TUESDAY, 7 JUNE 2022
SUBJECTS: Interest rates; Boris Johnson; G20.
LEILA MCKINNON, HOST: Another crunch is coming – the big question this morning, just how painful will it be? In just a few hours’ time, the Reserve Bank will announce another expected rise in interest rates, pushing millions more Aussies into mortgage stress as the pressure on household budgets grows. So, let’s discuss with Federal Education Minister Jason Clare, good morning to you, and 4BC’s Scott Emerson in Brisbane.
Now Minister, let’s start with you. It’s shaping up to be the perfect storm, isn’t it? You come into office with rising fuel costs, grocery prices, a housing crisis and the prospect of interest rate rises. A big job ahead. What are you going to do to try and ease the cost of living for Australians? Where do you start?
JASON CLARE, MINISTER FOR EDUCATION: You’re right. We’ve got inflation through the roof. Wages are through the floor. We’ve got interest rates now knocking at the door. We can’t pre-empt what the Reserve Bank’s going to say or do today, but they’ve made it pretty clear there’s going to be a number of interest rate rises, and that just makes it harder for people who’ve got big mortgages already – particularly for people who’ve just signed up to a mortgage in the last 12 months. For a lot of Aussies, they’re ahead in their mortgage. But if you’ve just signed up and then the bank tells you you’ve got to pay more, it’s going to make it harder and harder. Now, there is no simple, or magic fix to this. There are some measures that the former government put in the Budget which we support, but we need some medium and long term measures to help get wages going again and help people with the cost of living, whether it’s childcare or the cost of medicine or the cost of energy. But it’s hard. There is no simple fix here.
MCKINNON: Yeah. Scott, it’s alright to put the squeeze on spending, isn’t it? But if the spending is on things that you can’t avoid buying like food and fuel, you know, how is this going to help?
SCOTT EMERSON, 4BC: Oh look, it’s going to be so hard for so many people, and Jason’s right in terms of those who’ve just got into the mortgage market. But when you’re talking about, say, a lettuce for 12 bucks, I mean- and interest rates going up. Jason mentioned about getting wages up. Of course, if wages go up to the inflation rate as the Government is forecasting and they want to do, well that’s only going to put more pressure on inflation. That means interest rates will go even higher. We already know that Philip Lowe is talking about two per cent by roughly the end of this year. So we could see a rise today of what, 0.4, maybe even 0.5, taking it up to 0.85 per cent of interest rates. Now that’s going to hurt a lot of people there.
MCKINNON: It certainly is. Now, let’s move on. In the last few moments, Boris Johnson has given his reaction to surviving a vote of no confidence. Let’s have a listen to that.
[Excerpt] BORIS JOHNSON: So it’s- I think it’s a convincing result, a decisive result. And what it means is that as a government we can move on and focus on the stuff that I think really matters.
MCKINNON: He didn’t even convince me then. Minister, we know about spills in Australia and we know what’s going to happen here, don’t we? Is he toast?
CLARE: If history’s any guide, then this is not the end of it. I think when the same thing happened to Margaret Thatcher, when the same thing happened to Theresa May, they won this initial vote, but they end up resigning soon after. The same thing we’ve seen in Australia, I think, more recently with Malcolm Turnbull. He’s only just won this; almost half of his party voted against him. Obviously his party are as angry as I’m sure the general public are, that when you tell people not to do something, to sacrifice things like Christmas, and then you go off and have parties, it has a political impact, and that’s obviously biding in the UK at the moment.
MCKINNON: It certainly is. I mean, Scott, the population has certainly spoken, hasn’t it? You’ve seen the booing there at the Jubilee. It seems like they don’t want a bar of him.
EMERSON: Look, Bojo is toast. That’s just the reality of it. How long he’ll limp on for, it’s hard to say. He’s got to by-elections coming up at the end of this month and the Tories are likely to lose those. Theresa May, she limped on for a while, Margaret Thatcher did so. John Major actually got to an election after he had a vote of no confidence he’d won. But look, I can’t see Bojo surviving, and clearly the UK population doesn’t want him there He has clearly flouted the rules that he brought in like it didn’t apply to him. And I think once you have that situation, the public believes you don’t abide by the rules that everyone else is expected to follow, well, you can’t survive as leader.
MCKINNON: Now let’s move on to another unpopular leader. It’s Russian President Vladimir Putin who’s been surprisingly invited to the G20 summit in Bali. So, I’m just imagining, Minister, if he does attend, nobody’s going to want to shake his hand or be photographed with him.
CLARE: No one would want to sit next to him. Not after everything that he’s done. Remember, this is a person who’s authorised the blowing up of hospitals, the bombing of childcare centres and kindergartens; the rape, murder and torture of women and children. I don’t think anybody really wants him there. No one would want to sit next to him. But it’s important that we go to the G20 because it’s an important event. It’s held in Indonesia, which is one of our best friends in the world. It’s important also to note, Leila, that President Zelenskyy’s been invited as well. And that’s a good thing.
CLARE: I think everybody will want to shake his hand.
MCKINNON: Yeah, will we see Zelenskyy there? Will we see Putin there? What do you think, Scott?
EMERSON: Look, I think this is a really difficult one for a lot of the world leaders there, because I can’t imagine a situation that we turn – Anthony Albanese is there standing in the group photo then with Vladimir Putin. Joe Biden has accused Vladimir Putin of being a war criminal, and then what – turn up to an event with him? I can’t imagine that anyone wants Putin there, but given his view of the world, he will turn up. And the trouble is he will use it to justify to the Russian people that the world does accept me as a leader, a legitimate leader, rather than a war criminal who’s overseeing the atrocities in Ukraine So it’s going to be a very difficult one for Anthony Albanese to be in that group photo. What, is he going to step out of it and say, no, I’m not going to be there with him? Or what happens if, unfortunately, he is standing next to Vladimir Putin at one of those events?
MCKINNON: Yeah, awkward. Reminds me of that Chinese curse. this morning’s chat, that we’re living in interesting times, aren’t we?
CLARE: Interesting times, indeed.
MCKINNON: All right Minister, Scott Emerson, thank you for joining me this morning. We’ll leave it there.
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