Doorstop with Shadow Treasurer Angus Taylor, Parliament House
7 May 2024
ANGUS TAYLOR:
Well, the Reserve Bank, of course has just handed down its decision for the month. And whilst they've held interest rates as they were, they have also given us updated forecasts. And these are truly grim reading, truly grim reading. Because what we're seeing is the Reserve Bank has made it very clear that it's expecting to see inflation to stay higher for longer, and all the major indicators in our economy are moving in the wrong direction. So as I said, their inflation forecast is up for the next 12 months. And in fact, we know we have the most persistent high inflation of any advanced country in the world. The Economist has told us that on multiple occasions. We also know that working families in Australia have seen an increase in their prices, over the time Labor has been in power, of 17% and this is set to continue in the coming months, according to the Reserve Bank. The Reserve Bank has also downgraded its growth forecast and we are seeing right now, an economy that has ground to a halt on a GDP per person basis. And people are feeling that on the ground. We see the sluggishness of the economy in the way households and businesses are having to deal with their economic circumstances right now. Meanwhile, they've made the call that we're going to see lower real wages than they had expected. We've seen for working families, a reduction in real wages of just over 7.5% since Labor came to power and the Reserve Bank expects that in the second half of this year real wages will be flat again. So we are failing to see the relief that this government has consistently promised, we're seeing the exact opposite indeed. And the Reserve Bank has also pointed out that productivity is going to be slower than had been expected. And of course, we've seen the government wrapping the economy in red and green tape in the last 18 months or so. And there's no sign of any improvement in productivity and I'll tell you why this matters. It means that you cannot deliver prosperity, you can't restore people's standard of living whilst productivity is moving in the wrong direction. It is very clear from all of this that Labor's homegrown inflation is rampant. The Reserve Bank hasn't been able to address this and frankly, if the Reserve Bank has the foot on the brake, it's necessary because this government has had its foot on the accelerator. And frankly, what you end up with, with that situation, is a situation where you wreck the engine. And that's exactly what we're seeing in the Australian economy right now. Now, we need a budget next week that fights inflation first. Until you beat inflation, the rest simply can't follow. And this government has consistently failed to put in place the policies that beat inflation. It's moving in the wrong direction, it's persistent, it's amongst the highest of any country in the advanced world. And I'll hand over to Jane, to talk more about what we expect to see in the budget and what we need to see in the budget, if we're to have the economic circumstances, the restoration of Australians' standard of living that we all want to see.
JANE HUME:
Thanks Angus. Isn't it extraordinary that this Labor government has spent an additional $209 billion over the last two years and yet Australians are worse off than they were two years ago. The news today out of the RBA is cold comfort to those Australians that are really doing it tough right now, that are seeing their real disposable income go backwards by 7.5% over the last two years because of high inflation, high interest rates and high taxation. The RBA told us today that inflation is staying higher for longer. It told us that productivity is too low. It told us that growth is lower than anticipated, and that real wages are remaining flat. Now the question for Jim Chalmers is going to be, can he deliver a budget next week that can respond to these revelations of the RBA today? Can he deliver a budget that is going to bring us back to basics on our economics, restore our budget discipline and our fiscal responsibility and our honesty. Put those guardrails back in place like tax to GDP ratio, like a medium term objective of a structural surplus rather than a windfall surplus. Can he tame inflation and restore our standard of living by getting those natural Labor urges of spending and spending more under control? And can he restore prosperity and opportunity for all Australians? Because quite frankly, the only way that you can sustainably restore prosperity, restore opportunity, and restore our quality of life and our standard of living is to tame inflation, to get inflation under control, something that this government has failed to do time and time again. Most importantly, the only way that we can get our cost of living under control is to tame inflation. It is the only solution for all those Australians that are doing it tough. Today's news is not good news for ordinary Australians. They're feeling the pinch in their pockets. They're feeling poorer, and there's a good reason for that. It's because they are poorer. They're poorer than they were two years ago, they're looking to the government for answers and they're getting none.
JOURNALIST:
Getting down to brass tacks then, I mean, in terms of, the government says a lot of the spending that's coming in this budget is unavoidable. What sort of spending do you think they should be avoiding specifically?
ANGUS TAYLOR:
Well, we've been very clear about a lot of spending that Labor hasn't needed to commit to. $45 billion of legislation they’ve pushed through, that we’ve opposed, because that’s not spending that we need for now. I mean, they spent $450 million on a failed referendum. They're spending money on supporting grants for the CFMEU. The Treasurer himself, he's spending $40 million on a spin unit. They've added 19,000 public servants since they came to power. Public servants have an important role to play but we don't need 19,000 more. So, this is the sort of spending that we think is unnecessary. $209 billion, that’s $20,000 for the average Australian household. Now we'll wait and see what's in the Budget. I'm not going to preempt the Budget, all I would say is that the test for the Budget is, are they able to show restraint? We're not talking about scorched earth here, we’re talking about restraint. It's a sensible restraint. Governments have done it in the past. Now, they have thrown away their fiscal rules. This is the first, most important point and Jane made this point. If you've got no fiscal rules, then you're not going to be restrained. Households are having to be restrained right now, they have no choice. It's time for the government to show that sort of restraint. In fact, we're seeing all the signs that the government is addicted to spending and will continue to be in the lead up to the election.
JOURNALIST:
Shadow Treasurer, just on the inflation forecasts, they're going to be higher at the end of this year than they are at the moment, by these figures. How much do the tax cuts play a role in that? How much do you think the tax cuts coming into place in the middle of the year play a role in that?
ANGUS TAYLOR:
Yeah, it's a good question. If you want a strong low inflation economy, then you've got to show spending restraint. You've also got to give people on the supply side, the incentive to get out there and go hard. Those two things go hand in hand. We learnt that from the 70s and 80s. The key thing to do is to show the spending restraint, as Jane said. $209 billion of spending, let’s see how much more there is in this budget. They've spent the majority of the income. Don’t believe the Treasurer on this, the $319 billion windfall, tax revenues that have been paid by all Australians and our commodity industries. They've spent $209 billion, that’s 65%. That's what they've done. This is a government that shows no restraint and it needs to if we're going to get inflation down and that's the key right now.
JOURNALIST:
The Senate supermarket inquiry has just dropped its recommended divestiture powers. David Littleproud has mentioned today as well that the Nationals and Liberals have struck a deal, or a plan, to take to the party room. Can you tell us anything about that?
ANGUS TAYLOR:
Well, I'm not going to preempt our processes. I will say that making sure we've got a competitive retail sector, a competitive grocery sector in this country is incredibly important, because we know Australians are suffering from real cost of living pressures. So it's very, very important that we put as much downward pressure as we can on prices. It needs to be done in a sensible way. We need to have a strong sector which delivers the services and employment that Australians need. But it also has to be a competitive sector and anything that's going to improve competition we will continue to focus on.
JOURNALIST:
Jim Chalmers says there is a row between Liberals and Nationals on that. I mean, I'm not sure how he'd know that, but would you like to see more than just Woolworths and Coles, maybe more Aldi’s coming into the market? Is that where we should be looking to?
ANGUS TAYLOR:
We want as much competition as possible. I believe firmly in competition delivering better outcomes for consumers. If you've got competition, then the consumer is the regulator - they choose. That's what we want to see more of in absolutely every sector. I think Jim Chalmers should focus on delivering a budget that’s going to put downward pressure on inflation rather than pretending that he sits in our Joint Party Room.
JOURNALIST:
Let's come back to Ben’s question on tax cuts, obviously tax cuts are expansionary, especially when they're as large as this. The IMF talks about not just spending cuts but talks about revenue increases as something that can help to fight inflation. You mentioned, Senator Hume, the tax to GDP cap there that you'd like to see. Are you open at all to measures on the revenue side to raise revenue, to take money out of the economy?
JANE HUME:
When Labor talk about structural changes in the Budget, structural problems of the Budget, they always talk about the revenue side. That’s the only side that they've actually made any structural changes to. They never talk about structural changes to expenditure. All you need to do is look at the NDIS. It is a terrific example. They said that was going to be their great structural save. But in fact, it's just a spending cap of 8%, down from 14%. That hasn't been delivered I might add. But more importantly, it's just a cost shift to the states rather than in the NDIS package. We're looking forward to seeing what it is that they have a plan for aged care, because that was again, another area of structural saves that they have committed to and yet delivered nothing.
JOURNALIST:
Just on the RBA legislation, Shadow Treasurer, what's the path forward on that? Jim Chalmers seems to say that it’s up to you and the Greens to work that out. What's your pathway forward on that?
ANGUS TAYLOR:
We’re not working with the Greens on the RBA, I can assure you of that. But what we've said to Jim Chalmers is very clear. It's not an opportunity for him to spill the board and stack it with his cronies. It's not an opportunity to do that. This is an institution, hasn't always got everything right, but is incredibly important. It needs to be protected and needs to be strengthened. And you don't strengthen it by throwing the existing board out and putting a new board in place at a time like this. I mean, it's no wonder this government is failing to beat inflation when that's on their agenda. That's politics above what's right for Australians. But that's what he wants to do. So, we've said very clearly, we will work with them on this. But that is one that we're not prepared to compromise on, throwing the existing board out and bringing new people in, that spilling the board at a time like this is not on. So, we've proposed a very simple amendment to his proposed legislation, which would keep the existing board in place until their tenure has come to a natural end, and then they will be replaced as always. That gives us more stability, which is incredibly important at a time like this.
JOURNALIST:
Would you accept anything other than a like for like, maybe most of the board carried across?
ANGUS TAYLOR:
I think it's simple. You don't spill the board at a time like this. Now, we've been very, very clear about this, it's a red line and I've heard absolutely nothing, other than through the media, since I've made that point. So far, it's clear that they've got no intention to do anything other than spill the board. We've seen strong signs that that's what they plan to do. But that's not on for us. It's not acceptable. But we await patiently the possibility that he will see the error of his ways on that one. That we need an RBA that’s strong, that's independent, that has learned from its mistakes from the past and is able to deliver what we all need to see alongside strong anti-inflation policies from this government.
JOURNALIST:
Is that the only red line on that bill?
ANGUS TAYLOR:
Section 11 is the other red line.
JOURNALIST:
That is still a red line?
ANGUS TAYLOR:
Well, again, I haven't heard anything from Jim Chalmers. So we've made very clear what our position is. But we are yet to hear back from the Treasurer. I mean, we've worked through many other issues in good faith with the government on this. They were the two issues that we are deeply concerned about. And as I say, we've heard absolutely nothing from them since I've it made clear that they are red line issues for us.
JOURNALIST:
There's talk there might be another round of energy bill relief in this budget. Would that be a good move or is that inflationary by putting more money in people's, back into people's budgets?
ANGUS TAYLOR:
We all want to see lower energy prices. Every one of us wants to see lower energy prices. We want to see the government's promise of the $275 reduction on energy bills delivered, it was promised many, many times by the Prime Minister before, hasn’t been promised since the election, but we want to see that delivered. Now, there's no point dealing with the symptoms here, you've got to deal with the source of the problem and the source of the problem is inflationary pressures right across the economy. Until the government deals with this, it's going to be putting band aids on bullet wounds which is what it continues to do.