Topics: Reserve Bank decision; Labor’s homegrown inflation; student debt; abortion; flight upgrades; US election

 

E&OE   

 

PATRICIA KARVELAS:

The hopes of a Melbourne Cup Day interest rate cut were dashed yesterday, the Reserve Bank opting to keep interest rates on hold at 4.35%. The RBA says despite signs of the inflation easing, it will be some time yet before inflation is sustainably in the target range. The Opposition says part of the reason interest rates haven't come down yet is due to government spending. Angus Taylor is the Shadow Treasurer and he joins me this morning. Angus Taylor, welcome to the program.

 

ANGUS TAYLOR:

Good to be with you, PK.

 

PATRICIA KARVELAS:

The Coalition has pushed back against changes to stage three tax cuts, energy bill relief, and this week against the government's pledge to wipe 20 per cent off student debt. Aren't these measures there to help people with cost of living pressures during what is a really tough time?

 

ANGUS TAYLOR:

Well, PK, what will help Australians … will relieve those cost of living pressures is lower inflation and lower interest rates and the beauty of that is it helps absolutely everybody, whether you are a student, whether you're struggling with your energy bills, whether you've got a mortgage, everyone is helped by lower inflation and lower interest rates and what we heard from the Reserve Bank yesterday is that interest rates are going to be higher for longer. That increased spending is having an impact. It's creating an imbalance between supply and demand, which means you have higher interest rates and higher inflation for longer. We've already seen interest rates coming down in the US, UK, Canada, South Korea, New Zealand and so on Europe, but not here, and we see in Australia, our inflation is expected to be higher than every other peer country, bar one, and we're absolutely at the back of the pack in getting inflation back to where it needs to be and in fact, it's going to be two years, it's clear now from the Reserve Bank forecasts, according to them at least before we get back to the target rate. So we've got a long way to go here. Australians are losing hope. They're not seeing the relief they want and the reality is that government policy is incredibly important. We know this historically PK.

 

PATRICIA KARVELAS:

Okay. So let me put this to you. You've said that you want to lower inflation through an economic agenda that includes cutting back government spending. Does that mean winding back the cost of living measures that I just outlined?

 

ANGUS TAYLOR:

Well it means dealing with the source of the source of the problem, not just the symptoms.

 

PATRICIA KARVELAS:

But specifically, what would you cut back?

 

ANGUS TAYLOR:

There's some measures we've supported and there's some measures we haven't, but at the end of the day, everything has to be paid for. The thing about an inflationary environment like we've got right now, PK is, is that it all has to be paid for. Someone has to pay for it. Now they either pay for it with taxes in the future, or the worst tax of all, which is inflation today and that's exactly what's happening right now. When the government spends money, it has to be paid for. The $16 billion in debt they're writing off. Well, that's $1,600 for the average Australian household. That has to be paid for, and they will pay for it.

 

PATRICIA KARVELAS:

So you don't support, just to clarify that you're against this policy of cutting student debt by 20 per cent?

 

ANGUS TAYLOR:

Well I think we've made pretty clear. I mean, there's, there's a whole lot of parts to this package, and we'll work through each piece of it, but the $16 million debt right off … right now. I mean, we'd love to see, we all want to see lower debt for all Australians, whether it's student debt or mortgage debt.

 

PATRICIA KARVELAS:

But given younger people are really struggling …

 

ANGUS TAYLOR:

Can I finish, PK? Can I finish? We all want to see that. We all want to see that. But the truth is, the best way to help Australians’ standard of living, which has been smashed in the last two and a half years since Labor has been in power, is to get inflation down, get interest rates down, and get the economy back on track and this government has absolutely failed in its promises to do that.

 

PATRICIA KARVELAS:

Okay, so just to clarify, what would you … what measures would you stop to try and rein in inflation?

 

ANGUS TAYLOR:

Well you know, I've said this, we've been through this list many times on this program, and I'll go through it with you again. We've opposed $92 billion of spending from this government since they came to power and add to that, their announcement over the weekend, which we're working our way through, but we've made very clear that we're against writing off this debt at this time. It's not appropriate. Every Australian is going to pay for it. We've said we are opposed to the government's reckless spending on so-called housing policies that are not delivering extra houses. They're not even going to get close to their housing target. That's very, very clear. We've said that their so-called manufacturing policies that see the manufacturing sector going backwards in this country is not spending that is the right way to get our manufacturing and mining sectors to where they need to be. I mean, this is spending that we have opposed in the Parliament and I’ve got to say, PK, find me another Opposition in history that has opposed that kind of magnitude of spending. This is reckless spending at this time, and spending that, spending that might be acceptable in a different economic environment is not acceptable now because it's imposing the greatest tax of all on all Australians, which is higher inflation and higher interest rates, and every Australian is suffering from that.

 

PATRICIA KARVELAS:

So when you say $16 billion for the HECS debt relief, it's $300 million I understand over the forward estimates, isn't it?

 

ANGUS TAYLOR:

They're writing off $16 billion. Someone has to pay that $16 billion. This is not complicated economics.

 

PATRICIA KARVELAS:  

But it’s clear … no, no it’s $300 million over the forward estimates so where do you get the $16 billion?

 

ANGUS TAYLOR:

Well, because that's the amount of debt that's being written off PK. I mean, it's, it's really simple. It's not, you know, there’s this magic pudding economics we get from the Labor Party. Always magic pudding economics. It doesn't work like that. Every Australian understands if a government spends a whole lot of taxpayers’ money, taxpayers’ ultimately have to pay for it.

 

PATRICIA KARVELAS:

But over the next four years, it's $300 million that usually gets paid back, that won't be paid back, right?

 

ANGUS TAYLOR:

There's $16 billion of debt being written off. Let's be clear, this is not …. let's not mince with words here. And the truth …

 

PATRICIA KARVELAS:

Okay but do you accept the $300 million over the next four years number?

 

ANGUS TAYLOR:

Well, their policy is to write off $16 billion and that's along with many other spending initiatives from this government, as I rightly say. I mean, as I said a moment ago, you know, the truth is that something that looks good in an environment with low inflation and low interest rates is not an appropriate policy at a time like this. Inflation is the worst tax of all, because it hits absolutely everybody, and it hits the people who are least …

 

PATRICIA KARVELAS:

… but it has been halved hasn’t it?

 

ANGUS TAYLOR:

… least able to deal with it. Well, let's be clear about this. Labor promised before they got into power that they would deal with the cost of living pressures of Australians, that we'd have lower mortgages, we'd have lower energy prices, we haven't seen any of that PK. They have absolutely failed in their promise, and frankly, they need to be held to account for this and look, a big part of the reason is they don't have the toolkit for the times. The right thing to do in an inflationary and high interest rate environment is for government to make ends meet. It doesn't mean slash and burn. I've said this 100 times, but it does mean making sure the economy grows faster than your spending and we've got an economy which has been in household recession for 18 months, for six quarters. You know, the Treasurer likes to say, oh, we've seen this before. We haven't. This is not right. This is not right. This is absolutely new territory for the Australian economy, and the result is Australian households have seen their standard of living collapse.

 

PATRICIA KARVELAS:

Let me … because we're running out of time, if I can just change the topic. The Nine papers are reporting Opposition leader Peter Dutton has rebuked Coalition MPs for pushing for a federal debate about abortion in Australia. The Minister for Women, who's Katy Gallagher says that Peter Dutton needs to call on two of his MPs to withdraw an anti-abortion bill. Do you think he should? Do you want them to withdraw that issue?

 

ANGUS TAYLOR:

Well it's a state issue and we should leave this issue to the states.

 

PATRICIA KARVELAS:

Do you want them to withdraw that bill then?

 

ANGUS TAYLOR:

Well, it should be left to the states. I mean, that's a matter for … the Senate will work that through but let's face it, this is a state issue. It should remain a state issue. You certainly shouldn't be politicising it in the lead up to an election.

 

PATRICIA KARVELAS:

No, but if it's a state issue, should it be withdrawn? I’m going to ask really specifically because that’s what she says.

 

ANGUS TAYLOR:

I’m not aware of that bill. But let me tell you that it's a state issue and it should be dealt with that way.

 

PATRICIA KARVELAS:

Okay, I am aware of the bill.

 

ANGUS TAYLOR:

Oh good.

 

PATRICIA KARVELAS:

Well, I am. I'm across the bills. It is a bill in the Senate. Two of your MPs are behind it. Should they withdraw their support?

 

ANGUS TAYLOR:

Well, look, I'll say it again and I'll keep saying it. This is a state issue and it should be dealt with at the level of the states, PK. Look, it's a very sensitive issue and you know, it is clear that the Labor Party, we've seen it in Queensland, and you know, it may well be true here at the Federal level, they would love to politicise this and use this in a lead up to an election. I can understand there's a range of different views across all parties on all of these issues, and there's a whole range of issues that you might be referring to and the truth and the truth is, I think having a debate about all of this in the heat of an election campaign is inappropriate for two reasons. One is, it's a state issue, not a federal issue and two, I think it's incredibly insensitive and but it's clear that the Labor Party will politicise absolutely anything and right now, I think what Australians want us to focus on is the cost of living pressures that are destroying their household budgets.

 

PATRICIA KARVELAS:

For sure but it is and that is why we talked about it at length, but it is a bill that two of your MPs have in the Senate. So it is actually …

 

ANGUS TAYLOR:

Senators.

 

PATRICIA KARVELAS:

But they're in your party.

 

ANGUS TAYLOR:

Yeah well, look, as I say, it's a state issue and it should be dealt with that way.

 

PATRICIA KARVELAS:

So should they pull their heads in?

 

ANGUS TAYLOR:

Well, you know, you can ask me the question 25 times and I'll give you the same answer, PK.

 

PATRICIA KARVELAS:  

Should I take it then that you don't actually think they should withdraw the bill?

 

ANGUS TAYLOR:

(Laughs) I've already answered your question. You can keep asking it, if you like.

 

PATRICIA KARVELAS:  

The Australian Financial Review is reporting Nationals Senator Bridget McKenzie failed to declare more than a dozen free Qantas and Virgin flight upgrades since joining Parliament. Should politicians accept free flight upgrades from airlines? Have you?

 

ANGUS TAYLOR:

Well I don't know whether any of that's been verified but put that aside for the moment. I think the real issue here is this: we have a Prime Minister who, when Transport Minister, who when Transport Minister is alleged to have actively reached out and lobbied for personal upgrades. That's inappropriate. There is no question that is inappropriate. Other upgrades that are given by an airline in different circumstances, they should be declared, and I'm sure that will be worked through.

 

PATRICIA KARVELAS:

Is that the benchmark then? If you ask for an upgrade, then that is unacceptable?

 

ANGUS TAYLOR:

No, I think any upgrade, like any benefit given to a politician needs to be declared. I mean, that's, they're the rules.

 

PATRICIA KARVELAS:

So has she done the wrong thing?

 

ANGUS TAYLOR:

If there's been an error on that, then it should be corrected. I mean, that's very simple but that's completely different from a circumstance where the Minister responsible for this area reaches out, either directly or through their office, to lobby for an upgrade for personal use. You're in a different world there, PK. That is a completely different thing. Of course, upgrades should be declared but what I've just described the allegation there, is very, very different.

 

PATRICIA KARVELAS:

There's a US election today. I'm sure you're across it (laughs). I don't think I'm breaking any news to you. Are there implications for our economy from a potential Trump win? According to Chris Richardson, that would be more risky for our economy.

 

ANGUS TAYLOR:

Look, there's lots of catastrophisation going on here from all sides about what might happen. I tell you the thing I've learnt in US-Australian relations over the years is that our relationship is stronger and bigger than any individual administration or leader or any individual policy for that matter and that the strength of the US and the US economy is something we typically underestimate. It will continue to be strong and we benefit from that, and we benefit from the strength of the relationship between our two great countries and that is something that I am very confident will continue to be the case whatever the outcome of the election coming up today, and we'll hear about later on today.

 

PATRICIA KARVELAS:

Certainly will, although we've still covered Australian politics, we are Australians. Thank you very much for joining us this morning.

 

ANGUS TAYLOR:

Good on you. Thanks PK.

 

PATRICIA KARVELAS:

Shadow Treasurer Angus Taylor there.

 

ENDS.