Jane Hume (Victoria, Liberal Party, Shadow Minister for the Public Service) Share this | Link to this | Hansard source

My question is to the Minister representing the Treasurer, Senator Gallagher. Last week, the RBA confirmed that struggling Australian households should not expect a rate cut in interest rates this year. The RBA's chief economist told the Senate Cost of Living Select Committee last week that the board needed to see softer growth in public spending before it could cut rates, but I understand that the Labor government's spending has increased by $315 billion, and in response the RBA has more than doubled its forecast for government spending. Why are you making decisions that are keeping interest rates higher for longer and costing Australian families who are already doing it tough?

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

I thank Senator Hume for the question, and I am pleased that Senator Hume used the figure of $315 billion, because, as Senator Hume would know, a significant component of that is automatic indexation for pensions.

Jane Hume (Victoria, Liberal Party, Shadow Minister for the Public Service) Share this | Link to this | Hansard source

Which is inflation.

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

So you're going to cut pensions, are you? You're going to cut pensions. There we have it. Pensions are going to be cut. Senator Hume has just confirmed that pensions will be cut. I wasn't expecting that, but Senator Hume has now confirmed that that is their approach. In that $315 billion, there are investments in Medicare, so that's going to be cut too, I presume. The energy bill relief, the money that we're putting in to ensure that childcare costs are cheaper—childcare costs will come down 11 per cent with our investment. Are they going to be cut? This is where you can't talk out both sides of your mouth, like they do every single day. They complain about spending, but they won't explain what they are going to cut if they were given the chance.

As the RBA governor said last week, when she confirmed that we were doing the job we needed to do and they were doing the job they needed to do—let me quote for you, if you hadn't heard, what the Reserve Bank governor said:

… governments have job to do and I have a job to do. My job and the Reserve Bank's job is to get inflation down. The governments have a different job. Their job is … to get inflation down, and they acknowledge that, but it's also to provide services and infrastructure for the Australian people.

Unless of course you have a Liberal government, in which case you cut those services and infrastructure. She goes on to say:

So, they need to do that at the same time as they need to focus on keeping inflation down—

here it is—

My personal view is that they're doing what they can do in that area and I'm doing what I can do in that area.

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

Senator Hume, first supplementary?

Jane Hume (Victoria, Liberal Party, Shadow Minister for the Public Service) Share this | Link to this | Hansard source

The Prime Minister last week said that his policies would put downward pressure on inflation. But the RBA's chief economist told the Senate Cost of Living Select Committee:

In terms of being a sustained return to target, that's not something we can see coming from those particular policies.

Does the government accept the advice of the RBA's chief economist?

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

I think it's all covered in the Statement on monetary policy, where the bank does acknowledge that energy bill price relief will put downward pressure on headline inflation. But underlying inflation, which is what the shadow Treasurer has focused on and says is the more important measure, has moderated for six consecutive quarters. For six consecutive annual quarters we have seen moderation in underlying inflation. If those opposite are cross and losing their minds over inflation with a three in front of it, imagine how furious they must have been at themselves when it had a six in front of it? Imagine! At the point that government was handed over, inflation had a six in front of it, and you had a budget which spent $40 billion. They are the measures and they're decisions you took. When inflation was the highest, you went on a spending spree. (Time expired)

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

Senator Hume, second supplementary?

Jane Hume (Victoria, Liberal Party, Shadow Minister for the Public Service) Share this | Link to this | Hansard source

Last week the ABS confirmed that the cost of living had increased for working Australian households by 6.2 per cent in the last year alone. Since the election, real disposable income has fallen by 7.8 per cent per person. The cost of living is skyrocketing under this government. Why is Labor relying on spin and tricks during this cost-of-living crisis? Why don't you have a plan to sustainably reduce inflation?

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

Inflation is moderating. It continues to moderate. That is what the bank says in its statement on monetary policy. It's what the Treasury forecasts say. The opposition are again talking out both sides of their mouths, not wanting to spend but then asking, 'What's your actual plan?' We have delivered tax cuts for every taxpayer. We've halved inflation since coming to government. We've got record jobs growth. We've doubled wages growth, and do you know what? We've—and this one must really hurt those opposite—turned significant Liberal deficits into two Labor surpluses. That is what we are doing. The bank has acknowledged that running surplus budgets is helping in putting downward pressure on inflation. We inherited inflation with a six in front of it. Not every taxpayer was getting a tax cut. We've turned all that around, and we are delivering surpluses at the same time.