Julia Gillard (Lalor, Australian Labor Party, Prime Minister) Share this | Hansard source

I thank the member for La Trobe for her question. I would like to inform the House that the Reserve Bank today has announced it will cut the official cash rate by 25 basis points to 4.5 per cent—a decision just announced. As the nation gets ready for the race which stops us once a year, the Melbourne Cup, this will be a welcome relief for Australian families who are under cost-of-living pressures.

I understand that despite our strong economic fundamentals, and they are strong, parts of the community are doing it very tough and finding it very hard to make the family accounts add up to get the bills paid. So this news will come as welcome relief to them. It will be relief for families too as we move towards the festive season, when people want to make arrangements for Christmas and Christmas holidays.

Importantly, today's decision by the Reserve Bank confirms this government's strong economic management credentials. We do understand that families are under cost-of-living pressure and that is why we have introduced a range of measures to assist families, including increasing the childcare tax rebate to 50 per cent and creating the education tax refund to help with the costs of getting kids to schools. We are going to deliver an increase of $4,200 in family tax benefit A for the mums and dads who have teenagers, and, of course, we have brought in paid parental leave to help parents of very young babies. And we have secured an economy where 95 out of every 100 Australians who want a job have got a job. Our focus has always been on making sure that Australians have the benefits and dignity of work, and that is why we moved to put economic stimulus into our economy, to keep jobs for Australians when the global financial crisis threatened.

We have also come through with a strict fiscal discipline plan and we are delivering the fastest fiscal consolidation on record. The delivery of that fiscal consolidation and getting the budget back into surplus—back into the black—as promised, is very important. The government's strict fiscal strategy means we have created space in the economy for it to grow without adding to price pressures. You run a strict fiscal policy in order not to put upwards pressure on inflation, and that helps the RBA have the room it needs to move on monetary policy.

At the same time, our strong public finances continue to be the envy of the world. That point will come home to me very forcefully, I am sure, as I attend the G20 in coming days, where I will meet with leaders of other economies who are struggling with debt, who are struggling with high unemployment rates and who are struggling with the prospect of how they deal with their budgets, whilst we here, of course, have strong public finances, we have Australians in jobs and we are bringing the budget into surplus by engaging in strong fiscal consolidation.

We live in the right region of the world at the right time in history. Economic weight is moving from west to east. Our economy is strong now and we must keep reforming and changing to ensure that we maximise the benefits of the Asian century in which we live. Today's announcement by the Reserve Bank will be good news for Australian families to help take that bit of pressure off on this Melbourne Cup day.

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