Interview with Peter Stefanovic, First Edition

25 March 2024

PETER STEFANOVIC: And even more numbers will be out there this week because Jim Chalmers will be making a submission to the Fair Work Commission pushing to raise the minimum wage in line with inflation. Let's go to Canberra. Joining us live, the Shadow Finance Minister Jane Hume. Jane, good to see you as always.

JANE HUME: Well, as you know, Pete, the Fair Work Commission is an independent body and it will make its decision on the minimum wage, taking into account a huge amount of data that it prepares and also that is submitted to it by interested parties, including the government. The difference here, of course, is that the Labor Government, at its last submission, also made a recommendation as to what it wanted to see the minimum wage go to because it said that it wanted to keep wages in line with inflation and not see real wages go backwards. Now, of course, the Coalition wants to see sustainable growing wages in Australia. But of course we want to make sure that they are backed up by both productivity and economic growth because quite frankly, unless wages are sustainably supported by productivity, with economic growth, it's going to make it harder and harder to keep inflation under control. The Labor Government wants minimum wages to go higher as a cost of living measure, but quite frankly, the only way you can sustainably make sure that those higher wages aren't eaten up by inflation is to get inflation under control. And we still have some of the highest inflation in the developed world. And that's because Labor have failed in their quest to bring inflation down faster.

PETER STEFANOVIC: If we are guided by the lower level of the forecast CPI, that will put it somewhere around 3 to 4%. Would that be inflationary in your view?

JANE HUME: Well, that's not a decision for the Coalition to make. That's a decision for the Fair Work Commission to make.

PETER STEFANOVIC: But in your experience, I mean, you're going through all the numbers, you're going through the numbers.

JANE HUME: We want to see what. Yes, what we want to see is the government get inflation under control. And it has the power to do that with the levers that it has at its disposal. Its fiscal policy levers in particular, have been under utilised in the quest to bring inflation down Instead, they've relinquished all responsibility to the Reserve Bank. And of course, the Reserve Bank only has one tool in the shed, and that's interest rates. That's why we've seen 12 interest rate rises under this government in the 20 times that the Reserve Bank has met since the since Labor came to power. It's raised interest rates 12 times. It's kept them on hold eight times. But it hasn't brought interest rates down once. And that's because the inflationary pressures are still there and the government isn't doing its fair share of the heavy lifting with its fiscal firepower. The only the best thing that it could do would be to get its expenditure, those urges to spend under control already we've seen Labor spend an additional $209 billion since the election. And of course, that is inevitably going to have increased inflationary pressures on the economy unless we can get that inflation under control, any wage rise is going to be eaten up.

PETER STEFANOVIC: What about when you've got an increase to the minimum wage, coupled with tax cuts that start in July 1st? Would you have any concerns about inflationary pressures there?

JANE HUME: Well, certainly, if there is more money available in the economy to spend, you do find that there are inflationary pressures there. The Reserve Bank and the government and the Treasury keep telling us that this is not going to be the case, but the proof of the pudding of course, is going to be in the eating.

PETER STEFANOVIC: Okay. New figures out this morning show the cost of the government's super plan for paid parental leave will actually be double the original estimates. Now, somewhere in the region of $430 million. That's according to The Australian this morning. Jane, the government will, I presume, confirm this on budget night. But your thoughts on that figure?

JANE HUME: Well, I can't understand why they're going to confirm it on budget night, why they haven't come clean about the cost of this policy when it was announced. I mean, let's face it, Katy Gallagher, who announced the policy is not just the Minister for women, she's also the Minister for finance. So it's inconceivable that she doesn't know exactly what this policy costs are. You know, we have said that we will support super on paid parental leave. In fact, it was a policy that we took to both the 2010 and 2013 elections. Back then, we were told by the Labor Party that it was a gold plated option. Well, now they seem to have come to the party but they haven't come clean on exactly what it's going to cost. While we support the policy, that's certainly not giving the government a blank cheque $430 billion in its first year alone suggests that over the forwards, it might cost around $2 billion. I would be very interested to see if that is the case.

PETER STEFANOVIC: Okay. Uh, just a final one here on Newspoll. Government's heading for minority next, uh, election. Would that mean a chaotic time?

JANE HUME: Well, always, you know, as we've seen in the past, that when Labor goes into minority and has to get in bed with the Greens, it can create an extraordinarily chaotic circumstance and we wouldn't want to see that happen again. But yes, that is the way that the Newspoll is, suggesting that we will go. Now, of course, Newspoll’s come and go. And the most important one, as we know, is on Election day what we would like to see. What I think that this Newspoll tells us is that the Australian public are yet to be convinced that the Labor Government is focused on what's important to them, instead of being focused on the cost of living, which is the number one issue right now, the pain that people are feeling in their hip pockets. The government is distracted by the chaos on our borders and its mismanagement, particularly of border security and massive immigration. And for that reason alone, I think that it suggests that this is a government that has the wrong priorities and the Australian public are telling them so.

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