Andrew Bragg (NSW, Liberal Party) Share this | Link to this | Hansard source

My question is to the Minister representing the Treasurer, Senator Gallagher. Given the higher than expected inflation rate announced today, will the government commit to limiting spending growth below inflation?

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

I thank Senator Bragg for the question and for remembering that there are other people in the chamber, other ministers who can answer questions. I've just been looking at the monthly inflation figures that have been released today and at the rate of 6.8 per cent in the month of February, which is lower than the 7.4 per cent rate reported in January 2023. But I don't think it's any surprise—and I've been saying for some time in this chamber—that one of the significant challenges facing the budget and the decisions we are taking in relation to the budget is how we deal with the inflation challenge, how we provide sensible cost-of-living relief where we can without adding to the inflation challenge across the economy.

That requires us to show some restraint—where we've got revenue upgrades, to look at how we bank those upgrades. In October we banked 99 per cent of those upgrades in the first two years, and I think it was 92 per cent over the four years. That gives you an indication of the fiscally responsible way that we will go about making these decisions, and we're doing that against the backdrop of increasing pressures on the budget, whether from defence, from the NDIS, from health, from aged care or from some of the terminating measures—cleaning up the mess that we are also working through and have been talking about in this chamber this week. So, you'll see the budget when it's released, but the question Senator Bragg asked of me is certainly front and centre in the minds of all of us who participate through the ERC process.

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

Senator Bragg, a first supplementary?

Andrew Bragg (NSW, Liberal Party) Share this | Link to this | Hansard source

Following the 10th consecutive interest rate rise, the government has committed $45 billion in off-budget spending. How much of this will be spent in the next financial year?

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

Those provisions were made in the October budget and have been factored into the figures that were released as part of the economic forecast for the October budget. Obviously in relation to the NRF that has passed the parliament, with Rewiring the Nation, we are moving on that through the Powering the Regions Fund. The Housing Australia Fund hasn't passed the parliament, so we won't be in a position to establish that fund until it passes the parliament. There will be some expenditure, I would imagine, once those funds are up and running. We'll report that in the normal way, as you would expect, once those decisions have been taken. But I would say that the actual provision for those has been factored into the budget and the economic forecasts outlined in October. (Time expired)

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

Senator Bragg, a second supplementary?

Andrew Bragg (NSW, Liberal Party) Share this | Link to this | Hansard source

Minister, did the International Monetary Fund find that off-budget spending items like the National Reconstruction Fund fuel inflation and should be avoided? Why won't the government follow the IMF's advice?

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

I thank Senator Bragg for the question. I don't have the IMF report in front of me, but I think those opposite—well, I don't want to say they've verballed the IMF—have used the IMF report selectively for political purposes. My recollection of the IMF's report is that it talked about being mindful of the impact of establishing funds and being cautious about the use of them, and that's exactly what we were doing. In fact, if we go back and have a look at when you were in government, you established quite a number of those funds in a similar way that we are doing now. We are using them to drive a common good, whether it be in housing, in manufacturing jobs, or in ensuring we've got an energy grid that actually works for the renewable energy future that Australia will have to have. (Time expired)