David Fawcett (SA, Liberal Party) Share this | Link to this | Hansard source

My question is to the minister representing the Treasurer, Senator Gallagher. Was the Assistant Treasurer reflecting government policy on interest rates this morning when he said, 'We think that what's already in the system should do the job to ensure that we can dampen down demand'?

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

I missed the end of the question, but I think I've got it.

David Fawcett (SA, Liberal Party) Share this | Link to this | Hansard source

I'm happy to repeat it.

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

If you don't mind—sorry, I just missed the end of it.

Tim Ayres (NSW, Australian Labor Party, Assistant Minister for Trade) Share this | Link to this | Hansard source

Do it with a bit more feeling this time!

David Fawcett (SA, Liberal Party) Share this | Link to this | Hansard source

Thank you, Senator Ayres I'll do that. Was the Assistant Treasurer reflecting government policy on interest rates this morning when he said, 'We think what's already in the system should do the job to ensure that we can dampen down demand'?

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

I haven't actually seen the transcript of that interview, but I do understand that the Assistant Treasurer was outlining our government's plan to deliver on cost-of-living relief. He also indicated that the RBA has a tough job to do and that the RBA is independent—and those statements are correct. The RBA does have a difficult job to do. It is independent of government. It makes decisions based on the information that it has available to it at the time. The government's position reflects that. It is an independent body making decisions on monetary policy in this country. The area where the government have something to do is in making sure that our decision-making, the decisions we make in relation to the budget and others, do not make the job of the Reserve Bank harder, and that is the government's position.

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

Senator Fawcett, a first supplementary?

David Fawcett (SA, Liberal Party) Share this | Link to this | Hansard source

Despite the minister saying that what they have in place would 'dampen down demand', the RBA said in its statement yesterday:

The Board expects that further increases in interest rates will be needed over the months ahead to ensure that inflation returns to target and that this period of high inflation is only temporary.

The Assistant Treasurer said this morning, 'I'm hoping if this is not the last'—he's talking about interest rate rises—'it's near the last of the rate rises.' Minister, why does the Albanese government contradict the RBA?

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

The government isn't contradicting the RBA. I've read the governor's statement on the monetary policy decision, and it's very clear that the Reserve Bank is making decisions about how to deal with the inflation challenge and how to return inflation to more normal levels. It's a challenge not only for the Reserve Bank but for the government as well.

Of course, the bank needs to make these decisions independent of any influence. We have total and utter trust in them making the decisions that they need to make to ensure that inflation doesn't remain high for longer. And they are saying that they are seeing inflation moderating. The challenge for the government in working with the Reserve Bank and not against it is to make sure that the decisions we take are supportive and work alongside monetary policy and not against it, which is why the decisions we're taking in the budget are informed by that, dealing— (Time expired)

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

Senator Fawcett, a second supplementary?

David Fawcett (SA, Liberal Party) Share this | Link to this | Hansard source

The increase in the cash rate to 3.35 per cent, the eighth successive rise under your government, will add more than $10,000 in repayments for the average Australian family with a variable-rate mortgage. With no plan to tackle inflation, a treasurer distracted by writing essays and an assistant treasurer who contradicts the central bank, isn't it the case that Australians will keep paying more under your government?

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

Conveniently, that question left off the fact that there was an interest rate increase during the month of May, when you were in government, and that the highest quarter of inflation growth was in the March quarter last year.

Murray Watt (Queensland, Australian Labor Party, Minister for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

Who was in government then?

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

And who was in government then? This is an inflation challenge that we inherited. We inherited this challenge. The government has a plan to deal with it. It's to deal with cost-of-living relief, where we don't add to inflation. It's to deal with some of the supply chain problems that we've been seeing as a result of the war in Ukraine and the end of the pandemic. The third thing is to deal with the budget mess that we inherited from you lot and to show spending restraint in some of the decisions that we take in the May budget. So it's incorrect to say that the government doesn't have a plan. We do have a plan. We are implementing the plan, and we look forward to more of that in the budget.