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

I thank the wonderful member for Dunkley for her question. As we have acknowledged today and on many other occasions, we on this side of the House understand that Australians are under the pump as a result of high inflation and interest rates, which started rising before the election. That's why our economic plan and the budget we delivered this month were carefully calibrated and designed to take pressure off the cost of living, rather than add to it. The Reserve Bank governor, as I said before, acknowledged that this morning, telling Senate estimates: 'I don't think that the budget is adding to inflation; it's actually reducing inflation.' Those are the words of the RBA governor. He backed the spending restraint that we showed in the budget as well. He said: 'In the most recent budget, I was pleased that the government saved most of the upgrade in revenue, and the electricity price package is helping with inflation as well. That's important because if it knocks over three-quarters of a percentage point off inflation over the next financial year that will help lower the headline inflation rate and help contain inflation expectations, which we were talking about before, so that is helpful.' He went on to say: 'The budget, largely through the electricity price package, is taking pressure off inflation.' The Reserve Bank governor said that the budget hadn't changed the outlook for interest rates, telling estimates: 'We incorporated the broad parameters of the budget into our forecasts. We have got good liaison through the Treasury secretary and the Treasurer. We understood the parameters of the budget, so it hasn't affected our outlook for the economy or for interest rates.'

As I said before, this puts to an end for all time the ridiculous argument being put by those opposite about the budget's impact on inflation and interest rates. They are very angry today because they have been sprung. They voted for higher electricity prices and now they want to vote for higher medicine prices as well. That will put upward pressure on cost of living rather than downward pressure.

See this speech in context