Julian Leeser (Berowra, Liberal Party) Share this | Link to this | Hansard source

My question is to the Prime Minister. Andrew Boak of Goldman Sachs says that Labor's budget is likely to impact on interest rates:

The risks are skewed to more tightening being required and potentially as soon as next month's—

Reserve Bank—

board meeting.

Why does this budget make inflation worse?

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

I thank the member for Berowra for his question and I also take the opportunity to acknowledge the significant stance that he has taken. I give my respect for the stance that he took on a personal level.

On the question, which goes to inflation and the impact of the budget on it: it occurs in a context of the Governor of the Reserve Bank saying, on 2 May, 'Inflation in Australia has passed its peak.' This will be a first, but I'll quote Terry McCrann. Terry McCrann had this to say: 'I don't see the budget as a serious threat to inflation. I certainly don't see the Reserve Bank reacting by raising interest rates.' The Commonwealth Bank said this:

The move to surplus in 2022/23 represents a fiscal contraction that is helpful in moderating the inflation pulse through the economy.

Bill Evans, of course, said: 'I don't expect them to put upward pressure on interest rates in the near term.' That is what respected economic commentators have said.

That shouldn't be surprising, because, when a government does what we did with the budget, which is to bank, over the two budgets, some 87 per cent of revenue gains—compared with what the Abbott, Turnbull, Morrison governments did, of banking just 40 per cent, or the Howard government, just 30 per cent—then that is what responsible fiscal policy looks like. That takes pressure off the area on which the honourable member has asked. But in addition to that, of course—unlike the anticipated deficit projected by those opposite, which was $78 billion when they were in government and handed down their budget, just over one year ago—that fiscal turnaround is the most serious fiscal turnaround in Australian history, from a $78 billion deficit to a projected surplus of $4.2 billion. This comes, of course, off the back of the highest CPI that we've seen this century—2.1 per cent in the March 2022 quarter—that saw vegetables rise by 6.6 per cent, fruit by 4.9 per cent, beef by 7.6 per cent, tertiary education by 6.3 per cent and fuel by 11 per cent. That was the legacy that we inherited when we came into office. The opposition created the mess, but we are busy fixing it. (Time expired)

Mike Freelander (Macarthur, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Industry and Science. What new initiatives is the Albanese Labor government delivering that will grow advanced manufacturing in Australia?

Ed Husic (Chifley, Australian Labor Party, Minister for Industry and Science) Share this | Link to this | Hansard source

I want to thank the member for Macarthur. He is part of a government elected on a commitment to build a future made in Australia, because manufacturing matters. It creates great firms and secure jobs and delivers the products that Australians need. But the manufacturing jobs of the future depend largely on the decisions we make today. That's why we supported and stood up, in the last weeks of March, the National Reconstruction Fund, one of the largest investments in Australian manufacturing capability in living memory.

In this week's budget we took the crucial next step, which was: investing more than $500 million to lay the foundations for future economic growth in science and industry. At its heart, we had an investment in the $392 million Industry Growth Program, because we want to turn great ideas into strong businesses, especially if they support advanced manufacturing, growing businesses and jobs. Across the country, you see really great ideas at work.

The member for Solomon, for example, showed me SPEE3D up in the Northern Territory. They are the world's fastest 3D metal manufacturers, working across the marine and defence sectors—a very impressive outfit. In Camooweal in Queensland, Bulugudu is using First Nations knowledge of spinifex grass to make medical gels used in the treatment of arthritis. SpeeDx, recognised in the Prime Minister's science and innovation awards, has world-leading diagnostic technology used to detect cancers and infectious diseases. The industry growth program will work with businesses like these to turn those great ideas into something real and support them to grow. It will connect them with a support network of experts, help them find investors and provide grant funding of between $50,000 and $5 million to set them up for potential future support in the National Reconstruction Fund.

These are viable, tangible ways to help businesses where they need it, when they need it and in the form that they need it. It's part of our plan to support domestic manufacturing, to grow sovereign capability and to continue to be a country that makes things. The Albanese government is building a stronger foundation for the future, backing Australian manufacturing—focusing on growth was a key pillar of the budget. This isn't just about the $392 million that will be invested in innovators and new firms, and it's not just about the $15 billion National Reconstruction Fund: we're backing our people and we're backing their know-how. We want them to build new businesses and new jobs.

The money is important, but so is the signal that we are sending to industry—that there's a future for them here and that the government will back them. The budget proves that we will do just that.

Karen Andrews (McPherson, Liberal Party) Share this | Link to this | Hansard source

My question is to the Prime Minister. PinPoint Macro Analytics chief economist, Michael Blythe, said of Labor's budget

Unfortunately, proposed fiscal settings look a little confused. Policymakers cannot claim that fiscal measures are both stimulatory for households and non-inflationary.

Why does this budget make inflation worse?

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

I thank the member for McPherson for the question. I acknowledge her service to this House. As a minister in the former government and as someone who has announced her retirement, I sincerely wish her very well in her future. I do that publicly, as I have privately.

To the member: what we have done is put together a responsible budget—a budget that delivers $14.6 billion of cost-of-living relief, assisting people who need that support with modest increases in JobSeeker and rental assistance, and by the changes we have made in parenting payments that will make a difference to the lives of people who are doing it tough. But we've also done measures, such as our Energy Price Relief Plan. When determining that in partnership with the states and territories, instead of doing a cash splash and handing out cheques—as has occurred at various times in the past—what we did was come up with a design that deliberately put downward pressure on inflation. That's why Treasury have found that that measure, together with the gas and coal caps, will reduce inflation by three-quarters of a per cent. So we were responsible. And our fee-free TAFE will mean relief, whilst addressing the supply chain constraints that have been identified by the Reserve Bank governor as the major cause, along with the Russian invasion of Ukraine, of the inflationary pressures in our economy and also in the global economy. So we have put together a budget that is responsible.

But we didn't just have expenditure in the budget, we had savings as well. Across this budget and the last budget we had $40 billion of savings. That was hard work at the Expenditure Review Committee, to go through it line by line to make sure that we were delivering for the Australian people. That's the context of the changes that we made, on top of us putting 87 per cent, across the two budgets, of any revenue gains towards the bottom line. That means lower debt repayments in the future, which is so important. It contrasts with the last budget of the former government, who splashed money everywhere. It all ended just as soon as the election was over. But we've dealt with that. We didn't create the mess, but we're fixing it. (Time expired)