Jess Walsh (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Finance, Senator Gallagher. Tomorrow the ABS will release the national accounts for the June quarter, providing the most up-to-date snapshot of how the Australian economy is performing and how Australian households and businesses are responding to current conditions. Can the minister please update the Senate on the challenges facing our economy and how the Albanese government's economic plan is working to ensure that Australians are provided with targeted and carefully calibrated cost-of-living relief investments, and how important it is to support economic growth now and into the future and to repair the budget over time?

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

I thank Senator Walsh for the question and for her leadership of the Senate Economics Committee. It's good to get a question on the economy. The government's highest priority is of course rolling out billions of dollars in cost-of-living relief—

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

Minister, please resume your seat. Order!

Senator McKenzie. Order! Minister Gallagher, please continue.

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

in ways that take pressure off inflation and support the economy. Today during question time, of course, we will have the Reserve Bank decision, but the national accounts will be released tomorrow, and we will expect to get an assessment of the impacts of the increases in interest rates, the high-but-moderating inflation and some of the continuing global uncertainty and the impact that is having on the economy. We are seeing welcome progress in the fight against inflation. Higher interest rates that started increasing in May last year, before the election, have impacted, particularly on mortgaged households, and are slowing the economy. National accounts are likely to show the combined impact of the higher interest rates and that global uncertainty.

We understand that Australians are doing it tough, which is why our main priority focus has been on providing targeted cost-of-living relief in the way that doesn't add to inflation and in a way that the budget can afford. That cost-of-living package includes providing assistance across the board in support for those who receive rent assistance; for those who are using the childcare, early education and care system; for those accessing cheaper medicines, or needing scripts filled every month, or every two months under some of the changes recently; the fee-free TAFE, which has been such an incredible success; and of course support to reduce the impact of energy increases through energy bills.

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

Senator Walsh, a first supplementary?

Jess Walsh (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

How important is it that the government balances the challenges facing the economy, both here and globally, while at the same time working to strengthen the economy and support Australian households, particularly those that are doing it tough? How will the government's targeted cost-of-living relief measures support households and the economy in the coming months?

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

I thank Senator Walsh for the supplementary. We've seen in recent economic data that Australians are pulling back on their spending, dipping into their savings, and we will see a lot of the cost-of-living relief measures flow into the economy over the next few months. Some of them started on 1 July but some of those important supports around income support are starting in September. I would say that the inflation data for July was very instructive. The ABS showed clearly the impact that our energy rebates are having on energy bills for people in contributing to CPI. If we exclude the impact of rebates from the 23 July figures, electricity prices would have recorded a monthly increase of 19.2 per cent as opposed to six per cent. Let's remember, who voted against those rebates? All those over here. That is right. All of them voted to keep electricity bills higher than they needed to be.

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

Senator Walsh, a second supplementary?

Jess Walsh (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

The final budget outcome will be published at the end of this month, and for the first time in 15 years the government will deliver a budget surplus. Why is the government's fiscal strategy so important when it comes to supporting the economy going forward?

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

I thank Senator Walsh for that question. We have flagged through the budget and indicated that we were expecting a surplus for the 2022-23 year. It will come in significantly higher than was forecast at this year's budget, and we will be the first government in 15 years to actually deliver a budget surplus—not promise one, not get mugs printed, not run around saying how great we are that we expect to deliver one but actually deliver a budget surplus, reduce the amount of debt we have to borrow and reduce interest payments for a generation over time because of our fiscal management.

Opposition Senators:

Opposition senators interjecting—

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

Order! Minister Gallagher, please continue.

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

I know they hate it, President, but we've returned 87 per cent of tax receipt upgrades to the budget, we found $40 billion of savings across two budgets. How many did you find? Zero. There were zero savings from those opposite. These careful steps mean we will deliver a strong budget surplus for the 2022-23 year.