Interview with Stephen Cenatiempo, 2CC

14 May 2024

STEPHEN CENATIEMPO: One person will be looking at it very, very closely is the Shadow Finance Minister, Senator Jane Hume, who joins us now. Jane, good morning.

JANE HUME: Good to be with you, Stephen.

STEPHEN CENATIEMPO: What are we? I mean, the underlying success that the Treasurer is banking on here as a $9.3 billion Budget surplus, they say 96% of that will go to paying down debt, which I don't think anybody can argue with. But the outlook moving forward from this year doesn't look all that rosy?

JANE HUME: It certainly doesn't, we've had two years now of failed policies and wrong priorities and that's left Australians worse off. There is no doubt that Australians feel poorer and there is a good reason for that, their real disposable income has gone backwards. They in fact, are poorer and that's because of decisions that Jim Chalmers and Anthony Albanese have made and unfortunately, it looks like that yet again, because they haven't focused on that back to basics economic agenda, it's going to happen all over again. We want to see a Budget that restores that discipline, that honesty, that rather than returning windfall surpluses actually returns structural surpluses rather than a little bit of a sugar hit, good news today and then long term deficits as far as the eye can see. We have to tame inflation. That's the only way we're going to restore our standard of living and restore prosperity and opportunity for Australians again.

STEPHEN CENATIEMPO: I want to get to the inflation for a moment, explain to us for a moment the difference between a surplus and the structural surplus.

JANE HUME: Well, that surplus that Jim Chalmers has returned, well says he's going to return tonight, and also indeed in his last Budget, have come from two things. High commodity prices, and more importantly, from bracket creep, but because of inflation. That means that Jim Chalmers hasn't done the hard work to create a surplus. Australians have done the hard work and of course they're now making decisions about their household budgets, what they need to rein in to tame inflation. But unfortunately, Jim's not doing the same. He's letting the Budget run out of control. He spent an additional $209 billion over the last two years already. We'll see what additional spending comes out in the Budget tonight. But quite frankly, if he keeps spending, well then the RBA keeps having to either keep rates on hold or lift them again, in order to tame inflation so he's not doing his fair share of the job.

STEPHEN CENATIEMPO: Well, let's talk about that because the Reserve Bank clearly isn't confident that inflation is under control as yet. The Treasurer seems to think that we'll get back to that 2 to 3% band by December, which is, look, you know, music to most people's ears if it can happen, but there's obviously a disconnect there between the Government and the Reserve Bank. Katy Gallagher, the Finance Minister says it's because the RBA hasn't seen the Budget yet. What could there possibly be in the Budget that is going to make such a huge difference?

JANE HUME: Well, I'm scratching my head and asking the same question and quite frankly, this is a question that should be posed to the Treasurer. What is it that he has got up his sleeve that is going to bring inflation back down? Is it because the decisions that he is making means that interest rates are going to stay higher for longer? So that means that people are going to rein in their own consumption? That's not good news. Is it because the economic circumstances are so dire that the inflation and consumption goes down and therefore inflation will come down too, now that's not good news. Is it because unemployment goes up? That's not good news, either. So I'm dying to see what it is, the rabbit he's going to pull out of his hat, that's going to make everybody better off tonight.

STEPHEN CENATIEMPO: Well, Dr. Chalmers has said that it's going to be a Budget of relief and restraint. Now my high school economics education tells me that those two things aren't necessarily possible at the same time.

JANE HUME: Well, certainly not as you're continuing to spend and that's exactly what this Government is doing. It keeps talking about unavoidable spending, but in fact, I just think that's a Government that has failed to make some hard decisions. An additional $209 billion in its first two Budgets alone. It was no sign of restraint whatsoever. The only way that we're going to tame inflation and restore our standard of living is for Labor's limitless appetite to spend is reined in.

STEPHEN CENATIEMPO: Okay, so where do we cut that spending? If you were in Katy Gallagher’s shoes at the moment, where would you cut that spending?

JANE HUME: Well, I have to say that $450 million on a failed Referendum wasn't a good start. But there's also another $40 million there on an ad campaign to sell the broken promise on stage three tax cuts. I think that that's excessive. On top of that, though, there's interest in billions of off balance sheet funds like the Housing Australia fund, the National Reconstruction fund, neither of those have actually supported any projects yet. There's no new houses for it and there's no investments in businesses that are remaking manufacturing in Australia. A billion dollars to support solar panels that even the Productivity Commissioner says may never may never be competitive and will just prop up an industry in which will never be competitive. A half a billion dollars on quantum computing in an American company, which is supposed to be part of a Future Made in Australia and yet even the Chief Scientist has said that probably that American company won't get to a commercial solution any faster than any of the Australian companies that are looking at quantum computing and then you put another $2.2 billion on, and I'm a Victoria, on the Suburban Rail Loop boondoggle down in Victoria, that all Australians are going to pay their taxpayer money towards. Even the Victorian Auditor General says that investment doesn't stack up. So there are plenty of things in this Budget that we wouldn't have done.

STEPHEN CENATIEMPO: Right, well, I guess we'll see tonight exactly what else is in there. Jane, I really appreciate your time this morning.

JANE HUME: My pleasure, Stephen.