Interview with Sarah Abo and Chris O'Keefe, Today Show
14 July 2023
SARAH ABO: Welcome back. You're watching today in the Reserve Bank of Australia could have a new governor as soon as today. As speculation mounts, the Government will choose to replace Philip Lowe. Joining us to discuss today's headlines is Shadow Finance Minister Jane Hume in Melbourne and to drive host Chris O'Keefe in the studio. Thank you both for your time Jane, your man could be shown the door. Peter Dutton has warned against anyone closely linked to the Government taking the role in Philip Low's place. Who would make you happy?
JANE HUME: Well, there's actually a hugely qualified group of people that are on that short list, Peter Dutton said, and rightly so, that he would have natural hesitations if it was somebody that is recently in the public service or currently in the public service. And there's a good reason for that. It's a lot about perception. You know, we want to make sure that the RBA remains independent from government, not just in reality, but also perceived to be independent from government. It's very hard for a public servant who does the bidding of government, who implements government's policies one day to then be entirely independent the next. So any decision that they make, whether it be to raise interest rates or keep them where they are, might be perceived as a reaction to that, lack of independence from government.
SARAH ABO: Chris, do you reckon Peter Dutton’s too concerned about the optics here?
CHRIS O’KEEFE: Yeah, that’s offensive. We're talking about the Secretary of Treasury, the Secretary of Finance and the Deputy Governor of the RBA. It's offensive to those three individuals to say that somehow they can't make themselves independent. They're public servants, sure, but they're very esteemed people, very qualified people. And to say, ‘oh, you know, you guys might be Labor patsies, we don't want you in there’. Please.
JANE HUME: No, don't think it's that, Chris I really don't.
CHRIS O’KEEFE: Sorry. When you guys were in government there was not a public servant that wasn't a patsy to Scott Morrison and Malcolm Turnbull for ten years. That's all you guys did. So I think it's a bit rich to be sitting here and somehow saying that the Secretary of the Treasury, Secretary of the Finance Department and the Deputy Governor of the Reserve Bank somehow will have undue political influence on them. I think you probably owe those three people an apology.
JANE HUME: I think you've missed the point, Chris to be honest. Those people are hugely qualified. I've worked particularly with Steven Kennedy and Jenny Wilkinson before. I have absolutely no doubt about their ability. It's really about perception. It's about perception and particularly markets. Markets respond to RBA governors. So we want to make sure that the perception is there, not just the reality.
SARAH ABO: Ultimately, you can't actually block any decision anyway, right
JANE HUME: Well, no, of course that's, you know, it's a decision of government, but it's always traditionally been done in consultation with the opposition. We want to make sure that the right person was there. Michelle Bullock I should say, isn't a public servant. She has been the Deputy Governor of the RBA, so I wouldn't include her in that mix. It's more about the current heads of departments Jenny Wilkinson and Steven Kennedy, great people, hugely qualified, worked with both of them very closely, great admirers of both. But it's just the fact that they are such recent public servants.
SARAH ABO: It's controversial either way anyway. Look, I think the issue here is obviously households are hurting. And what's made it worse is obviously this cost of living crisis that we're currently in, groceries going up 60%. I mean, Jane, this is an issue for families. They can't even afford to put food on the table.
JANE HUME: It's a massive issue. Everywhere I go, the cost of living is the number one issue that Australians are talking about right now. Just in the last week alone I've been in Brisbane, in Tasmania and Hobart and even last night I was out in, Lilydale, just in Victoria, outer suburbs of Melbourne. And that's exactly what everybody's telling me about whether it be energy prices, grocery prices, the mortgages going up, rents are going up, insurances are going up. And that's why it's so important to get inflation back under control. The RBA governor is going to have an enormous task ahead of them to get inflation back under control. It's good to see it coming back down those headline rates, but core inflation is still really sticky. It's a very important job that the new RBA governor will have.
SARAH ABO: This is a very real, isn't it? I mean, Chris it can be tempting to sort of look into the politics of who's going to get the job and all this sort of stuff, but at the end of the day it's going to affect Aussies in their households. Of course it is.
CHRIS O’KEEFE: And on groceries, I think there's something weird going on here because we did this on the show the other day and just look at apples, right? So the production cost of a kilo of apples is $2. The big supermarkets are selling it for $5 a kilo. Yet supply chain issues haven't been this low, according to the Federal Reserve in the US since 2008. Energy prices are energy prices, sure, but the unit price of fertiliser, which you need to grow apples, has come back down since the war in Ukraine. Yet the price is still up. So why are the grocery supermarket giants taking the Mickey out of us? Are they just pointing to inflation and saying, oh, you've got to pay five bucks because of inflation, that it's all inflation, when realistically all the key indicators and the input costs are dropping. So you can't blame Covid, you can't blame the war in Ukraine yet the prices are still high. Don't know what's going on here.
SARAH ABO: You know, I agree with you. I think it does seem funny because there are I mean, look, there are specials out there in supermarkets, but it's quite inconsistent with what we actually need and the causes.
CHRIS O’KEEFE: And if inflation drops, are we expecting to see grocery prices drop or are they just going to stay at the same rate?
SARAH ABO: Yeah, no, who knows? It's a tricky one. All right. Well, finally, animal lovers have taken to the polls to vote for their favourite native animal. The shortlisted nominees being announced today are Jane. The Southern Bent Wing bat took the top prize last year. Rather unusual. It just pipped the dingo. Is that one of your top choices, do you think?
JANE HUME: Yeah nah, don't think that I'd put a bat at the top of my list. I've been thinking about this, as you know, as the topic obviously is, you know, the big issue of the day. And look, I'm tossing up I was going to say, because I did hear that somebody mentioned Max Gawn as their favourite mammal, obviously a Melbourne supporter there. So, you know, I thought I was going with the wombat and then I thought maybe Chris O'Keeffe, and then I thought, 'Nah, he's just been rude about the RBA Governor', so I'm going Karl Stefanovic.
CHRIS O’KEEFE: Favourite Australian mammal Karlos, please.
KARL STEFANOVIC: You should see my back would have gone with Wombat too.
SARAH ABO: Chris, what's your fave?
CHRIS O’KEEFE: I think the platypus. Yeah. That's a mammal, isn't it? Probably not, I don't know.
SARAH ABO: I think so.
CHRIS O’KEEFE: Not really up with my flora and fauna.
SARAH ABO: Well, this. competition will set you straight. We'll keep an eye out.
CHRIS O’KEEFE: All I will say is that I am anti-bats, they’re gross.
SARAH ABO: Yeah I’m surprised the bats won, it’s bizarre. They’re not cute at all. We’ll go for you Karl, I reckon you can take this one.