Jane Hume

Answer from Katy Gallagher

The minister noted inflation had peaked at nearly 8 per cent in December 2022 and had since decreased to the three per cent range. She stated the government was taking responsibility for economic decisions while acknowledging global challenges. She defended cost-of-living support as targeted and non-inflationary, and accused the opposition of voting against tax cuts and wage increases while criticising the government's economic management.

Answer from Penny Wong

The minister acknowledged productivity as a long-standing challenge for governments of both persuasions since the Hawke-Keating era. She noted that productivity had fallen for seven quarters before the pandemic. She stated that the budget included 15 productivity reforms aimed at attracting investment and cutting regulatory costs by $10.2 billion annually. These measures included reducing red tape, building a single national market, modernizing energy markets, and unlocking data and AI opportunities. She confirmed that the long-run assumption for productivity growth was 1.2 per cent, which had been revised down in the first term based on Treasury advice. She did not provide a specific figure for the rate required to make up for lost productivity, instead focusing on the government's reform agenda.

Answer from Penny Wong

The minister acknowledged inflation remains a challenge but noted it is lower than when the government took office. She highlighted economic progress, including low unemployment and wage growth above three per cent for 16 consecutive quarters. She criticized the opposition for opposing tax cuts, wage increases, and cost-of-living measures. She stated the government is focused on relieving inflationary pressures and cost-of-living costs, without committing to specific fiscal policy changes in response to potential rate hikes.

Answer from Penny Wong

The minister acknowledged illicit tobacco as a serious organized crime crisis. She stated the government had allocated over $365 million to improve border detection and joint enforcement activities. The Illicit Tobacco National Disruption Group was established to target criminals. The minister emphasized the need for cooperation between states and the federal government, noting that states regulate tobacco sales. She rejected opposition proposals to reduce excise, citing concerns about increasing smoking rates and the rise in vaping.

Answer from Penny Wong

The minister guaranteed that the changes were motivated by increasing housing supply and that opposition policies would have reduced supply. She clarified that existing negative gearing arrangements were grandfathered and that incentives remained for new builds. She cited ABS data showing investor lending for new constructions rose by 27 per cent in the June quarter.

Answer from Penny Wong

The minister noted that John Setka had been expelled from the Australian Labor Party years ago, a process not subject to the five-year rule. She affirmed the government's zero tolerance for corruption, criminality, and violence in the construction industry, stating that the administrator had achieved significant progress in cleaning up the union. The minister indicated that the government would carefully consider any advice from the administrator regarding necessary changes to disciplinary powers, emphasizing that the current administration had taken stronger action than previous governments.

Answer from Penny Wong

The minister stated that the opposition had opposed energy assistance and tax cuts. She highlighted the Japanese ambassador's statement on personal trust between leaders and accused the opposition of creating a diplomatic issue through media stunts and summoning the ambassador. She emphasized the government's commitment to strengthening the strategic partnership with Japan.

Answer from Katy Gallagher

The minister stated that the government had adopted more realistic Treasury advice on productivity assumptions, rejecting the previous government's higher assumptions. She highlighted regulatory reform bills aimed at reducing red tape and improving productivity, which she claimed the opposition had voted against. She listed budget measures including building homes, modernising energy markets, and unlocking data and AI. She rejected the proposition that tax increases were lowering productivity, citing Treasury advice that budget decisions supported productivity assumptions, and criticised the opposition for constraining wages in the past.

Answer from Katy Gallagher

The minister stated that the government was delivering five income tax cuts, which the opposition had voted against. She argued that the opposition was not genuinely concerned about tax burdens given their voting record against wage increases and cost-of-living relief. The minister highlighted that the government was returning bracket creep through fairer tax cuts and the Working Australians Tax Offset. She stated that the government was focused on easing the cost-of-living burden through a better tax system, wage growth, and budget repair, contrasting this with the opposition's consistent rejection of reforms.

Answer from Penny Wong

The minister stated the government does not tolerate corruption or criminality in the construction industry. She noted that the Minister for Infrastructure had written to states regarding these issues and that she would seek further information on specific contracts. She clarified that the conduct suggested would be illegal. She added that Mr Gatto is facing charges as a result of actions taken by the administrator appointed by the government. She confirmed that federal funding agreements now include strong governance and accountability mechanisms.

Answer from Penny Wong

The minister stated that the legislation would help more Australians buy homes and deliver tax cuts to 13 million people. She indicated that the government intended to address the specific issues raised in subsequent legislation. She defended the government's record of cutting taxes for working people five times, noting that the opposition had voted against each instance. She rejected the characterisation of the policy as a 'widow tax' and highlighted government measures benefiting women, such as higher wages in care industries.

Answer from Penny Wong

The minister stated that the government had consulted with the small business sector and maintained four existing tax concessions, raising the threshold for one to include more businesses. She noted that a consultation paper on capital gains tax reforms for innovative startups had been released, with submissions open until mid-July. The minister highlighted that the government was delivering $3.8 billion in new business tax relief, including a permanent $20,000 instant asset write-off and allowing firms with sales under $1 billion to carry back losses for two years. She also mentioned increasing the turnover threshold for the 50 per cent active asset reduction capital gains tax concession from $2 million to $10 million.

Answer from Penny Wong

The minister stated the policy change aimed to address intergenerational inequity and help young Australians achieve homeownership. She clarified that negative gearing remained available for investments in new builds. The minister argued that the combination of capital gains tax discounts and negative gearing privileged investors over owner-occupiers. She highlighted that the budget included tax cuts averaging $2,800 for workers, contrasting this with the opposition's past promises of higher taxes.

Answer from Penny Wong

The minister stated that the excise reduction would flow through to users in the coming days or weeks. She mentioned that she had personally paid around $2.60 per litre recently. In response to supplementary questions about dry service stations, she cited a report from the Adelaide Advertiser indicating that fuel prices had dropped by 30c per litre in South Australia, with unleaded falling to $2.29. She criticized the opposition for focusing on leaked talking points rather than the government's actions.

Answer from Penny Wong

The minister stated that Treasury estimates indicated the excise cut could lower headline inflation by approximately 0.5 percentage points over the year ending June 2026. She defended the government's cost-of-living measures, contrasting them with the Coalition's proposal to cut the Cheaper Home Batteries Program, which she argued would have increased electricity bills for 300,000 households. She rejected the premise that the government was failing to find savings, citing the Coalition's previous record of higher deficits and taxes.

Answer from Katy Gallagher

The minister stated that inflation was lower than when the previous government left office, having peaked at 7.8 per cent in December 2022. She explained that the government's approach focused on repairing the budget, paying down debt, and providing cost-of-living assistance. She noted that the government continued to focus on inflation, productivity, and reform in the lead-up to the budget.

Answer from Penny Wong

The minister attributed high prices to the Middle East conflict, noting Iran's attacks on hydrocarbon infrastructure and threats to the Strait of Hormuz. She asserted that Australia's fuel holdings were secure and criticized the opposition for politicizing the crisis rather than focusing on national interest. In response to supplementary questions, she defended the government's spending record, challenged the opposition to specify cuts, and stated that ministers were monitoring fuel supplies and warning retailers against price gouging, with the ACCC prepared to enforce laws.

Answer from Katy Gallagher

The minister rejected the premise, stating that real wages were falling before the government took office and that the government had reversed this trend. She noted that annual nominal wages had grown above 3 per cent for 14 consecutive quarters and that real incomes per capita had increased by 2.1 per cent over the year ending in the September quarter. She argued that living standards were growing faster than in every G7 economy and that the government was focused on managing inflation and global uncertainty.

Answer from Penny Wong

The minister stated that inflation was lower than the peak inherited by the government but remained higher than desired. She attributed current pressures to a mix of temporary factors and persistent housing costs, noting that the Reserve Bank cited private demand, not government spending, as the driver. She rejected the claim that Australians were poorer, highlighting government cost-of-living measures. She refused to apologize, asserting that the opposition had consistently voted against these support measures.

Answer from Penny Wong

The minister stated that the government was actively addressing cost of living pressures through tax cuts for low and middle-income earners, significant investments in Medicare to expand bulk-billing, and substantial funding for social and affordable housing via the Housing Australia Future Fund. She attributed the current housing crisis to years of neglect by the previous government and highlighted ongoing efforts to increase housing supply.

Answer from Penny Wong

The minister highlighted the $9.3 billion National Agreement on Social Housing and Homelessness, which provides $1.8 billion annually to states and territories, and noted additional budget funding for food relief. She pointed to wage increases for minimum and award wage workers, totaling over $9,000, as well as rises in the superannuation guarantee, energy bill relief, and boosts to Medicare. She argued these measures demonstrated the government was honouring its commitments to assist households.

Answer from Katy Gallagher

The minister stated that Labor supported strengthening superannuation and ensuring good returns for members. She did not directly address the specific concern about watering down the performance test, instead affirming the government's support for super.

Answer from Katy Gallagher

The minister stated that the issue arose from the Treasurer's economic roundtable discussions regarding capital investment and flows. She confirmed the Treasurer would review the test but emphasized that any changes would not compromise the fundamental objective of securing the best financial outcomes for members. The minister noted that the government had not yet concluded its thinking on the matter and that further work was underway.

Answer from Katy Gallagher

The minister defended the budget, highlighting two budget surpluses and a reduction in debt by $177 billion. She stated that the budget included cost-of-living relief, tax cuts, Medicare support, and energy bill assistance. She contrasted this with the opposition's record, noting their previous opposition to tax cuts and their current proposal for nuclear power, which she claimed would require significant spending cuts.

Answer from Penny Wong

The minister criticized the opposition's credibility on public service issues, citing previous cuts under the Liberal government. She explained that the budget forecasts used the same methodologies as the former government, with entities forecasting their own wage and salary expenditures. She stated that the opposition's claim of a 'black hole' was misleading and contrasted it with the opposition's proposed nuclear power plan. She reiterated that the approach to APS wages was consistent with past practices and challenged the opposition to specify where their proposed cuts would come from.

Answer from Penny Wong

The minister stated that the number of small businesses had increased to a record 2.6 million. She highlighted $640 million in targeted support, including energy bill relief which the opposition voted against. She noted updates to Commonwealth Procurement Rules to increase contract shares for small businesses and investments in cyber support.