Topics: Federal budget, Labor’s homegrown inflation crisis, Qantas settles with ACCC

E&OE

KIERAN GILBERT:

Let's go live now to the Shadow Treasurer, he joins us from Goulburn. Angus Taylor, thanks for your time. Banking 95% of revenue upgrades, that's what we're hearing the government will do in next week's budget. Do you welcome that? Is it good enough?

ANGUS TAYLOR:

Funny numbers from the Treasurer as always. He claimed that last time around, and we know that the majority of the windfalls were spent by Labor, $209 billion spent indeed. There were significant windfalls because personal income tax payments have increased dramatically, windfalls from commodity prices in the way, the sort of artificial way that they budget. But they spent the majority of those and I'm sure they will do exactly that again. This is a government addicted to spending. $209 billion so far before this budget, since they came to power, that's $20,000 for every Australian household, Kieran. And I have no doubt they're going to spend more. And this is why we're hearing economists from many quarters coming out and saying they've got to stop the spend-a-thon, they've got to contain the growth in spending, that will take pressure off this homegrown inflation, Labor's homegrown inflation, which is hurting households, which has meant that we've got more persistent, higher interest rates than was expected. And we've seen inflation data coming out just in the last week or so, where inflation is going up, not down. That means prices are going up even faster than they were. And that's a huge amount of pain for Australian households.

KIERAN GILBERT:

Indeed, it is a lot of pain. And the government has got to walk this tightrope of trying to help where they can but not fuelling inflation. If they are to continue the energy subsidies and boost rental assistance further, are those sorts of measures inflationary in your view?

ANGUS TAYLOR:

Well, we haven't seen them so we'll wait and see. But what I would say is that the first and most important test of this budget is, are they going to put downward pressure on inflation and interest rates. That means containing their addiction to spending. I mean, this is what Labor governments always do. They try to defy the laws of economics. And we're seeing the failures of this now, with their homegrown inflation continuing to rage. We've got the most persistent inflation of any advanced country in the world according to The Economist. We've got amongst the highest levels of interest rates - of inflation sorry - of any major country in the world, and we're all paying a huge price for it, Kieran. Now, you can't put a band aid on a bullet wound, no doubt they'll try to do that. That's what Labor loves to do. You've got to go to the source of the problem. And the source of the problem is a government that is addicted to spending. That is putting extra regulation all around the economy, red tape, green tape, imposing in workplaces, putting union officials in charge in our workplaces. These are all things that are inflationary. And I'm sure we're going to continue to see it. I hope for the best, of course, but I fear for the worst.

KIERAN GILBERT:

When you look at the numbers released today by the government, $25 billion upgraded revenues, but the overall bottom line is going to be worse in the out years. Is this just a reality of where we're at right now, that the government won't be able to spend in the next financial year because of the inflationary pressures, but then later in the cycle they will have to spend to boost growth? Do you recognise that as part of the structure of what Jim Chalmers is facing next week?

ANGUS TAYLOR:

Well, you know a big spending budget over the forwards is going to be inflationary. I mean, there's no doubt about that. This is not, you can't defy the laws of economics, Kieran. Labor always think they can. Every Labor government thinks they can defy the laws of economics, and they fail time and time again. And you know, the only exception to that was, of course, in the 80s. But we had a Labor government then led by a Prime Minister who was an economist, and I can tell you, Anthony Albanese and Jim Chalmers aren't economists. They are trying to defy the laws of gravity. I'm sure they're going to try and do it again. But I think there is an opportunity for them here to fix this. And that means making sure they're containing their addiction to spending, containing their addiction to additional regulation on small businesses, making sure that businesses are in a position where they can invest, and get on and get approvals, all the things they need to be able to grow the economy. But that's not what we're seeing from this Labor government. They think that the way to get private enterprise going is for the government to invest. Well you know what, that's not going to give us the answers. And we've seen, you know, bizarre allocations of money in the last little while, where money is going off to a company in Silicon Valley. I mean, this is where this government is at. We need to get back to basics, we need to get back focused on an agenda that recognises the basic laws of economics.

KIERAN GILBERT:

Was the Queensland government energy subsidy announced last week, $1,000 on every power bill in the state, is that inflationary? We haven't seen the federal government's measures next week, but that Queensland measure, is that inflationary?

ANGUS TAYLOR:

Well, you know, again, it's dealing with the symptom and not the source. And if you deal with the source, you take the pressure off inflation, if you deal with the symptom you don't. It's pretty simple. These are basic principles, Kieran, and we learned them in the 70s and 80s. And we seem to be having to relearn them again, as Labor governments across the country fail. We see, rightly, criticism of Labor governments that can't contain that addiction to throwing more money around and putting additional inflationary pressures into the economy, and therefore driving up interest rates or keeping interest rates higher for longer. We'll have a Reserve Bank decision of course tomorrow. We're going to see a statement from the Reserve Bank, it'll be interesting to see what they have to say. But there's a lot of economists, a big chorus of economists...

KIERAN GILBERT:

There is a sense there might be...Well, there could be a rise, according to some. I know it's only 5% according to the markets, but some economists I've been speaking to, including Warren Hogan, our regular on this show, he believes it's well over 5%, the chance.

ANGUS TAYLOR:

Yeah, and whatever the Reserve Bank does tomorrow, what is clear is those inflationary pressures are intensifying. They're persistent. They're not being dealt with. And the concern these economists rightly have is that we're going to have a budget handed down that doesn't help that. In fact, it's best is neutral and may well make the situation worse. But either way, is not actually dealing with the source of the problem. So we ended up with these Labor governments dealing with the symptoms, and I'm sure they'll continue to do that.

KIERAN GILBERT:

One question before you go, the Qantas, ACCC deal, do you welcome that?

ANGUS TAYLOR:

Yeah, look, I think this is a positive step forward. I'm a big believer in good, strong consumer and competition policy. Consumers need to, they shouldn't be dudded by their service providers. This was pretty egregious and the Coalition's campaigned on this for some time, including a Private Member's Bill. Bridget McKenzie has been very, very strong on this, as has Dean Smith, who have been taking carriage of it, and I think it's good to see the ACCC stepping in and standing up for consumers as they should.

KIERAN GILBERT:

Shadow Treasurer Angus Taylor, thanks. We'll talk to you over the coming days.

ANGUS TAYLOR:

Thanks Kieran.

ENDS.