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

My question is to the Prime Minister. The Albanese Labor government is writing off $16 billion of taxpayers' money on HECS policy. Respected economist Chris Richardson has called this 'dumb' and 'a fairness fail'. Prime Minister, our country is off track and this Labor government is damaging the economy and hurting everyday Australians. Why are Australian families paying the price for the Albanese Labor government's reckless spending?

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

Those opposite gave Australia much higher public debt and much higher student debt, and this side of the House is giving Australia much lower public debt and much lower student debt. We think lower public debt and lower student debt are good things. We know now from the reaction to our announcement on the weekend that you think that lower student debt is a bad thing. So let every young person and everyone in Australia with student debt understand: this side of the House is trying to cut your student debt, and that side of the House wants you to have more student debt. He wants millions of Australians to have more student debt.

I can hardly believe my luck in being asked by the shadow Treasurer about public debt, because since we've come to office there has been $150 billion less public debt because of our responsible economic management. Because of that $150 billion reduction in debt, Australians will pay $80 billion less interest on that debt. If those opposite were still sitting over here, Australians would still be copping it in the neck when it comes to those higher debt interest repayments.

Because we've been able to deliver two surpluses—not an outcome that those opposite are familiar with—and because we've been able to improve the underlying cash balance by $172 billion in two years, the biggest nominal improvement in history, we've been able to see much less debt than was forecast by those opposite. What that has meant, as I said a moment ago, is that, when you manage the budget and the economy responsibly, you can make room to support people who genuinely need our help and our support.

On this side of the House, our Labor values tell us that responsible economic management is important—it is the bedrock of a good government like this one that this Prime Minister leads—but it's not an end in itself. Responsible economic management is not anathema to helping people who are doing it tough; it is central to it. It is crucial to it. By cleaning up the mess that those opposite left behind, we have been able to give a tax cut to every taxpayer, energy bill relief to every household, cheaper medicines, cheaper early childhood education, wages growth, rent assistance. We have cracked down on the supermarkets and, most importantly in the context of the last couple of days, made sure Australian young people, particularly students and graduates carrying student debt, can earn more and keep more of what they earn. We know you don't want them to do that. We know that you want Australian students to have more debt and graduates to have more debt. We are getting public debt down. We are getting student debt down—two things that you were either unable or unwilling to do.

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

I would remind the Treasurer to direct his remarks through the chair.

Susan Templeman (Macquarie, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Treasurer. What does the decision taken today by the Reserve Bank mean for Australians? What progress is being made in the fight against inflation and how does this compare to other approaches?

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

Thank you to the member for Macquarie for her very timely question, because the Reserve Bank has indicated in the last few minutes that they will be leaving rates on hold at 4.35 per cent. Australians would understand that this outcome today is not a surprise; it was an outcome that has been flagged well in advance by the Governor of the Reserve Bank. What this means is rates have not gone up since last Melbourne Cup Day, so it has been a year since rates last went up and that reflects two things: firstly, the impact of rate rises already in the system. Australians are already doing it tough enough when it comes to dealing with these higher interest rates.

Secondly, it reflects the progress we are making together in the fight against inflation. We saw that in last week's inflation numbers. Inflation is back in the target band for the first time since 2021. It means the inflation we inherited at 6.1 per cent is now 2.8 per cent. At the same time as underlying inflation is coming down, monthly inflation is coming down in welcome and encouraging ways. When we came to office, inflation was much higher and rising; now it is much lower and falling. But we know people are still doing it tough and that is why our cost-of-living help is so important.

The outcome today is not a surprise, but I direct the House to the new forecast released by the independent Reserve Bank today. Because what those forecasts show, whether it is headline inflation or trimmed mean inflation, is that they have lowered their forecasts for inflation over the next little while. If you take inflation overall—headline inflation—they have downgraded it for the end of this year from three per cent to 2.6, for the middle of next year from 2.8 to 2.5—the middle of the band—and they have downgraded inflation to even out in 2026.

For those opposite who asked me about trimmed mean inflation, they should recognise that the Reserve Bank have lowered their forecast for trimmed mean inflation across all of the forecast period. What this shows is that we have been able to fight inflation without ignoring risks to growth and without sacrificing the gains we made in the labour market. We have struck the right balance by taking the right economic decisions for the right economic reasons. Because of that, we are confident but not complacent about a soft landing in our economy. We would much prefer a soft landing than to clean up after the hard landing that those opposite would prefer for political reasons. What these new forecasts show is that we continue to make welcome and encouraging progress in the fight against inflation, and the new forecasts released by the independent Reserve Bank in the last few minutes go to that point.