Interview with Fran Kelly, RN Breakfast

13 May 2024

FRAN KELLY: Jane Hume is the Shadow Minister, she also has made her way into the Parliament House Studio. Jane Hume, Welcome back to the program.

JANE HUME: Good to hear you on RN again Fran.

FRAN KELLY: Thank you very much, it’s always great to be here. Jane, the Government says inflation could come down to the Reserve Bank's target band of 2 to 3% by the end of this year. That's the forecast. Do you welcome that and do you believe it?

JANE HUME: Well, it's certainly very different from the RBA's forecast that was made only six days ago and I suppose it's really up to the Treasurer now to tell us exactly how the Government is going to bring inflation back down sooner. Obviously that's a much more optimistic outlook than say economists like Chris Richardson or Warren Hogan, who have been saying for some time now that inflation, in fact, is going to be higher for longer, largely because of Labor's spending. So is the Treasurer saying that with all that spending, interest rates are going to be higher for longer than the RBA currently anticipates, and that's going to bring consumption down? Or is he assuming that consumer sentiment is subdued for a longer period because the economic conditions aren't improving and that's causing consumption to be lower, or is it because unemployment is going to increase? These are the questions that we're going to make sure that we are asking the Treasurer, as he brings down his Budget tomorrow night.

FRAN KELLY: There's been plenty of hints. There's been plenty of announcements so far of new spending measures on housing, on construction workers, on fee relief for students, on, uh, safety options, for housing, for women fleeing violence on a whole range of elements and we've also now got pretty strong clues that the Government will be extending the, um, power bill relief and also increasing rental support for renters. Does the opposition, on the face of it, support all those spending measures?

JANE HUME: Well, we will unpack that when we look at the details of them in the Budget tomorrow night. But what we can say.

FRAN KELLY (INTERRUPTS): Well, you've already had a good look at the, uh, the impact of power bill relief and also increased rent assistance. Did you like what you saw over the last 12 months? And if there's more of that, would you support it?

JANE HUME: Well, there's certainly a lot of spending that has been announced in this Budget and what we've been saying for the last two years is that some of these policies have failed, some of them have been the wrong priorities, and Australians have been left worse off because of that. In fact, they've seen their real disposable income decrease by about 7.5% over the last two years.

FRAN KELLY: But over the last year, over the last 12 months, we've seen wages go up. So for many Australians whose wages have gone up higher than inflation, they've got a real increase.

JANE HUME: Well, real disposable income Fran has gone backwards over the last two years. Someone on around $100,000 is in fact $7,000 worse off. So if Australians out there are feeling poorer, there's a good reason for that. That's because they are poorer. That's why we're saying that Australia can't afford the Treasurer to bring down the wrong Budget again and that the Treasurer and Anthony Albanese will fail unless the budget focuses on those back to basics, things like restoring the Budget discipline and honesty, putting those guardrails back around tax to GDP ratios, making sure that your spending doesn't exceed economic growth, and returning a structural surplus in the medium term, not a windfall one. Making sure that our standard of living is improved by taming inflation and reducing expenditure, and real spending growth of around 5% at the moment is well over the growth of the economy and of course, part of that is tackling energy, not with more subsidies but with more supply. That's the only way we're going to be able to restore prosperity and opportunity.

FRAN KELLY: Okay. Well that's the challenge. All right. Can I ask you again, from the spending announcements we've seen already and there's been quite a few of them, are there any just on the face of it that the Coalition has decided they don't like?

JANE HUME: Well, again, we will look at the details of all of those measures in the Budget tomorrow night. What I can say is that the future Made in Australia announcements, which is still very unclear. No one quite knows exactly what this Future Made in Australia is going to be, is an enormous spending agenda that seems to be made up of subsidies to big business. Now, that's not what a Coalition would focus on. We would focus on making sure that energy prices are lower by increasing supply, by making sure that industrial relations are simplified and more flexible for employers, and of course, by a deregulation agenda. So rather than this Government intervention, and I heard Katy Gallagher say that it's important that the Government intervenes in the private sector. We would actually like to see the Government pull back and let the private sector do what it does best. It's not all about subsidies to big business. It's about fuelling the inspiration and aspiration for small business, making sure that they're rewarded for the efforts and the risks that they take because it's small business that fuels the economy.

FRAN KELLY: Does that go for nuclear, too? Because, you know, we know that the future Made in Australia Act, one of the key sectors, focus sectors for that will be the energy sector. As you've mentioned. The Government, the opposition rather, their plan for the energy transition largely seems to be nuclear. Yesterday, Angus Taylor, the Shadow Treasurer, told insiders that nuclear would need to be capable of delivering a commercial return. But I haven't seen any of the experts suggesting that is possible anywhere near possible in the near term. So would you provide subsidies or Government funding to start a nuclear industry in Australia?

JANE HUME: Well, again, we will announce our nuclear energy policy, not at a time of the media's choosing or at a time of the Government's choosing, but a time of the Coalition's choosing. But it will be very clear in advance of the next election, the way we want to go about opening up a new energy source for Australia that will deliver emissions free energy and lower energy prices by increasing the mix of types of energy over the long term.

FRAN KELLY: Will you be able to do that without subsidies? I'm sure you've had a good look at it.

JANE HUME: That's fundamentally important. But in the short term and in the medium term, of course, we need a transition through gas.

FRAN KELLY: Which the Government has just announced.

JANE HUME: Well, the Government has announced a future gas strategy, and it's already torn their Cabinet apart.

FRAN KELLY: But you support it?

JANE HUME: It has been essentially, you know, that future gas strategy on first blush, seems to be a reinstatement of principles. There doesn't seem to be any financial support behind it. I'm hoping that we see something in the Budget tomorrow night.

FRAN KELLY: You know what financial support for it do you. You don't want subsidies.

JANE HUME: Quite frankly, unless we see an encouragement of new supply into the system. It doesn't need to be subsidies. It can actually be fast tracking of approvals in places like Beetaloo or Scarborough or Bass Strait or Narrabri. These are places where we need to see more gas supply come into the system to support the transition to a net zero energy future.

FRAN KELLY: Just before we finish with nuclear, earlier this year, the Coalition said it would announce its policy before the federal Budget, which is tomorrow. When will we see it? Will Peter Dutton release it in the Budget reply speech?

JANE HUME: Well, it is a very career limiting move for a Shadow Finance Minister to pre-empt what is in the Leader's Budget in reply speech. But what I will say is we will announce our policy on energy, as we will on tax, as we will on other issues prior to the next election. We won't be driven by the Government's agenda. This is going to be the Coalition's agenda.

FRAN KELLY: Just finally and briefly, the Government, as I was just speaking with Katy Gallagher about that, is meeting with the University sector today to tell them it's going to cap the number of international students, you've been calling on the government to bring down immigration levels, to take the pressure off the housing crisis, and other reasons, too. Do you support a cap on international students?

JANE HUME: Well, so far all we've seen on this is the press release. So we'll wait and find out exactly what is planned. But the Coalition, you're right, has been saying for some time that more needs to be done here. It will inevitably affect the university sector, and we would like to have a better understanding from them exactly how the Government's policy will do that. But from the media reports, we know that net overseas migration forecasts for this financial year is around 395,000. That's 182,000 more than the Coalition's last Budget. It's around 160,000 more than Labor's first Budget. So labor keeps telling us that they're cracking down, but it just doesn't seem to be working. Housing completions aren't keeping up with immigration, there's a resurgence in illegal boat arrivals. This is an area of profound failure of this Government and hopefully there's something, you know, this is a policy that is backed up with evidence. But quite frankly, it may be too little, too late because we're already in a per capita recession. We're only being propped up by those migration figures. It's really important that this Budget delivers on its promise to restore economic growth, but more importantly, tame inflation.

FRAN KELLY: Jane Hume, you are going to have plenty of time for the conversations over the coming days, thank you.

JANE HUME: Thank you Fran.