Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | Hansard source

I thank Senator McKim for the question. There's no doubt that rising inflation is the most significant economic challenge that Australians are facing across the economy. In terms of the drivers of that, I think we saw, as to yesterday's inflation figures from the APS, the main drivers behind that were dwelling costs and rising fuel costs; they were the major contributors to that.

We have been very clear about our response to that. There are some things that we can do. Some it is out of our control, in relation to some of the international pressures that are coming from China and from the war in Ukraine—or China's COVID strategy and the war in Ukraine. They are definitely having impacts here locally.

Domestically, where there have been floods and some of those natural disasters, we've seen some supply chain disruptions which are flowing on to higher costs for households. The position that we have taken is that, in order to respond to those, we need to assist households with long-term policy responses which support lowering costs: so, on power prices; childcare; investing in skills; getting wages moving—they're the things that this government wants to do to deal with the reality of households dealing with rising costs and rising interest rates which are hitting households so hard. That's the focus of Dr Chalmers and I, as we work together to put forward our budget in October, but also, over the longer term, how we deal with some of the higher inflation and higher-than-expected inflationary impacts that we're seeing across the economy.