Maria Kovacic (NSW, Liberal Party) Share this | Link to this | Hansard source

My question is to the Minister representing the Treasurer, Senator Gallagher. Last month's budget predicted inflation would be three per cent by next year's budget. Does the government stand by that forecast and does it agree with the Reserve Bank deputy governor Michele Bullock that unemployment needs to increase to 4.5 per cent in order to tame inflation?

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

I thank the senator for her first question in this place. Yes, the government stands by the forecasts outlined in the budget. If there are changes to those they will get updated in the normal way, as has been done in every budget under every government since they've been put together. They are forecasts to set out the expectations of the Treasury and their advice to government about what is happening over the economy. I would say that in that budget we did forecast an uptick in unemployment as a result of higher interest rates, some global uncertainty and the fact that we expect our economy to slow over the next 12 to 18 months. They were all forecast in the budget. What we are seeing playing out across the economy is in line with those budget forecasts.

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

Senator Kovacic, a first supplementary?

Maria Kovacic (NSW, Liberal Party) Share this | Link to this | Hansard source

enator KOVACIC () (): Does the minister agree with the most recent CPI data released by the ABS that reveals that due to inflation the price of milk rose 16.1 per cent and the price of fruit rose 10.6 per cent between March 2022 and March 2023? As Australian fund manager Kate Shew said this week: 'Australia's inflation pulse is not receding as quickly as its peers.' What responsibility does the Albanese Labor government accept for these pressures?

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

I thank the senator for the question. In relation to the impacts on inflation and the contributors to inflation, there are obviously a range of inputs that are influencing the inflation number, and inflation is staying higher for longer than we would like. The Treasurer has been saying that consistently. The reason that our budget is so focused on putting downward pressure on inflation whilst easing cost of living, repairing the budget, finding $40 billion worth of savings and returning 82 per cent of upward revisions to revenue is that it was precisely calibrated to deal with the inflation challenge. We do believe that inflation has peaked and is coming back and it will head towards the target range over the next 18 months or so. That is in line with budget forecasts. But, yes, we would like it to come down faster. That's why government's decisions have been so calibrated. (Time expired)

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

Senator Kovacic, a second supplementary?

Maria Kovacic (NSW, Liberal Party) Share this | Link to this | Hansard source

Does the minister agree with the same CPI index data showing Australians paid 26.2 per cent more for gas and other household fuels, 14.9 per cent more for utilities and 6.3 per cent more for medical, dental, and hospital services in March this year than in March 2022? Doesn't the Albanese government's inflation crisis now represent Labor's latest tax on households across our country?

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

The answer to that question is no. I would say that the quarter with the largest growth in inflation was the quarter ending in March of last year. So it was actually before the government changed. That was the quarter with the single largest growth in inflation. That was when monetary policy started tightening and interest rates started lifting. There are a range of contributors to the CPI number. It does include gas and other household fuels. I would say that if we hadn't taken decisive action in December last year that could have hit households even harder. We know that. AEMO and other expert advisers have told us that—that prices, had we not acted, would have been higher and would have hit households harder. And you opposed it. You as the opposition opposed the steps that we took, which have eased that pressure on households. That's why in this budget we have $1½ billion going to support households with energy bill relief.