Interview with Bridget Brennan, ABC News Breakfast

5 September 2024

BRIDGET BRENNAN: Let's get more now on our top story this morning. With Australia's economy on the verge of going backwards, Shadow Finance Minister Jane Hume joins us now in the studio. Good morning to you.

JANE HUME: Good to be with you, Bridget.

BRIDGET BRENNAN: Not great news, is it, on the economy?

JANE HUME: No, it's not great news. In fact, it's confirmed what a lot of Australians are feeling that the economy is going backwards. It's really tough out there right now. There were three things that I took out of yesterday's data. The first one was that we were, in fact in a per capita recession already. If it wasn't for that massive population growth that we've seen in the last two years, we would already be in recession. The second thing was that Jim Chalmers was essentially crowing that public sector spending was propping up the economy. Well, of course that's unsustainable. It's the private sector that grows the economy. Otherwise you're just chopping up the pie in a different way, not growing the pie. And the other thing that really concerned me was the productivity figures. When productivity is going backwards, as it has done in the last quarter, as it has done in the last two years, well, then it's impossible to grow the economy in a sustainable way.

BRIDGET BRENNAN: The Treasurer insists, and the Government insists it's its economic decisions, its spending, that have kept the economy on life support. Is that true?

JANE HUME: Well, you can't sustainably bring down inflation and grow the economy by trying to tax and spend your way to prosperity. You can't do it if the public. If the private sector is retreating from the economy. And that's what's happening now, the public sector is advancing, but the private sector is retreating. That's a recipe for disaster.

BRIDGET BRENNAN: There have been some measures, though, from the Government that have probably been very welcome to struggling households. I'm thinking of the electricity rebate, for example, which for people who are just feeling the pain every time they get a bill, must have been somewhat welcome. Hasn't that helped Australian households, especially those that are really struggling to save at the moment?

JANE HUME: Well, of course, because Australian households have seen their real disposable income go backwards in the last two years by around 8.7%, and that's because of high interest rates, high inflation and higher taxes. So of course any relief is welcome. But the problem with that relief is it's just the bandaid on the bullet hole. It's not actually fixing the problem at its source. Rather than delivering lower energy prices, the Government is delivering subsidies for higher energy prices once those subsidies are removed. Well, of course, that increases the price again and that causes inflation to go up. It's one of the reasons that inflation is staying higher for longer, and that interest rates are staying higher for longer.

BRIDGET BRENNAN: Okay. If you're on the other side of the aisle, what would you be doing differently to the decisions made by Jim Chalmers?

JANE HUME: Yeah, the focus really must be on boosting productivity, and the only way you can do that is to do things like bring energy prices down by putting more supply of energy into the system, particularly gas. As we move in that transition to a net zero economy. The other thing you really need to concentrate on is having a more flexible industrial relations system, not a less flexible one, one that works for both employees and employers so that there is an incentive to employ more people and be more productive. The other thing you can do is reduce your red tape and overregulation and green tape as well, making sure that businesses have more time to focus on what they're good at creating things, growing the economy rather than dealing with compliance and delays. And thirdly, if you had a lower and simpler and fairer tax system, you inject that sense of aspiration back into your economy.

BRIDGET BRENNAN: Let's talk about rate rises, because the RBA clearly has felt that there's been too much demand in the economy. It's why things have been on hold for such a long time, with people anxious to see when rates are going to fall. Do you take a view on whether it's time now for Australians to be getting a bit of relief with rate rises?

JANE HUME: Well, that's a decision for the Reserve Bank. They're an entirely independent body and it should be that way. And I wouldn't try and push them or verbal them in any way, which essentially is what the Government and Jim Chalmers does seem to be doing. They appeared before a Senate economics, a Senate Cost of Living Committee that I chair just a couple of weeks ago. And we're saying that they still feel that public sector spending is running too hot and that without a softening in that they're not going to be able to lower rates any time soon. They've got one job, and that's to get inflation back down into the band of 2 to 3%, but their job is being made that bit harder by decisions that the Government is making. And they've said and they've only got one tool in the shed to do it and that's interest rates.

BRIDGET BRENNAN: Let's move to another issue, which is this debate around the census. Do you think that health bodies in particular, which use a lot of this data to inform health research around mental health and, important clinician decisions for Australians need this information about gender identity and sexuality?

JANE HUME: I'm sure there's lots of organisations and institutions that could use this data. I have no problems with the questions being asked in the census. To tell you the truth, I can't understand why this is an issue in the first place, why Anthony Albanese would feel the need to make a captain's call that broke an election commitment over something that's pretty basic and pretty obvious, that upset his own caucus, that upset so many members of the community without really concentrating on what's important, which, quite frankly, for this government is getting the economy back on track.

BRIDGET BRENNAN: So the Opposition wasn't planning to run some sort of culture war on these census questions?

JANE HUME: I feel like the Prime Minister is jumping at shadows here. It's quite a bizarre decision. It's the Government tying itself up in knots. This is not an issue for the opposition.

BRIDGET BRENNAN: All right, Jane Hume thanks for your time today.

JANE HUME: Good to be with you, Bridget.