Interview with Kylie Morris, RN Breakfast

15 January 2025

KYLIE MORRIS: The Coalition is hoping to fight the upcoming election on economic issues, and wants voters to blame Labor for high interest rates and anemic economic growth. This week, Peter Dutton has promised an end to what he calls Panadol policies if the coalition wins office and he's promised the start of some necessary economic surgery. Jane Hume is the Shadow Finance Minister, and joins me now to discuss the weeks and months ahead. Senator, welcome back to Radio National Breakfast.

JANE HUME: Good morning. Kylie, great to be with you.

KYLIE MORRIS: Listen, what exactly does Peter Dutton mean when he says economic surgery is just code for spending cuts?

JANE HUME: No, not at all. We believe that the decisions that this government have made mean that inflation has stayed too high for too long, that productivity has gone backwards and economic growth has stagnated. We also believe that the only way that our nation will reach its potential, and Australians will experience the prosperity that they expect and deserve, is if that's a private sector led phenomenon. It doesn't mean that having a great big public sector and ever increasingly bloated bureaucracy is going to be the solution to the problem.

KYLIE MORRIS: But there's a difference between a bloated bureaucracy and deep spending cuts. I mean, just to go back to what Peter Dutton said, and this is a direct quote, “the expensive Panadol policies must stop, the necessary economic surgery to stop wasteful spending must start”. So certainly, it sounds like he's talking about spending cuts.

JANE HUME: The only solution the Albanese government has to a problem is to spend more. They've said that a big Australia with a big government is the right solution. We don't think that that is the right solution for Australia. We think that containing the size of government and the size of spending is fundamentally important. And it's not just Australia and the Coalition is taking this approach. It's happening right around the world. My counterpart in New Zealand, the US administration is doing that. Even the Labor government in the UK have now realised the need to right size government, right size regulation, because they know that if they can create efficiencies within the public sector, well then unless they can create those efficiencies in the public sector, well then the private sector is held back. And that's exactly what we've seen under this government. We've already seen 26,000 businesses go to the wall under the Labor government in the last couple of years. And as I said, labour productivity has collapsed and the Public Service has grown, and it's grown by 20% and economic growth is stagnating. Something has to change if we are going to create a prosperous Australia.

KYLIE MORRIS: But the flip side to that is that a cut in government spending, which you're proposing, could force Australia into recession, because economists say it's only in fact, government spending that's prevented that from happening. That's according to Westpac data.

JANE HUME: Well, Kylie, actually, we're already in a household recession, and we have been for the last seven quarters. It's the longest household recession on record, and the only thing that's propping up our economic growth at the moment is these extraordinary migration figures that we've seen under Labor. Migration has gone out of control. And once you actually remove the effect of more and more migrants coming to the country, well then economic growth would also be going backwards as well. We don't think that's sustainable. That's not sustainable. That's a Ponzi scheme. That's not a plan for economic growth.

KYLIE MORRIS: Senator, I'm getting a nudge from a listener who just texted in to say, Please tell the Senator that inflation is now within RBA, RBA targets, Australia's current inflation rate is 2.8%.

JANE HUME: Well, headline inflation is down, but every credible economist, independent economist, will tell you that's been an artificial deflation because of government spending on subsidies, and particularly energy subsidies. In fact, core inflation, which is the data that the RBA have said that they look at when they make decisions about interest rates, is still above band. And in fact, it's come back to band in other comparable nations, but it hasn't here in Australia. And one of the reasons that the RBA has cited, as indeed has the OECD and the IMF, is excessive government spending that has been keeping inflation higher for longer, and that's caused our living standards to go backwards. In fact, our living standards have gone backwards by about 7.8% under Labor. So for those Australians who are out there that are feeling poorer this year, it's not in your head. You actually are poorer, and that's because of decisions that the Labor Government has made.

KYLIE MORRIS: Senator, would a Coalition government restore the original stage three tax cuts if you want to put more money into people's pockets?

JANE HUME: I think we've said that the original stage three tax cuts, unfortunately, cannot be restored to the way they were without an extraordinary expenditure. And we think the most important thing to do at the moment is to get inflation under control so that interest rates can come down and Australians can begin to consolidate where they are. Because you look at the government data right now and it says that those living standards that we've lost aren't going to be restored until about 2030 and that's by the Government's own data. We're always committed to lower and simpler and fairer taxes. We've already announced some tax cuts to small business, because it's small business that are really suffering right now.

KYLIE MORRIS: Senator a final question on spending, the Prime Minister gave an especially strident defense of public spending when he was on the road last week. He said “Anyone with a parent in a nursing home would be happy that a registered nurse is on site. Anyone needing childcare would be glad for the childcare pay increase. He defended the NDIS, which has undergone reform. He said anyone who needs to drive on the Bruce Highway wants to see it fixed”. Does any of that fall into your category of unnecessary spending?

JANE HUME: We've said we will not be making cuts to essential services. We've said that over and over again, so the Prime Minister can say what he wants. But the fact is, the Public Service has increased by 20% and on top of that, the Finance Minister has approved an 11% plus, more than 11% pay rise for public servants, and yet hasn't accounted for it in the mid year, economic and fiscal outlook hasn't accounted for it in the budget. Now that is irresponsible budgeting.

KYLIE MORRIS: Let's talk about public servants. What will voters know before the election where you'll be making cuts? When you talk about government spending, you often cite the figure of 36,000 new public servants across Labor's term.

JANE HUME: Yes, a 20% increase.

KYLIE MORRIS: So how many jobs are you losing?

JANE HUME: Well, we'll go through and make sure that the services can be delivered, but you'd be hard pressed to find an Australian that believes that because they've had a 20% increase in the public service that they're being 20% better served than they were only a few years ago. This has been an extraordinary expenditure, and yet it hasn't been accounted for. We'll be asking some questions of both the Finance Minister and the public and the departments, about how this can possibly be the case. They haven't got their stories straight. They haven't got their numbers straight. They're putting forward dodgy numbers, and there's a $7 billion black hole in the budget because of it. That cannot be right.

KYLIE MORRIS: Senator, Labor argues that the public service has grown partly because it has reduced reliance on external contractors, which was a large expense under the previous Coalition government. So would there be any kind of cap on the use of external contractors or the amounts spent on them under a Coalition government, if you're talking about shrinking spending on the public service, is that something you would make a commitment on?

JANE HUME: The government is still using consultants, and the public service will always refer to the expertise of consultants, particularly in a world where technology is changing so fast. So I think that that's a difficult, a different comparison to make. But we've been clear an efficient and effective public service is important, but it needs to be sustainable. And for every public service job that's created, Australians are paying for it. They have to work harder and they have to pay more taxes to pay for it. So we will stop that exponential growth in the public service and refocus on delivering the essential services that Australians rely on.

KYLIE MORRIS: Senator, you're listening to Radio National Breakfast where the time is quarter to eight. I'm speaking with Shadow Finance Minister Jane Hume about the coalition's economic policies heading into the election. Senator, how does the promise of smaller government and less spending fit with your nuclear policy, which involves, effectively, taxpayers bankrolling nuclear power plants, because no one in the private sector would do it?

JANE HUME: Well, one of the things that has driven inflation high and kept inflation higher for longer has been high energy prices. In fact, we've seen electricity prices go up as much as 30% over the last two and a half years, and gas prices increase 32% that's pushing up our electricity prices that not just households are feeling the pain, but businesses too, and it's making the goods and services that they then produce more expensive. We want to see a reduction in energy prices over the long term, and that's about getting a balanced mix in our energy in our energy system. So of course, renewables are going to play an important part of that role. But also, in the meantime, we need that base load, that firming power that's going to come through more gas. We will fast track gas projects to make sure we bring more gas into the system. But in the long term, when those coal fired power stations that are providing the base load power that we rely on now start to retire. We want to replace them with zero emissions base load power coming from nuclear energy, as have all major countries around the world, all major developed nations around the world, that are now benefiting from that zero emissions nuclear energy that brings cheaper power prices as well.

KYLIE MORRIS: Finally, Senator, there's been reporting this week in the Australian Financial Review that the Coalition's pre-selected only one woman to replace retiring members and six men. Is that disappointing to you?

JANE HUME: Well, I also think that's a bit of nonsense. I've been campaigning around the country now for a long time with some amazing women from places like Wentworth with Ro Knox, Jamiee Rogers in Warringah, Katie Allen in Chisholm, Amelia Hamer in Kooyong…

KYLIE MORRIS: Sorry, Senator, are you saying that those numbers aren't correct?

JANE HUME: Well, retiring members aren't the only safe seats. In fact, there's no such thing as a safe seat anymore back in 2023, 2022 at that election, there were only 15 seats out of 151 around the country that were decided on first preference votes. So there's no safe seats, but of the seats that we are trying to win, and there are plenty of them, there are some extraordinary women that are running for those seats, with incredible professional backgrounds, such a diverse range of women, and I'm looking forward to campaigning with all of them but not only campaigning with them, having them in the party room they will be an extraordinary presence, a real force. They are amazing.

KYLIE MORRIS: Jane Hume, thank you for joining us.

JANE HUME: Great to be with you,

KYLIE MORRIS: Jane Hume is Liberal Senator and the Shadow Finance Minister. This is Radio National breakfast.