Topics: National Accounts 

 

E&OE   

 

TOM CONNELL: 

Well, the economy is still growing, but only just. 0.1% in the last quarter going backwards clearly on a GDP per capita basis as well. Joining us now the Shadow Treasurer Angus Taylor, thanks for your time, you managed to get away from your parliamentary duties. The soft landing, is it what, dead, buried, cremated? No chance? 

 

ANGUS TAYLOR: 

Well, we've got a hugely dangerous combination right now, of stubborn inflation, core inflation is going up, not down. We're the only one of our peer countries where core inflation has risen since December. And now we see five consecutive quarters of GDP per person going backwards. We've got productivity that has collapsed, minus 5%. We've got household disposable incomes down by almost 8% since Labor came to power. I mean, this is a disastrous combination and Australians are feeling it. It's why there's so much pain, these numbers are just telling us the story that every member of parliament is seeing on the ground every day. And it's truly diabolical. The problem is, they've had three budgets that could have been pushing us in the right direction, but they've all failed. And you know, we've heard economist after economist to say this was the wrong budget for the times and it was.  

 

TOM CONNELL:  

And what could it have done for core inflation, which as you point out, is the main game for the RBA. I mean what could a budget have done about the sort of things that are in there right now? 

 

ANGUS TAYLOR: 

Well, one of the things that the RBA is deeply concerned about and should be, is the productivity, labour productivity has collapsed. And some, Labor likes to say oh well, you know, this isn't new. Well it is. We've never seen anything like this. This is over 5% collapse since they came to power. And it means the Reserve Bank has a hugely difficult problem in trying to get inflation down at the same time as they grow the economy. That's the fundamental economic problem for them. And the forecasts, the productivity numbers we've seen are way out of line with the RBA forecast. So they've got a really serious problem. And it's been created by a government that hasn't been focused on these things, it's had its priorities wrong, it's had its policies wrong, whether its fiscal policy, and no shortage of economists have made that point on this program or these programs on Sky and others, and no shortage of economists have been saying it again, in the last couple of days. Steven Hamilton, Richard Holden, they've all been saying it again and again.  

 

ANDREW CLENNELL:  

Because if they hike rates couldn't that just tank the economy? If you've got inflation 3.5% consistently, it's sticky, okay, but it's not going up. With this growth figure being so poor, isn't there a risk with another rate hike?  

 

ANGUS TAYLOR: 

Well, that's the risk. And even if even if that wasn't to happen, what you've definitely got an ongoing risk of is that if interest rates stay higher for longer, which is what the capital markets think at the moment. Their response to this has not been positive for the government. They're saying, hey these numbers are a real problem.  

 

ANDREW CLENNELL: 

So Jim Chalmers basically says this shows we shouldn't have slashed spending in the budget because the economy's on the way down. 

 

ANGUS TAYLOR:  

What this shows is you've got to get the basics right. That is the overwhelming message from these numbers. You've got to get the basics right, you've got to get your fiscal policy right, you've got to get rid of red tape, you've got to make sure you've got businesses making investments. That's why we're so enthusiastic about proper accelerated depreciation policies. You've got to make sure that you haven't put the union officials in charge of our workplaces, that you allow employers and employees to work together, on casual arrangements for instance, which was a point that Peter Dutton made in his budget in reply. You've got to make sure you're not committing unnecessary spending, and we're seeing all sorts of unnecessary spending coming out in estimates in the last few days. So they're the basics. It's all good, old fashioned supply side stuff. And none of that is being done by the government. It's not their focus. Corporate welfare in the budget. I mean, if they think that's going to solve the problem... 

 

KIERAN GILBERT: 

Do you believe that recession, a real recession and not per capita, is that what we're facing? 

 

ANGUS TAYLOR:  

For Australian households, this is a real recession of extraordinary magnitude. 

 

KIERAN GILBERT: 

But an official, is that what we're heading to?  

 

ANGUS TAYLOR: 

We can argue over semantics. But when GDP per person has gone backwards for five quarters, when your household disposable income per person has gone backwards by almost 8% since labor came to power. I mean, that's a recession in what everyone is feeling and seeing every single day. And what are they doing? The thing we've seen that's most striking about this, they've stopped saving any money, they're basically down to under 1%, around 1% saving now. It's just diabolical. They've had to work harder, we see this. They can't take the kids to sport, pick up the kids from school, I mean, these are real choices that people are making now. And they're cutting back hard on anything that's discretionary, and even things that you traditionally think is non discretionary. So we've got to get back to basics, we've got to get back to the sorts of things we know are necessary to beat inflation, and high interest rates. And there's no sign, there was no sign in this budget of doing that.  

 

OLIVIA CAISLEY:  

I was gonna say, parliament over the past couple of months, there's been a huge focus on detainees, Border Protection, Andrew Giles very much in the spotlight. Given these figures today, and the fact that the overwhelming issue for most voters is the cost of living, do you think that there's been a distraction there? Do you think you need to bring the focus back to cost of living and really sell to Australians what you'd be doing differently? 

 

ANGUS TAYLOR: 

Look, I don't know how many interviews I've done with many of you and others over the last 12 months on this issue, and we'll keep doing it. I mean, that's not to say there's not other issues running. I mean, the incompetence of the government is broad ranging now. It extends to what we're seeing with the detainees. I mean, I think it's extraordinary. But we'll continue to focus on the incompetence in the economy of this government, because they have, they are overseeing a disastrous set of circumstances. And we'll continue to do that. 

 

TOM CONNELL: 

We had Maria Kovacic on before. Now, she wanted to limit how many homes you can negatively gear in her maiden speech, you can't call it that anymore, her inaugural speech. We said is that part of policy, she said ask the shadow cabinet. And I thought, great, we've got part of the shadow cabinet here. Is that on the table?  

 

ANGUS TAYLOR: 

No  

 

TOM CONNELL: 

As a policy? 

 

ANGUS TAYLOR: 

No. I mean, the Labor Party want the big industry super funds to own the housing stock in Australia. They want Australians to be renters, and they want the CFMEU to build the houses, right? They're the three objectives, they're very clear. And the fastest way to do that is get rid of negative gearing. So I understand... 

 

TOM CONNELL: 

Not get rid of, she's saying, limit it, you know, maybe you can... 

 

ANGUS TAYLOR: 

I understand your point. But that's what they want. That's what the Labor Party wants. That's not our approach. We want to see more Australians owning homes. We do want a rental stock that's affordable and in sufficient supply to keep rental rates down for Australians. And what served us well, for a long time, is a lot of smaller owners of that rental stock, often builders and tradies and so on, and I think that's been a very, very good model for Australia. But the key thing here is supply is out of line with the number of Australians. Over 1.2 million growth in population since Labor came to power, Tom, and I mean that's an extraordinary number. Housing is nowhere near in line with that and the government doesn't seem to be troubled by this. We see the Treasurer today patting himself on the back saying everything's tickety boo.  

 

TOM CONNELL: 

Yeah, we'll see if they can get the concreters in, that might be a topic for next time. Angus Taylor, appreciate your time.  

 

ANGUS TAYLOR: 

Thanks. 

 

ENDS.