Interview with Kieran Gilbert, Sky News

7 May 2024

Topics: Budget

KIERAN GILBERT: Jane Hume is with me live in the studio now, the Shadow Finance Minister, welcome to the program. I just started to get you to respond to the comments by Jim Chalmers yesterday. One of the points he was making is where the Coalition says the Government actually didn't bank as much of the upgraded revenue as it claims. What's it basing that argument on? I know Angus Taylor and you have said this for months.

JANE HUME: Essentially the Government has spent an additional $209 billion since the last election. Now, you don't need to look very far. It's simply a comparison of the Pre-Election Fiscal Outlook which is confirmed by the Parliamentary Budget Office and most recent economic data that we have which is MYEFO just before Christmas, which shows that there has been an increase in tax receipts and an increase in total revenue.Yet the underlying cash balance has only gone up by a lesser amount than anticipated. Now, why is that? It's because expenditure has increased by about $209 billion. When you look at the tax receipts and revenue compared to the spending, in fact, it looks like this Labor Government has spent around two thirds of those revenue upgrades and it's pretty basic accounting. Anything else is simply smoke and mirrors. 

KIERAN GILBERT: Well if it's made savings elsewhere, though, to accommodate that expenditure is it inaccurate for then the Treasurer to be claiming he has banked upwards of 90% of the revenue?  

JANE HUME: Well, I think he has been very selective in the data that he uses. Quite frankly, he's saying that all of the expenditure that's been done, some of that isn't his fault. It isn't his responsibility. It's automatic, it has to happen. But a lot of that is driven by inflation and what this Government has essentially done is absolved its responsibility for inflation going up. What we have been saying, have been saying for a long time now, is that inflation is the number one issue in the economy. It's what's driving the cost of living crisis, and the Government has to be doing its bit, using its fiscal firepower, in order to help bring inflation back under control. It can't simply rely on the Reserve Bank to do all the heavy lifting. The Coalition has been saying this for some time, but that's certainly being backed in by many, many economists. 

KIERAN GILBERT: Do you welcome the news today the Treasurer has confirmed that gross debt is going to be now $150 billion lower this year than previously expected. That's part of that repair effort, I guess, you're talking about. 

JANE HUME: Well, I would hope that it could be even lower if the decision is to spend hadn't continued on, and there is an insatiable appetite to spend coming out of this Government and you don't need to look very far to see it. Just look at some of the Future Made in Australia announcements that seem to have no basis in purpose and certainly some rather hazy decision making processes about it. A billion dollars on solar panels that potentially will never be competitive. Half a billion dollars of Commonwealth taxpayer money and another half a billion from Queensland on a quantum computing company that is owned by Americans, all of these things seem to be very strange decisions that have been made by this Government, that is simply pushing expenditure further and further up and it's Australians that are paying the price, because unless you can get that expenditure under control, that appetite to spend under control, the RBA will keep having to work at getting inflation down.

KIERAN GILBERT: That Quantum decision though, let’s just zero in on that because I guess it's emblematic of the Government's Future Made in Australia policy. They are talking about building a quantum computer. First of its kind, this particular kind in Queensland and Boston Consulting said that it would have a massive multiple flow on effect for the economy, if that is to be achieved. So isn't isn't it smart of the Government is trying to leverage some of that technology and get there at the ground floor so to speak?  

JANE HUME: You don't need to convince me of the benefits of quantum computing. I used to be the Digital Economy Minister and I know that quantum is a really important part of our AUKUS agreements, but it's also one of the great drivers, potentially, of productivity. It's this particular decision though, that we have concerns with. There are plenty of quantum computing organisations out there and even the Chief Scientist cast some doubt as to whether this particular investment is going to turbocharge the adoption of quantum in a commercially viable way.

KIERAN GILBERT: We've seen some numbers out today, retail trade volumes down 0.4% in the March quarter; lower than had been expected. Is this showing that the retail, not just retail but consumers are hurting badly from the rate rises? Do you think that that will help the RBA keep things where they are as opposed to hiking them? 

JANE HUME: There is no doubt that average Australians are really hurting right now and that's reflected in those retail trade figures and it shows that the economy really is slowing. The problem is, its aggregate demand that pushes up inflation. Aggregate demand is driven by two components. There's the private sector, but there's also the public sector. Our concern is that the public sector side of the equation hasn't come back in the same way that the private sector consumption has. 

KIERAN GILBERT: Are the States to blame for that largely? If you look at what's happening at the state level with Victoria today with payments for school aged kids. In Queensland, that $1,000 boost to energy bills for households, regardless of, that's not means tested. 

JANE HUME: I don't think that it's only the States. Certainly, the OECD has pointed out that State debt is genuinely a problem and State's fiscal positions are driving some of the problems with inflation. But it is not the only driver and quite frankly the Commonwealth Government, particularly when you've got wall to wall Labor Governments in mainland Australia, should be leading the charge in this crusade to get inflation down, because unless you get inflation down, Australians are going to pay the price. The cost of living simply will not come down until inflation is under control and we're just not through the woods yet. 

KIERAN GILBERT: No we're certainly not and just with this interest rate decision today, some economists like, we spoke to Warren Hogan earlier in the program, suggesting that it might be smarter for the RBA, if it is sticky inflation that proves to remain sticky, to act sooner rather than later. Possibly, as soon as today. Is there an argument there?

JANE HUME: I'm not going to preempt the RBA’s decision. The RBA is an independent decision maker on interest rates and that should always be the case and I wouldn't want to jawbone the RBA Governor in any way, shape or form. What I would say though, is that the RBA’s decisions, the RBA’s decision, is made that much harder if it's only got, if it's the only one that's tackling inflation, unless the Government's using its fiscal firepower as well as using monetary policy to tackle inflation, well then inflation stays high for longer and interest rates stay higher for longer. When interest rates stay higher for longer, Australians will pay the price. That's one of the reasons why we've seen real disposable incomes in Australia go backwards 7.5% in the last two years, because of new taxes, inflation and interest rates are making people poorer. If you feel poorer, it's because you are poorer and that's because of inflation, because of taxes and interest rates.

KIERAN GILBERT: The Shadow Finance Minister, Jane Hume, appreciate your time. 

JANE HUME: Great to be with you, Kieran.