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

I thank the wonderful member for Reid for her question and, while we're west of Sydney, I acknowledge the economic students from William Carey Christian School, in the electorate of the fine member for Werriwa, up the back. As honourable members would now be aware, the Reserve Bank has just announced its decision to increase interest rates by another quarter of a per cent, bringing the cash rate to 3.6 per cent. This will make life harder for many Australians who are already under the pump. This was expected, it was flagged, the markets anticipated it, but it will still sting. The cumulative impact of these interest rate rises, which began before the election, mean that, for every half a million dollars owed, the increase is now about $1,000 a month. That's the cumulative impact of these rate rises, which began before the election.

Last week's national accounts showed that Australian households spent about $20 billion in mortgage interest payments in the December quarter, compared to about $11 billion in the same period a year earlier. As I said, the worst quarter for inflation was in March last year, before government changed hands. That was when rates started rising. The Reserve Bank makes its decisions independently and that independence is an important feature of our system.

The government's job is to take responsibility for those things that we have influence over. Australians understand a lot of this inflation is coming at us from around the world and that broken supply chains here in Australia are part of the problem as well. We take responsibility for working through this inflation issue in a responsible and methodical way to address inflation in the ways that we can. Our three-point strategy is all about, as we said before, cost-of-living relief, repair of supply chains and restraint in the budget.

As the Reserve Bank governor statement says today and makes clear, we do expect that inflation has peaked but it will be higher than we would like for longer than we would like. That is why our cost-of-living relief is targeted and responsible, to make life easier for people but not to add to inflation. We are making early childhood education cheaper, making medicines cheaper, building more affordable housing, providing help with energy bills and getting wages moving again. When Australians are doing it tough and there is a trillion dollars in Liberal Party debt left to Australian taxpayers, our highest priority is cost-of-living relief and a more responsible budget. When Australians are under the pump and interest rates are rising, the highest priority of those opposite is borrowing more so that ordinary people can subsidise bigger tax breaks for people who already have tens of millions of dollars in super.

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