JIM CHALMERS:
Inflation is the biggest challenge in our economy, and it's the biggest focus of the Albanese Government's economic plan. Our economic plan is all about addressing the inflation challenge in our economy. We do that by providing responsible cost‑of‑living relief without adding to inflation. We do that by repairing our supply chains and our workforce and reforming our economy, and we do that by showing restraint in a responsible Budget. So our three point plan to address inflation is all about relief, repair and restraint. And the ratings agencies and the international organisations have backed that plan enthusiastically. It's the right plan for the combination of challenges that we confront as a country, in our economy, particularly when it comes to this inflation challenge.
Now, obviously, the Reserve Bank has released some forecasts at the end of last week. Both the Reserve Bank and the Treasury expect that inflation has peaked towards the end of last year, and is beginning to moderate but inflation will be higher than we'd like for longer than we'd like. This is a persistent problem in our economy, even as we get to the other side of the peak of inflation. Now, these pressures are coming at us from around the world but they're being felt around the kitchen table. We understand that, and that's why we've got a three point plan to deal with and address the inflation that is in our economy. We have received and published today, really encouraging signs that the energy market expects our energy plan to do its job. Our energy plan will take some of the pressure off inflation in our economy, and that's a very encouraging sign. These are estimates from the market for prices in 2023. We expect these prices to come off a bit compared to what they were going to be, and that's very encouraging. We're not getting carried away by it. We know that some of the big price hikes from last year are still flowing through into the economy and into energy bills, but this is a very encouraging sign. Our energy plan is expected to work, we're seeing some of the edge come off some of these price rises for the rest of the year ‑ that's a very good thing. We want to see our energy plan take pressure off inflation in our economy, and these are encouraging signs that it will. Obviously when it comes to our energy plan, the fact that the Opposition voted against our energy plan shows that they voted for even higher inflation in our economy. Both the Reserve Bank and these new figures today show that our energy plan is expected to work in 2023 to take some of the sting out of these energy price rises, which risk doing such damage to household Budgets and to small businesses as well. Our energy plan is a key part of our plan to address inflation in our economy.
I've asked the Reserve Bank review panel to provide me with their report on the 31st of March. I will respond to it in initial terms, and release that report from the RBA review panel between the 31st of March and the Budget in May. I've asked for it to be provided on that day, the 31st of March. I will release it and respond in initial terms between then and the Budget. It's important to remember what the Reserve Bank review is and what it isn't. It is a really important opportunity for us to look at the structures and processes and objectives of the Reserve Bank, and make sure that we've got world's best practice going forward. It's never intended to be about one person or one decision or one set of decisions, and it's not intended to mess with the independence of the Reserve Bank. It's a really important opportunity. I look forward to receiving the report on the 31st of March and responding soon after that. I met with the RBA review panel on Friday, I asked for their report on that date. And I discussed a number of important issues that they are grappling with as they finalise and consult on their very important report.
I've also received the five yearly review of the Productivity Commission into Australia's productivity performance, and their suggestions about policy changes going forward. This Productivity Commission report is almost 1000 pages long. It's nine volumes and there are more than 70 recommendations across a number of governments. I'll take the time to work my way through it, to consult with relevant colleagues. I'm looking to release the Productivity Commission report in March if I can. I'm not obligated to release it until the end of May under the legislation, but I'd like to try and release it in March instead, so that we can have this really important national debate about why our productivity performance has flatlined in recent times, and what we might be able to do about it. Now, obviously, the Government won't pick up and run with every single recommendation from the Productivity Commission, but I think there will be areas of common ground. I think there will be opportunities to align our economic plan with some of the directions put forward by the PC. I look forward to this big national debate about our productivity performance. I look forward to releasing the Productivity Commission review. Once I've been through it and consulted with colleagues, ideally, I can release it earlier than the end of May. Ideally, I will release it in March, and when I do, I think it will be an important contribution.
Now, I've been asked to cover off on a bunch of other issues as well. First of all, Tropical Cyclone Gabrielle. The Tropical Cyclone Gabrielle has passed Norfolk Island and been downgraded ‑ that's a good thing. We're told that there wasn't substantial damage on the island, again, a very good thing. But obviously, the Commonwealth agencies stand ready to provide any support that is necessary. Minister Murray Watt is obviously monitoring the situation very closely, but we're pleased to see Tropical Cyclone Gabrielle pass the island. We're pleased with reports so far, that there hasn't been substantial damage ‑ that's a good thing ‑ but we stand ready to do whatever is necessary for the people of Norfolk Island.
Next, when it comes to the Voice, tomorrow was a really important anniversary ‑ the 15th anniversary of the apology to the Stolen Generations by Prime Minister Rudd, was a really proud and uplifting moment in the history of our country. And we have another opportunity with the Voice, to move forward together in the spirit of respect and unity. The Voice is overwhelmingly about two things ‑ the Voice is about recognition and it's about consultation. It's about making a tangible difference to the lives of First Nations people by giving them a say in the issues that affect their communities. Australia can't afford to miss this big, generous opportunity to move forward together in a spirit of unity and respect. We want to see this led by the people and not by the politicians. Now the 15th anniversary of the apology to the Stolen Generations is also a reminder, Peter Dutton has been on the wrong side of history before and we don't want to see him get on the wrong side of history again. Again, Peter Dutton missed the moment last time 15 years ago and for the sake of our country and its people, we don't want Peter Dutton to miss the moment again. We genuinely want this to be a moment, an uplifting moment of national unity and respect. We want it to be all about recognition and consultation and we want it to be an important opportunity to make tangible improvements to the lives of First Nations people by giving them a say on the issues that affect their communities as well.
I'm asked to comment on the Aston by‑election. Obviously, this is not a focus of mine, I'm focused largely on our economic policy and our economic plan in the lead up to the Budget. It's worth remembering, though, that we haven't held the seat of Aston for more than three decades and an Opposition hasn't lost a seat to a government [in a by‑election] in more than a century I believe, since 1920. So we're realistic about our prospects in Aston. The history is against us in Aston. No doubt the PM and the party will have more to say about who we put forward in the seat. Obviously there will be a lot of interest in this by‑election but from my point of view, I think it's important to remember the history is against in Aston ‑ haven't held it for more than three decades, an Opposition hasn't lost a seat to a government [in a by‑election] I think, I'm told, in more than a century. The other thing I'd say about Aston is this ‑ Josh Frydenberg is absolutely stinging to get back into the Parliament but he won't have a bar of Peter Dutton's Opposition leadership. I think it's important to recognise that Josh Frydenberg, who is absolutely desperate to get back into the Federal Parliament has shown a vote of no confidence in Peter Dutton and his leadership by sitting this one out. In normal circumstances, Josh Frydenberg would be into this like a rat up a drainpipe and the fact that he isn't, I think, is a vote of no confidence in the direction that Peter Dutton is taking the Commonwealth Opposition and I think that's an important point to make.
Last thing I've been asked to touch on is the National Reconstruction Fund. The National Reconstruction Fund is an important opportunity for us to modernise our economy by broadening and deepening our industrial base, particularly in the regions and particularly when it comes to manufacturing. One of the reasons why we've got this inflation challenge in our economy is because our supply chains aren't as resilient as they need to be and the National Reconstruction Fund is designed to address that challenge in our economy. Now, we don't have an inflation challenge in our economy because there's been too much investment in our supply chains, but because there's been too little for too long. The National Reconstruction Fund is part of the solution when it comes to our inflation challenge, and not part of the problem. It's an important thing that we need the Parliament to pass so that we can invest in a more modern, broader, more diverse and deeper industrial base which will serve us better particularly at times of extreme international volatility like we're seeing right now.
JOURNALIST:
[inaudible]
CHALMERS:
Inflation is a big challenge in our economy and energy is a big part of that challenge, and we've recognised that for some time. One of the reasons I put those forecasts out in the Budget is because I wanted to focus the nation's mind on this challenge, and I wanted to do something about it and we are. I think it's really important that our energy plan is taking some of the sting out of these energy price rises in our economy. What the market has said is that it will make a meaningful difference. It will take some of the pressure off inflation by taking some of the sting out of these higher energy prices, and that's an encouraging sign.
JOURNALIST:
[inaudible]
CHALMERS:
We'll update our forecasts for energy prices in the May Budget in the usual way but what these new numbers show today, and what the Reserve Bank concluded on Friday, is that our energy policy is working to take some of the sting out of these high energy prices, which are putting such pressure on households and small businesses. It's a combination of things at work here and that's important. And in addition to these benefits that we're seeing beginning to flow in our economy, over the course of 2023, we've also got household assistance, which will flow from the Budget. That's an important part of our plans to provide responsible cost of living relief without adding to inflation.
JOURNALIST:
[inaudible]
CHALMERS:
The Treasury estimate when we put the gas cap in place was that gas price rises would go from about 20 per cent to closer to 4 per cent, about a 16 percentage point difference, and that's why we put the gas cap in place. Now obviously, we're still seeing some of the impacts of last year's higher prices flowing through in our economy. It will take some time for the gas cap to do its work in the economy but what we've seen from the Treasury, the Reserve Bank, and now the market itself, is the encouraging expectation that the Government's decisive intervention in the energy market will make a meaningful difference. We're not getting carried away by it. We know that prices are higher than people would like, but they are lower than they would otherwise be because of the steps that Anthony Albanese and his government have taken.
JOURNALIST:
[inaudible]
CHALMERS:
We're working closely with the states and territories to provide this relief in electricity bills. The point that they made ‑ when we did a heap of work over Christmas and are continuing to work hard on it ‑ is that we need the time to implement it. There's a number of implementation challenges here that we're working through. We agree on more than we disagree on when it comes to the provision of this electricity bill relief. I've said that we will come to an agreement as soon as we can. I'll obviously budget for it in May, and the benefits will flow soon after that.
JOURNALIST:
[inaudible]
CHALMERS:
The expectation of the market and the new numbers released today is that the difference in electricity prices will be somewhere between 34 per cent and 48 per cent depending on where you are in the national energy market. This is not just the expectation of the Government, it's the expectation of the market. The market is sending encouraging signs that they expect the Albanese Government's energy plan to work and will take some of the sting out of these high energy prices somewhere between 34 and 48 per cent difference to what were expecting to see.
JOURNALIST:
Is it purely down to your intervention or are there other factors at play?
CHALMERS:
Well, the most important part of these expectations is the Albanese Government's energy plan, and obviously when we took the difficult decisions that we took at the end of last year when we brought the parliament back, was because we wanted to see some of the sting taken out of high energy prices. We're encouraged to see that that is likely to be the case when you look at the expected prices for 2023. And I think the Opposition needs to explain why they voted against this energy plan and why they voted for even higher inflation. Every time the Opposition bleats about inflation, remember that they voted against this energy plan and in the process voted for even higher inflation in our economy. I think that speaks volumes about them and their priorities.
JOURNALIST:
[inaudible]
CHALMERS:
The Opposition is always looking for headlines and we're looking for outcomes. They will oppose no matter what the Government puts forward. They will oppose whatever we put forward and they're looking for excuses to have done that. They should be embarrassed about their vote in the parliament, they should be ashamed of themselves frankly, voting against electricity bill relief for Australians and for Australian small businesses. They went in the Parliament, and they voted against this price relief, which is expected to make a meaningful difference. In the process, they voted for even higher inflation, they should be ashamed of themselves for doing that. They should be embarrassed about that. We will get on with our job regardless. Thanks for that.