Topics: RBA decision, Nuclear energy, NSW redistribution  

 

E&OE   

 

ANGUS TAYLOR: 

No change to interest rates today from the Reserve Bank, but also no comfort to Australian households about a pathway to lower interest rates and lower inflation. The Reserve Bank highlighted the uncertainty of the environment we're facing now, eight times in a statement, eight times it highlighted uncertainty. And the only thing that is certain is that this government's budget absolutely failed to deal with those inflationary interest rate pressures that Australians are facing. We are facing a dangerous cocktail right now of low growth - five quarters where GDP per person hasn't grown, a household recession, bearing down on every Australian family.  

 

And at the same time, persistent inflation, The Economist tells us the most persistent of any advanced country in the world and the Reserve Bank itself highlighted the persistence of that inflation today, and made the point that it's staying higher for longer than expected, and it's proving much more stubborn and much more difficult to bring back into line with the target than had been expected. Now, we know there are two factors which were highlighted in the statement today driving it. One is stimulus from government budgets, state and federal, they are adding to the problem. $315 billion of extra spending from this government, $30,000 for every Australian household they've added since they've been in power.   

 

And the Reserve Bank highlighted today the role of that stimulus. But they also highlighted the cost pressures that businesses are facing, small businesses in particular I see facing enormous cost pressures continuing, and productivity that has gone sharply backwards. Labour productivity has gone sharply backwards under this government, again highlighted by the Reserve Bank today. And it's simply impossible to get inflation and interest rates back to where they need to be when you have governments stimulating the way they are, adding spending and at the same time, productivity going in exactly the wrong direction. Now, households are having to deal with this in any way they can. Digging deep into their savings, working extra hours, and having to take measures to cut back on their spending - discretionary and non discretionary at this point - in order to make ends meet. And we see it today, Australians digging deep with buy now pay later. Many, an increasing number of Australian families, are unable to pay their mortgages and we're seeing those numbers coming up and there's enormous suffering sitting behind those numbers.  

 

There is a better way. Getting back to basics. Making sure that you grow the economy faster than spending. That's not what the budget that was just recently handed down planned to do. Making sure that your industrial relations policy is focused on helping both employers and employees to get a better outcome of more competitive workplaces. And making sure that we've got an immigration policy that is in line with the housing supply. And all of these, alongside sensible energy policy are the measures that need to be taken in order to beat inflation, but they are not the measures being taken by this government. In a highly uncertain time the only certainty here is that this government continues to fail to deal with interest rates and inflation pressures bearing down on Australian families. Happy to take questions.  

 

JOURNALIST: 

Do you think the state governments are playing a role as well with their budgets? 

 

ANGUS TAYLOR: 

Sure. I think both. I mean, there's no doubt about it. We've seen big spending state governments, Queensland, Victoria and now New South Wales, on top of a federal government that's added $315 billion of spending. This is what Labor governments do. This is how Labor governments think they can solve inflationary problems. But it's not how you do it, it's not how you do it. And we've learned this. History is so clear on this issue. And yet they keep doing what they love to do, which is to stoke that fire of inflation, throw more fuel on the fire. And that's exactly what this budget that was handed down here, the NSW budget, the QLD budget, Victoria as well, they're all doing the same thing.  

 

JOURNALIST:  

The RBA warned in its statement about wages growth, productivity not matching wages growth. And we've seen today the CFMEU putting in a 23% wage claim. Do you fear wage inflation could become a problem? 

 

ANGUS TAYLOR: 

Well, we want to see higher real wages. We all want to see higher real wages. Everyone here wants to see higher real wages. But the way you get there is to make sure that you've got labour productivity that's always improving. It's pretty simple. This is not rocket science. It's straightforward economics. It worked in the past, as you know, and it can work again in the future, but you've got to get back to basics with your economic policies. We've got a Treasurer who's out of his depth, who's out of touch, and simply doesn't understand those basic principles and certainly can't carry them in Cabinet.  

 

JOURNALIST:  

Mr. Taylor, is there a place in Australia for large scale industrial wind farms?   

 

ANGUS TAYLOR: 

Look, right now we need an energy policy...I've been consistent that in Australia, we need to have a balance across a range of technologies. There's no question that we've seen some large scale, renewable projects that have been forced on communities that are deeply unsettling for those communities, deeply unsettling for those communities. I've always been a strong advocate of the role of household solar. And I think that continues to play an important role and will continue to play an important role for many years, but we also need gas. And we might need longer term baseload solutions that we simply don't have from this government. And they're not interested in. That balance is crucially important. But you know, when governments impose projects on communities, where there's deep resentment, and deep opposition, it doesn't help us to get to where we need to go. That's what we're seeing from this government right now.  

 

JOURNALIST: 

So was David Littleproud wrong when he said that the Coalition would be... 

 

ANGUS TAYLOR: 

I'm agreeing with David Littleproud that we shouldn't be, the government shouldn't be imposing major projects on communities that are deeply opposed to those and where there's deep resentment towards them.  

 

JOURNALIST:  

Just back to wages, given what you've said about households struggling and doing it tough, do you think many Australians will find palatable that politicians could be getting a 3.5% pay increase? 

 

ANGUS TAYLOR:  

I understand the resentment towards that, I made some comments on this this morning and I think that's completely understandable.  At the end of the day, we've got to get the economy back on track. The way to get the economy back on track is to have wage increases that are justified by continuing improvements in productivity. It's simple stuff. The Reserve Bank highlighted this today. I thought it was an excellent statement. It highlighted the deep uncertainty we're facing right now. As I say there's only one certainty and it's the wrong one, it highlighted this dangerous cocktail of slow growth, alongside cost pressures and slow productivity, and that's the worst possible combination you can face. And it's why Australia is doing so badly versus other countries in the world, the most persistent inflation of any advanced economy. The Economist has told us that on multiple occasions. We've seen, of course, our interest rates stubbornly high. We're seeing cuts in other jurisdictions but not here. Not here. And Australia is behind the eight ball. It's as simple as that. 

 

JOURNALIST:  

The Queensland LNP leader has ruled out lifting the nuclear ban in that state. Don't you face a choice between imposing nuclear power plants on communities that don't want them or abandoning your fig leaf to reach net zero?  

 

ANGUS TAYLOR: 

We've been very clear that we want to work with communities not against them. There's been no ambiguity about that principle from the start.  

 

JOURNALIST: 

So none in Queensland then because David Crisafulli won't stomach them? 

 

ANGUS TAYLOR: 

Well, it's the communities, the local communities that we're focused on here, and it's the local communities that have been causing those issues in the Illawarra and elsewhere and local governments do need to [inaudible]. 

 

JOURNALIST:  

Mr Taylor, to the RBA statement, the statement says on the budget outcomes that they may impact demand. The language also goes on to say federal and state energy rebates will temporarily reduce the headline inflation. 

 

ANGUS TAYLOR: 

Highlight temporary. The point the RBA is making, which is not new, economists have been making this point regularly in recent weeks is a) those changes are temporary and b) they hit headline but not underlying. And it's the underlying inflation rate that matters when central banks make their decisions. So I think that statement, I did notice that statement in the RBA's broader statement, that sentence was very, very marked. Very clear. And I think that makes a very, very important point, which is you can't trick the Reserve Bank, it doesn't work. Tricking the Reserve Bank will not work. And yet that's what Jim Chalmers, always tricky, always tricky. But at the end of the day, out of touch and out of his depth when it comes to the underlying economics. 

 

JOURNALIST:  

Mr Taylor last week's redistribution dramatically reduces your boundaries for your electorate of Hume including taking our Goulburn. What does that mean for your thinking ahead of the next election? Will you be contesting Hume again? Will you be looking to represent a different seat in the future? 

 

ANGUS TAYLOR:  

I'm planning to represent Hume. There's some wonderful new areas coming into the electorate. It's a bigger change in terms of geography than population, but wonderful new areas around the Camden local government area, like Oran Park and Harrington Park, that I've spent a lot of time in representing my electorate now. And I look forward to representing them and having that opportunity in the future. Obviously, losing Goulburn, it's tough. It's gut wrenching for me. I lost a significant part of my electorate in the 2016 redistribution as well. And it's never easy when you make connections, deep connections with communities as I have in Goulburn. And that is the nature of these redistributions and I don't think any of us revel in that outcome. It's not something that I love, obviously. But I represent Hume and I plan to continue to represent Hume. 

 

ENDS.