Interview with Neil Mitchell, 3AW

3 May 2023

NEIL MITCHELL: The Cost of Living Committee is releasing their interim report at midday, on the line is the chair of the Cost of Living Committee, Shadow Minister for Finance and Chair of the Committee, Senator Jane Hume.

JANE HUME: Good morning, good to be with you.

NEIL MITCHELL: Now, you say energy prices are the main contributing factor, is there anything getting done about that?

JANE HUME: Well, it's not just energy prices, Neil, in fact, in the inquiry we found that the cost of living challenges have been worsening, just in the last 12 months. It's not just energy prices, of course they are increasing, despite the promises from Government that they'll get energy prices under control. But also wages are going backwards. Even people that are seeing their wages increase because of inflation, seeing their purchasing power disappear. So their real wages are going backwards. Importantly too, we are hearing from charities that are saying they're under increasing pressure to make up the difference for struggling Australians, particularly with people that they may have never seen before. Often people with incomes, dual incomes and mortgages and potentially some of the Government's policies and making the inflation situation worse. The RBA responded yesterday. We know that, by essentially saying inflation is lasting too long and is way too high and they have to do something about it.

NEIL MITCHELL: So what is the increase in energy prices over the year?

JANE HUME: Well, the Budget was suggesting that they were going to be up to 23 or up to 30% depending on one's electricity or gas. We'll see in the Budget next week whether those predictions, whether those forecasts are actually increasing even further because of the decisions that the Government is making, particularly around gas mechanisms and intervening in a market that will potentially stymie new investment, which will increase supply and we know that increasing supply is really the only way to bring prices down sustainably.

NEIL MITCHELL: Interesting. You mentioned charities and today we've discovered that the Andrews Government is putting a $1.5 million tax on op-shops.

JANE HUME: I find that just bewildering because charities are also doing it tough. They've got their own overheads to deal with whether it be rent or energy prices in their buildings. Plus we heard at the Cost of Living Committee that charities are now finding it hard to get volunteers, because their volunteers are now going out to get work, to deal with their own cost of living crisis. So this is a perpetuating problem. It's not just those primary indicators of a cost of living crisis. It's the secondary ones too and that's a real problem for the Government to deal with, but the problem is that the Government doesn't seem to have a plan to tackle inflation and to bring the cost of living under control.

NEIL MITCHELL: Paint a picture for me of the person worst hit by these cost of living prices. Is it a renter, what is it, who is it?

JANE HUME: Well this is the thing, it's kind of across the board, isn't it? We know that mortgage holders are really taking a hit, the average mortgage holder with around a $750,000 of mortgage, is paying an additional $21,000 a year on their mortgage. So that's around $1,700 a month. That's not money you find down the back of the couch. Of course that means that rents go up as well, as people seek that additional return and pay for their mortgages. So renters are in trouble. Pensioners have trouble because their purchasing power is going down and while their pensions are indexed, that only happens twice a year. So there's lots of pressure points around Australia. I don't think that there is an Australian out there now that isn't feeling the pressure of the cost of living crisis and want to see inflation come down. Unfortunately, the RBA is the one that has to do all the heavy lifting, because the Government isn't doing its fair share of the load.

NEIL MITCHELL: I'll be a bit surprised if Lindsay Fox has cut back on the air conditioning to save money.

JANE HUME: I was just thinking about that, I learned how to use my air conditioner on YouTube. So there you go.

NEIL MICTHELL: How are people coping, are you getting a message? What are people doing to cope?

JANE HUME: Some of the stories that we're hearing at the Cost of Living Committee meetings are really quite tragic, particularly when we talk to charities about the new people that are coming through their door. For instance, St. Vincent DePaul, were saying that one in three people that are new people coming through their door saying that the cost of living crisis had sent them there. FoodBank was saying that they're seeing dual income families coming to them asking for assistance to feed their families. This is only going to get worse as those inflationary pressures, as interest rates begin to bite and more and more people have to adjust the way they spend, the way they live in order to cope with the cost of living.

NEIL MITCHELL: Are people turning down the heating? Are people not driving the car? Are people not eating out?

JANE HUME: Absolutely. People are choosing between heating or eating and on a day like today in Melbourne, where the temperature has plummeted, I think we're going to see some of those really hard decisions being made by families. The problem is of course, if families are making hard decisions about their budget, well, the Government has to do the same.

NEIL MICTHELL: This might be delicate, but a lot of the Government focus this year has been on the Voice to Parliament. Is cost of living a more important issue?

JANE HUME: Neil, by far and away, the cost of living is the number one issue for all Australians right now and every poll will tell you so. While the Government wants to talk about, well just about anything else, this is what Australians are crying out for help for.

NEIL MITCHELL: You got any answers? What should we do?

JANE HUME: Well, we're hearing a lot of different answers around things like reducing red tape and improving competition, but also with general assistance to organisations like charities.

NEIL MITCHELL: But that's going to cost money you haven't got.

JANE HUME: That's exactly right. That's why we want to see decisions from this Government taken to assist people with the cost of living, that don't push up inflation even further. We don't want to see policies that are undertaken by Government make a bad situation worse. Now, we're not saying that that's an easy task. But that's what governing is all about, making tough decisions.

NEIL MITCHELL: Just finally, Tony Staley, former President of the Liberal Party has died. He was also my politics lecturer at University. I didn't do very well. But did you know him?

JANE HUME: Neil, he was a dear friend of mine, actually. I went to visit him just two weeks ago. We used to have lunch together every six months. He was a lion of the Liberal Party, an extraordinary man. One of the early Ministers for communications, one of the architects of the Whitlam Government's dismissal, and the Federal President throughout the Howard years, his loss will be greatly felt, not just by his gorgeous family, but by Liberals far and wide. He was a great man.

NEIL MITCHELL: Thank you very much, Senator Jane Hume. Shadow Minister for Finance, Chair of the Cost of Living Committee set up by the Coalition.