Interview with Andy Park, ABC RN

9 May 2024

 

ANDY PARK: Jane Hume is the Liberal Senator for Victoria, and Chair of the Select Committee on Cost of Living. Welcome to you, Senator. 

JANE HUME: Great to be with you, Andy. 

ANDY PARK: Two of the 14 recommendations are on housing. Is that in your mind the biggest cost of living challenge right now? 

JANE HUME: Well, certainly respondents did say that they have noted that the cost of housing, the cost of paying mortgages, and the cost of paying rent is placing additional burdens on Australian families. Moreover, we heard from charities that they're seeing people come through their doors for the first time that are mortgage holders, that sometimes are dual income families that are seeking help to put food on the table. So while household costs, house costs, whether it be paying your rent or paying your mortgage, certainly is playing a factor, and actually has a knock on effect to the rest of the problems that Australian families and businesses are facing with the cost of living. 

ANDY PARK: A lot of this is being felt very intuitively by people listening right now and one of the recommendations is for a lower, simpler and fairer tax system. Easier said than done. So what do you mean exactly? 

JANE HUME: Well, certainly the Coalition will be presenting its lower, simpler and fairer tax policy prior to the next election because that essentially enshrines aspiration into our system, it makes sure that whether they be businesses, small businesses, or individuals are rewarded for the effort that they make and are encouraged to work and to take on those extra hours take on those extra days, we've been hearing from people that are doing that simply to put food on the table simply to keep their family afloat and I think that's a real concern. But the pressures are coming from everywhere. They're coming from energy prices, they're coming from rising costs of groceries.  

ANDY PARK (INTERRUPTS): Insurance costs as well, telecommunications, we've seen this week, some telcos raising the prices of their contracts mid contract. So Australians are getting it from all angles. What tax reforms do you think could ensure that many Australians, as particularly the housing crisis aren't paying the price? 

JANE HUME: Well, we know that, for instance, land taxes that have gone up dramatically, particularly in my home state of Victoria, are placing pressures on landlords to push up rental prices. Now, that can have an unfair effect on renters, but it can also reduce the supply of rental housing. So you can see how these unfair taxes have a knock on effect. 

ANDY PARK: ANZ had recently revealed the number of loans now 60 to 89 days behind in repayments is up 63% in the 12 months to March. So what recommendations has the committee made when it comes to housing stress, particularly in relation to the banks and the finance sector? 

JANE HUME: Yes, more and more people have identified housing stress as one of the great pressures and to be honest, I think that some of the data that we're seeing come out of the banks a little underestimates that problem. Because we know that the last thing people will not pay is their mortgage that they will set aside. They'll put aside their mortgage repayments, and they'll set aside other expenditures, whether it be on entertainment, or whether it be on other essentials, in order to pay their mortgage. We heard from one gentleman that told us that he'd stopped letting his kids play Saturday morning sport, because he was trying to save money on petrol. He couldn't afford to drive the boys to football, from town to town, and these things play out much more, I think, in regional and rural Australia, where some of those sorts of costs are exacerbated. The same goes for food costs, just because of the burden of transport costs that can elevate food prices, particularly in rural and regional Australia as well, and that's one of the reasons why one of the recommendations is to reduce the heavy vehicle road usage charge which was a new tax that was imposed by the Labor Government in a recent budget and that of course, immediately gets passed on at the grocery checkout. The same goes for the Biosecurity Levy, which is charged to farmers now - that immediately gets passed on in the form of higher grocery prices. We know that there's been a lot of conversation about supermarkets, but quite frankly, if the Government was serious about lowering food prices, it wouldn't be charging additional taxes, to transport workers and also to farmers. 

ANDY PARK: The report also recommends that the Government support and legislate the Coalition's first home super buyer scheme. Modelling from Deloitte today reveals that such a scheme could cost Australian taxpayers $1 trillion? I mean, do you accept Deloitte modelling, or is it a bit of flogging a dead horse here? 

JANE HUME: It was $1 trillion by the end of the century, it sounds almost Dr. Evil-esque doesn't it, to have those sorts of estimates and let's be honest, it was Deloitte modelling that was commissioned by the superannuation lobby. If you ask people that are saving for their first home, they will tell you how hard it is to get that deposit together, to get out of the renting cycle, and get into their first home, and we also know that it takes so much more of your income, so many more years of savings now, to pay for that deposit than it used to. Which is why we want young Australians to get that first helping hand to get into their first home and you will have noted that Peter Dutton in last year's Budget in Reply, extended that policy out to women, to older women who were finding themselves suddenly single, whether they'd be widowed or at the end of a relationship, who are also at risk of poverty in retirement if they don't own their own home so that policy under a Coalition Government would be available to them as well. It's always the people that are seeking their first home that are most interested in this policy. Obviously, the superannuation lobby isn't. 

ANDY PARK: Senator, the federal Budget is less than a week away. The committee has also recommended in this report that the Albanese Government reduce its aggregate spending. So where would you suggest the Government makes its first cuts?

JANE HUME: This is really important. And it's not just the Coalition and not just the Cost of Living Committee that are saying this, you're hearing it from economists right around the country, that the Government can keep putting band-aids on the cost of living crisis and keep paying out subsidies but quite frankly, unless it is using its fiscal policy to address aggregate demand, well, it means that the Reserve Bank has to only use monetary policy to keep raising interest rates to try and reduce inflation and inflation is the ultimate driver of this increased cost of living that we've seen. Unless you tame inflation, the cost of living will keep running out of control. That should be the Government's number one priority and it should be using everything in its arsenal to do exactly that. Otherwise, if you keep spending, trying to compensate people for a cost of living crisis, you can simply make the problem worse. Inflation will be higher for longer, interest rates will be higher for longer and your disposable incomes will reduce over time rather than increase. 

ANDY PARK: We'll have to leave it there Liberal Senator for Victoria and Chair of the Select Committee on the Cost of Living Jane Hume. Thank you for joining me this afternoon. 

JANE HUME: Thanks, Andy