PETER STEFANOVIC: Let's bring in the Shadow Finance Minister Jane Hume. Jane, good to see you this morning. Thanks for your time. So what are your thoughts on where this all leads?

JANE HUME: Well, the Coalition have been saying for the last two years that expansionary Budgets rather than contractionary Budgets simply make the inflation problem worse, and now economists and commentators are following suit in that message and demonstrating their concern. Quite frankly, an additional $209 billion in spending, which is what we've seen in the last two years, has only made the inflation problem worse. Economists like academic Professor Richard Holden have said that Australia's inflation problem is now homegrown and it's sticky, and Chris Richardson has said today that this government is falling for the oldest trick in the book, which of course, is making those structural promises, those spending promises on the back of temporary good news. That's a mistake, but we see it every day in the newspapers. You cannot pick up a newspaper these days without another billion-dollar plus spend coming from this government without getting the expenditure side of the Budget right under control. That's what's driving inflation, keeping inflation higher for longer, which is keeping interest rates higher for longer. 

PETER STEFANOVIC: A tick of approval though on a second surplus? 

JANE HUME: Well, it's a surplus thanks to other people's hard work, not Jim Chalmers’ hard work. It's on the back of high commodity prices and of course bracket creep, which is caused by inflation as people's incomes move into higher and higher tax brackets. The hard part of course for Australians to stomach this is that they've had to make cuts to their household budgets because of that high inflation. It's time Jim Chalmers did the same thing. He's pointed to areas like NDIS and said that there's only going to be an 8% growth cap, price the spending cap on NDIS and yet there are no policies to back that up. He hasn't done the hard work on the expenditure side. He's simply banking windfall gains from bracket creep, and from high commodity prices.

PETER STEFANOVIC: If spending is too high, and you win office next year, that likely means that you'll have to make the cuts, right?

JANE HUME: Well, I'll tell you what we wouldn't do. We wouldn't be spending $450 million on a referendum for a Voice to Parliament that Australians clearly said that they didn't want. We wouldn't be spending $2.2 billion on a Suburban Rail Loop here in Victoria that didn't even have a business case to back it up and now the ratings agencies are warning the Victorian Government and the Federal Government that this is a boondoggle that we simply can't afford, and I'll tell you exactly what we wouldn't do. We wouldn't be spending $40 million on an ad campaign to advertise a tax cut which everybody gets anyway. This is wasteful spending. It's unnecessary spending. It's ill-disciplined spending that is causing the Budget to be in an unnecessarily precarious position and blowing out that's part of that $209 billion of extra spending that we've seen. 

PETER STEFANOVIC: Okay, so, in your Budget Reply, where are your cuts going to be?

JANE HUME: Well, I've just told you what we will not be spending on. 

PETER STEFANOVIC: But where are your cuts going to be? 

JANE HUME: Most importantly, most importantly, this is a Government that said that they were going to get NDIS and aged care under control and the Coalition have come out and said that when the Government makes its decisions on how to do that, we will be supportive, because quite frankly, these are areas of the Budget that are now getting out of control. This Government came to office saying that it was going to control spending in those particular areas… (interrupted).

PETER STEFANOVIC: But if you're not going to make any cuts, if you're not going to be making any cuts.

JANE HUME: The promise that this Government made was that Australians would be better off under Labor and demonstrably people are not better off. In fact, they're 7.5% lower in their real disposable income than they were just two years ago and that has been caused by inflation. Inflation has been pushed along by the fact that this Government doesn't have the fiscal discipline it needs in order to restore a Budget balance on a longer term basis. That’s what we want to see. That’s the test we want to see. 

PETER STEFANOVIC: The point I'm trying to be honest, if you're not singling out cuts, then wouldn't the situation be just as bad?

JANE HUME: Well, the tests we want to see met, Pete, include restoring those fiscal disciplines things like a tax-to-GDP ratio, making sure that your long term spending doesn't exceed your long term economic growth forecasts, taming inflation and restoring our budget balance, restoring our budget disciplines, restoring our standard of living, should be the priorities of this Government, above and beyond anything else, whether it be a large announcement on A Future Made in Australia that involves nearly a billion dollars to an overseas company to build something in Australia where even the Chief Scientist says it's probably going to happen no faster than other companies are gonna be able to deliver it. These are concerns; these announcements are ill-disciplined as opposed to dealing with the problem facing Australians right now, which is their rising cost of living caused by inflation. 

PETER STEFANOVIC: Jane Hume, the Shadow Finance Minister, appreciate your time. Thank you. We'll talk to you again soon.