Topics: Reserve Bank decision; Labor’s homegrown inflation; US election

 

E&OE   

 

ANGUS TAYLOR:

Well, no relief in sight for Australian families after the Reserve Bank yesterday held interest rates where they are and indeed said that it would be some time, and there's no certainty about whether we're going to see interest rate increases or indeed reductions in the future. What is certain is we're still well short of where we need to be to start to restore Australians’ standard of living. And the truth of the matter is that Australian standard of living has been slashed. Real disposable incomes, over eight per cent since Labor came to power. There is no plan from this government to restore that standard of living. None. Not even close. And our economy has been disastrous for households who are struggling to make ends meet. Now the truth of the matter is, whether you look at interest rates or inflation, Australia is at the back of the pack. Absolutely at the back of the pack in dealing with this. We know core inflation in Australia is higher than every other peer country, bar one. The IMF tells us that almost every other country is going to be doing better than us on bringing inflation down over the next 12 months. We also know, the Reserve Bank tells us we're not going to be back to the target range for two years, for two years, and there's two years of pain still coming for Australians under this government.

 

The Reserve Bank pointed out that spending is absolutely central to this and indeed they are having to accommodate in their projections increasing and unexpected levels of spending by this government and it's no economic secret when the government decides to throw money around, it puts upward pressure on interest rates and it puts upward pressure on inflation. This is not a secret. This is not new. Now the Labor Party will continue to spend taxpayers’ money in a way which is completely irresponsible, completely irresponsible and the truth is, the announcement over the weekend is going to cost the average Australian household $1,600. That's what it's going to cost, and they're going to pay for that either in higher taxes or higher inflation and the fact of the matter is, in an environment like we're in today, we see government spending translating to higher inflation, higher prices for everything, every single day, every single day.

 

This is a government that has completely failed when it comes to economic responsibility, and that's why they have failed to bring down interest rates, to bring down inflation in the way that they promised they would. They promised cheaper electricity, they promised cheaper mortgages. Australians haven't seen any of that. They haven't seen any of that and there's no there's no relief in sight and the Reserve Bank understood that in their comments and their statement yesterday. Happy to take questions.

 

JOURNALIST:

Do you think there's a reason for Australians to be concerned about what a Trump Presidency might mean for tariffs and the trade agreement between the US and Australia?

 

ANGUS TAYLOR: 

You know, there's lots of catastrophisation about these things and I think the Australian US alliance has always been bigger than any individual person or administration, and they will always be policies that we do like or don't like that come from other countries. What really matters is that the Australian-US relationship is a strong one. It always has been and as far as I see, always will be, and it must be, and we will make sure that we do our bit to ensure that that relationship continues to be strong in the future. But I'm very confident. I'm very confident it will be under either administration. Our focus right now is on the failures of the administration here in Australia. Those failures are key for all to see. The standard of living in Australia has gone backwards. Australians with a mortgage paying $30,000-$35,000 more than they were a couple of years ago. They go to the supermarket, and frankly are trying to work out how to make their budgets work every week, every single week. And it is a battle. It is a struggle, and we have a government that is getting it all wrong. And it's not as though the lessons from the past, it's not as though the lessons from the past aren't clear. They are absolutely clear. We went through this in the 70s and the 80s and we know what the answer is and it's not what this Labor Government is doing right now.

 

JOURNALIST:

More broadly, there's been a lot of promises by both Presidential candidates heading into this election. There's been concerns from economists about the effect that those promises will have on the global economy. Is that something that you're concerned about, and the impact that could have on Australia?

 

ANGUS TAYLOR:

As I say, I mean in terms of the US-Australian relationship, I think we're going to be bigger than any individual election outcome regardless of what it is. A strong US economy is good for Australia and good for the world. And I tell you what, we've seen, a strong US economy, there's no doubt about that. On every indicator it’s stronger than what we've got here in Australia. It underscores the failure of this government. I mean, productivity has been in free fall in this country, down 6.3% since Labor came to power. Not in the US. And if you're a central bank, the Fed in the US, and you've got productivity going in the right direction, you can get interest rates down and you can get inflation down and that is not true here. That is absolutely not true here. We do need a strong US economy, but most of all, we need the homegrown inflation that's come from this government where services inflation went up, up in the last CPI. We need this government to get serious about solving the problems here at home. All good. Thank you very much. Cheers.

 

ENDS.