Nick McKim (Tasmania, Australian Greens) Share this | Link to this | Hansard source

We will try again, and finally. My question is to the Minister representing the Treasurer, Minister Gallagher—and, Minister, congratulations on your ministerial appointments. Two weeks ago, the Australia Institute released research which showed that rising profits, not rising wages, are a primary driver of inflation in Australia. Earlier this week, former ACCC chair Mr Rod Sims observed that, in times of high inflation, companies in concentrated markets—which many Australian markets are—can use their market power to increase prices at a higher rate than their costs are increasing and further exacerbate inflation. Does your government accept that corporate profiteering is a primary driver of inflation in Australia? And, if so, what are you going to do about it?

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

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

Thank you, Senator Gallagher. Senator McKim, a first supplementary?

Nick McKim (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Minister, the Treasurer has just told Australians that, because inflation is rising, they should brace for higher unemployment and further real wage cuts. But the Treasurer said nothing about what corporations who are earning record profits should brace for. Why is the government telling those who can least afford it to brace for yet more pain yet we are hearing nothing at all from the Treasurer about what the profiteering corporations should brace for?

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

What you saw from the ministerial statement is a very honest assessment from the Treasurer about what households are experiencing now and what they can expect in the future. This is part of the different approach that we are taking in comparison to the approach of the previous government, where it was all about spin, short solutions and political fixes. The assessment today in the ministerial statement—and it will be followed up in the October budget—is giving people the best and latest information available to the government about what we expect to happen over the next year, which will be updated, of course, in October.

I understand the point that Senator McKim is making, but the approach that this government is taking is about pulling people together and working with each other to deal with some of the challenges. It's no longer the divisive game that has been played in politics about those that have and those that have not. (Time expired)

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

Senator McKim, a second supplementary question?

Nick McKim (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Minister, given corporate profits are at record highs, why has your government ruled out introducing a corporate super profits tax or taxes which could fund cost-of-living relief by providing high-quality free public services to Australians, such as free child care, truly free public education, and putting dental into Medicare and helping Australians address the cost-of-living crisis?

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

The government's position is that we will work with the private sector, with business and with community groups—right across the board. We don't want to divide. We don't want to point the finger between the haves and have-nots and point the blame at anyone. We are dealing with significant economic challenges right now. Households are feeling it. There is no such thing as free money, Senator McKim. There is no such thing as free money going anywhere—that you can just do this and it will be just that. It doesn't work. We are dealing with these economic challenges that are thrown at us. As households are trying to find extra dollars, we are looking across our budget at ways we can re-prioritise and reinvest to deal with some of these cost-of-living pressures. But we are going to be honest about it and we are going to work across the community and business to make sure that we get these decisions right. And we're going to do what we said we were going to do before the election. (Time expired)