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

My question is to the Minister representing the Treasurer, Senator Gallagher. Last week, the IMF—which, it has to be said, is one of the chief agents of neoliberalism around the planet—suggested that Labor's stage 3 tax cuts should be reassessed. Here in Australia, everyone to the left of Malcolm Turnbull thinks that the stage 3 tax cuts should be ditched. Minister, does your government really believe that Labor's stage 3 tax cuts are good policy? Do you really believe that a quarter of a trillion dollars in tax cuts that overwhelmingly benefit the top end of town are preferable to putting dental and mental health into Medicare, making child care free and wiping out student debt?

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 and his ongoing interest in this portfolio space. I recognise, and I think we all recognise in this chamber, that there are different views around the stage 3 tax cuts, but our policy and our position on those tax cuts haven't changed. Our priority when it comes to tax reform is the tax reform we outlined in the October budget, which is around ensuring multinationals pay their fair share of tax here in Australia. We also acknowledge that those tax cuts aren't scheduled to come in until 2024, and we are focused on the near-term challenges in the economy, including how we ease cost-of-living pressures on households. The inflation challenge and dealing with the associated cost-of-living impacts that it's having are our main focus in terms of the economic portfolio.

But you raise a broader question as well, around the budget and pressures on the budget. There is no doubt that the economic and budget vandals that sit opposite us had left the budget in such a terrible state—

James McGrath (Queensland, Liberal National Party, Shadow Assistant Minister to the Leader of the Opposition) Share this | Link to this | Hansard source

I don't think that's patently true.

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

Well, I'm not going to let you get away with this view. I'm not. The zombie measures, the terminating measures, the pork-barrelling and the failure to deal with the big pressures on the budget that happened on your watch—we have been left to resolve them. We are the responsible fiscal managers of the budget, and people will see, as we go through the detail of what we inherited, just what vandals you were. Looking out and saying, 'We're managing everything,' while sweeping it all under the carpet; pork-barrelling to friends; failing to fund things properly, and having them all fall off a funding cliff in June this year—that's the legacy you leave, and that's the challenge that we are dealing with in the budget.

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

Senator McKim, first supplementary?

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

Minister, you mentioned inflation in your answer. The Treasurer said this week, 'Labor has a plan for inflation.' The RBA is forecasting that inflation will be above their target band when the stage 3 tax cuts come into effect next year. Isn't it the case that the stage 3 tax cuts are grossly inflationary? Is putting another $9,000 a year into the pockets of billionaires part of your government's plan to address inflation?

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

The Treasury of course in the budget give their forecasts for inflation over the forward estimates, which will include the stage 3 tax cuts when they come into operation. You can see what the Treasury forecast there in terms of inflation. It's forecasting that inflation will track back towards the more normal range over the next 18 months.

Senator McKim also said the Treasurer had outlined a plan for inflation, and we do have a plan for inflation. It's a three-point plan. There is cost-of-living relief, where we can sensibly and meaningfully make a difference without adding to inflation, which is our child care, our relief for energy bills, our investments in cheaper medicines, to deal with the supply chain issues, which is workforce and skills, and to show budget and spending restraint in May. That is the plan that we have and that we are implementing.

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

Senator McKim, a second supplementary?

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

Minister, most Australians know that you only supported the stage 3 tax cuts to neutralise the issue to win the election. Isn't it the case that your position now boils down to not doing the right thing, because you promised, in your own self-interest, to do the wrong thing? Minister, how is Labor's political cowardice helping the millions of Australians who are struggling with rents, mortgage rises, and the cost-of-living crisis, and who will get pennies on a dollar at stage 3 compared— (Time expired)

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

There was a lot in that! I give credit to you, Senator McKim, for managing to squash that into 30 seconds! We covered a whole range of issues there. I do not accept the points made—the negative reflections on our motivations around self-interest. We wanted to change the government. We managed to change the government. We think that is good for the country, in that we are now able to implement all of the policies that we took, such as our positive policies around climate, dealing with those issues that you've been interested and involved in for some time. We are in government, we are dealing with the inflation challenge and we are dealing with some significant budget pressures. We've got to focus on households and cost of living, easing cost-of-living pressures where we can, where it doesn't add to inflation and doesn't make the job of the Reserve Bank harder. This is the job that the Treasurer and I do every day, day in, day out.