Matt O'Sullivan (WA, Liberal Party) Share this | Link to this | Hansard source

My question is to the Minister representing the Treasurer, Senator Gallagher. After the government released a budget that economists from Barrenjoey called 'inflationary' and which did nothing to reduce inflation, the ABS said yesterday that increasing interest rates over the year contributed to living cost rises ranging from 6.3 per cent to 9.6 per cent. The average Australian family must find an additional $22,000 this year to cover the mortgage repayment increases that have happened on your watch. At the same time, real wages have gone backwards. Is this what the Prime Minister had in mind when he said he had a plan for cheaper mortgages?

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

I thank Senator O'Sullivan for the question and the focus on cost of living, because the government has acknowledged that many Australian households are doing it tough right now. We are in an inflationary environment. The highest inflationary quarter, of course, was under the former government's watch—2.1 per cent in the March quarter of last year. We are seeing inflation moderate, which is pleasing, but it's staying higher for longer than we would like.

In relation to the budget and the cost-of-living initiatives which we have put in place, they are precisely to deal with those pressures that households are under. Whether it be child care, cheaper medicines, the energy bill relief, the investment in Medicare or the investment in fee-free TAFE, these are all areas that the government has identified where we can invest to make a real difference in people's household budgets but not add to inflation.

I note Senator O'Sullivan selectively quoted from an economist in his question. I think if you put 10 economists in a room you might likely get a few different opinions. But I, and the government, will take the advice of the Treasury secretary and the Governor of the Reserve Bank, who have both confirmed that the government's budget actually put downward pressure on inflation through the energy bill relief and the price caps that we put in place that those opposite opposed. Had they had their way and we weren't able to progress that important form, it would have kept prices up higher for longer and that would have affected household budgets. So we have done the responsible thing. We've targeted our cost-of-living relief but not in a way that adds to inflation that will hurt households in the long term.

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

Senator O'Sullivan, a first supplementary?

Matt O'Sullivan (WA, Liberal Party) Share this | Link to this | Hansard source

ABS data shows that the cost of living for Australian workers, self-funded retirees and pensioners rose again in the June quarter under your Labor government. The data shows that many Australians are taking on additional jobs just to make ends meet in Labor's cost-of-living crisis. The Prime Minister said his 2023 new year's resolution was to deal with the cost-of-living crisis. Will he now admit to the Australian people that his resolution and his government's policies have failed?

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

The short answer to that question is no. The government is absolutely focused on supporting Australians through this cost-of-living crisis. We accept that people are doing it tough, and that is why we have calibrated and targeted our cost-of-living relief to those areas where we can make a difference without adding to inflation.

I think the opposition's economic narrative is very mixed up, because we have people saying we are spending too much and then we have them saying we are not spending enough. There are a whole range of opinions. We are very clear about what we have to do. We have to fix the budget and make sure it's in the shape it needs to be so we can use it for those important investments we need to make at the time we need to make them. We need to grow the economy through our agenda, particularly around fee-free TAFE, the clean energy transition and the digital economy. We need to provide cost-of-living relief where we can without adding to inflation. (Time expired)

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

Senator O'Sullivan, a second supplementary?

Matt O'Sullivan (WA, Liberal Party) Share this | Link to this | Hansard source

ABS data shows an annual rise in food prices between seven and eight per cent and an annual rise in utility prices between 12 and 14 per cent, driven by the energy bills that the Prime Minister said would actually go down by $275. Prior to the election, the Prime Minister said Australians would be better off under a Labor government. Why did the Prime Minister not tell the truth?

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

I note Senator O'Sullivan has used wages in one of his questions and used energy bills in another of his questions—both areas where those opposite either voted against it or kept wages low for an entire decade. And they now come in here and, all of a sudden, care about working people's wages. What a surprise! After a decade of—

Hon. Senators:

Honourable senators interjecting—

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

Minister, please resume your seat. Order! Minister, please continue.

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

This feigned horror at wages policy—what an absolute joke! A deliberate design feature of your economic architecture was to keep wages low.

Honourable senators interjecting—

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

Senator Watt! Senator Hume!

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

Now they're increasing; for the first time in a decade, we're seeing promising wages growth to assist people with some of those increases in the cost of living. That is our plan. We are implementing our economic plan to support households through this high period of inflation.

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

Before I call Senator Payman, I remind the chamber that interjections are disorderly. Towards the end of the minister's response then, your interjections were drowning out the minister. That's incredibly disorderly.