the question. The question outlines some of the uncertainty that exists across the global economy now. The war in the Middle East is reshaping the global outlook, and the IMF's World economic outlook downgraded global growth to 3.1 per cent this year, down 0.2 percentage points, and revised up global inflation to 4.4 per cent this year and three per cent next year. There's no doubt that those global impacts are having impacts here in Australia on our economy and, importantly, on Australian households, which are under real pressure. That conflict overseas is pushing up prices and inflation here at home. Energy prices and supply chains are the main channels, which is why it often shows up first or early at the bowser and at the supermarket checkout.

Against that backdrop, Australia's economy is strong. The economy grew by 0.4 per cent in the June quarter to be 2.1 per cent through the year and 2.4 per cent across 2025-26. Annual growth in Australia was as strong as or stronger than every other major advanced economy—equal to the United States and stronger than the rest. So our economy is resilient. When it comes to annual growth, we have stronger employment growth than almost every major advanced economy and lower gross debt to GDP than every major advanced economy. But despite that and despite the fact that real household disposable incomes grew in the quarter, that the household savings ratio lifted in the quarter, that the compensation of employees was up six per cent through the year and that unemployment was still historically low at 4.5 per cent, we recognise that people are doing it tough and are really concerned about all of the uncertainty that exists around them right now.

Senator Darmanin, first supplementary?

S&P Global has recently reaffirmed Australia's AAA credit rating status, which is a strong endorsement of the Albanese Labor government's responsible economic and fiscal management at a time of extreme global uncertainty. Why is this AAA credit rating so important to retain, and how is the government balancing its spending decisions while providing targeted and responsible cost-of-living relief for Australians?

I thank Senator Darmanin for the supplementary. While there are many things concerning Australians about the global economy that we can't control, there are things here at home that we can. That's why our responsible budget management and our focus on savings, on paying down debt and on making sure that upward revisions to revenue were returned to the budget have been key parts of our strategy since coming to government. Last month, Standard and Poor's reaffirmed Australia's AAA credit rating. We are one of only nine countries rated AAA by all three major rating agencies. S&P endorsed our tax and saving reforms and said we have modest debt by international standards. Fiscal discipline remains important at a time of heightened global uncertainty, and that's exactly what we're delivering through the budgets we've delivered, but also in the decisions that we'll take going forward.

Senator Darmanin, second supplementary?

What will the Albanese Labor government's approach be moving forward to ensure that Australians continue to receive the support that they need while also delivering reforms that will grow the economy?

I thank Senator Darmanin for that final supplementary. We're committed to responsible economic management and sensible cost-of-living support for Australians, which is why our decisions around cheaper medicines and lowering the cost of energy bills, our investments in early childhood education and care, our investments in higher wages and our tax cuts have all been focused on making sure we could take some of the pressure off the Australian people. But global uncertainty requires stable, consistent, responsible budget management. Our savings approach that we've taken in every budget and in every MYEFO will continue. We know those opposite went to the last election promising higher taxes, bigger deficits and more debt. They have made hundreds and hundreds of billions of dollars of commitments already, since the election, that would damage the Australian budget and put us in much worse shape than we are.