Interview with Natalie Barr and Clare O'Neil, Sunrise

3 May 2023

Topics: RBA rate increase, inflation, Budget, docking welfare of parents with habitual criminal kids. 

NATALIE BARR: In other news, borrowers are facing more mortgage pain after the Reserve Bank's shocked decision to hike rates. It takes the cash rate to 3.85%. Many economists had expected the RBA to hit pause for another month. Now we are being warned there could be another increase to come. How things change. Let's bring in Home Affairs Minister Clare O'Neil and Liberal Senator Jane Hume. Good morning to you both. Clare, is this all worth it to slow inflation? 

CLARE O’NEIL: Oh, look this absolutely sucks for mortgage holders right across the country. I represent lots of people who've got big mortgages out in the suburbs in Melbourne and it is just awful coming on top of what all the other cost of living challenges that we face. I think the only thing worse than an unexpected rate rise is inflation. All of your viewers at the moment would be going to the supermarket week after week and seeing that the same amount of money is buying a smaller and smaller amount of groceries all the time. And that's what the independent Reserve Bank is trying to manage. But I say that not trying to make any bones about it. This is really awful for households who are already grappling with a lot of increased costs. 

NATALIE BARR: Yeah, well, the minister sitting there saying that sucks is pretty honest. Jane, how much more can families take? Because this is hurting. 

JANE HUME: It's a tough question, Nat, because ordinary families now are paying around an extra $1,700 a month or $21,000 a year. And that's just since Labor came into power nearly a year ago. That's not the sort of money you find down the back of the couch. The RBA has to do all the heavy lifting because fiscal policy and monetary policy have to be working hand in hand. That's why we need to see in this budget some restraint from Jim Chalmers showing that the Government is doing its bit to bring down inflation as well, because bringing down inflation is a team sport, it can't all be left to the RBA. 

NATALIE BARR: So Jane, what would you suggest the Government does? 

JANE HUME: Well, the Government has to restrain its spending. It has to give its indications to the RBA that it's doing its bit so that the RBA doesn't have to do all the heavy lifting. Getting inflation down is not just their responsibility, it's a team sport. They have to do their bit too well. 

NATALIE BARR: So no JobSeeker increases, no help, no cost of living help. Jane, Is that what you're saying the government should do in this budget? 

JANE HUME: That's a decision for the government. It's the one that has all the resources of the departments behind it, giving it the advice that it needs to be able to ensure that it does its job without making the situation worse. That's what Jim Chalmers' challenge is.

NATALIE BARR: Yeah Clare, Australia's core inflation rate is now higher than G7 countries, the UK, higher than the US. What do you do with this budget? Because people are crying out for help, but if you spend a lot, it's going to push up inflation. What do you do? 

CLARE O’NEIL: Yeah, sure. I mean, I think there's a lot of what Jane said there that I agree with. There's some very important points of difference. I mean, I think the most important thing here is that we've got to strike that right balance in the budget. We would have had a lot more choices if we hadn't inherited $1 trillion of liberal debt with very little to show for it. The goal for the government now is how do we provide Australians with cost of living relief that they desperately need in a way that expands the economy. So the childcare reforms that Labor has announced and that will come into effect on the 1st of July are a really big part of that. It's a central cost of living relief for households, but also gives lots of households that choice to work a bit more if that's what they want to do. So that's the difficult balance that we've got to strike. We've been working really hard on this and the budget's only a week away, so we'll find out what's in it very shortly. 

NATALIE BARR: Okay. On to another big topic. There are calls out of Queensland for welfare payments to be docked for parents with habitual criminal kids. Claire, do we need to see mums and dads take more responsibility in some of these cases? Is that fair? 

CLARE O’NEIL: Look, Nat, I have to say, I think the, news piece that's at the centre of this is an absolutely horrible car accident where two women and a child died in a pretty small community and is a gut wrenching thing to have happen in a pretty small regional town. And I'm not sure that now's the time to sort of think about the big policy implications from that. I know all Australians today will be thinking of that community in Maryborough. As for the suggestion, you know, of course we're all open to ideas about how we can address these things. I'm not sure that taking food off the table of vulnerable families is the answer here. The main thing for me is just thinking about that poor community out there who are suffering in terrible grief today after so recent an awful car accident. 

NATALIE BARR: Jane, we've got people in Queensland, high level people involved in this, like the Queensland Police Union president, saying this now is the time because families are being left in tatters. Is this a good solution do you think? 

JANE HUME: It is an extraordinary tragedy. Claire is right and David Crisafulli has been all over the issue of youth crime in Queensland. It is up to the Queensland Government to make some tough decisions. But what we don't want to see is knee jerk reactions in response to this particular incident. What we really need is an effort at policy building to make sure that re-offending is less likely to occur. 

NATALIE BARR: Okay, so would you wouldn't support parents being docked welfare payments, Jane, if their kids are habitual criminals? 

JANE HUME: Unless there's evidence to suggest that is, in fact, going to stop re-offending, that it's not going to make the situation worse. Perhaps that's not the right policy solution. 

NATALIE BARR: Okay. We thank you both this morning. Thanks.