Interview with Laura Jayes, AM Agenda

1 November 2023

LAURA JAYES: Well you don’t need to have this confirmed, but the cost of living is skyrocketing in Australia. The Reserve Bank has flagged the possibility of another interest rate rise on Melbourne Cup Day and housing is fueling the RBA's concern. Joining me now is the Shadow Finance Minister Jane Hume. Jane, good to see you. Thanks so much for your time. What can be done about this?

JANE HUME: That's a very good question and a really important one, Laura. It's not just the cost of housing that's going up although that has gone up around 10.4% just in the last 15 months alone, but food has gone up 8.2%, electricity 18.2%, gas 28% so no wonder Australians are feeling the pinch. Those CPI figures that came out last week were you know, somewhat concerning. 1.2% increase in the last quarter alone. That's something that we know the RBA will be considering when they make their decision about interest rates on Cup Day. Michele Bullock said that she would be on the lookout for any material change. Is 1.2% change in CPI material? Well, that's something that we'll yet to see. But there's other factors as well. Things like a 0.9% increase in retail spending in the last month alone. That's thanks to geeks and gardeners apparently in the new iPhone release and the fact that the weather was good meant that everybody went to Bunnings. So we've seen an increase in retail sales as well and as we heard in your last report, housing just in the last month went up 0.9% so these are all things that will factor into the RBA's decision next week.

LAURA JAYES: Yeah, they will and one of the biggest problems is businesses still need workers. They're still crying out for workers, skilled and unskilled in their companies in small businesses, small and large businesses. So on the one hand, we need migration, on the other hand, migration is also fueling inflation, what to do about that Jane?

JANE HUME: That's, again, a good question and a difficult one for the government to answer. But what we can say is that a well managed migration policy has been one of the foundations underpinning Australia's economic prosperity and, and growth for decades. But the key is well managed. And that's, I think, something that came out at estimates just in the last week that we're seeing around 125,000 migrants come to Australia each quarter, so around half a million a year. That sounds like an enormous number in which to absorb whether it be through housing, whether it be through pushing up prices for services, and service price inflation, is one of the great drivers of those CPI figures that we saw last week.

LAURA JAYES: So would you reduce, if you were in government now, would you reduce that level of migration? You say it needs to be well managed, what does that actually mean?

JANE HUME: Well, there's lots of different kinds of migration. There's family reunion, there's skilled migration, that's humanitarian intake.

LAURA JAYES: Yeah but the humanitarian side isn't fueling inflation, right. You'd have to agree it's more the skilled side.

JANE HUME: No but we're talking the figures of net migration, they include all of those things. They include international students, they include tourists and backpackers, sorry that tourists obviously they don't that's not migration, but certainly, you know, those. We want to make sure that there are unskilled labor-

LAURA JAYES: Tourists are coming here spending, exactly.

JANE HUME: -workers coming too. That's exactly right, that are not just, well they're spending, but they're also working. And I think that that's fundamentally important, particularly for things like farmers and hospitality. They rely on those students and those and those backpackers to fill those positions. So managing the migration intake is fundamentally important, and that's something that we've been calling on the government to do. They seem to do a lot of reports. They seem to do a lot of announcements. They seem to point in the rear vision mirror and say, 'Oh, the previous government this'll be all their fault', but they haven't actually come up with a solid solution yet that we've seen to manage that migration flow to make sure that we get the balance right between filling the skills but making sure that the pressure on housing and demand and CPI is also under control.

LAURA JAYES: All right, Jane. Well, let's see how this goes. We'll talk after that RBA decision on Cup Day. Looking forward to it.

JANE HUME: You'll see me then.