FRIDAY, 2 JUNE 2023
SUBJECTS: Cost of living; May Budget; Wages
NATALIE BARR: All eyes will be on the Reserve Bank next week with yet another interest rate hike expected. It comes after a rise in inflation, which increased to 6.8 per cent in April. That’s been driven by the fast-climbing cost of rent, holiday travel and food staples such as bread, milk and cheese, and economists say that may force the RBA’s hand when it meets.
Let’s bring in Education Minister Jason Clare and Deputy Opposition Leader Sussan Ley. Good morning to both of you.
JASON CLARE, MINISTER FOR EDUCATION: Good morning.
SUSSAN LEY: Morning Nat.
BARR: Increases rates again, already we have had 11 rises, more pain for Aussies obviously. What else can be done to bring down this sticky inflation?
CLARE: The first thing I’d say, Nat, is pass the Budget. What the Reserve Bank Governor said in Estimates this week is that the Budget will help to reduce inflation. Sussan and I butt heads on Sunrise every Friday morning and inevitably Sussan will say something negative again in a minute, but the good news is that we’ve got bipartisan support for the Budget. Both sides are going to support to get the Budget through which the Reserve Bank Governor says will reduce inflation.
Today we’re going to see more than two million Aussies get a pay rise. That’s going to help a lot of Australians doing it tough with the cost‑of‑living. And in just under a month more than a million Australian families with children in child care will see their child care bills go down, cheaper child care for more than a million Aussie families. That will make a big difference as well.
BARR: Sussan, it is tough out there. It’s not going to be enough for a lot of people. What do you think the decision on interest rates will bring next week?
LEY: Well, Nat, we can’t talk about inflation without recognising Kochie, and I know he has one week to go, but I just want to actually recognise what he’s done for millions of Australians and their families when it comes to empowering their own financial security.
But back to business. If you don’t have a plan to deal with inflation you have interest rate pain, and what that pain is doing to households is pretty awful. So yes Jason, you and I butt heads but I’m here understanding the pain that’s out there and families that have to pay $20,000 a year more in after tax dollars on their mortgage, and that is really hurting.
Now the Treasurer put in the budget papers that the cash rate would stay at 3.85 per cent till 2024. I thought that was a pretty big call. If interest rates go up next week, then I think the government has real questions to answer and it does come back to that plan, that real plan that we just haven’t seen to tackle inflation.
BARR: Jason, was that a mistake?
CLARE: You know, I told you it would happen, like Nostradamus, here comes the negativity from Sussan again.
BARR: But is she right?
CLARE: No, of course she’s not. Inflation peaked back at Christmas. If you ask any economist, if David was here now, he would say the same thing, inflation peaked back around Christmas, it’s on a general trajectory down.
It’s still the biggest issue in the economy that we face and so every step we take needs to be focused on it, and the Budget’s focused on it. We’re talking about the Reserve Bank making a decision next week. The Reserve Bank Governor said in Estimates this week that the Budget is taking the pressure off inflation and helping to reduce inflation.
One of the things he was talking about there was the cap on coal, the cap on the price of gas, as well as the money we’re providing people to help them with their electricity bills.
Now we are voting together on the Budget, but last year we didn’t vote together on that. That measure that the Reserve Bank Governor says will help bring inflation down was something that Sussan and Peter Dutton voted against.
BARR: Yeah. Sussan, Lowe did say this week that the caps on gas and electricity prices and the energy bill relief has knocked off three quarters of a per cent off inflation. What else would you do?
LEY: Nat, Nat, there just isn’t a plan for affordable reliable energy.
BARR: Yeah, so what else would you do?
LEY: Now we have to grow our way out of this, not tax our way out of this.
BARR: If you say there’s no plan ‑‑
LEY: Put in place a plan.
BARR: ‑‑ what else would you do? Sussan?
LEY: Unlock the supply. Unlock the supply of gas. Unlock the supply of gas so that can you have affordable, reliable energy. You would have flexible and productive workplaces, Nat, and you would also congestion‑bust infrastructure, fast‑track infrastructure. There was nothing in the budget about infrastructure. So of course we have positive ideas.
CLARE: Just $120 billion.
LEY: We have those three things that I’ve just mentioned. They didn’t appear, they didn’t appear anywhere in the budget at all. And if you talk to the sector that is responsible for delivering cheaper electricity, affordable electricity to households, they will say this Government has got it all wrong.
And I think deep down, Jason, you know this, because by giving people money for relief, yes, that’s something, yes, that’s short‑term, but it doesn’t go to every household.
CLARE: So why didn’t you vote for it?
LEY: It doesn’t go to every small business; it doesn’t go to the people that I meet on the street every day. And I look at this government, Nat, I’ve sat here in Parliament this week, here I am, and I just don’t think they understand.
We just get the insults, we just get the jeers, we just get the finger pointing. We just don’t get the acknowledgement of what real Australians are feeling out there now with their electricity bills soaring at the moment, and their mortgages going up and everything appearing to hurt.
BARR: Okay. Well thank you both for your time, we’ll see you next Friday.