THE SENATE
QUESTIONS WITHOUT NOTICE
Cost of Living
Date: Wednesday, 18 October 2023
Senator KOVACIC (New South Wales) (14:54): My question is to the Minister representing the Prime Minister, Senator Wong. In minutes released yesterday from the Reserve Bank's 3 October meeting, the RBA warned: 'Some further tightening of policy may be required should inflation prove more persistent than expected.' With the possibility of a further rate rise on top of rates already at their highest since April 2012, will the Albanese Labor government take full responsibility should there be another increase in interest rates?
Senator WONG (South Australia – Minister for Foreign Affairs and Leader of the Government in the Senate) (14:55): Thank you to Senator Kovacic. I would make the point that obviously we are deeply concerned about inflation. You would have heard the Prime Minister, the Treasurer, the Minister for Finance and others being very clear about why the inflation challenge is the primary focus of our government and why we are seeking to roll out cost-of-living relief in a way that doesn't add to inflation. Inflation certainly is more persistent around the world than we would like. We recognise that inflation is moderating in our economy, but obviously we are not immune to the global trends.
I would make the obvious political point, in response to the obvious political question, that the decisions of the Reserve Bank are decisions of the Reserve Bank. It is independent and it makes its own decisions. What we can do in government is to continue to invest in the future to address inflation and to seek to make progress on those things where we are able to. There is some welcome progress—not as much as we all would want, but there is welcome progress. We know that quarterly inflation peaked in the March quarter of last year, before the election. We also have the first surplus in 15 years, because of our responsible economic management. There was a $100 billion turnaround which resulted in a $22.1 billion surplus for the last financial year as compared with forecasts inherited from the former government. It's the biggest nominal budget improvement in Australia's history.
THE PRESIDENT: Thank you, Minister. Senator Kovacic, first supplementary?
Senator KOVACIC (New South Wales) (14:57): The RBA also noted that the rise in retail petrol prices could continue to underpin inflation over coming months and could 'influence households' inflation expectations'. Can you outline specifically what your plan is for Australians who may soon be unable to pay their mortgage?
Senator WONG (South Australia – Minister for Foreign Affairs and Leader of the Government in the Senate) (14:57): I will first make a point in relation to petrol—and I think I had this question yesterday. Petrol prices here in Australia are primarily driven by the global market and by the Australian exchange rate. That was the case under your government—although obviously you came after the election, Senator. But that is the case under governments of both political persuasions. With that response, I want to make sure that I'm very clear that we understand how difficult the higher petrol prices are for families, particularly those for whom long commutes are a necessity. I would also say that we have asked the ACCC to regularly monitor and analyse fuel prices. Again, that analysis confirms that the international benchmark price and the value of the Australian dollar are the primary drivers of— (Time expired)
THE PRESIDENT: Senator Kovacic, second supplementary?
Senator KOVACIC (New South Wales) (14:58): Prior to the election, the Prime Minister promised Australians cheaper mortgages, along with cheaper fuel, a $275 cut to power bills and real wages growth. Instead, under Labor this cost-of-living crisis has gone from bad to worse. When will the Albanese government take full responsibility and deliver a real plan to reduce the cost of living, just as the Prime Minister promised that he would?
