Interview with Peter Stefanovic, First Edition

2 December 2024

PETER STEFANOVIC: Well, one expert, claims that the luck has deserted Treasurer, Jim Chalmers, as budget forecasts show cash deficits will total about $220 billion between now and 2028 this comes from Chris Richardson, who argues the treasurer has overseen a very favorable environment over recent years. In fact, it's a damning assessment from Chris Richardson towards Jim Chalmers, who claims the Albanese government is the luckiest Australia has ever seen, at least in budgetary terms. But he argues luck is running out. Jane Hume, the shadow finance minister, joins us now. Jane, good morning to you. So Mr. Richardson, I mean, he's got some lines here that I'm sure the coalition will be able to use. He says the spendathon has returned into COVID highs with what he calls increasingly dodgy off budget expenditure. What are your thoughts on that?

JANE HUME: That's right, yeah, that's right Pete. Chris Richardson, belled the cat some time ago, as indeed has the Coalition that Labor's spending has kept inflation higher for longer. That's kept interest rates higher for longer and made Australians poorer. Whenever you go to the grocery store, fill up at the bowser or whether you're paying your rent, paying your mortgage, it's not in your imagination. If you're feeling poor, you are poorer because of inflation, because of interest rates and because of higher taxes. Chris Richardson has been saying this for some time, as has the coalition. Unfortunately, Jim Chalmers seems to it's fallen on deaf ears, and we're now seeing that sense of that natural urge, that Labor urge to spend is coming out again, and I'm absolutely certain we'll be seeing more of it in the lead up to the next election. Of course, the problem is Australians will pay the price.

PETER STEFANOVIC: Okay, so just, just to go through the status quo, if we want to put it that way at the moment, and I mean, this is what Jim Chalmers would argue at the moment anyway, that that employment is staying down, that wages are moving slightly upwards, inflation is tracking down. So does that mean it's on the right path, whatever it's doing with its finances?

JANE HUME: Do you think that there's anybody out there that feels that they're better off now than they were three years ago Pete? Of course they don't. Of course they don't. It's taken far too long to bring inflation back down, and indeed, last week's data showed us that core inflation, which is the one that the RBA look at, core inflation, has actually bumped up again. Now that's a real concern. Jim Chalmers will try and blame anybody else for the crisis that we're in. He's tried to blame Vladimir Putin or China or the Middle East. He's tried to blame anybody else, but unfortunately, he hasn't turned the mirror upon himself. Reserve Bank Governor Michele Bullock has said that Australia's inflation problem, our sticky inflation, is a home grown problem and can only be solved with homegrown solution. That means reining in that urge to spend, winding back that additional $315 billion that Labor has spent since the last election, and keeping inflation under control from the public spending side of aggregate demand, rather than the private spending. Private spending has come down. You know, the Reserve Bank have done all of the heavy lifting here. Unfortunately, Jim Chalmers and Anthony Albanese haven't done the same.

PETER STEFANOVIC: So if they're guilty of what's known as short termism, would your old government, or could it be accused of the same and contributing to this predicament that we're in?

JANE HUME: My old government, I'm interested. That's, what's a strange phrase, but I can see where you're going. In fact, over the life of the nine years of the Coalition and the life of the nine years of the Coalition, the budget deficit was brought steadily down. In fact, just before COVID, we had a balanced budget. Unfortunately, during COVID, we threw the kitchen sink at a problem that was a global pandemic that the likes of which we had never seen before. After the pandemic, the taps were turned off. JobKeeper was turned off. Labor wanted to keep it on. You'll recall we wound back those COVID measures that were things like, whereas Labor wanted to pay people to get vaccinations that they'd already had, that urge to spend is part of Labor's DNA. We had a credible path back to surplus that's been blown out of the water by Labor's budgets, and we can now see that we're facing deficits to the tune of 20 plus billion dollars every single year for as far as the eye can see. That's not the way to economic prosperity. That's going to cost Australians more in the long run.

PETER STEFANOVIC: Alright, couple of quick ones here, Jane, before we go, the Assistant Treasurer, Stephen Jones. He's going after Google, Apple. This announcement is going to be later on today, $50 million fines to try and create a fairer playing field. What are your thoughts on that announcement today?

JANE HUME: I'm looking at my watch saying, Where have you been? Stephen Jones, it's been two years, and we've been speaking about the social media platforms getting out of control. We've now hit the last two sitting weeks of the year already. We're about to head into Christmas. There's still some question as to whether we will come back at all. I think this is all talk and no action from Stephen Jones, as we've seen for the last two and a half years. I just, he's been missing in action.

PETER STEFANOVIC: Yeah, but when it comes to Apple Pay, you know, does there need to be a spotlight on that? I know that the banks are accusing it of being quite unfair.

JANE HUME: Certainly, our payment system has been evolving very rapidly, and the RBA have been looking at this. This is Stephen Jones getting ahead of the RBA's own report into our payment systems. They're the experts. It sounds like yet another Assistant Treasurer announcement about an announcement rather than any action.

PETER STEFANOVIC: Okay, and just a final one here, because it's in your state of Victoria. No, you're not there today. But in Victoria, some 60 pubs and clubs will not be open on Australia Day next year because the owner of these pubs, and there are pubs right around the country that this particular company owns, it says it's not going to celebrate Australia Day because some of its patrons are hurt by the day. What are your thoughts on that?

JANE HUME: Well, first of all, I think it's an absolute nonsense. If you're one of those people that would like to boycott Australia Day, you can do so by staying at home. You don't need to go to a pub. More importantly, though, I think it's no coincidence that Australia Day next year falls on both a public holiday and a Sunday. That means the penalty rates that are going to apply to staff that work in those pubs are going to be out of this world. When I speak to pub owners, I'll tell you what they're talking to me about. They're talking about unfair industrial relations, and they're talking about the cumulative excise on beer prices in particularly, that's pushing prices up, pushing the price of food up as well, because of that cumulative inflationary effect…

PETER STEFANOVIC: Would you wind that back by the way? Beer excise.

JANE HUME: I’ll tell you what we'd wind back, we'd wind back inflation, because if you wind back inflation, then the beer exercise is nothing like as it is, as onerous as it has been in the last Street. Why you're going to wind back prices and the cost of living is to wind back inflation.

PETER STEFANOVIC: Why are governments so, I know you get a lot of money from it. Why are you afraid to touch it, to wind it back the alcohol exercise? Is it because you stand to lose too much?

JANE HUME: Because the best way to do it is through inflation, if you can keep your inflation under control, well, then your beer exercise is under control. Any exercise is under control. That's what we saw in the nine years of Coalition government. Inflation wasn't on the radar as a problem because it was managed, because the budget was managed. If you can manage your budget, if you can manage that urge to spend, inflation stays under control. That's something that Jim Chalmers and Anthony Albanese have failed to do, and that's why Australians are paying more when they're, you know, getting a draught beer. It's why they're paying more at the supermarket. It's why they're paying more when they pay off their mortgages, because Anthony Albanese and Jim Chalmers simply cannot manage the economy.

PETER STEFANOVIC: Jane, we'll leave it there. Thank you for your time, though. We'll chat to you soon.