Interview with Gary Adshead, 6PR

15 May 2024

GARY ADSHEAD: Jane Hume is the opposition's Finance Spokesperson. She joins us on the line now. G’day Jane.

JANE HUME: Good to be with you, Gary.

GARY ADSHEAD: All right. Uh, now, I think the gamble that everyone can see here is in and around bringing down inflation so that we can perhaps start to see some cuts in interest rates. Do you think that's going to happen off the back of this one before the end of the year?

JANE HUME: Well, it has to happen sometime because Australians have seen their standard of living go down. Their real disposable income has gone backwards by about 7.5% in the last two years and that's why you're feeling poorer. It's because you are poorer and that's largely been caused by three things. Inflation, interest rates and taxes. So those three things really have to be tackled and quite frankly, this was a real opportunity in this Budget. But I don't think that anybody's walking out feeling like that or walking out of here, feeling like the problem has been solved now.

GARY ADSHEAD: Well, in fact, I've got some messages online telling me that this is kicking the can down the road in terms of deficits that we're going to see in the out years, certainly debt going over $1 trillion as well, but it certainly might make people happy that they get this $300 power bill rebate. Why do you have a problem with it in terms of it going across all households?

JANE HUME: Well, look, we know that Australians are doing it tough. One of the hats that I wear is as the chair of the Cost of Living Committee, and I was over in Perth not that long ago speaking to your community and talking about how the cost of living crisis is affecting them and I know that there'll be plenty of people there that will be very grateful for $300 off their power bills, but there'll also be people there that don't necessarily need that $300 and unfortunately, because it's going to everybody, that huge amount of spending that goes into it is potentially making the problem worse. Once those energy rebates have disappeared again into the aether, well, that'll push inflation back up. Essentially, it's just kicking the can down the road a bit and look, to be honest, the Reserve Bank aren't stupid. They can see through those sorts of ploys and they're not going to be making decisions about interest rates to lower interest rates based on that one policy.

GARY ADSHEAD: But nevertheless, I mean, there clearly had to be some form of cost of living response in this on top of the tax cuts that are coming. So are you saying then that in Coalition you would have means-tested this $300? Because I don't know if you know, the Treasurer this morning is now saying, well, a mechanism would have been required for that would have been costly. So the easiest thing to do was just to apply it to all households.

JANE HUME: There's no doubt that they simply just didn't have the means by which to do that. But they did at the last Budget because they did it in conjunction with the states. Because the Federal Government decided to go it alone. They had to do the big cash splash instead. But to be honest, the real problem here is inflation, because the only way to sustainably get the cost of living down is to get inflation down and the only way to get inflation down is for the Government to rein in its spending ambitions and this Government has spent an additional $315 billion since coming to Government. It's actually spent $4 for every $1 it's saved. It's the equivalent of about $30,000 per Australian that they've spent. Now, that's an extraordinary amount of money and of course, that pushes up inflation. So the Reserve Bank has to keep doing all the heavy lifting with interest rates to try and keep inflation down. But the Government keeps spending, which pushes inflation back up again. It's like having one foot on the brake, one foot on the accelerator and that's a great way to bust the engine.

GARY ADSHEAD: Can I ask you whether you have a view on, I know Anthony Albanese sort of didn't rule out I mean, you know, he used sort of interesting language, but he certainly didn't rule out an early election. Can you see them wanting to put another Budget to the nation before the next election next year, or do you reckon they'll go early?

JANE HUME: Well, they've had two cracks already before this one and both of those had the wrong priorities and failed policies in them. I think this one's fallen pretty flat. They might want another crack at it. But quite frankly, they've gambled an awful lot on this. There are some pretty heroic assumptions about inflation here. But if you dig a little deeper, the news isn't great. Because there are deficits as far as the eye can see. Economic growth, GDP is on the downward slide, not the upward slide. Unemployment is going up. It'll be interesting to see whether people are still feeling the pain at the end of the year and yet the Government's trying to tell you that look, we fixed it. It's all good. Now, before this Budget, Jim Chalmers was telling people to get some perspective on inflation. Well, you know, quite frankly if you talk to the people that are lined up at FoodBank, that have got two incomes or have a mortgage that are seeking help for the first time because they can't put dinner on the table. Well, I wouldn't be telling them to get some perspective on inflation. I'd actually be doing something about it.

GARY ADSHEAD: Let's tick some boxes. I take it that the Coalition will support the $300 in terms of energy rebates through Parliament?

JANE HUME: Well, we're not going to stand in the way of helping Australians that are doing it tough. You know, this probably wouldn't be the way that we would do it. But I think that, you know, that they need help now.

GARY ADSHEAD: What about the funding, you know, nearly $14 billion in relation to tax credits for green hydrogen and other critical mineral development. You're talking billionaires pockets there or billionaires developments. What do you say to that? I know that Angus Taylor said we shouldn't be doing it.

JANE HUME: Yeah, we shouldn't be doing it. $3.7 billion in taxpayer funded subsidies for a very small number of businesses. That doesn't address the cost of living crisis, and it doesn't address the cost of doing business crisis. There are small businesses out there that are crying out for help. Now, we've seen an extension to the instant asset write off, and that is a good thing. But the problem is it just isn't high enough. You know, it's still back at the pre-pandemic levels, and it's the small businesses that are doing it tough. They're the ones that are, you know, having to go into insolvencies. Now we're seeing record numbers of insolvencies and I think that they would be really annoyed to know that there was $13.7 billion in taxpayer funded subsidies going to a very small number of businesses that are run by, you know, people that are not particularly doing it tough. Don't get me wrong, we want to see a really good, thriving, critical minerals industry, a thriving hydrogen industry. But the best way to do that is to lower the price of energy, put more gas into the system, loosen up the reins on industrial relations and make our workplaces more flexible and most importantly, get those approval times down. Because at the moment, it's about 16 years to get an approval for a new mine - 16 years. That's a huge amount of red tape. So let's get back to basics and do what we know works, rather than simply sticking band-aids on bullet holes.

GARY ADSHEAD: So okay, so you won't stand in the way of the 300 bucks, but you might stand in the way of tax credit payouts?

JANE HUME: We feel like that this is a very misguided policy decision. We will certainly have a close look at it and speak to those that are involved. But, you know, putting more money into the pockets of those that already have a fair bit, uh, is probably not the most effective policy solution in a cost of living crisis.

GARY ADSHEAD: You won’t upset Chris Ellison, Gina Rinehart and Andrew Forrest do you think along the way there?

JANE HUME: Well, I think they're doing okay, those guys, and you know, and look, let's be honest. There's so much demand out there for critical minerals and rare earths and hydrogen should be able to stand on its own two feet in a technologically neutral way to any other forms of energy. So we want to see these companies succeed, but we're not entirely sure that taxpayers are doing it tough, should be the ones to fund it.

GARY ADSHEAD: Alright, I’m looking forward to the Budget in reply speech that will come from Peter Dutton in coming days. When is it, tomorrow?

JANE HUME: It is tomorrow night, Tune in.

GARY ADSHEAD: All right. Can't wait. Thank you very much for that, Jane.

JANE HUME: That's a pleasure, Gary.