Topics: National Accounts data; Labor destroys Australians’ standard of living; reckless government spending; collapsing productivity; government subsidies; Reserve Bank; core inflation

 

E&OE   

 

KIERAN GILBERT:

Welcome back to the program. Let's get some more reaction to this GDP number. The Shadow Treasurer, Angus Taylor, live in the studio. The Treasurer maintains we're still on track for a soft landing. If the RBA does cut rates before the election, would they have achieved that, given unemployment remains as low as it does?

 

ANGUS TAYLOR:

Well, can I say Kieran, these numbers are a nightmare reflecting the nightmare Australians are facing in trying to make ends meet right now. This is the seventh consecutive quarter of GDP per capita going backwards, seventh consecutive quarter of a household recession. We've never seen that before. We haven't seen it before. It is absolutely diabolical. At the end of the day, what we're seeing is household standards of living collapsing in front of our eyes. 8.7% down since Labor came to power. There is no pathway to restore that lost standard of living. These numbers are a scorecard on the Labor government and they get a fail. It's very clear. Higher prices, higher interest rates, higher personal income taxes, they're up over 20% since Labor came to power, and at the heart of it is a strategy from Labor, which is a big Australia, big government agenda. We're seeing population growth of just short of 1.6 million since Labor came to power, that's a person coming to live in Australia every 44 seconds. It's way above what we've seen in the past and we're seeing spending which is out of control. $40 billion of new government spending or borrowing in the last quarter alone. That's higher than we've ever seen before, including during the pandemic crisis, and the only crisis we've got right now Kieran is Labor governments in power and they are a crisis.

 

KIERAN GILBERT:

Well, the Treasurer said that a big part of that was state spending and Defence spending so is the Coalition opposed to the Defence investments?

 

ANGUS TAYLOR:

You know, this is extraordinary. We've opposed $110 billion of spending through the Parliament. Find me an Opposition that's done that in recent times, and the reason we've done that is because this is the wrong time to be spending Australians’ money in that way. Now, not $1 of that is Defence. Not $1 of it. But this Treasurer will make stuff up because he's never understood the economy. That's clear. He's never understood the challenge that was facing our economy on what needed to be done. His reckless spending, his big Australia policies are wrecking our economy and wrecking Australians’ household budgets, and now he's just looking around for other people to try to blame. I mean, you know, he's had a go at everybody. Vladimir Putin was the problem for a while. Donald Trump recently. He had a real go. It was all was all his fault. Peter Dutton, I mean, it doesn't really matter. He'll always look for someone to blame. Well, he needs to take responsibility. He's got a MYEFO coming up in the next few weeks. He's had three failed budgets. This time, he can get it right, and that means an economy that grows faster than your spending, productivity getting back on track. We are going in exactly the wrong direction right now and that's why we've seen an unprecedented collapse in our standard of living, which no other peer country in the world has seen.

 

KIERAN GILBERT:

He's arguing that we'd be in a lot worse position without that government support, like for the cost of living relief that the Coalition had opposed. What do you say to that suggestion that people would be a lot worse off, if not for that cost of living, support?

 

ANGUS TAYLOR:  

Look, big government, lots of spending, which is what we're seeing from this government, going much faster than the economy, crowds out the private sector. It means … we've got collapsing private sector businesses, record levels of insolvencies and he would see that as success, I have no doubt, because he wants more government and less private sector. That's his agenda, clearly. That might be a success for him. Well, it's not a success for those businesses that … 24,000 now since Labor came to power, that have gone out of business. But it seems to me that that's what he thinks success is. He just doesn't understand the economy. He's never been … I mean, he worked in the private sector for six months, and on his own reports, he disliked it intensely. So he's not a guy who ever understood the private sector. Never will and that's why we're seeing this collapse in our economic circumstances. We haven't seen this before Kieran, the collapse in the standard of living. We've got data going back to the 50s. We haven't seen this. The seven consecutive quarters of household recession. GDP per person going backwards. We haven't seen it before, and he'll keep looking for excuses, because all he's got is spin. He's like a media adviser, not a Treasurer. We need a leader and we're not getting it from either the Prime Minister or the Treasurer because they spin it every day with their daily clever, clever tactics that they try, but none of it's working, Kieran and Australians are paying the price.

 

KIERAN GILBERT:

Is there a risk that, you know, you look at that anemic growth across the year but we saw retail sales recently up quite strongly. Do you think that there's a risk here that household spend does surge over the summer, and far from a rate reduction, we could face rate hikes in 2025?

 

ANGUS TAYLOR:

Well, look what the Reserve Bank looks at, is the balance between supply and demand. We know that because the Governor has said it on multiple occasions, and what we see in these numbers is supply going backwards. That's what productivity is. It's going in the wrong direction, and demand being stimulated by big government spending. That's exactly the opposite of what you want to see if you're going to get supply and demand in balance so that the Reserve Bank can get interest rates back to what they call neutral territory. Lower levels. But that's not happening at the moment. Look, core inflation went up in the data that came out in the last week. It’s gone up. Core inflation, we know, is the number that the Governor and the Reserve Bank looks at. It's going in exactly the wrong direction. We can see why now because what we've got is big government, big Australia, big population growth along with a collapse in productivity that is heading in exactly the wrong direction if we want lower interest rates and sustainably lower inflation.

 

KIERAN GILBERT:

If the government can land that attack, though on Peter Dutton and yourself saying you've opposed all the cost of living relief, that people are hurting but it would be a lot worse if Peter Dutton was Prime Minister. You don't think that that's a potent attack?

 

ANGUS TAYLOR:

It's the pathetic kind of attack we've come to expect from Labor. But, you know, no doubt we'll hear more of it. The truth is, this government has failed, Kieran on any measure. We've known from the start the way to ensure Australians have a rising standard of living, growing prosperity is to bring inflation and interest rates down as quickly as possible. That's why we've opposed $110 billion …

 

KIERAN GILBERT:

A short sharp recession would be better?

 

ANGUS TAYLOR:

No, well, no, just, just making sure that your economy grows faster than your spending and that productivity is growing in a sustainable way. We're not seeing either of those things. We've had three failed budgets. We've had a Treasurer who spent much of his time writing these essays on remaking capitalism, trying to take over the Future Fund so he could spend it, and a Prime Minister who was obsessed with his failed Voice referendum. No wonder they've been distracted, and no wonder they're taking the country in the wrong direction.

 

KIERAN GILBERT:

Mr Taylor, thanks as always.

 

ANGUS TAYLOR:

Good on you Kieran.

ENDS.