Jim Chalmers (Rankin, Australian Labor Party, Treasurer) Share this | Hansard source

I thank the member for Fremantle for his interest and for his question—another fine member of the WA massive asking another great question here in this House today. The Bureau of Statistics monthly CPI indicator increased by 6.9 per cent through the year to October. This was down from the 7.3 per cent increase through the year to September and it was below market expectations. It was a wide range, but the median expectation was 7.6 per cent, and this result is well below that.

In the data we saw some pretty big falls in fruit and vegetable prices last month, but this doesn't yet reflect the impact of the flooding, and we're seeing the rate of price growth in new dwellings, which has been a big contributor to inflation to date, continue to fall. But there are good reasons to be very cautious about the inflation numbers released today. It's important to remember that the monthly release is a relatively new dataset. It doesn't include everything the quarter release does. Also, really importantly, this data doesn't yet fully include the price impacts of the recent floods or the impact from higher energy costs in recent months, which are yet to fully show up in the reported figures.

All things considered, this result is cautiously welcomed. It shows us that there are reasons to be carefully optimistic that we are getting near the inflation repeat, but we're not there yet. Inflation is still too high. It's still hurting households. It's still the No. 1 challenge facing our economy. That's why responding to inflation was the No. 1 priority of our budget. It delivered cost-of-living relief with cheaper child care and cheaper medicines, fee-free TAFE and affordable housing, but it didn't add to inflation by keeping annual real spending growth to an average of 0.3 per cent over the forward estimates and by returning more than 90 per cent of tax revenue upgrades to the budget as well. The inflation challenge is just another reminder of the costs and consequences that have come from a decade of stagnant wages in our economy and in our country, which has left real wages lower today than they were a decade ago. That's why we are working so hard to get wages moving in this country again—because we know that wages growing strongly and sustainably is good for the economy, not bad for it.

All of these actions in the past six months have been about cleaning up the mess that we inherited, but they've also been about making sure the budget is more responsible and our economy is more resilient. We know, with this inflation challenge hanging around longer than we would like, there is much more work to do. But that work has begun.

See this speech in context