Interview with Natalie Barr, Sunrise

25 September 2024

NATALIE BARR: For their take, let's bring in Minister for Social Services Amanda Rishworth and Shadow Finance Minister Jane Hume. Good morning to both of you. So the RBA, resolute in its position arguing that the latest inflation figures are not good enough at just 3.5%. Amanda, people are blaming you aren't they? Is there anything that you think you can do better?

AMANDA RISHWORTH: Well, firstly, I would say that this rate hold is not unexpected. We have seen now no rate hike for almost a year and that shows that we are, you know, working towards our fight on inflation. This is really, really important and we are making sure that this is absolutely our primary focus and that's why you've seen responsible budgeting, but also cost of living support, that doesn't add to the inflation challenge. So we're very much working on this. We've seen a halve since the peak when it comes to inflation and this is something that we're taking very seriously as we fight inflation which is a primary issue in the country. But we know people are doing it tough and that's why we'll keep working on it.

NATALIE BARR: Isn't some of that cost of living relief actually not helping? Aren't they looking through some of the energy help and saying, look, we're putting that out of the way and we're looking at the figures and they're still no good.

AMANDA RISHWORTH: Well, firstly, I would say that when it comes to the Reserve Bank's job, their job is, of course, to look at monetary policy. Our job is to make sure that we're responsible with our fiscal policy. That's exactly what we're doing. But it's also to support people and help people and we know, for example, that cost of living is an issue people are facing and that's why we have important measures like rent relief for Commonwealth rent assistance recipients, and also, of course, energy bill relief. These are really important measures to support people that aren't adding to the inflation challenge. So this is really important we get the balance right and that's exactly what we're doing.

NATALIE BARR: Um, yeah okay. Jane, what would you say that the government should be doing or could be doing to change where we are economically at the moment?

JANE HUME: Well, Nat, the Reserve Bank have said two things. One is that inflation is home grown. So that means it's not being imported from overseas. It's a problem with our domestic policies and it's also sticky, which means it's not coming down fast enough. The Reserve Bank economists told the Cost of Living Committee that I chair that unless they see a reduction in public sector expenditure, well, then they're not going to be able to bring interest rates down any sooner. They've now pushed out their forecast to say that they don't expect inflation to come sustainably back to the band, in which they could lower interest rates until 2026. Now that's 15 months away and it's more than a year longer than Labor's own forecasts were saying. So that's going to be cold comfort to mortgage holders that are really feeling the pinch of those higher interest rates and that's a real shame. So the government can't just say, well, we're not making the problem worse. They have to tackle it head on and particularly around tackling this growing public sector expenditure.

AMANDA RISHWORTH: Well, we are Jane. Of course, what we're doing is returning the Budget to surpluses. That's something that you weren't able to do when you were in government. But of course, the question, Jane, for you and your opposition is what would you cut? I mean, you've flagged cutting pension increases, flagged cutting Medicare.

JANE HUME: No we haven’t. No we haven’t. We haven’t said that at all, that’s your talking points.

AMANDA RISHWORTH: You have said that you are planning cuts.

JANE HUME: No we haven’t.

AMANDA RISHWORTH: And no, no, no. It’s not talking points. That's what you said. You saw that, you saw billions of dollars of unrestrained spending, which you would look at cutting. Well, they are the pension increases. They're actually Medicare.

JANE HUME: We've said that we won't cut essential services. We've said that we won't cut on social safety nets.

NATALIE BARR: Ok, there is a bit of disagreement on that. Look, I want to get to negative gearing because this is making headlines this morning. An anonymous senior Labor official has revealed that work has begun on developing options to scale back negative gearing and capital gains tax concessions. The government has reportedly asked Treasury for expert advice on the possible changes, with the PM not ruling out any changes when asked on radio last week. Amanda, are you considering scaling back negative gearing in this country?

AMANDA RISHWORTH: Well, I want to be really clear. We've got a very ambitious housing policy in front of us at the moment. Um, $32 billion of investment in increasing supply in housing and a number of policies already underway, a number that unfortunately, the Coalition and the Greens are blocking in the Senate. But we've got a really ambitious housing policy that is focused on supply. It is not our proposal to address or to add negative gearing to that. We are getting on with the job.

NATALIE BARR: So it's not your proposal, but are you asking Treasury what the numbers look like to possibly scale back negative gearing?

AMANDA RISHWORTH: Well, Treasury does this sort of work. It would have done so under the Coalition.

NATALIE BARR: Well, not if they're not asked I guess, have you asked them?

AMANDA RISHWORTH: Well, Treasury does routine work all the time around different policies, different ideas.

NATALIE BARR: So do they just think of a thought bubble, or do you ask them, have you asked them?

AMANDA RISHWORTH: Well of course they look at a variety of scenarios across the board and they would have done so under the Coalition many times.

NATALIE BARR: But I mean, look, we're with you guys, you’re the government. Have you asked the Treasury to look at the numbers on scaling back negative gearing? Just a question.

AMANDA RISHWORTH: I have to be very clear that as the government, our focus is on delivering our housing agenda that we've got in front of us and quite frankly, if The Greens and the Coalition would get out of the way of the Senate and actually ensure that we can have more rent to buy.

NATALIE BARR (INTERRUPTS): Okay, that’s a non answer.

AMANDA RISHWORTH: Well, we've got a housing policy and it's there to be seen.

NATALIE BARR: Yeah we know you have a housing policy, but that's obviously not something you want to answer this morning. Jane, there are a lot of arguments for scaling back negative gearing. Number one, I guess, a lot, three quarters of people who negative gear properties do it for established houses. Would you consider this?

JANE HUME: Well, actually, when we looked at this policy in 2019, when a then Shorten led Labor opposition was proposing changes to negative gearing, the Coalition worked out that, in fact, if you scale back negative gearing, it can have dramatic effects on supply and we're already beginning to see.

NATALIE BARR: Well, if it's used for established houses, it's not adding to the supply. So that would be the number one reason to scale it back. Would you look at it?

JANE HUME: If you take landlords out of the system, well then all that happens is rents go up. I was down in Western Victoria just on Monday, walked into a real estate agent. There's a sign up saying no rental properties available and that's a catch cry that we're hearing right around the country. You take away negative gearing as clearly the government are planning to do. That's why they're commissioning the work. Clearly they're planning to do this. You take away negative gearing. You're going to have a dramatic impact on rental supply. That's a real problem in this country already. It would only make it worse.

NATALIE BARR: Okay, thank you both. We'll see you next week.