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

I thank Senator Polley for the question and for her interest in the upcoming budget. It's an important part of the parliamentary year. The Treasurer has said, and I think those of us on this side understand, that, whilst we're making welcome and encouraging progress against inflation, our fight against it continues and we recognise that people remain under pressure. Quarterly inflation is now around a third of the 2.1 per cent it was when we came to government in May 2022. This is incredibly welcome progress in the time that we've been in government. As you identified in your question, Senator Polley, monthly inflation is much lower now than what we saw at the election. We will have new monthly inflation numbers tomorrow, but the downward direction of these numbers is clear.

The ABS also made it clear in the data that they have released that our policies on rents and electricity and our investments in early childhood education have directly reduced inflation by half a percentage point. This goes to the point we've been making about fiscal and monetary policy working together to put downward pressure on inflation. The IMF and the OECD have recognised our inflation-fighting efforts too, and the RBA has confirmed that fiscal and monetary policy are working in the same direction.

Real wages are now growing for the first time in nearly three years and ahead of the forecast. They were going backwards by 3.4 per cent at the time of the election. This means that Australians are earning more, and from 1 July our tax cuts mean that they will keep more of what they earn too. Of course, we're doing a range of other investments on top of the tax cuts, whether it be energy bill relief, making medicines cheaper, making it easier to see a doctor, cheaper child care, building more social and affordable housing, and fee-free rent.