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. Households are facing higher interest rates for longer because Labor has failed to tackle homegrown inflation. Last week the Treasurer blamed the RBA for 'smashing the economy'. Why is the Treasurer obsessed with fighting everything and everyone except inflation?

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

There were so many factual things wrong in that question; I don't really know how to approach it. On day one we inherited an inflation challenge with a six in front of it. Remember that? The highest quarterly growth in inflation was under the last quarter of your government. But I am proud to work with a Treasurer whose 100-per-cent focus has been on making the right economic decisions for the Australian people from day one.

As the national accounts show, the decisions that we took and have taken over the last two years to get the budget in better shape, to deliver two surpluses—something that those opposite were unable to do in a decade—to find savings, to lower the Commonwealth's debt, to lower the interest on that debt, to provide cost-of-living relief where we can without adding to the inflation challenge, and to put in place investments that support future economic growth have been the right ones for this economy, and that was clearly shown in the national accounts. Those opposite have already announced $315 billion in cuts that they would like to make to public spending. If those opposite were in power, based on the decisions that they've made clear to the Australian people, this economy would be in recession.

Now, they might want that for political purposes, but we have taken the right decisions for the right time. Our economy continues to grow. That growth is weak. We are supporting that growth with appropriate investments across the economy, and we will continue to do so.

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

Last week, the former Treasurer, the Treasurer's former boss and the Labor Party national president, Wayne Swan, told the Today show that he was 'very disappointed' in the Reserve Bank and that it was 'punching itself in the face'. Do you agree with this assessment, Minister, and does the Treasurer think that this kind of language is an appropriate way to speak about the independent body, the Reserve Bank, and has the Secretary to the Treasury raised this language with the Treasurer?

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

There was a lot in that too. I use my own language when I describe the economy and some of the challenge that we're seeing in the economy. I used my own language and, indeed, I have used very similar language to that which the Treasurer used. Obviously, those opposite have been asleep, because it's like they first heard this last week when it appeared on the front page of a daily paper. I used my own language.

It is no secret that growth is weak because interest rates have been lifted. That is the effect. That is factual. That is a point of fact. We have similar objectives to the Reserve Bank. We have different jobs to do but a similar objective: getting inflation back. But our job is also to support households during this time, which is why we've got our cost-of-living relief, which those opposite have opposed.

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

Minister, why does the Labor Party think it's acceptable to blame-shift onto the independent RBA in this way, when all they're doing is clearing up after your economic mess? Is this kind of aggressive language really appropriate for senior representatives of Labor?

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

I don't believe the Reserve Bank puts it in the way that you have just put it there. In fact, the Reserve Bank has acknowledged that the decisions that we are taking, such as delivering a surplus, are actually helpful at this time. Two surpluses delivered, savings found, lower debt, making appropriate cost-of-living investments where we need to—we work hand in hand with the Reserve Bank. They have their job to do.

But it is no secret that higher interest rates are having an effect on household consumption, and that's been reflected in the national accounts. For a treasurer or a finance minister to make that point of fact is not unusual. Inflation is moderating in welcome ways. Again, I remind those opposite who are so shocked about it now: you must have been absolutely terrified when it had a six in front of it under your watch.

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

My question is to the Minister for Finance, Senator Gallagher. Last week's national accounts confirmed what we know: that consumption is low and households are under pressure. It also confirmed that the Albanese Labor government's economic plan to fight inflation whilst providing cost-of-living relief is the right one for the times and is one which supports growth in the economy. Can the minister outline how our responsible and balanced approach is helping Australians doing it tough? What additional cost-of-living relief is rolling out in September to further assist households?

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 and for her assessment of the national accounts. The national accounts show the challenges facing the economy. They also support the Albanese government's balanced plan to fight inflation while helping those who are doing it tough. The accounts confirm the impact of global economic uncertainty, higher interest rates and persistent—but moderating—inflation on the Australian economy in the June quarter. The data shows Australians are continuing to limit their spending, with household spending under pressure. This clearly demonstrates that the approach we took in the budget was the right one in response to these difficult conditions. It gives us more confidence in the economic judgements we've made, but we're not complacent about the soft landing that we are working towards.

Critical to that approach is the government's rolling out of more cost-of-living relief for Australians through September—as Senator Walsh outlined in her question—and providing more money to help pay the rent, more help for people on payments and cheaper medicines for more Australians. From September, the maximum rate of Commonwealth rent assistance will increase by a further 10 per cent. We're finalising the rollout of 60-day dispensing with additional medicines being made available, bringing the total to almost 300. We're extending the higher rate of JobSeeker to single recipients who have an assessed partial capacity to work less than 15 hours per week, delivering at least an additional $54.90 a fortnight. Payments are being indexed for people on JobSeeker, the age pension, the disability support pension, the carer payment and the parenting payment on top of the Commonwealth rent assistance increase. This is on top of new data that shows that Australians have saved more than half a billion dollars since the Albanese government introduced cheaper medicines.

We know that there's more to do in the fight against inflation, and we acknowledge that. That's why we're rolling out more responsible cost-of-living relief from September, whilst at the same time turning big Liberal deficits into Labor surpluses— (Time expired)

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

Senator Walsh, first supplementary?

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

It's clear that the Albanese government's balanced and responsible approach to the budget is delivering support for Australians while ensuring the economy is resilient enough to weather the challenges we're facing. Can the minister outline the other ways this approach is benefiting Australians and supporting our economy, such as creating almost one million jobs, delivering the first surplus in 15 years—in fact, back-to-back surpluses—as well as record women's workforce participation and the fastest wage growth since 2009? (Time expired)

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 question. Employment is up from 13½ million in May 2022 to 14½ million in July 2024. The participation rate is at a record high of 67.1 per cent, up from 66.3 per cent. The gender pay gap is down to a record low of 11½ per cent from 14.2 per cent. Full-time employment for women is up from 3.6 million to 3.9 million. Manufacturing jobs have risen from 834,600 to 905,700. Long-term unemployment has dropped. Industrial disputes have fallen sharply. Annual wage growth is up. Wholesale electricity prices have halved. Gas prices have dropped. Private business investment is up. Small businesses have grown. We've turned a $78 billion deficit into a $22.1 billion surplus and we've got another one to come.

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 Albanese government has delivered a range of supports, from cheaper medicines and energy bill relief to tax cuts for every Australian taxpayer. We know that these measures are directly helping Australians manage the cost-of-living challenge. Can the minister explain how the economy would have responded had these government supports and essential services not been in place?

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

While we're delivering relief to help with those costs of living, the Leader of the Opposition and his colleagues are planning cuts to essential jobs and services. The opposition is planning huge cuts to housing during a housing shortage and won't come clean on hundreds of billions of dollars of secret cuts to come.

In the third year of a three-year term, the coalition has no costed or credible economic policies—just a plan for savage and indiscriminate cuts. Cuts don't solve a housing shortage, they don't get power prices down and they don't strengthen Medicare. We think it's time for the opposition to come clear on what all those cuts will be and where they will come from. We know, based on the voting record of those opposite, that the coalition want higher power prices, higher grocery prices, higher housing prices, higher taxes, lower wages and, now, $315 billion in secret cuts.