Dean Smith (WA, Liberal Party, Shadow Assistant Minister for Competition, Charities and Treasury) Share this | Link to this | Hansard source

My question is to the minister representing the Treasurer, Senator Gallagher. The Prime Minister was quoted in the Australian newspaper on 2 May last year as saying, 'Labor has real, lasting plans for cheaper mortgages.' How does the Prime Minister reconcile his statement with the fact that interest rates are up 400 basis points since May last year, adding $15,168 to annual loan costs?

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

I thank Senator Smith for the question and the lack of acknowledgement of the inflationary environment that we are in at the moment. We came to government after the first interest rate rise in May last year, and they have continued since, with one pause. The Reserve Bank is doing what it needs to do to put downward pressure on inflation and return it to a target range.

The job the government has to do—and some of it goes to the answer my colleague just gave on housing—is to generate supply in housing to ease cost-of-living pressures for households as we tackle some of the challenges in our economy. That's why our budget, as one of its main focuses, had a cost-of-living package. We also had significant investments in Medicare and the care economy, in inclusion and equality, and in growth opportunities to deal with the productivity challenge across the economy. We also sought to improve our budget and put it on a more sustainable footing, but we are facing difficult economic times. These are challenges that are being faced not just by Australia but around the world. There is an illegal war in Ukraine. That is having an impact on the global economy. It's flowing into Australia.

The bank needs to do what it needs to do, and that is to control inflation through monetary policy. If they weren't doing that, the impacts on everyone across the community, but particularly those on low incomes, would be much, much, much worse. Our job is to work hand in hand with the work that the bank is doing and to look at how the budget can support households as we work through these difficult times. (Time expired)

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

Senator Smith, first supplementary?

Dean Smith (WA, Liberal Party, Shadow Assistant Minister for Competition, Charities and Treasury) Share this | Link to this | Hansard source

How does the Prime Minister reconcile Labor's promise for real and lasting plans for cheaper mortgages with the RBA's Statement on monetary policy released last month, which projects scheduled mortgage repayments will reach around 9.6 per cent of household disposable income by the end of this year and around 9.9 per cent by the end of 2024, meaning that scheduled mortgage repayments as a percentage of disposable income—

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

Thank you, Senator Smith. The time for asking has expired.

Dean Smith (WA, Liberal Party, Shadow Assistant Minister for Competition, Charities and Treasury) Share this | Link to this | Hansard source

will be at their highest since November—

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

Senator Smith, when I call you to order I expect you to sit down. Your question needed to be slightly shorter. Minister Gallagher.

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

(—) (): I thank Senator Smith for the question, and I acknowledge that these interest rate increases are hitting mortgage households really hard. They really are. The government has acknowledged that. I would also say that the Prime Minister's comments, which Senator Smith referred to, were made in relation to one of our housing policies that we took to the last election. Everything we are doing at the moment through our budget, through the investments we are making and through the work with states and territories that we're doing is all about how we support Australians through the next 18 months or so, which are, as our budget shows, forecast to be some challenging times. Our focus is on cost of living and supporting households without adding to inflation. (Time expired)

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

Senator Smith, a second supplementary?

Dean Smith (WA, Liberal Party, Shadow Assistant Minister for Competition, Charities and Treasury) Share this | Link to this | Hansard source

MITH () (): Given Australian households have now experienced 11 interest rate rises since the election of the Albanese government, will the Prime Minister deliver on his promise of plans for cheaper mortgages by committing to reduce inflation so that there will be no further rate rises before the next election?

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

As Senator Smith knows with that question, the government does not control interest rates. Rises are decisions made by the independent Reserve Bank. The recent review of the Reserve Bank actually recommended strengthening that independence. We are working with the opposition on that legislation. To suggest that the government can control that is silly. It's not the way the system works.

What I would say is the government have a role to ensure that the decisions we make do not add to inflation, and that is the focus of our budget. That has been confirmed by the Governor of the Reserve Bank. It's been confirmed by the secretary of the treasury department. In fact, in our energy measures, which those opposite voted against, there is downward pressure on inflation. So that is the focus of this government. It is a focus that we will continue. That is our focus for the Australian people. (Time expired)