Topics: Reserve Bank decision; collapse in living standards under Labor; Public Service 

  

E&OE   

 

SALLY SARA   

Well, the opposition has also welcomed the RBA rate cut decision as relief for borrowers, but they say it's taken too long to get to this point, and the Coalition is telling voters that Australia faces a long journey back to the living standards we had before the cost of living crisis began. The Shadow Treasurer Angus Taylor joins me now. Angus Taylor, welcome to breakfast.  

  

ANGUS TAYLOR   

Good to be with you Sally.  

  

SALLY SARA   

You've been critical of Labor for presiding over rising interest rates. Do you give them some credit now that rates are coming down?  

  

ANGUS TAYLOR   

Well, we've had twelve up under Labor and one down. And whilst it's welcome relief, there's no question about that. The truth is that this is too little too late for many Australian families who have seen the biggest collapse in their standard of living in history. So this is unprecedented. It's also unrivaled this collapse in standard of living, versus our peer countries across the world. So there's a lot of pain out there. The Reserve Bank's own forecast tell us we're only going to recover our standard of living to where it was two and a half years ago in 2031, their updated forecasts that came out yesterday. So there's a long journey here Sally back to where Australians were when Labor came to power. At the end of the day, a cost of living crisis that continues to cause pain for Australians is has got to be the top priority of any government, and we know the way to be the cost of living crisis is bring inflation and interest rates down, and that means strong economic management. 

  

SALLY SARA   

When you're making comparisons to some of those other countries, interest rates in many places, like the US, UK, New Zealand, Canada, went higher and also are still higher than ours, and the Australian unemployment rate at 4% is also lower than most of those comparable economies. Is that not a measure of some success? 

  

ANGUS TAYLOR   

Well, the comparison I was making in fact, was to the standard of living, the real disposable income of Australians, on average per person or per household, and that has fallen harder and faster than any other country in the world in the last two and a half years. And it's unprecedented, but this is what we have seen, is our hit to our standard of living that we have never seen before since data has been collected on real disposable income. And you see it every day when you're out on the street. Australians are having to cope with this by cutting back, by working extra hours, by taking on a second job, a record number taking on a second job, but there is has been a huge shock to their standard of living. One interest rate cut, whilst it's welcome, of course, not anything like what is necessary to get us back to where we were, and the government's own plans don't get us back to where we were until 2031 now, on the updated RBA forecasts. We need to accelerate that journey, and we need to get Australians back to where they were faster. And we know the answer to this from the 70s and 80s, when we last placed a cost of living crisis with strong economic management is the pathway back to a higher standard of living, the prosperity we need, the aspirations of Australians being realised that we all want to see. 

  

SALLY SARA   

The RBA governor Michele Bullock did refer to homegrown inflation, but she's also said that the government, that government spending is not the main game and has been serving an important purpose. What is the spending that the Coalition says should not have happened?  

  

ANGUS TAYLOR   

Well let's, let's clarify what the Reserve Bank said on this, because they made a very clear statement yesterday in the documents they put out about this. And essentially they said that public demand has been growing fast, and it's private demand, which is households and businesses. It's Australians, every single day in the private sector, who have cut back, and they're the ones who have done the hard work here to get this interest rate cut, and they're the ones having to do the hard work, because public demand continues to grow.  

  

SALLY SARA   

To be clear. Michelle Bullock said, I want to be clear that public demand is not the main game. 

  

ANGUS TAYLOR   

Except that in the statement yesterday, what was very clear is that government public spending has been growing fast, record levels we're seeing now in terms of spending as a percentage of the GDP of the economy. And the result of that is the hard work is being done by households. They deserve this rate cut because they've done the work well. Government needs to do more work. And in answer to your original question, we've been very clear. We've opposed over $100 billion of spending in this term of Parliament that we is inappropriate at this time. Whatever the merits of those initiatives, they're not the right ones. None of this is cutting essential services. That's not what we're proposing, but it is saying that every dollar of taxpayers money needs to be managed very carefully. Now if governments don't manage their money carefully, then households have to tighten their belts and do the hard work. And that's exactly what we've been seeing, and that was reflected in the statement yesterday.  

  

SALLY SARA   

Let's talk about the public service. Can we get some clarity, because we've heard conflicting accounts, would the Coalition cut jobs to reverse the 36,000 position increase in the public service, or would there be a hiring freeze and a reduction by attrition? 

  

ANGUS TAYLOR   

I know you want me to announce all our policies today, but what I will say - and I'm not going to do that so, but what I will say is that Labor has increased the public service, Canberra based by 36,000. We think that is way too much. We certainly don't want to cut back in areas that are absolutely essential for Australians, like Veterans Affairs, but right now, if government doesn't tighten its belt, then households will have to do it instead, and so we do want to make sure we've got a productive and effective public service, and we do think that adding 36,000 public servants is the inappropriate thing to do - 

  

SALLY SARA   

Will you cut those jobs? To be clear, that's a lot of jobs.  

  

ANGUS TAYLOR   

They will be lower. The numbers will be lower. And we'll say more about the details of that in the lead up to the election. We still don't know when the election is going to be Sally and we're we, we will say more about this, but what, what I will say is every dollar a taxpayer's money needs to be managed carefully, because if governments don't do it, households have to do the work for them, and that's exactly what we've been seeing over the last two and a half years.  

  

SALLY SARA   

Last time, under the Coalition government, there were cuts, controls in public the number of public servants, but a large number of consultants were brought in. Does that mean, really, that those numbers just creep back up, but under another name?  

  

ANGUS TAYLOR   

Well, let's be clear about what happened under the last Coalition government, given you asked. We saw the economy growing faster than spending, we contained that growth in spending, and that is the pathway back the maths of this is simple. If you can grow the economy faster than you're spending, then you strengthen the budget position of the government. You put yourself in a position where you can pay back debt, and critically, at this time, you take pressure off the cost of living crisis that we've been facing.  

  

SALLY SARA   

Labor has achieved two surpluses, correct?  

  

ANGUS TAYLOR   

Well let's be clear though, they're growing spending at a rapid rate, at a rapid rate. We've had windfall, we've had windfall surpluses because we've had iron ore prices way above forecasts, way above forecasts, as well as coal and gas. But that hasn't been a sustainable structural surplus, and the government's own budget tells you there's red ink, as far as the eye can see, Sally, so that they have, they have not done what is necessary to do in terms of economic management - 

  

SALLY SARA   

Angus Taylor, apologies, we're coming up to the news. We'll need to leave it there. Angus Taylor is The Shadow Treasurer. 

 

ENDS.