Panel with Paul Murray and Joe Hildebrand, Paul Murray
9 May 2023
PAUL MURRAY: Let's start it off with Jane, who is the Shadow Finance Minister, her responsibility if she became the Finance Minister would be what the Government is spending in and of itself apart from anything else and Joe Hildebrand is a future Treasurer in a future Labor Government. Until then, he will continue on at The Daily Telegraph and here at Sky News. So Jane, a question and then your hot take. My analysis here is that they get more revenue as the years go on. But they're also going to spend way more than the extra revenue, which means deficits go down, and so much for all this talk about the debt, on their own numbers, their own calculations, all of it gets worse. So what exactly is the point of this budget?
JANE HUME: Well, that's a very good question, Paul, because you're right. We've seen this, you know, a lot of crowing about a surplus tonight. But the real test, of course, is whether that surplus can be maintained over future years. We saw that the objective of a balanced budget was actually removed from the fiscal strategy in the October Budget this year; they removed the priority of lowering inflation as well and that's why we're really seeing nothing in there for middle Australia, the ones who have already seen and that's this is a back of the envelope calculation, by the Opposition, the average family has seen a $25,000 increase in their costs in this year alone and there really is very little in this budget for them. Not only that, but they seem to have raised the white flag on lowering inflation and they've said that it will all happen. Don't worry about it. Nothing to see here. It'll happen eventually. Because the RBA is gonna have to do all the heavy lifting, the RBA is going to have to potentially put up interest rates further and in fact, the first comment tonight that I heard after the budget was from the economist Chris Richardson, who said that he thought that all the interest rate rises were over. But having had a look at this budget, he reckons the RBA is going to have to take the baseball bats out again.
PAUL MURRAY: So Joe, if the unemployment estimates in the budget are correct, we're going to go from the current record low to about a percent, three quarters of a percent, let's say, for easy numbers, an extra percent, the rough numbers we've been able to work out that's the best part of 140,000 people that will lose their job in the next twelve months. But in the next two years, we're going to add 700,000 people via migration. How does that work?
JOE HILDERBRAND: Well, look, again, low migration equals low unemployment is not necessarily an equation. I know it sounds counterintuitive, but you if you bring in the right people, and they've changed the mix, with a crackdown on the low skilled migrant intake, and make sure that it is a targeted Skilled Migration Program and full credit to the Government for that. But migration actually fuels the economy, it fuels economic productivity, it actually fuels employment, it actually fuels housing as well believe it or not, because people who are developing housing estates think, alright, there's going to be huge demand, I'm going to hit my straps. So this idea that all these migrants are going to come in and take all our jobs or take all our housing is just not true. So the fact of the matter is, Australia does have a workforce shortage in many critical areas, including aged care, it needs people to fill them, we do not have enough people here, which is why unemployment is at record lows, arguably even too low, believe it or not, but you might in the past have considered sort of effectively, you know, full employment and again, even if you do get, you know, an unemployment rate, with a four in front of it historically, that is still very, very low as someone who grew up when you know, unemployment was in the double digits at times during the last recession. I mean, these are still very, very low numbers and again, you cannot bring inflation under control when you have a roaring full employment economy. So I feel like some of the criticism of this Budget, I mean, Jim Chalmers could have brought a magic pudding into parliament and people would still be complaining, people are saying, oh, there's nothing in it for middle Australia, but he's spending too much, which is it?
JANE HUME: It’s both Joe.
PAUL MURRAY: Welcome to Government.
JOE HILDERBRAND: But this is this is the whole point, he hasn't he hasn't spent anything on middle Australia because the only people he is spending money on are those who are right on the edge, those who are right on the precipice, who are clearly the most vulnerable to going under and in terms of the increases to welfare. These are things that John Howard, Barnaby Joyce and Australian Business Chamber have actually called for so I don't know what he's done wrong. There's no pleasing people.
PAUL MURRAY: Okay, no, the picture at home is the Government's going to get more revenue than ever before, but it's going to spend way more than even supposedly the out of control Government that needed to be replaced is going to spend. 140,000 people, which I think is an entire few Hobart stadiums, are people that are about to lose their job in the next 12 months, but we bring in 700,000 people and again, the number of people, more than half of this budget is made up from income that comes from Pay As You Go workers. Now that is the vast bulk majority middle of Australia. That's why I went and had a look at what according to the latest census was the average Australian. The average Australian, if they have got kids in childcare, sure there's something for them. But that's not the vast majority of them. Vast majority of them have kids in primary school or high school, and they get nothing this year, they get 1500 last year, which is the 1500 that they had last year, which means they're not in front until what three years time, but also about the welfare part of it, can we play Jim Chalmers listing off all of these new payments that are adding into welfare, because I want to get to the percentage of the Budget that is welfare Jane, I think this is concerning for people, especially for that bulk in the middle that are more than willing to all day everyday have to go along and pay their taxes. Remember, when Frydenberg was the treasurer 35.3% of the entire federal budget was welfare. Now it's going to be 36.8%. Roll the tape.
JIM CHALMERS EXCERPT: The pressures on the Budget are acute, but as a Labor Government, we will always strive to help those who need it the most. That's why tonight, we announce a $40 per fortnight increase for JobSeeker recipients, plus those on Youth Allowance, AUSTUDY, and other income support payments and in the same spirit, we're expanding parenting payments single, so it will now be available to single parents until their youngest child turns 14, rather than eight. This will provide 57,000 families with an extra $176.90 per fortnight. Tonight to help ease the pressure on people feeling the pain of rising rents, we are increasing the maximum rates of Commonwealth rent assistance by 15%. This will provide up to $31 extra a fortnight for people renting in the private market, and community housing, the largest increase in more than 30 years.
PAUL MURRAY: So Jane, I understand what the benefits of some of these things are. But it's not just a one off like the $500 energy thing. This is a commitment that every single Government from every year on will have to cover, the percentage of welfare goes up, the percentage for health goes down. What does that say about the priorities of Jim Chalmers?
JANE HUME: Well, you're right, this is baked in spending, it will be there for decades to come and it won't be able to be unwound by future Governments. That's why we've got those intractable budget deficits that will continue on. But here's the deal. If you really wanted to deliver a Budget for all Australians, if you wanted to do across the board cost of living relief, which we know is the number one issue for Australians right now, the only way to do that is to lower inflation, is to make lowering inflation, a specific objective or specific policy in itself and we haven't seen that all we've seen is increased taxes and yet we know you can't tax your way to prosperity, you can't tax your way to reducing the cost of living and increase spending, you cannot spend your way into improved into a better inflation outcome. That doesn't add up. But moreover, we've seen other pressures on this Budget too. You mentioned the net migration take, well newsflash, it's actually changed. It's 1.5 million in net migration over five years, that includes this year, at the same time, as there are cuts and delays to infrastructure. So when you've got rising cost of living, rising inflation, and the problem of that, of course, it reduces your purchasing power, it erodes your savings, it lowers your standard of living, plus net migration without the infrastructure to keep up to support that net migration. You've actually got lowering living standards for all Australians.
PAUL MURRAY: So Joe, again, the politics around all of this right now, presumably, again, Budgets, they become a little bit like Rorschach tests, and your political position becomes whether it's the greatest ever or the worst ever, right? For the extreme majority of people, they're sort of okay, what's in it for me? Well, again, depending on where you are on the scale, there's a little bit, the Guardians’ take is that there is some help, but it's spread too thinly and their assumption would be that anyone earning over X dollars should end up with 99 cent taxes and all the rest of it, right. So, okay, they're out of the game. The Australian says there's an awful lot of, there's an awful lot of wild and rosy assumptions and all of this, but let's talk about the Telegraph reader. Let's talk about the person who may be brushing past right now. Now, I remember when Amanda Vanstone was ridiculed for what a milkshake tax cut. Well, if you're somebody who's on the dole, $40 is not exactly going to turn your life around. If you're somebody on the single parents stuff again, it's a little bit of help. But it isn't the fire hose to put out the fire of inflation for those millions of people. So politically, what do you think this means? Is that a dead cat bounce in either way, where it just ends up as sort of one all? Or what's the case for the political advantage of promising big, delivering more taxes, delivering bigger debt and deeper deficit?
JOE HILDERBRAND: Well, I don't think, I think the reason why there hasn't been a rise in the dollar other welfare payments for so long is because there is nothing in it politically, there's nothing in it politically for either Liberal or Labor, such people are overwhelmingly likely to vote Labor anyway. So Labor gets their votes anyway, and the Liberals don't get any political advantage from giving it and that's why they've been neglected for so long. So you know, it is the squeaky wheel in the middle that often gets all the goodies and we were talking before about, you know, this $20 a week wage wages rise, increasing payments to single mums and people on unemployment benefits and stuff like that and well oh it's baked in well, this is the thing that tax cuts that have been the tax breaks that have been allowed to expire, as both parties were always committed to doing. $1,500 for 10 million people. Again, this was not baked in because this is not a tax hike. This is something that was only ever meant to be temporary and yes, these things do end up taking on a life of their own and becoming permanent. But at the same time, the Government has committed to this stage three tax cuts, and that is going to have an overwhelming and disproportionate benefit for middle and higher income Australians.
PAUL MURRAY: Because they're actually paying the tax.
JOE HILDERBRAND: That's right and they're going to get it all back. They are going to get it all back. Much more than they were before. That's the whole point of a tax cut, that all the Government has ever said is that it will not it's not going to say, oh no, you're not going to notice this financial crisis, you're not going to be any worse off because of this roaring, you know, once was 8% inflation, right? They've said the exact opposite of that. They have said, for the people for whom this is a matter of economic life and death, we are going to give them what assistance we can without spending money like drunken sailors, everyone else is going to have to simply just, you know, weather the storm, and it will be rosier at the other end. So this again, this idea that you know that economic storms can come that you can have economic difficulties, you can have a cost of living crisis, you can have high inflation, but no one's going to be worse off no matter how much money they earn. This just seems to be just pie in the sky stuff. The Government has targeted the relief at those who need it most, those for whom it could be the difference between being homeless and not being homeless and yes, everyone else like you and I are going to have to cop it sweet for a little while. But we're still getting the great big tax cuts at the end of it and the Government has still committed to that.
PAUL MURRAY: See, Jane, again, this is the clever trick of any new government right, which is a vote for me and it will change your life. Then you get into power and you don't change everyone's life. But then you turn around and say don't vote for the other person because they're worse than we are right? I'm pretty sure I remember the current Prime Minister, formerly Opposition Leader, his clear, absolute no asterisks, no ifs, no buts promise was the cost of everything is going up. A Labor Government will lower the cost of living, not an asterisk for some. That's what the promise was on that basic promise, has this budget delivered on a Labor Government will lower the cost of living full stop? No ifs? No buts. No, these people know that people?
JANE HUME: No, of course not. We've seen inflation with a seven in front of it in the last three quarters. There is no way that you could be improving people's cost of living until you deal with the inflation problem, until you have slayed the inflation dragon and all of these cost of living measures are either temporary or that, you know, I think the way that Angus Taylor described it was putting a band aid over a bullet hole. You know, they're dealing with the symptoms, not the cause. You've got to deal with the cause. This is a Government that you're right said that they were going to reduce your cost of living and we've seen nothing but the cost of living increase. They said your real wages would rise under Labor, real wages have gone backwards and are forecast to continue to go backwards throughout the entire life of this Parliament. This Government said that they were going to make mortgages cheaper. Well, of course we've seen 10 interest rate rises under them alone. 11 in total. So this is a series of broken promises that the Government has, let's put aside $275 reduction annually in your electricity bill. That one's just been completely forgotten, because even with the electricity subsidy, or the power bill subsidy that they've announced and let's remember they announced it in December, it still won't kick in until later this year, months and months and months later, well after winter. Even with that we're still seeing power prices go up. So this has been a fail from this Government. It has broken so many promises and I am certain that there are more to come. I'm very pleased to see the stage three tax cuts stay in the Budget. However, interesting to note that they were not mentioned even once in the Budget papers, not even once in the Treasurer's speech tonight. I think that makes me a little bit nervous.
PAUL MURRAY: So tomorrow, the Prime Minister and Treasurer will no doubt high five each other out the front of Parliament while they're doing the big sell tomorrow morning and then they're off to a big event to sell the big idea. So let's go off the top of our head here, Joe? Where is the one place they're gonna go to say, look how good we are? Are they going to the local GP super clinic? Are they going to an unemployed person over the age of 55? Who are they going to, hoping for a big cuddle tomorrow?
JOE HILDERBRAND: I think you'll definitely see the GP clinic where they will say that, you know, anyone under the age of 16, no matter where they come from, and not means tested will be more likely to get bulk billing, as will someone over the age of 65. So I think that is probably a pretty safe bet and I would also say like, by all means let’s all disagree, but the 275 thing that modeling was for 2025. That was for two years away. So granted, it's pretty heroic at the moment. But that didn't promise that we're going to do it by next Tuesday.
PAUL MURRAY: It was garbage then, it’s garbage now.
JOE HILDERBRAND: Wages are projected, real wages are actually protected to expect it to grow in the next couple of years. That's in the budget.
JANE HUME: Based on reduced inflation, how does that go down? There's no policy to reduce inflation, it’s just a hope and a prayer.
JOE HILDERBRAND: By all means, by all means, you know, question the assumptions or say that you don't think that that's actually going to happen. But a Budget is nothing, if not a blueprint for the future and this is what the Budget is saying is going to happen. So this idea that we're all you know, if you've got to believe the bit about us going into debt and believe that bit about us running deficits, then you have to believe the rest of the stuff in it. Otherwise, you're just picking and choosing the bits that you're like.
PAUL MURRAY: No, no, I do, which is why they're gonna have higher taxes than ever before. They're gonna spend way more than the taxes that they're getting and 40,000 people are going to lose their jobs.
JOE HILDERBRAND: Wages will outstrip inflation.
JANE HUME: Point to one policy that brings inflation down. I cannot see one policy. I cannot see one single policy that will bring inflation down, not in a sustainable way. Maybe a band aid, maybe a temporary measure on energy prices, but nothing sustainable. That's my concern, Joe.
JOE HILDERBRAND: Joe, I'll save you from having to answer that question and play Jim Chalmers on medicines if we came here, because this was something that both parties took this into the last election, which was a reduction in the amount that you'd have to pay on medicines. But I'll tell you what, if there is one group of Australians who, I'll be surprised if they don't start getting more political, and that is the pharmacy guild, remember, yes, having a scenario now where yes, you're going to get two months worth of medicines for less money, which means the pharmacist is going to cop it on a couple of levels. I saw some examples about pharmacists that we're printing sort of messages about this, on those little folders that you get with your script as well. I'll tell you what, if they want to go nice and political, there's going to be some damage for the Government in the next little while. But till then, this is the crowing from the Treasurer.
JIM CHALMERS EXCERPT: From September this year, patients will be able to get more of the medicine they need for less money and less hassle. Instead of having to go back to their pharmacist every month, many people with common chronic illnesses will be able to get two months worth of treatment for over 300 different medicines, this change will save people up to $180 a year.
PAUL MURRAY: Joe, you're looking forward to take one with a meal, bottom - don't vote Labor?
JOE HILDERBRAND: I'm looking forward to seeing just how much influence the pharmacy guild actually has in this country, because apparently, they're bigger than the Freemasons. So we'll say just how much they arc up about this. But it is, I mean, the most artificial, you know, anti free market policy in the world. I mean, I'm on a couple of medications you might be not surprised to learn, that do not require any data. All they require is they simply go and get the same thing over and over again, it's been happening for years. They're very mild and the idea that I have to rock up every single month and that you couldn't possibly hand out another script. There are doctors that are already sort of writing scripts in different ways. So you can get more than that from artificial market manipulation. It's socialism!
PAUL MURRAY: Well, I was talking to a pharmacist today who was running the numbers suggesting they could be about $60,000 a year worse off. They'll have to sack one of the people who works in their pharmacy, which would be one of the 140,000 people about to lose their job. All right. Anyway, Jane, Joe, thank you.