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

My question is to the Prime Minister. After two years of Labor's homegrown inflation, food is up by over 11 per cent, rents are up by 14 per cent, electricity is up by over 21 per cent and gas is up by over 22 per cent. Isn't this another example of this Prime Minister's weak leadership letting Australians down?

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

Thank you to the member for Hume for his question. As the Prime Minister indicated in his answer a moment ago, you have to be very careful about the facts that the shadow Treasurer puts in his questions. The reason why I'm so grateful to the Prime Minister for letting me answer this question is because it gives me an opportunity to correct some of the facts that the shadow Treasurer has been peddling in the last half an hour or so.

On the first one: if he wants to talk about homegrown inflation then homegrown inflation is nontradeable, and non-tradeable inflation is lower under us than it was under them. And the same is true of headline inflation. Inflation when we came to office, as the Prime Minister rightly said, was 6.1 per cent. Now it is four per cent in the monthly indicator—and that's too high, we're upfront about that. That is too high, but it is much lower than the inflation that we inherited from those opposite.

This answer also gives me the opportunity to point out to the shadow Treasurer that he has now said twice today something which is factually wrong about international comparisons of inflation, and I thought that I would take this opportunity to correct the shadow Treasurer—

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

The member for Hume has asked his question.

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

for making this mistake twice in the last half an hour or so. He said a moment ago in the question to the Prime Minister that core inflation in Canada was going down. Core inflation in Canada is going up. While we're at it, we should tell the shadow Treasurer that core inflation in the euro area is also going up. So that's a reminder.

Again, the Prime Minister hit the nail on the head a moment ago in his answer—and the Governor of the Reserve Bank, similarly, in the quote that the Prime Minister shared. The governor and the Prime Minister have pointed out that it's not unusual around the world in countries where inflation peaked higher and earlier than it did here in Australia, particularly with these more volatile monthly figures, for the number to bounce around and zigzag on the way down. We saw in the US earlier in the year that inflation went up twice before it started to come down again. As the Governor of the Reserve Bank and the Prime Minister have rightly pointed out, our experience in Australia is not materially different from the kind of experience that we are seeing around the world.

So, if the shadow Treasurer is unhappy with inflation at four per cent—as are we—he must have been absolutely filthy at the 6.1 per cent that he presided over. He must have been absolutely furious at the performance of his own government, when they bequeathed us inflation at 6.1 per cent. As I said, inflation in the monthly indicator today edged down in monthly terms, but at four per cent annually it is still too high. We want inflation to be lower and sooner, and that's why our cost-of-living relief, which kicks in on Monday, is so important.

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

The member for Deakin interjected seven times during that answer. He is now warned. I'd like to hear from the member for Calwell.

Maria Vamvakinou (Calwell, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Treasurer. What do the latest figures tell us about the fight against inflation and how the Albanese Labor government's economic plan compares to other approaches?

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

I acknowledge the wonderful service of the member for Calwell over a long period of time in this place and thank her for the question as well. As I said a moment ago, we got new inflation data today which showed that inflation edged down in monthly terms. But at four per cent annually it's still too high. We acknowledge that. Of course we need inflation to be lower sooner. I think that's an objective that we all share. But while we acknowledge that inflation is still too high in our economy we also need acknowledge and remember some important facts which have been lost on those opposite. As I said before—as we've said many times—the monthly numbers bounce around. They don't compare the same goods and services. As I said a moment ago, the experience in other countries is that inflation doesn't always moderate in a straight line and that the last mile is the hardest, and that's why we've seen core inflation go up in Canada and in the euro area as well.

Inflation at 4.0 per cent is too high, but it is much lower than the 6.1 per cent that we inherited from those opposite and it is less than half of its peak a couple of years ago. The other important thing that shouldn't be lost on this House is that inflation would be much higher if we were running our budgets and our economy in the irresponsible and wasteful way that those opposite were carrying on in government. When inflation was higher, and rising, they handed down a budget with $40 billion of new spending and no savings. If budgets are such a key determinant of prices in our economy then they failed their own test when they were in government. Now, inflation would be higher still were it not for the cost-of-living policies that they voted against. In the ABS data today, we find out that electricity was up 6½ per cent, but it would have been 14½ per cent without our energy bill relief. Rents were up 7.4, but they would have gone up 9.3 without our rent assistance. It's why our cost-of-living help is so important, it's why it's so warranted, it's why it's so necessary and it's why it's so timely.

On Monday people will start to get a tax cut and energy bill relief; a pay rise—for people on awards; cheaper medicines; and more weeks of PPL. This is how you deliver cost-of-living relief. Not by pushing up energy prices with nuclear reactors. Today's inflation figures were another reminder of the pressures that people are under that we acknowledge and that we are responding to, and another important reminder of just how crucial it is that we help people with the cost of living and that we do that in five days' time in all the ways that we've talked about. At the same time as we turn big Liberal deficits into Labor surpluses in a way that the Governor of the Reserve Bank says is helping in the fight against inflation.