Perin Davey (NSW, National Party, Shadow Minister for Water) Share this | Link to this | Hansard source

My question is to the Minister representing the Treasurer, Senator Gallagher. Minister, following the budget you claimed:

The targeted cost-of-living measures announced in the budget are expected to reduce inflation, with energy bill relief … expected to directly reduce inflation by half a percentage point in 2024-25.

You and the Treasurer have both gone on to repeat this claim. Minister, the RBA's latest minutes confirm that they will look past these rebates when considering further interest rate increases and that any reduction to inflation will be reversed by 2025. Minister, do you agree with the RBA that they should look past this policy because the impact of it will be reversed?

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

I welcome the opportunity to talk about our targeted cost-of-living measures that were calibrated carefully in the budget. As we said, from 1 July this year, which was Monday this week, we have tax cuts flowing into the pay packets of every taxpayer in the country and, importantly, energy bill rebates and relief for every household in Australia, recognising that this is a big bill for most households and that we should be providing support where we can. I read the minutes of the RBA board meeting which were released yesterday, and obviously the question did not give a comprehensive analysis, shall I say, of the minutes, which were quite extensive and went through what is happening not only in the international environment but also here domestically.

I don't think it's any surprise—in fact, we dealt with this issue at estimates—that energy bill rebates were about putting downward pressure on inflation in 2024-25, and I don't think anyone has pretended otherwise. That year is the focus of that effort, and that was the evidence of Treasury, and it was my evidence. It's very consistent with the lines that the Treasurer and I have used since budget day. We believe that, whilst inflation is moderating in welcome ways, it is remaining higher than we would like for longer than we would like. We have made sensible investments to support households with some of those pressures as we get inflation back into the target range.

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

Senator Davey, first supplementary?

Perin Davey (NSW, National Party, Shadow Minister for Water) Share this | Link to this | Hansard source

The RBA minutes also revealed:

Members acknowledged that if inflation expectations were to rise materially from current levels, it could require significantly higher interest rates to bring inflation back to target …

With the latest monthly data showing headline inflation accelerating to its highest rate in six months, isn't it true that the Albanese government's latest budget has only made the RBA's job harder?

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

No, I don't agree with that. I think there's evidence from the governor about how the fact that we are running surplus budgets—not only one already delivered last year but one that we will deliver shortly—is actually assisting. So I don't agree with that. I think you are very selectively reinterpreting or providing your own analysis of the minutes. The minutes also go through arguments about maintaining the cash rate at the level it currently is, Senator Davey, so if you've read the minutes you will realise—and it is a useful document that journalists and other commentators look at—there are arguments for and against decisions that the RBA board may take going forward. I think it's useful information. It sets out the challenges that many are considering, but no; I do not agree with your question. (Time expired)

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

Senator Davey, second supplementary?

Perin Davey (NSW, National Party, Shadow Minister for Water) Share this | Link to this | Hansard source

Minister, with all due respect, will you now admit that your big-spending budget has poured so much fuel on the 'Jim-flationary' fire that, under Labor, Australians will see any tax cuts and other so-called relief gobbled up by higher inflation and higher interest rates?

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

It is interesting. I haven't heard examples from those opposite, while they criticise spending, of what spending in the 2024-25 year they don't support. Is it the tax cuts? What are the Nationals telling the Liberal Party that your position is? We know you've won on nuclear. We know you've won on divestiture powers. Here is the Australian Liberal Party actually moving policy to divest businesses. This is the world we're living in: where the Nats tell the Liberals what their policy is, and then you all come in and implement it. Is it the tax cuts that you don't support? Is it the energy bill relief that you don't support? You can't have it both ways, President. You cannot come in here, complain about spending but then not explain which of those measures you don't support.