Interview with Kenny Heatley, AM Agenda

20 March 2024

KENNY HEATLEY: Joining me live is Shadow Finance Minister Jane Hume, good to see you Jane. So Governor Michele Bullock did acknowledge that households are hurting, unemployment is rising but said the fight against inflation is not over yet. But has softened the language as we just heard about hikes and economists believe this subtle change in language further cements the view that the next rate move is going to be down. Is that what you got from the press conference as well? And what does this say about where we are at economically at the moment?

JANE HUME: Well, I do think that there are Australian households out there that breathed a sigh of relief that interest rates didn't go up again. The Reserve Bank has met 20 times since the Labor Government came to power less than two years ago. Of those 20 times, they've raised rates 12 times. They've kept them on hold eight times. But not once have they reduced them and the message yesterday from the Reserve Bank Governor is that we're not out of the woods yet and in fact, they're not expecting inflation to come back too band now until 2026. Moreover, there are a number of risks in the economy, including unemployment. I spoke to a bank economist this week that suggested that in the middle of the year when labor force figures come out, if there is going to be a significant increase in those unemployment figures. That will be an important trigger to the Reserve Bank, but it could mean bad news for Australian consumers, because quite frankly, the only thing that has managed to get them through this cost of living crisis has been the assurance that there was plenty of work out there. If that changes there'll be a lot of people in a lot of trouble. They've already seen their real disposable incomes drop by around 7.5% just in the last two years alone, and that's not coming back anytime soon. The average mortgage has gone up by around $24,000 a year or $2,000 a month, which is not the kind of money that Australians find down the back of the couch. So there's a lot of people doing it really tough out there and quite frankly, the economy is hanging precariously in the balance, as we are in a per capita recession.

KENNY HEATLEY: Yeah, those jobless figures soon to be released. So cutthroat timelines definitely, but the Governor also dismissed the possibility that July 1 tax cuts, wage increases or power price relief will not add to inflation in the economy. Were you surprised by that? And are you confident that if power price relief was to continue, it wouldn't extend the timeline out from November for a rate cut?

JANE HUME: Well, power price relief that isn't sustainable, simply puts a bandaid over the inflationary problem. The Coalition understands that decisions that the Labor Government are making is actually making the problem worse, because inflation is lasting higher for longer and it's increasing costs in the economy. Workplace relations changes are putting added pressure on the cost of doing business. The decisions around safeguard mechanisms around energy and caps on energy are decreasing supply which pushes energy costs up in the long term, and of course taxes. Those increased taxes and the interest tax take that's being imposed on ordinary Australians is affecting their standard of living. Australians are seeing their quality of life, their standard of living go backwards under this Government, which should be a first order of business for Government to improve.

KENNY HEATLEY: Well just on that, as many as 5 million households face big increases in their power bills if taxpayer funded energy subsidies do not extend into the next financial year. The effect of the subsidies ending in July would wipe out the predicted drop in power bills, the Australian energy regulator revealed on Tuesday. So how much pressure is this putting on the Government to announce new relief in the May 14 budget and should Treasurer Jim Chalmers do it?

JANE HUME: Well, that's obviously a decision for Government but as I said -

KENNY HEATLEY(INTERRUPTS): Does the Coalition support more financial support?

JANE HUME: A subsidy for energy bills simply puts a bandaid over the fundamental problem, which is a lack of supply in the system that pushes up prices in the medium and longer term as well. The short term can only be dealt with through a subsidy. That's not really a sustainable solution. What our policy would be would be to increase the supply of energy into the system, make sure that there is a sustainable energy mix that would bring prices down.

KENNY HEATLEY: But that’s long term, in the short term does the Coalition support power bill relief extending beyond June 30?

JANE HUME: Well, that's not something that the Labor Government is proposing. If they propose it, well, then we would have a look at the legislation that would enable it and put it through our processes and make a decision then. Quite frankly, though, this is a problem of a Labor Government's making and it's a problem for the Labor Government to fix.

KENNY HEATLEY: Okay, we're running out of time, but I just want to ask you something else, children charged with serious crimes as young as 14 can be fitted with electronic monitoring devices, in a major change proposed to Victoria's youth bail laws. As a Senator for Victoria, do you support this State Government plan?

JANE HUME: This is not something that I've had any insight into obviously, it is a State Government issue. Obviously, we want to make sure that that youth crime is contained and then managed appropriately. Is this the best way to deal with it? That I can't answer you? I haven't seen the evidence that would support that. But I would hope that my Parliamentary colleagues in Victoria would be taking a great deal of interest in this issue because we want to make sure that children are treated appropriately and fairly, but at the same time that the community is kept safe.

KENNY HEATLEY: Jane Hume, thanks so much for coming on the program. Good to talk to you again.

JANE HUME: Thank you.