Interview with Andrew Clenell, Sunday Agenda

12 May 2024

ANDREW CLENELL: Joining me live now is Shadow Finance Minister Jane Hume in Melbourne. Jane Hume thanks for your time. What are you expecting to see from this Budget? What would you like to see from this Budget?

JANE HUME: Well, good morning Andrew and Happy Mother's Day to your mother and to all the mothers out there and note that I am here and not having my sleeping and breakfast in bed today. Look, my concern with this budget I think is shared amongst not just the Coalition but also amongst economists. That after two years of wrong priorities and failed policies of an Albanese Labor Government, Australians are paying the price and we cannot afford to have the wrong budget brought down again. Quite frankly, unless Jim Chalmers on Tuesday night presents a budget that restores the fiscal guardrails that we've seen in previous Coalition and Labor Budgets, and makes sure that there is a structural surplus, not just a windfall surplus in that medium term, unless it tames inflation and restores our standard of living by lowering energy prices and focusing purely on getting inflation back under control and controlling that cost of living explosion that we've seen that's costs Australian so dearly in the last two years. And unless it restores opportunity and prosperity for all Australians, particularly by focusing on small businesses, not just large businesses, then this Government will have failed in its duty. It spent an additional $209 billion over the last two years, $209 billion. And that has driven aggregate demand further which has pushed up inflation, which is the driver of cost of living unless you bring inflation back under control. Well, then the cost of living will continue to rise and Australians will pay the price.

ANDREW CLENELL: All right, Jane Hume you've caught me short on Mother's Day, Happy Mother's Day to my wife, mother and all the mums out there. But let me ask you, you just mentioned a structural surplus. Are you saying past this financial year they should be producing a surplus?

JANE HUME: Well, we know that from the commentary that Jim Chalmers is very pleased to announce surpluses where he can but any surplus he announces is not because of his hard work. It's because of other people's hard work. The surpluses that he's reporting come through high commodity prices and through bracket creep. That bracket creep that sucks the aspiration out of our society that prevents people from taking on that promotion or that pay rise or taking on that extra work because your tax moves into a higher tax bracket. Now governments benefit from that, but it costs Australians dearly. In fact, Australians have seen their real disposable income go backwards by around 7.5% in the last two years, purely because of inflation, because of higher interest rates and because of bracket creep, because of taxes. And that's what we'd like to see concentrated on in the medium term, that these windfall gains these windfall surpluses, they mean nothing, unless you can sustainably return a surplus in the medium term, a structural surplus, and the only way to do that is to concentrate on the spending side of things and get your spending under control. And that's not just the Coalition saying that, that's the economist right around the country.

ANDREW CLENELL: Appreciate that. The Government says it's a responsible budget, though they say they're returning 90% of the extra revenue to the budget. They say they've had to fund some programs that the previous Government didn't allow monies for. What do you say to that?

JANE HUME: I'm scratching my head at those magic numbers of Jim returning 90% of the budget to the bottom line. I've gone through these numbers myself and tried to work it out. But it's pretty clear if you compare the Pre-Election Fiscal Outlook, which is kind of your baseline Budget to MYEFO, which is the most recent numbers that we have, the numbers are clear. The Government has made an additional $285 billion in tax that it wasn't expecting. That's contributed to revenues of around $320 billion that it wasn't expecting. Yet, the underlying cash balance has only gone up, gone down I should say, by around $111 billion. So there's $209 additional billion dollars of spending that this Government has made now $209 billion compared to $320 billion. That's around two thirds of the unexpected gains that they have used, that they have spent. So these magic numbers that Jim keeps coming up with certainly aren't reflected in the budget books.

ANDREW CLENELL: Oh well last week, we saw the Select Committee you Chair on Cost of Living hand down a report which spoke about what you're speaking about recommending the Australian Government reduces aggregate spending to support the reserve bank to get inflation down. But the key question here is what spending would you cut Jane Hume?

JANE HUME: Well, of course, there are plenty of things that the Coalition Government wouldn't do. We certainly wouldn't be spending a $450 million on a failed referendum. We wouldn't be spending $40 million to spruik a tax cut that everybody's gonna get anyway. We wouldn't have put on an additional 10,000 public servants and quite frankly, we've only really seen the standard of service go backwards with the addition of those new public servants. And we would be very careful about spending taxpayer monies on things like an investment in an American company to invest in quantum computing. When even the Chief Scientist says that probably this company isn't going to reach its commercial quantum computing goals any faster than any of the Australian companies that are doing the same sorts of research. So of course, there's different ways that we would be where you be managing the Budget bottom line-

ANDREW CLENELL: Would you cut public servants because it sounds like it?

JANE HUME: Well, we certainly wouldn't be putting out an additional 10,000 public servants and I'll be interested to see whether that number has increased because I don't know about you, but have you felt like you've been 10,000 public servants better off in terms of the service. In fact, we've seen delivery times decrease in some areas. So I'd very much like to understand exactly what those 10,000 new public servants are doing. And, you know, let's put this in perspective. Myer Australia has about 10,000 employees in total. Virgin Australia has around 10,000 employees in total. So they put the same number of employees on as there is in the whole of Virgin Australia, into the public service in just two years alone. Now that's pretty exceptional. And if you're not receiving the services you expect and deserve with that investment. Well, what was the point?

ANDREW CLENELL: This is what your committee also recommended that the Australian Government in keeping with the principles of the original personal income tax cuts your original stage three, legislate to deliver a lower simpler and fairer tax system that fights bracket creep and insurance aspiration, our tax system. Have you given the game away on your election policy there, Jane Hume? It seems to indicate the Opposition policy will be for bigger and better tax cuts, especially at the higher end, or aspiration as you call it?

JANE HUME: We have made this very clear from the beginning that the Coalition will always stand up for lower, simpler, fairer taxes for businesses and for households. That insidious bracket creep, it has been eating away at the prosperity and the aspirations of Australians for years. That's why we had the Stage One, Two and Three tax cuts so carefully calibrated to deal with bracket creep and genuinely reform the tax system to remove an entire tax bracket. Now that has been trashed by this Government. Even when reform was already embedded, already costed, already paid for in the system. They still repealed it because they are so gun shy of genuine tax reform. Now, I think that's a real shame but that said the Coalition will always, will always stand up for lower simpler, fairer taxes. And I'm not going to announce tax policy on your show today, Andrew, I don't want to preempt that. But what I will say is that you will see a tax policy from the Coalition to the next election, that restores the balance.

ANDREW CLENELL: Wow, okay, and we'll pick that up now certainly is such a reply speech on Thursday?

JANE HUME: It's would be the biggest career limiting move I could make to preempt what Peter Dutton is going to say in the Budget Reply on Thursday. But if you're interested, which I'm certain you are Andrew, I would suggest that you tune in.

ANDREW CLENELL: But what about the Government argument that if you restored if you kept these tax cuts the same and you restored the previous package that would cost an extra $40 billion over four years?

JANE HUME: Yeah, well, I've seen some very big numbers coming out of this Government. And quite frankly, we're not talking about restoring the stage three tax cuts, as they previously were, as I said, they've been trashed. They've been trashed by this Government that is clearly genuinely timid of real tax reform that would get rid of that insidious bracket creep. So we will come out with a tax policy well before the next election, that you can have time to digest then, but I don't want to announce it today. On your show. Sorry, Andrew.

ANDREW CLENELL: All right. If the Government extends the energy bill relief and the Commonwealth rental assistance on Tuesday, will you support that?

JANE HUME: Well, again, these are essentially band aids on bullet holes. They’re subsidies that have to go out there to help people with a cost of living crisis that is of the Government's making. Let's not forget that this inflation is not just sticky. It's also homegrown, and simply providing more and more subsidies could potentially make the problem worse because it pushes up aggregate demand, particularly from the public sector side. And so while the private sector is doing it tough, while economic growth has ground to a halt, while we're essentially in a per capita recession, and GDP without migration is going backwards, you can make the problem worse. And inflation will last higher for longer if the Government doesn't rein in its spending ambitions. I think Chris Richardson put it perfectly, perfectly succinctly when he said that the Government is making permanent promises on the back of temporary good news. And that's a real mistake because it in fact, makes the structural problem worse.

ANDREW CLENELL: There is a bit of a contradiction in what the opposition has been saying. You probably have indicated you're going to offer more in the way of tax cuts. You've already said you're going to spend more than the Government on Defense. And yet, you say the Government should cut spending big time. How does that work?

JANE HUME: Well, quite frankly, all you need to look at some of those big spending areas like NDIS and aged care which this Government came to office saying that it was going to get under control and has failed to do so. In fact, with the NDIS all they offered up was a spending cap, but they haven't backed that in with a single policy. And what policies they have said that they were going to announce through National Cabinet is essentially just duck shoving the problem, just expenditure to the states rather than expenditure on NDIS. We're yet to see any real reform on aged care which we know is a growing pressure in the budget. Now on both NDIS and aged care, Peter Dutton has come out and said that the Coalition will consider any sensible policies that will sustainably reduce those pressures on the budget and yet the Government has failed to come to the Coalition to do, so that's a real concern.

ANDREW CLENELL: On Palestine, what's your reaction to the Government’s vote in the UN on this?

JANE HUME: Let's get the facts straight on this one Andrew. Hamas is the Government of Gaza and Hamas is a terrorist organisation. What Penny Wong and Anthony Albanese have done is essentially reward an organisation that Australian Security officials have specifically designated as a terrorist organisation. They've done so without reference to Israel, who is an ally of Australia. There can be no sustainable two state solution without the consent of Israel and without an acknowledgement that both sides have a right to exist peacefully alongside each other. That simply is impossible right now, particularly while Hamas still has hundreds of hostages from Israel still within its borders and hasn't returned them. This is genuinely a change in position. We heard the cat was belled just a few weeks ago by Penny Wong, but clearly, this is a significant shift in Australian foreign policy. And we are very disappointed that the Labor Government have decided to go the way of emboldening and rewarding terrorist organisations rather than dealing with this crisis through the means of diplomacy and negotiation.

ANDREW CLENELL: I wanted to ask you about this migration detainees issue to the case has been raised over the weekend that one of the people who did that home invasion on Ninette Simons, as well as Doukoshkan who has been charged and the opposition has been strident in this criticism that he was released, etc. But one of his alleged co-conspirators in that horrifying attack was someone the previous Government led out of migration detention even though he was a convicted drug trafficker, a guy called Seyed Tahami, doesn't that weaken your argument a bit here on this issue?

JANE HUME: Look, I'm learning about this from the same article that you are, Andrew. Quite frankly, the Coalition will be asking for briefings on this but the only people that the Government seems to be briefing is particular journalists in particular newspapers. What I can say from the article that you have read and that I have read is that clearly, this individual came on an illegal boat arrival back in the last Labor Government when Labor last lost control of the borders. He was released not because of any ministerial direction by an official, unlike the ministerial direction that has released more than 150 criminal detainees into our communities right now. Clearly, Labor has lost control over this situation, just as it's lost control over the borders, just as it's lost control over immigration. Minister Giles and Minister O'Neil have failed in their duties to keep Australians safe and to manage our borders. This is just one symptomatic problem of a broader failing by these two ministers, the fact that Anthony Albanese is still running a protection racket. Minister Giles in particular just is beyond explanation surely you should be protecting Australians not protecting his ministers.

ANDREW CLENELL: Shadow Finance Minister Jane Hume, thanks so much for your time this morning.

JANE HUME: Great to be with you Andrew.