Interview with Peter Stefanovic, First Edition

7 November 2023

PETER STEFANOVIC: Joining us is the Shadow finance minister, Jane Hume Jane, in sporting parlance, there is a fair bit riding on the RBA today. If there is a rate rise, as all four of the big four banks expect. What would that say to you?

JANE HUME: Well, we know that Australians hold their breath for the race that stops a nation, but I think they're going to be holding their breath for a few moments beforehand to when we find out whether the RBA is in fact going to raise rates as economists are predicting that they will. Of course, those CPI figures that we saw come through just a couple of weeks ago were much higher than anticipated, particularly the last quarter was higher than anticipated. And now the IMF have come out with a report saying that the RBA is going to need to do more to tame inflation if it's going to bring it back to band within the expected timeframe. And Michelle Bullock has said that she has a very low tolerance for any slower trajectory to bringing the inflation rate back to band. Any later than anticipated. Already that time frame has been pushed out numerous times. It's now the end of 2025. That's two more years of high inflation. And of course, if inflation remains high, that means that interest rates have to remain high as well. That's why we're calling on the government to do everything it can using its arsenal to put together a plan to tackle inflation so that the RBA doesn't have to do all of the heavy lifting.

PETER STEFANOVIC: Okay, so what would be your plan? What would you suggest they do to tackle inflation that they're not already doing?

JANE HUME: Well, if you were serious about tackling the cost of living and rising prices, why on earth would you put a tax on truckies and a tax on farmers when you know that those taxes are going to immediately be passed on in the form of higher grocery prices? Why would you intervene so severely in the gas market that you're turning away new investors when we know that the only way to bring down energy prices, particularly gas prices, is to increase supply? And why would you be spending an additional $188 billion that's additional $188 billion more than the coalition would have spent at its last budget, because essentially that's sending a signal out to the market that while the government has its foot on the accelerator the RBA has to keep putting its foot on the brake.

PETER STEFANOVIC: There's some interesting points that have been brought up from Newspoll today, basically punters suggesting what they think, what help should be provided when it comes to cost of living the top, one is to subsidise energy bills, the next one is to subsidise fuel prices. Would you support either of those?

JANE HUME: Well, of course, putting subsidies, whether it be on fuel prices, whether it be on energy bills, whether it be on childcare, all of these things can in fact fuel the inflationary fire rather than temper it. They are Band-Aids on the bullet hole. We want to see the government tackle inflation at its root cause, which of course is aggregate demand. is split into two parts. Public sector demand and private sector demand. has almost ground to a halt because of the 11 interest rate rises we've had already. But public sector demand keeps being fuelled by government spending. That's why we want to see the government come up with a specific plan to tackle inflation, not just deal with the symptoms, deal with the causes.

PETER STEFANOVIC: Okay. Doing well on the trade front, though, as those trade blocs are removed. And China, which leads me to the Coalition response to the prime minister's trip to Beijing overnight and his warm conversations, it seems, between the Chinese president Xi Jinping.

JANE HUME: Yes, there were some strange conversations about Kung Fu Panda and Tasmanian devils are here. But look, of course we want to see a good relationship with China. We've always wanted to see that, but not at any price. This is going to be a real test of Anthony Albanese about his strength and his substance over just that symbolic and you know, ceremonialism we want to see more than just, you know, a photo opportunity to look a little bit like Gough Whitlam did 50 years ago. What is going to come out of these talks? These economic sanctions have cost Australian companies billions of dollars. We want to see them lifted. It was China that imposed those economic. That's economic coercion. It was China that imposed these sanctions. They were a breach of a free trade agreement. And the World Trade Organisation would say, as such, had those cases gone ahead. But we also want to be able to make sure that we can defend our national interests, that we can speak out when we see things like Australians unjustly detained in China or when we see abuses of human rights. These are all things that are very important to Australians. We don't want to give up our national interest in the face of a renewed thawing of a relationship with China. Of course that is a good thing economically, but at what price?

PETER STEFANOVIC: Okay, Jane Hume thank you. We'll talk to you soon.