Press Conference, Goulburn, NSW - Monday, 16 December 2024
Topics: MYEFO; Reserve Bank Board; dire state of Australia’s economy under Labor; Bali Nine
E&OE
ANGUS TAYLOR:
The economic failures of this government will be on display this week. We've seen an economy which has been in household recession for seven quarters in a row. That's seven quarters of GDP per capita going backwards, which is completely unprecedented. We've seen a standard of living collapse that we've never seen before, and that's worse than any of our peer countries. And of course, we have a cost of living crisis that rages on. Prices that continue to go up, and as Michelle Bullock has said, there is no sign of those prices, and they won't come down. Australians are suffering under this crisis and we know this is homegrown inflation. We know that inflation comes from Canberra. Now we see we will see MYEFO on Wednesday and this is another opportunity for the government to get the settings right but they've failed three times in three budgets. And in fact, independent economists are telling us that there will be red ink as far as the eye can see in this MYEFO. We need a government that ensures that the growth of spending is contained, that they don't continue with reckless spending and yet we have independent economists tell us that we're going to see a massive budget deficit this year, and indeed well over $200 billion of deficits in the coming four years in the headline budget. This is not what we need when we want to get inflation down sustainably and the truth of the matter is, no matter what the Reserve Bank does, if a government doesn't have the settings right, if the government doesn't have its priorities right, and if the government doesn't make the right decisions, we won't see a sustainable reduction in interest rates and inflation.
Now into that you see a government that is desperate and a Treasurer that has absolutely failed at his number one job, which is to restore Australians’ standard of living after the collapse we've seen under Labor and now he's going about stacking and stacking the Reserve Bank board. This will not be a solution to the problem. We've been very clear for well over a year that we want to see a credible, capable and independent Reserve Bank that has stability in its governance, stability in its governance. We have been clear that we want to see the current board being carried over to ensure we have that stability. We know that a Reserve Bank or any central bank that does not have independence, that does not have stability, will find it extremely challenging to bring down inflation and interest rates on a sustainable basis. We're deeply concerned that this government continues to take us in the wrong direction. It's a government focused on politics, on tactics and on spin, and that's not how you beat a cost of living crisis. Happy to take questions.
JOURNALIST:
Angus, it’s Shane Wright. There's been no one sacked from the RBA board, and Marnie Baker and Renée Fry-McKibbin are very well recognised. Renée is one of the best macro economists in the country, and Marnie as someone with a deep understanding of regional banking. Are they core appointments to the Monetary Policy Committee?
ANGUS TAYLOR:
That's not why this is about, Shane. This is about destabilising a board when we need a stable board. An independent Reserve Bank, a credible, capable Reserve Bank organisation. It's not about the individual members of the board. It's about the institution and you know well, Shane through our history with monetary policy in this country that stability, independence, credibility and capability of the organisation is absolutely essential, and this government has taken a different view on that, and it's taken a different view because the government has absolutely failed to provide the right settings to allow the Reserve Bank to bring down inflation and interest rates on a sustainable basis and every Australian is paying the price for that and will continue to pay the price for that.
JOURNALIST:
It’s Evelyn here from the ABC. Just sort of following on from that you're saying that … you've accused the government of stacking the RBA board, and saying that you want to see credible, capable, independent RBA so who of these appointments are you suggesting isn't credible, capable and independent?
ANGUS TAYLOR:
I'll say again what I just said. It’s not about the individual appointments, but it's about the board and the organisation, and it needs stability, and we've been clear about that from day one, as have many other wise commentators around the country who have made the point that we need stability, including former Reserve Bank governors have made this point consistently. I've been making it for over a year but we do know this government has failed. It's failed to beat the cost of living crisis. It's failed to restore Australia's standard living. It's failed to put the Reserve Bank in a position where it could bring down interest rates, and it's failed to deliver the strong economy that it promised, and those failures mean now it's pursuing a whole range of desperate measures. This is not about the merit of individual board members. This is about the stability of the board, let's be clear and whilst the government will try to spin it all sorts of ways, because that's how they try to solve every problem, not through substance but through spin. We know that's how the Treasurer thinks about the world. He's a spin doctor. He's not an economist. He's not a Doctor of Economics, and we see time and time again, his solution to every problem is just more spin.
JOURNALIST:
Shadow Treasurer, Ben Westcott from Bloomberg. Thanks for doing this press conference. Just wanted to, again, to dwell down on your wording there, so you said that it's important for the bank to be independent, and it's important … and you said that this is Labor is pursuing its stack and stack strategy. Now stack generally means you're stacking something in your favour and you again mentioned independence is important. So which of these appointees do you think is biased in favor of Labor's agenda, and what particular things are you worried about from these appointments?
ANGUS TAYLOR:
Good try, again. I'm not going to [inaudible] comments about individual board members. I'm going to make a comment about the approach, the attitude of the Labor Government to the Reserve Bank. Look, Labor governments historically have always seen a Reserve Bank as a plaything for them. We saw that with Paul Keating, the hero indeed, of the current Treasurer, where Paul Keating boasted that he controlled Bernie Fraser, the Governor at the time, and told him what to do, instructed him on what to do, and that's the model of Reserve Bank governance that this Treasurer has grown up with and believes in. It's clear. So this is not about any individuals. This is about the institution. Let's be clear, and you can, you can try to focus on individuals and [inaudible] it's not about that, but it is about the independence and stability of an institution that is central to beating this cost of living crisis. Of course, the Reserve Bank can't do anything if the government doesn't get its settings right, and we will see in this MYEFO, no doubt, we've already seen forecasts from very credible economists saying that we're going to have red ink as far as the eye can see. We're going to have a massive budget deficit this year and next, and the year after and the year after that, and no doubt, for many years after that. That is not how you beat the cost of living crisis. But the Treasurer has given up the ghost and instead, right now, he's playing tactics, he's playing politics, and he's focusing on spin, and that's what he always does.
JOURNALIST:
Angus, Mike Read from the Financial Review. There are going to be two more appointments in 2026 to the monetary policy board. If you win the next election, you'll be the Treasurer. Would you conduct the process for those appointments any differently to how the Treasurer just conducted the process for these two appointments?
ANGUS TAYLOR:
Well, first of all, I’d consult Michael. I’d consult. You know, Jim Chalmers’ version of consultation is talking to himself in the mirror. Jim Chalmers’ version of consultation is talking to himself in the mirror. We have given Jim Chalmers a list of names from the beginning, which is the current board. He wasn't interested in those names, and so he wasn't interested in consultation. We will follow the process, Michael, as you suggested, and we've said to the government from the beginning when the Reserve Bank Review was handed down, they should follow the process. Indeed, it is important to note, immediately after accepting the recommendations of the Reserve Bank Review, the Treasurer ignored the recommendations and ignored the process for recruitment, and we made that point way back when and I'm sure you remember that, Michael, which is completely unacceptable but it's the sort of thing that we've come to expect from this Treasurer and this government.
JOURNALIST:
Angus, it’s Jennifer Duke from Capital Brief. Given you're not commenting on individuals, is it right to interpret that displeased with the process and not at all with the people and that regardless of who was announced today, you would have the same statement?
ANGUS TAYLOR:
Well, it's not about the individuals. It's about the institution. That's the point. I know the Treasurer will try to frame this as the question being about the individuals. No, the question is about the Reserve Bank. The institution. The organisation that has been enormously important over many decades at keeping inflation where it should be, bringing it down to where it should be. Of course, Peter Costello in putting in place major changes in the 1990s after the many failures of Paul Keating, made sure that we had arrangements in place where we could maintain an independent Reserve Bank. Not something that Labor agreed with back in those days, but it's important that we maintain that integrity of the Reserve Bank because that's how we sustainably beat inflation, that's how we sustainably bring down interest rates but of course, none of that is possible if the government doesn't get its settings right, and of course, this government has completely failed to provide the context within which the Reserve Bank would have been able to bring down interest rates in a timely way and to sustainably beat inflation.
JOURNALIST:
Shadow Treasurer, it’s Mike Foley from the Sydney Morning Herald. Just following up on some comments that Jim Chalmers made this morning where he said that the smaller energy grid forecasted by the Coalition in its nuclear costings correlates to an economy that has $4 trillion less activity by 2050. It is true to say at least that the Coalition expects to have a smaller energy grid by mid-century. Why is the Coalition more pessimistic than the government on that topic?
ANGUS TAYLOR:
Well, Mike. I’d say a couple of things. The first is, I hope you asked him the question as to how he made that number up because it's complete rot. Absolute and utter nonsense. Let's be clear, when you have energy prices that are half or close to half of what they otherwise would have been under Labor, you're going to have a stronger economy. You're going to have a stronger economy. The idea that a near doubling of electricity prices could strengthen the economy is beyond laughable. It’s beyond laughable but that's the position of this Treasurer because he doesn't understand economics and he never did. He's a doctor of spin, not a doctor of economics and it shows up with his ridiculous comments like this one.
JOURNALIST:
Angus, do you expect that mortgage … just another one. Do you expect that mortgage holders will actually be impacted by the change to the makeup of the board today?
ANGUS TAYLOR:
Well, there's no question that a failure to sustainably bring down inflation and interest rates imposes huge pain on Australian households, Australian small businesses, Australian families. There's no question about that, and this government's failure to deal with its homegrown inflation, the inflation that's coming from Canberra has caused enormous pain for Australians. Now it's true that the government has looked for someone to blame at every stage along the way. Initially, it was blaming Vladimir Putin. More recently, it was blaming Donald Trump. He blamed Xi just in the last week or so, and on the weekend, we saw the government, the Treasurer blaming veterans. This Treasurer will look for anyone to blame. He has absolutely failed in the number one job of this government, which is to sustainably bring down inflation and interest rates. Australians are paying a very high price for that. All good? Any others?
JOURNALIST:
One question, one question on the Bali Nine. Are you pleased to see them return home, and are you expecting that there'll sort of be any implications with Indonesia?
ANGUS TAYLOR:
Well, can I say, I'm sure this is a relief for them and for their families. But can I also say that this is a salient reminder of the consequences of drug smuggling. This is a very salient reminder of the consequences of drug smuggling, and of course, we must first and foremost discourage any Australian from ever considering conducting that kind of activity again.
JOURNALIST:
Shadow Treasurer, I just have a very quick one. Sorry, there's been a $100 billion or so black hole knocked in the budget by the slowing of the Chinese economy, or at least so the government says. If you come into government, you'll inherit that black hole. What do you think should be Australia's approach to dealing with the softening Chinese economy?
ANGUS TAYLOR:
Well, can I say, first of all, the approach that this government should take, first and foremost, is to take responsibility. I mean, he's blaming Xi now. He's blaming the Chinese now. It’s their fault. A little while ago he was blaming Donald Trump. Before that, he was blaming Vladimir Putin, on the weekend, in fact, he was blaming the veterans. Look, the simple message from this is take responsibility. There is much the government can do to strengthen the economy, to strengthen the budget, and the first thing they could do is stop the reckless growth in spending. We're seeing a rapid growth in spending. That's why we've opposed over $100 billion of spending through the budget because now is not the right time for an Australian government to be growing spending at a much faster pace than the economy. Households are having to manage their budgets carefully, but this government is not managing its budget, and that means all Australians pay a high price. The homegrown inflation rages along. We fail to see the cuts in interest rates we're seeing in economies across the world and Australians continue to pay a higher price for that. All good? Thank you very much.
ENDS.
