Louise Miller-Frost (Boothby, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Treasurer. What does the recent economic data mean for the budget in May and how will the budget help clean up the mess the government inherited?

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

Thanks to the member for Boothby for all of her hard work and for her great question. Earlier today, we got news that monthly inflation was steady at 3.4 per cent. This means that monthly inflation is at its lowest level in more than two years. It also means that monthly inflation is now almost half of what we inherited when we came to office—it's 3.4 now and was 6.1 when we came to office. As I said earlier in the week, the monthly inflation figure is a bit less reliable than the quarterly one—the monthly bounces around a bit. In the quarterly data, we're making even more progress. We inherited 2.1 per cent and it's now 0.6 per cent, still higher than we would like, but the direction of travel when it comes to inflation is welcome. It's encouraging and it's clear.

We're especially encouraged in today's numbers by new analysis by the ABS, which I can share with the House. Rent over the last year was 7.6 per cent—too high, but it would have been 9.2 per cent without our budget. But the one I want those opposite to particularly focus on is that, when you look at the electricity price rises since June of last year, they have gone up three per cent. Do you know what that would have been were it not for our energy plan? Eighteen point one per cent. That is three per cent versus 18.1 per cent since the middle of last year. When they voted no to our energy rebates, they voted yes to even higher inflation. That's not an opinion; that is a fact. It means that our cost-of-living relief is working as we designed it to, and we see it in the figures. We're getting inflation down as an important part of ensuring that people are earning more and keeping more of what they earn. We have inflation moderating and we've got wages going—that means we've turned real wages around. We inherited negative-3.4 per cent and they are now growing again.

Real wages are growing, inflation is moderating and unemployment is falling in the most recent data, but we do acknowledge that we've also got a slowing economy, we've also got global uncertainty and people are under pressure. These are the three most important pressures and influences on the budget that we will hand down from this despatch box in May when the parliament next sits. We will find the best balance of relief, repair and reform: cost-of-living relief built on a tax cut for every single taxpayer; repair of the budget; and reform of our economy so that we can attract and deploy investment in ways that deliver a new generation of growth, productivity and competitiveness so that we can get the budget in better nick without neglecting the pressures that we know people are still under despite the welcome and encouraging news on inflation today.