Nita Green (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister representing the Treasurer, Senator Gallagher. Can the ministers advise the Senate on the state of the economy following the Treasurer's economic statement today?

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

I thank Senator Green for her interest in the economic situation across Australia and the Treasurer's ministerial statement that he made earlier today. It's true that we are facing a very challenging set of economic circumstances, both domestically and internationally, and the Treasurer in his address to the House of Representatives today delivered that message but also importantly the message that the Australian economy is growing but that there are some challenges that need to be managed in the near term. We have been upfront with Australians about that since coming to government, and we will continue to be upfront and honest as new challenges emerge.

Today, in the latest update of Treasury forecasts, the Treasurer outlined that economic growth has been revised down by half a percentage point for the next three years. Inflation is expected to peak at 7¾ per cent by the end of the year, and the inflation challenge will obviously have an impact on the outlook for real wages and real wages growth. The forecasts also show with inflation and with real wages it will get worse before it gets better but that it will get better. The current expectation is that inflation will indeed get worse this year, moderate next year and normalise the year after. The Treasury forecasts also show that real wages are expected to stabilise mid next year before growing again in 2023-24.

When it comes to the budget, the final results for the 2021-22 financial year are likely to show a better-than-expected improved outcome compared to what was released at PEFO. However, temporary factors like supply chain disruption, capacity constraints and extreme weather have delayed some spending, and low unemployment and volatile commodity prices boosted revenue. The short-, medium- and longer term pressures on the budget are— (Time expired)

Sue Lines (President) Share this | Link to this | Hansard source

Senator Green, a first supplementary question?

Nita Green (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

Can the minister advise how these challenges in the economy are impacting on Australians?

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

I thank Senator Green. We absolutely understand the impact that this is having on Australians and Australian households. It's why we are being really upfront with the Australian public. It's because Australians are up for that. They want honest government. They don't want a government of spin, pretending things are fine when they're not. They want a government that understands the challenges they're facing—that household budgets are stretched, that bills are going up and that wages aren't matching that. They've had 10 years of stagnant wages growth, at best. They've had nine years of a government of missed opportunities and wrong priorities. This government is going to be clear about what the challenges are and clear about the plan to manage those challenges and to help households deal with that. But we are not going to pretend that nine years of neglect and poor government can be reversed overnight. (Time expired)

Sue Lines (President) Share this | Link to this | Hansard source

Senator Green, a second supplementary question?

Nita Green (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

What are the government's plans to deal with these challenges?

Opposition Senators:

Opposition senators interjecting—

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

President, I know responding to interjections is disorderly, but from the interjections I have managed to hear whilst I've been talking those opposite will be interested in the answer to this question. Despite what those opposite say, we do have a plan to deal with the economic challenges we face. Part of the plan is to deal with the waste and rorts that they had riddled through their budget—billions of dollars of waste and rorts, pork barrelling, the buying of seats and the buying of votes. That's part of our plan as we reorganise and reprioritise the budget. We have concrete plans—child care, cheaper medicines, cheaper and cleaner energy. We've got plans to grow wages—you get that; grow wages, not hold wages back which is what you did—and invest in skills and make sure that our people are ready for the jobs of the future. This is what a responsible government should have been doing for the past 10 years and what we're going to do now. (Time expired)