Interview with Peter Stefanovic, First Edition
29 July 2024
PETER STEFANOVIC: Well, still on the economic note, hospitality businesses are failing at the fastest rate on record. New data from ASIC out this morning shows the insolvencies are being driven by soaring food and energy prices, plus an overall pullback in consumer spending. People aren't going out to save money, joining us live now is Shadow Finance Minister Jane Hume. Jane, good morning to you and there could well be another rate rise to come.
JANE HUME: That is potentially on the cards. We'll find out what that CPI figure, this is going to be so important, will come out later this week and that will be part of the RBA’s decision making of course. But this is not a surprise. Certainly, my Cost of Living Committee has been hearing from businesses for the last two years, that it's not just the cost of living that's gone up, It's the cost of doing business, and particularly for hospitality, those hospitality businesses. We're now hearing that around one in eleven hospitality businesses face failure in the next 12 months unless something dramatic changes. They're telling us that it's not just the rising cost of energy, although their bills have gone through the roof. It's also things like an inflexible industrial relations system and complicated industrial relations system that's making it harder and harder to employ staff and on top of that those rising taxes particularly state taxes, like payroll taxes and land tax, which keep pushing up rent, that's making it so much harder for businesses to stay afloat. Just think about the cost of a cup of coffee now. Milk has gone up. Other inputs have gone up, the energy to make the cup of coffee has gone up. The plastic cup that you put your coffee in has gone up, or the paper cup has gone up. Everything's gone up and yet you can't put the cost of a cup of coffee up or people will simply stop buying it and start making it at home and fewer and fewer customers are coming through the door with less and less disposable income to spend because their disposable income has gone down by around 7.8% in the last two years and if inflation doesn't come down, these businesses will keep suffering.
PETER STEFANOVIC: Well, the problem is yeah, there's no short term fix or no short term solution to any of this is there, because there's not likely to be a rate cut until sometime next year?
JANE HUME: Which is why we've been saying for some time now that the Government needs to do all it can to focus on bringing inflation back under control. It can't simply rely on the RBA to do all the heavy lifting.
PETER STEFANOVIC: So what is it they should be doing?
JANE HUME: Well, Michele Bullock has said that this is homegrown inflation. The most important thing that they can do is to bring inflation under control by using their fiscal reigns, bring those energy prices back down and make sure that their spending is under control, sending the right signals to the market so that the RBA doesn't have to keep raising interest rates. That's the way to bring inflation under control and quite frankly, the Albanese Government has failed to do that.
PETER STEFANOVIC: I mean, the energy situation though, is so haphazard that I mean, that's unlikely. It's a product of years of policy failures.
JANE HUME: It's also a product of more and more interventions in the market that have failed and making the situation more complicated. More supply is necessary in the energy market, but there's things you can do right now. Loosen the reins on those industrial relations reforms that are now making it harder and harder for those small businesses in particular to employ people. They don't have compliance departments. They don't have human resources departments. Make it easier for people to employ others, not more difficult.
PETER STEFANOVIC: So is that your suggestion to Murray Watt, taking over IR now?
JANE HUME: Well, look, lucky industrial relations getting Murray Watt in charge of the reins. I'm sure that the CFMEU will be just as thrilled with that as they were with Tony Burke, who was the best friend of the CFMEU. Now of course he's in charge of the Immigration Portfolio. This reshuffle has really been an admission of failure on behalf of the Albanese Government, particularly in those areas of immigration and housing. Let's not forget that under Tony Burke, the last time he was Immigration Minister, 83 boats arrived with more than 6000 illegal immigrants. That was more than one boat a day. So I would imagine that those people smugglers are rubbing their hands together at the idea that Tony Burke is now responsible for the Immigration Portfolio. I think there's one little bit of good news that's come out of this reshuffle and that is that the mission critical role of Minister for a Republic has gone by the wayside. Matt Thistlethwait has been moved on to another role. I think taxpayers will be thrilled to know that they have paid for a Minister for a Republic for the last two years.
PETER STEFANOVIC: Yeah, that was coming for sure. Won't be a referendum for some time I would have thought. Jane, thank you. We'll talk to you again soon.
JANE HUME: Thanks Pete.