Helen Polley (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister representing the Treasurer, Senator Gallagher. In May 2022, the monthly rate of inflation was 6.1 per cent, and last month it was recorded at 3.4 per cent. Since taking office, the Albanese Labor government has had a consistent focus on reducing inflation and providing targeted relief from the cost-of-living pressures faced by Australians. Minister, how have the measures delivered by the government to date helped to provide cost-of-living relief while not feeding inflation? What economic headwinds continue to persist which the government is factoring in ahead of the May budget?

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

I thank Senator Polley for the question and for her interest in the upcoming budget. It's an important part of the parliamentary year. The Treasurer has said, and I think those of us on this side understand, that, whilst we're making welcome and encouraging progress against inflation, our fight against it continues and we recognise that people remain under pressure. Quarterly inflation is now around a third of the 2.1 per cent it was when we came to government in May 2022. This is incredibly welcome progress in the time that we've been in government. As you identified in your question, Senator Polley, monthly inflation is much lower now than what we saw at the election. We will have new monthly inflation numbers tomorrow, but the downward direction of these numbers is clear.

The ABS also made it clear in the data that they have released that our policies on rents and electricity and our investments in early childhood education have directly reduced inflation by half a percentage point. This goes to the point we've been making about fiscal and monetary policy working together to put downward pressure on inflation. The IMF and the OECD have recognised our inflation-fighting efforts too, and the RBA has confirmed that fiscal and monetary policy are working in the same direction.

Real wages are now growing for the first time in nearly three years and ahead of the forecast. They were going backwards by 3.4 per cent at the time of the election. This means that Australians are earning more, and from 1 July our tax cuts mean that they will keep more of what they earn too. Of course, we're doing a range of other investments on top of the tax cuts, whether it be energy bill relief, making medicines cheaper, making it easier to see a doctor, cheaper child care, building more social and affordable housing, and fee-free rent.

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

Thank you, Minister. Senator Polley, first supplementary?

Helen Polley (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

Thank you, Minister, for that good news. Labor's tax cuts will roll out from 1 July this year and form the centrepiece of this government's cost-of-living relief package. Why is it so important that Australians keep more of what they earn, and why did the government take the decision to provide support to all taxpayers, not just some?

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

I just want to correct the record, because I meant 'fee-free TAFE' at the end of my previous answer. There are just so many measures that we're doing to alleviate cost-of-living pressures, and rent assistance was another one of those, but I put the two together.

The previous government had a policy of keeping wages low. We've taken a different approach, and you saw that during the election campaign, with the Prime Minister leading the way on making sure we were arguing for wage increases for the lowest paid workers. Now, with our tax changes, all Australian taxpayers will get a tax cut because we want all Australians to keep more of what they earn. Labor's tax cuts will be a centrepiece of the May budget, and, of course, we are in a position to provide these tax cuts because of the careful economic management that we have undertaken.

I'm proud today of the hard work that we've done. I know those opposite hate it, but gross debt is lower than when the Liberals were in charge, real spending growth is lower and inflation is lower. We've delivered the first budget surplus in 15 years and wages are higher. (Time expired)

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

Senator Polley, second supplementary?

Helen Polley (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

Thank you, Minister. You and the Treasurer are working hard to finalise the upcoming May budget, so we thank you for your hard work. I understand that it will be a budget that balances the fight against inflation—

Hon. Senators:

Honourable senators interjecting—

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

Order! Order! Senator Polley, resume your seat. Order across the chamber. Order! Order! Interjections across the chamber are disorderly. Senator Polley, the last I heard was 'budget'. Would you like to repeat from there, thank you.

Helen Polley (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

I understand it will be a budget that balances the fight against inflation with a need to gear our economy for growth. Why is it crucial that we make the necessary investments and drive growth in the economy and create more jobs for Australians, unlike those opposite?

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

I thank Senator Polley for that very good question. These are the issues before the ERC, and I do note that the only way to wake up the opposition is to say something nice about what's happening or something good about the economy. All of a sudden, awake they go. Whoa! I haven't heard a peep out of them, and then, whoa, they're awake! They just can't bear it, can they? Gross debt lower, real spending growth lower, inflation lower, the first surplus in 15 years, wage growth higher, jobs growth higher—that really gets them going.

Labor is the party of good economic management. Our record proves this—

Hon. Senators:

Honourable senators interjecting—

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

There we go! There we go! They are awake, President! We thought they were all asleep, but they really were awake. These are all the issues that we are focusing on in putting the budget together. Our budget will be a budget for the times. It'll have those tax cuts getting to every taxpayer, and we'll look at other sensible investments where it's affordable and we're able to do so. (Time expired)

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

Order! Senator Ciccone, it is not appropriate to bang the desk.