Sally Sitou (Reid, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Treasurer. What does the independent Reserve Bank's decision on interest rates mean for Australians?

Jim Chalmers (Rankin, Australian Labor Party, Treasurer) Share this | Link to 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.

Angus Taylor (Hume, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

My question is for the Prime Minister. Under the Albanese government, interest rates have now gone up nine months in a row. Economists and the RBA say there are more rate rises to come. Westpac Chief Executive, Bill Evans, says it is going to be a very tough time. There's a lot of pain out there. Why, when Australians are already doing it tough, is the Prime Minister's only answers to break promises and raise taxes?

Anthony Albanese (Grayndler, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

The shadow Treasurer, who refuses to ask a question of the Treasurer even in the context of the Reserve Bank making the decision independently that they did, exposes the disingenuous nature of the question by refusing to acknowledge that interest rates began to rise on their watch. They talk about the rate that's now 3.6 per cent, but it was 6.75 per cent when this bloke was the Assistant Treasurer of Australia. Now, is 6.75 more or less than 3.6? More. Those opposite are so disingenuous. The shadow Treasurer, who asked the question, said as recently as last September:

It is very clear that the world has changed dramatically even in the past few months …

We've seen a rapid shift to an inflationary environment.

Interest rates are bucking decades of downward trends.

That's what he had to say.

On the change in 2025 that we've envisaged on super, the shadow Treasurer was asked repeatedly by David Speers on Insiders to say that it was a bad policy, and he couldn't bring himself to, because it's precisely the policy that he backed when the changes went through in 2016-17. They know frauds when they see one. Those opposite helped create problems with supply chains, and that has fed into inflation. The Reserve Bank governor said that half and up to two-thirds of the inflationary pressures in our economy are about supply chains. Those opposite are coming in here and voting against the National Reconstruction Fund, which will assist with the supply chain issues that we're confronting. They also came in here and voted against the relief that was provided for in December—that $1½ billion of energy price relief.

Milton Dick (Speaker) Share this | Link to this | Hansard source

The member for Bowman is warned.

Anthony Albanese (Grayndler, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

They opposed the measures that we put in place for pharmaceuticals, which came into place on 1 January. They're against the childcare reform that we put in place on 1 July. What they did the last time they had an opportunity to have a budget was pour massive amounts of money into the system that all ended once— (Time expired)