Interview with David Speers, ABC Insiders

25 September 2022

DAVID SPEERS: Jane Hume, welcome to the program. So should the fuel excise cut come to an end this week or should it be continued?

JANE HUME: David, certainly when we were in government, that was the decision that we took, that the excise cut would be temporary, it would only be for six months and it was in response to cost of living being faced back then, back in March. Now at that stage, obviously Russia had just invaded the Ukraine. There were international factors that were playing into the fuel price. In fact, we saw fuel prices get up to $3 per litre at one stage. So that temporary fuel excise cut was welcomed by Australians that were feeling the pinch in their pockets. Now fuel prices have come back down, I think the last time I saw they were around $1.80 or so, there will be an up tick obviously when the fuel excise comes off. The ACCC have got an eye on it to make sure that it doesn’t, that it is not passed on in full. But the most important thing is that this is not the only cost of living pressure that Australians are facing right now. They are still feeling it at the grocery checkout. They are still feeling it when they pay their power bills and they are certainly feeling it when they pay their mortgages. That's because inflation is so high, interest rates are going up and those inflationary pressures continue. So what we want to hear from Labor is what they are going to do is to help Australians with their immediate cost of living pressures right now.

DAVID SPEERS: Just to be clear on fuel, you support that temporary relief coming to an end?

JANE HUME: Well, that was our policy when we were in government.

DAVID SPEERS: Do you still hold that position?

JANE HUME: Now the Labor Government has taken the same decision. That's their decision to make. What we want to see is how the Labor Government...

DAVID SPEERS: I’m just asking your position though.

JANE HUME: That was our policy.

DAVID SPEERS: But do you support it coming to an end?

JANE HUME: It was still our policy when we went to the election. We are not in government anymore, so it is their policy.

DAVID SPEERS: No I’m asking you, what is your view now?

JANE HUME: Well, my view is that the Government will make its decision. What it does need to do is address the other cost of living pressures that are facing Australians today.

DAVID SPEERS: Well this is one of them and I'm just asking you, your position. You have positions on other things like the aged pension, for example, you have announced what the Government should be doing there. On fuel, should it come to an end?

JANE HUME: Well that was our policy.

DAVID SPEERS: But now? 

JANE HUME: It is our policy. It was our policy. We don't have policies, we are in Opposition, we’re not in Government.

DAVID SPEERS: Well you do, you have policies on aged pension. What about fuel?

JANE HUME: It is not a policy that we can implement, even if we had a different position. Our policy was a temporary cost of living measure for the fuel excise. That’s going ahead. The Government made its decision. Now we want to see what it’s going to do about energy prices, about grocery prices and most particularly about mortgage rates because interest rates are going up so rapidly because of those inflationary pressures. That’s what the Labor Government needs to deal with. 

DAVID SPEERS: But it’s the fuel that I'm asking about. That's what is happening this week, that’ll come to an end. Are you trying to have it both ways here and say we need to be fiscally responsible but also help with cost of living?

JANE HUME: Well when we were in government, we made decisions about how we would deal with cost of living pressures. But now it's up to Labor to make its decisions.

DAVID SPEERS: And is it making the right one?

JANE HUME: It's making its decisions.

DAVID SPEERS: The right one?

JANE HUME: It was our decision when we're in government, it is their decision when they are in government.

DAVID SPEERS: I will move on. Peter Dutton thinks the US will go into recession, he thinks the UK probably will, too. What should be done to prevent a recession here?

JANE HUME: Well it is quite frightening actually when you speak to small business owners just how much they are preparing for a downturn. They can see the signs already. I think it's really important that, most importantly, that the Labor government makes sure that its fiscal policies are in line with monetary policies. When the Coalition were in government and we faced the COVID crisis, that was one of the things that got us through. Our fiscal policies and our monetary policies worked together. If your fiscal policy works against your monetary policy, well then all that happens is that the RBA has to pull that lever, that bit harder. Interest rates will go up that bit more. Now, that will dramatically affect the mortgage holders.

DAVID SPEERS: So it should be cutting fiscal spending, is that what you say?

JANE HUME: Well, the Labor Government came to government promising higher deficits than the Coalition. In fact, it promised $45 billion of off-balance sheet spending and $18 billion more of on-balance sheet spending. I think it's time that the Labor government consider the priorities, and whether it is a good idea to go ahead with it at a time when winding back your fiscal priorities, winding back your fiscal wish list to make sure that your fiscal policy is in line with your monetary policy, would it be a better solution.

DAVID SPEERS: So again, what are you saying they should do, cut some of that spending, not proceed with some of that spending?

JANE HUME: Well when we were in government, we made sure we managed expenditures and grew the economy at the same time as lowering taxes.

DAVID SPEERS: I'm asking about now. What should they do now?

JANE HUME: Well, that is up to the government. We are not in government. We’ve already proposed one policy that would help people with the cost of living expenditures right now. That was the pension work bonus and I think you mentioned earlier it has been particularly well received by Australians. That would have given older Australians an opportunity to work a little bit more, to work longer hours, to improve their position and earn a little bit more income to help with their cost of living pressures and also.

DAVID SPEERS: So this is interesting because the one idea you have put out there is more spending, so is this really the approach we should be taking when you're saying we need to move in line with the Reserve Bank? Is more spending the right approach?

JANE HUME: Well, actually the policy we put forward would have helped Australians to meet their own cost of living pressures, older Australians with their own cost of living pressures...

DAVID SPEERS: Exactly, a handout of one form.

JANE HUME: And fill the skills gap.

DAVID SPEERS: It's more spending though.

JANE HUME: We would be keen to see any policy that the Labor government wants to put forward that would reduce spending, but would also reduce pressures on ordinary Australians.

DAVID SPEERS: So should they spend more or spend less?

JANE HUME: No, we would be very interested to see any policy that would manage the payment side of the budget that would also not put more pressure on ordinary Australians in this cost of living crisis. So we are very open minded. We would like to be constructive with the government. Whatever policy they have, we would like to see.

DAVID SPEERS: Sorry I'm trying to be clear here. As Shadow Finance Minister heading into the Budget, should the Government be spending more or spending less?

JANE HUME: We went to the election saying we should be spending less. That's exactly what we took to the election. The Australian population voted for Labor. We didn’t make it to government.

DAVID SPEERS: Right now your one idea is to spend more. Is that the approach the Government should be taking?

JANE HUME: Actually the pension work bonus is a very, very marginal spend. Not only that, it has deflationary effects because it allows people to earn more, older Australians to earn more, to supplement their cost of living pressures. But it also fills the skills gap, that labour shortage that small businesses in particular are screaming out for.

DAVID SPEERS: Alright. But in general,

JANE HUME: In general.

DAVID SPEERS: Spend more or less?

JANE HUME: This budget should be all about making sure that fiscal policy works in line with monetary policy because otherwise if you've got your two policies working against each other

DAVID SPEERS: That means spending less.

JANE HUME: Particularly mortgage holders are going to suffer.

DAVID SPEERS: Spend less?

JANE HUME: We would like to see managed spending from this Labor government. 

DAVID SPEERS: Managed spending, does that mean less spending?

JANE HUME: That's what we did when in government.

DAVID SPEERS: Is that less spending?

JANE HUME: I would like to see a very cautious budget and I would like to see Labor re-prioritise some of their spending commitments particularly the $45 billion of off-balance sheet spending and $18 billion on.

DAVID SPEERS: In the Coalition's final budget handed down just before the election, you did forecast spending would outstrip revenue this year, next year, the year after, the year after that. Do you accept you left the budget in structural deficit?

JANE HUME: Not at all. In fact, in 2019, because of the time we had been in government, we managed our expenditures, we made sure that there were budget offsets for any new expenditures and we grew the economy, and we could also decrease taxes and we went to the 2019-20 Budget essentially in balance.

DAVID SPEERS: Well, in balance? Forecast revenue of 23.8% of GDP, spending of 27.2%. That is not in balance. That's a deficit, and a deficit the year after, and the year after, and the year after.

JANE HUME: That’s 2019-20 we are talking about, then COVID hit. Now obviously we threw the kitchen sink at COVID. We wanted to make sure we saved lives and livelihoods and clearly we've done that. That $50 billion windfall in inverted commas that Jim Chalmers has been talking about is testament to that. That's because the Coalition Government left the economy in good shape, left the Budget in an improving position.

DAVID SPEERS: But even after that windfall thanks to high commodity prices and the jobs market.

JANE HUME: Well, I take you to task on that one I don't think it is. I don’t think it is all high commodity prices. 

DAVID SPEERS: 28 billion of the 50 is high commodity prices.

JANE HUME: Is increased revenues, not high commodity prices. $28 billion is increased revenues. Now we haven't seen the Final Budget Outcome David, and so we do not know what that is made up of. Surely...

DAVID SPEERS: But even after all that, $30 billion deficit. That’s a structural deficit isn’t it?

JANE HUME: Well it’s $30 billion, that we had a plan, a credible plan back to surplus. And a credible plan to pay down the debt.

DAVID SPEERS: What was the credible plan back to surplus because we didn't see it?

JANE HUME: Well that was in the Budget in 2022. 

DAVID SPEERS: You would have to point that to me, because every year in the forward estimates in that Budget is in deficit. 

JANE HUME: But it was a credible plan towards surplus.

DAVID SPEERS: When?

JANE HUME: Well it was after the forwards but it was a credible plan back to surplus.

DAVID SPEERS: Not in the next 10 years.

JANE HUME: When we were in government, we reduced expenditures, we managed expenditures, we lowered taxes and we grew the economy and that's how we brought the budget back into surplus in 2019. COVID changed all that, we know it changed all that. But Philip Lowe has said that the only way you could improve the budget position is to either raise taxes, to decrease payments or to grow the economy.

DAVID SPEERS: And you're up for that?

JANE HUME: Well, this is now the Government's job to make a decision.

DAVID SPEERS: You are open to support them on that?

JANE HUME: It is the Government's decision as to what they will do.

DAVID SPEERS: Sure but...

JANE HUME: We will not support raising taxes and we have said that from the outset.

DAVID SPEERS: So you are ruling out one of Philip Lowe, one of the Reserve Bank Governor's recommendations?

JANE HUME: Well we know that they are the three options. What we want to see is this Government manage its expenditure in such a way…

DAVID SPEERS: But only through two of those options?

JANE HUME: manage its expenditure in such a way that it doesn't need to do that.

DAVID SPEERS: Let me ask you about a few things coming up in Parliament this week. The Government will introduce its election legislation that it promised to boost child care subsidies. Will you support that?

JANE HUME: We do believe that child care is a really significant cost and a really important service for many Australian families. When we were in government, we did the largest reform to child care in 40 years, and in fact reduced the cost of childcare and made sure that families were subsidised, particularly those who were working, those who were studying and volunteering, which was really important.

DAVID SPEERS: So you would increase the subsidies?

JANE HUME: We are investing $11 billion a year in childcare subsidies already. $11 billion.

DAVID SPEERS: Will you support the increased subsidy?

JANE HUME: Labor's policy will increase that by 5.1 billion and even Jim Chalmers himself has said that, that is a hefty price.

DAVID SPEERS: So will you support?

JANE HUME: Well I haven't seen the legislation yet and I don’t know what the outcomes will be. We want to make sure families that have childcare costs can make decisions that suit them, that there isn't an affected marginal tax rate.

DAVID SPEERS: So you opposed it before the election but now you are open to looking at it? 

JANE HUME: Well, they won the election. Labor won the election with this commitment. But I haven't seen the details of it. I want to make sure it is not just - they say it is a productivity measure. Let's check that out. They say it is a participation measure. That may well only be at the margins, I think it's important to see the analysis behind any childcare policy to make sure that it is actually delivering on its promises.

DAVID SPEERS: What about the legislation to cut taxes and duties on electric vehicles and hybrid cars. Will you support that?

JANE HUME: Well no, we have already said that we won't be supporting that legislation…

DAVID SPEERS: But that’s lowering taxes?

JANE HUME: We won't be supporting that legislation because it is really poor policy. The electric vehicles, the reduction of the FBT on electric vehicles, the Government couldn't explain whether it would actually reduce emissions. The industry couldn't explain whether it would increase the take up of electric vehicles. It is enormously costly, runs to billions and billions of dollars and if you can't prove the effect of a policy decision, why would you go ahead with it?

DAVID SPEERS: So you support the higher taxes? 

JANE HUME: No existing taxes. Let's be frank, it is an existing tax.

DAVID SPEERS: We will see if it goes through.

JANE HUME: If it doesn't make any difference then, why on earth would you remove it?

DAVID SPEERS: The National Anti-Corruption Commission is being introduced this week. Peter Dutton says he supports a federal ICAC. Scott Morrison, you will remember, called ICAC a kangaroo court. Where do you stand on this?

JANE HUME: We support anything that will stamp out corruption in public life. We've always said we supported the introduction of a federal ICAC. This is really important legislation to get right, because if you get it wrong, it has dire consequences. We haven't seen the details of Labor's bill yet, so we want to ask those questions: Will there be procedural fairness and natural justice? Will hearings be in public or will they be in private? When will they be one or the other?

DAVID SPEERS: Should they be in private, those hearings?

JANE HUME: Will legal fees be subsidised? Because what we've seen in other states and other jurisdictions is when an ICAC goes wrong, well, it actually affects people's reputations, it affects their employability, people have taken their lives because of a poorly functioning ICAC, and we do not want to see that happen again.

DAVID SPEERS: So would you support public hearings?

JANE HUME: I haven't seen the legislation, so let's wait until…

DAVID SPEERS: What's your view on public hearings?

JANE HUME: Well it really depends on the circumstances now doesn’t it.

DAVID SPEERS: So you're open to that?

JANE HUME: It’s not up to me to be open to that. I want to see the legislation, all details of the legislation before we make a call. What is most important, though, is to understand if you get an ICAC wrong it will actually deter good people from entering public life. That would be a disaster. We want the best and the brightest to join, but if the risk to your professional reputation, if the risk to your bank balance, the risk to your life and livelihood is there, just because you can politicise a corruption charge, well, why would anybody enter public life? I'm not just talking about politicians, I'm talking about public officials.

DAVID SPEERS: Just finally, co-chairing a review of the Liberal Party's election campaign with Brian Loughnane, the former party director. Are you holding back the release of this until after the Victorian election?

JANE HUME: Well actually this a really important review. We want to understand for the sake of our voters, for the sake of our party members and for the sake of our parliamentarians what we could do differently in order to make sure we return to government. Now, there has been like 600 or so submissions. It is an awful lot to get through. There are a lot of opinions out there. We want to make sure what we are providing is strong, constructive and implementable and the timing of that is really determined by how long it will take to build the recommendations. There is nothing else in it.

DAVID SPEERS: Nigel Farage, the former Brexit party leader has given you a bit of advice. He says the seats lost to the teal Independents are gone, the Liberals should forget about trying to win them back. Does he have a point?

JANE HUME: Well actually, because neither party received a particularly high primary vote in this election, I think this is something that we should all be concerned about, and in fact there is no such thing as a safe seat anymore. 20 years ago, about half of the 151 House of Representatives seats were won on primary vote. In 2013, that had dropped to 50. In the last election it was 15. So there is no such thing as a safe seat.

DAVID SPEERS: So you are not giving up on the teal seats?

JANE HUME: We don't give up on any seats. There is no such thing as a safe seat and that's an important lesson for all parties.

DAVID SPEERS: Jane Hume, we have to leave it there. Thank you so much for joining us.

JANE HUME: Great to be with you.