Tony Sheldon (NSW, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister representing the Treasurer, Senator Gallagher. I refer to the independent Reserve Bank's decision to leave interest rates unchanged at 4.35 per cent—a relief for 3.3 million Australians with a mortgage. In a statement released following the decision, the RBA board confirmed that inflation continues to moderate, and the task of returning inflation to sustainable levels is its highest priority. What is the Albanese Labor government's response to the decision taken by the independent RBA board yesterday?

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

I thank Senator Sheldon for the question and his focus on cost-of-living pressures and how we can alleviate those pressures on Australian households. It's great to get a question like that—

Hon. Senators:

Honourable senators interjecting—

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

I know. Imagine—an issue like that in this place! The independent Reserve Bank met yesterday, as Senator Sheldon said, and kept rates on hold at 4.35 per cent.

I can't hear you, Senator McKim, other than a loud kind of rabble in the corner. Interest rates have been on hold now for four months, which is welcome news, particularly for mortgagees who have been feeling the brunt of those interest rate increases over the last 18 months or so—which, of course, started under the former government when inflation, in a quarterly sense, was at its highest.

The board's statement was clear: that inflation continues to moderate in line with their forecasts but returning inflation to the target band is and remains the priority. Managing the inflation challenge in the economy remains a key priority for the Albanese government as well. What the decision yesterday shows is that good progress is being made in the fight against inflation. It has come off significantly since its peak in 2022, and I think demonstrates that the work we're doing on the fiscal side in supporting the work that the bank has been doing in trying to better balance demand and supply across the economy.

When you look at what we've been able to do across the budget—the first surplus in 15 years, which is very important in terms of managing inflation. We've turned a $78 billion deficit into a $22 billion surplus, and at the same time we've been able to do that we've been able to make important investments to alleviate and reduce some of the pressure people have been feeling on their household budgets, whether it be energy bill relief— (Time expired)

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

Senator Sheldon, your first supplementary?

Tony Sheldon (NSW, Australian Labor Party) Share this | Link to this | Hansard source

The RBA's decision to leave interest rates on hold this month will help Australian households dealing with cost-of-living pressures. The minister has said previously that the Albanese Labor government is working hand in hand with the independent Reserve Bank. How is the government's economic and budget strategy tackling inflation and how is the government's approach delivering relief for Australians?

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

I'm sure Senator McKim will get his opportunity later. The approach the government has taken is to make sure that we are not increasing pressure on inflation and that we are reducing the pressure on inflation across the economy, but that we are able to provide households and Australians with cost-of-living relief. We've seen from ABS data where our policies have directly reduced CPI, whether it be in our rent assistance or our energy bill relief, and that is important in helping this fight against inflation. We've had other areas where we've made targeted investments—for example, in making medicines cheaper, in supporting families with childcare costs, and with our housing plans to increase the supply of housing across Australia.

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

Senator Sheldon, your second supplementary?

Tony Sheldon (NSW, Australian Labor Party) Share this | Link to this | Hansard source

It's clear that the Albanese Labor government is focused on working for all Australians in strengthening the economy and tackling inflation. Why is the upcoming May budget an important opportunity to continue delivering the investments our economy needs while fighting inflation?

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

Like our first two budgets, the May budget will be responsible, affordable and suited to the economic circumstances of the time. Our economic and budget strategy revolves around the three key areas of providing cost-of-living relief without adding to inflation, repairing our budget and the supply chains that we've seen, in particular, over the last couple of years, and driving our growth agenda—our economic reform agenda—to drive the future economy.

The centrepiece of the budget will be those tax cuts that have passed the parliament. They are a very important and very significant investment to make sure that people are keeping more of what they earn, and that will be a key part of the budget. Those measures will flow from 1 July. We will do whatever else we can responsibly, within the budget parameters, to support Australian families. (Time expired)