Press Conference on MYEFO - Wednesday 18 December 2024
Topics: MYEFO Coalition’s nuclear policy, Labor’s economic failures
EO&E;
ANGUS TAYLOR
Well, today's budget update has highlighted the enormous cost that Australians would have to pay for another three years of labor, the enormous cost of another three years of labor. This is another illustration of what we get with a big spending, big taxing, big Australia, Labor government. By the end of the next term of Parliament, if Labor was to win the election, we will have seen an additional 2 million immigrants coming into this country without the supporting infrastructure, or without the supporting housing that is so desperately needed. What we see in this update is red ink as far as the eye can see, the headline cash balance $233 billion dollars of red ink. That's over $23,000 for every Australian household over the next four years. The underlying cash balance similarly, $143 billion and those numbers in the underlying cash balance, $347 billion worse than when Labor came to power over the forwards. Australians have to foot that bill. This is not free money, it doesn't come from the sky. Australians have to pay that bill, and they pay it either through higher inflation, higher taxes and, or higher interest rates right now. In recent times, we've seen around the world that kind of spending, most of all, translates into higher inflation. Every Australian has to pay that price. This is not free money. This is the biggest spending government we have seen out of outside of wartime or crisis, the biggest spending government outside of wartime or crisis. There is absolutely no path in this update to a restoration of Australians' standard of living, no restoration to Australians' standard of living. Now all of that is on top of what's already happened in the last two and a half years, we've seen seven consecutive quarters of family recession, of household recession, where GDP per capita has gone backwards. We have never seen that before in this country. We haven't seen seven consecutive quarters of GDP per capita going backwards. We've seen household's standard of living, Australians' standard of living collapse. Again, completely unprecedented. We've never seen a collapse like this, and it's the worst of any of our peer countries across the OECD. Australians are paying a price for a government that simply has had the wrong priorities and has consistently made the wrong decisions when we're facing a cost of living crisis and we're facing an economy that has been griding to a halt. Now we've just heard from the Treasurer an hour of Orwellian spin. We've heard almost an hour of Orwellian spin from this Treasurer, he has a slogan for everything but a plan for nothing. Worst of all, the only thing this Treasurer does more than spin is spend. The only thing this Treasurer does more than spin is spend. Australians cannot afford another three years of Labor.
JOURNALIST
On the spending issue, where do you see the wins to be made there? As you pointed out, Australians pay for it one way or the other. How do you address that? Where are the wins?
ANGUS TAYLOR
Can I just pick up on that last point? I mean, what's been so remarkable about recent years all around the world, is that we're paying for it much more immediately than we might have in the past, because it drives inflation. It drives higher interest rates, it drives a lower standard of living. And that's why spending restraint is so important, and it's restraint in the growth of spending. It's not austerity, but it is restraint in the growth of spending that matters so much. And Jacob, that's why, as you know, we've opposed over $110 billion of spending in this term of Parliament so far. I suspect there'll be more. And some have like to criticise. But we've said all the way along, the number one issue facing Australia right now is to beat, sustainably beat this cost of living crisis, which is bearing down on every Australian household, every Australian business. Now measures that in different times you might consider to be, to have merit are not measures that are appropriate when you're in the middle of a cost of living crisis, and that's why we've opposed some of those measures. Those measures have included wanting to grow the size of the bureaucracy here in Canberra. Those measures have included power lines that we don't think are appropriate and necessary if we get our energy policies right. They have included billions of dollars of spending for supposed housing where we aren't seeing new houses. In fact, Labor's given up the ghost on its housing targets. They simply aren't delivering. At the end of the day the problem for Labor is they have the wrong tools for the times. Their answer to everything is always spin and spend, spin and spend. The right answer now is on the supply side, is get the basics right. Get back to basics, get the country back on track. And that means initiatives like ours to make sure the infrastructure bottlenecks are beaten to get more housing in the marketplace, making sure that you've got the baseload, low emissions, zero emissions, energy that you need for this country to beat our emissions goals and ensure that Australians don't have to pay more than they have to. These supply side measures are the key. They are the way forward, getting approvals through. I mean, Labor has had no focus on this. They've been blocking approvals for major projects in this country if you don't get the supply side right, this is what you're left with, what we've seen today. Which is an extraordinary situation, and it's not only a commentary on the failure of Labor over the last three years, it's a commentary on the failure of Labor over the next three years, if they are to win government, particularly if it's a Labor-Green government.
JOURNALIST
Mr Taylor, it's the same question I put to your counterpart. You've got budget deficits of about $117 billion forecast over the forward three years, not including this year. Where does that leave tax reform? Can you go to the next election promising lower income tax?
ANGUS TAYLOR
Well, we have promised already important initiatives and reforms on the tax side, as you know Shane. An important one that I think should never be understated is to increase and make permanent accelerated depreciation for small businesses. And this is because one of the ways through the crisis that Labor's got us in right now, that they seem not focused on, is to encourage business investment. We know small businesses are the backbone of our local economies right across this country, and we need to be investing. And that's why that's such an important measure, not imposing taxes on unrealised capital gains. You've seen the Treasurer just today confirm that he wants to tax unrealised capital gains. He's confirmed it. He's at it again. I mean, there's no amount of money that this Treasurer can get hold of that he doesn't, that means he doesn't want more. He just, he just wants more every single time. Now the truth is, the truth is that Labor has, as you know, spent all the money and more. That's what they've done. And so we'll look closely at these numbers. And where there are initiatives, There's, of course, more honeypots that have been laid out today, on top of what was already in the budget, it's going to be more spending from Labor. We'll see what's in that, and from that, we'll work it up, wat's possible as we go forward. But let me tell you the most important thing you've got to do to deliver lower personal income taxes, because it's a good question. The most important thing you have to do is ensure that the economy grows faster than your spending. That is the key. Re-establishing those fiscal guardrails thrown out by Jim Chalmers in his first budget, thrown out. They've been there since the charter of budget honesty was put in place by Peter Costello in the 1990's, he's thrown it away, and this is what we get. And yes, when you do this, you don't leave any room for personal income tax cuts. That's absolutely right. But of course, what we will do is re-establish those fiscal guard rails and then re-establish headroom to make sure that Australians aren't paying more tax, are able to get a fair go, to work hard and to do well.
JOURNALIST
You've been critical of Labor's off budget spending. Jim Chalmers today says your nuclear plan would be many multiples of the off-budget spending Labor's announced. Is that correct? And if not, how much would it be?
ANGUS TAYLOR
You know when, when Jim Chalmers is black, just assume white. I mean, the Orwellian spin we hear from this guy. I've never heard anything like it. I've never heard anything like it. He simply makes it up. Now, what Jim Chalmers has just brought down, as you know, is a headline cash balance over the forwards of $233 billion in four years. $233 billion over the forwards. I mean seriously. I'm not going to take lectures from this guy, because that's, you know, what we're talking about is investments over many decades, which are amortized over many decades. There's order of magnitude difference.
JOURNALIST
I was just going to ask about net overseas migration. The figures show that there's a 80,000 people higher than had been anticipated six months ago. But the papers make it clear it's not the arrival figures that that have got out, the departure figures. Coalition's got a policy to try and reduce net overseas migration. So do you have methods of trying to make people leave the country?
ANGUS TAYLOR
Well, you know, you've got to focus on both. As always, there's always an excuse with Labor. They'll say oh we've really tried on this, but we've failed because of that. I mean, seriously, this is a Treasurer, he started off by blaming Vladimir Putin for all his woes, and then he went Donald Trump. Not so long ago, he was talking about Donald Trump's the cause of all our woes. President Xi from China, last weekend he was on about veterans causing of all our woes. Now he's saying there's all this automatic stuff. Well, I tell you, what is automatic under Labor is high inflation and high immigration. That's automatic under Labor, but you can have policies in place that bring those in down. So your question is a good one -
JOURNALIST
So what's your policy?
ANGUS TAYLOR
It's a good question. And yes, we have been very clear about bringing those NOM numbers down, both arrivals and departures. It's very simple. It's not complicated. You know the fact that it's taken two and a half years for Labor to work out that net overseas migration is a function of both arrivals and departures just tells you that they haven't got a clue. I mean, seriously, if that's the new insight, heaven helps us.
JOURNALIST
You didn't answer the question. How do we get there? Those depatures -
ANGUS TAYLOR
We'll have more to say. As Peter has said and others have said, we'll have more to say about those numbers, the caps.
JOURNALIST
So you can't give an answer?
ANGUS TAYLOR
Well, we've been clear about the goal, that we'll bring those numbers down. We've been clear about some of the mechanisms, which is to bring down the number of international students. We've said that. We've been very clear about that. We've also said visa charges are part of the way we will do that, we've been clear about permanent immigration numbers and reducing those numbers, and we've been clear about getting back to where we were on humanitarian visas. So all of these things we've been very clear about. And we, you know, we get these numbers after you all get them, and as we see them, we've got to work out - we see immediately how much tougher the task is than it was last time we looked at it. Every time we get an update from this Treasurer, from this government, it's worse, it's harder. But we'll work out, and that's because we cannot afford to have 2 million new Australians over above organic population growth in just two terms when we're not getting the housing and infrastructure to support that. You only have to look in the high growth parts of Australia, my electorate is one of the highest of all where you see this. I mean, we're just not getting enough. So we'll have more to say about that in the coming months.
JOURNALIST
Just to follow on Mel's question, not last Sunday, the Sunday before the Opposition Leader, he walked back, you know, the commitment to 160,000 NOM target, saying it's not until after the election that the Coalition is going to come with a figure for net overseas migration.
ANGUS TAYLOR
No, we haven't. We haven't walked that back. What the government has walked back is its forecasts, which are completely failed. We anticipated that what we'd see in the numbers today is a huge upgrade in those numbers, and we've seen exactly that. And we now have to recognise, just as we do on the on the budget side, Shane's earlier question, Labor keeps putting us into a worse and worse position, digging a hole for us, which is deeper and deeper and deeper every single day. And we'll make appropriate adjustments to that, but we're not walking away from what we've said on the NOM at all.
JOURNALIST
You spoke about getting the guard rails back in place before you bring in the headroom, on tax cuts. Will you, will you recommit to the tax to GDP ratio you had in government? Right, so in that case -
ANGUS TAYLOR
We already have.
JOURNALIST
Sure. But would you, would that come ahead of getting the fundamentals right?
ANGUS TAYLOR
23.9%. The fiscal guardrails are pretty straightforward. I learnt this from watching Matthias Cormann and the way he did it. You make sure you grow the economy faster than your spending. If you do that, it gives you headroom to bring taxes down and to do as Shane put it out to get lower income taxes. It's a really straightforward formula, but when your spending is growing at close to 9% nominal per year, and your economy, in GDP per capita terms has been going backwards for seven consecutive quarters, you're not going to be able to deliver benefits to Australian households. And this is the dilemma that this government is putting us in, and it's why we remain absolutely committed to those fiscal guardrails that I laid out very early on in this term of parliament.
JOURNALIST
One of the big differentials between yourself and the government at the moment is on energy. Yesterday, the Deputy Premier of Queensland said on nuclear, we didn't support it, Queenslanders didn't support it. Is he right or is Peter Dutton?
ANGUS TAYLOR
Well, we're very confident that we will get support over time from Australians to have that affordable, reliable, baseload generation, which is zero emissions and helps bring down electricity bills. And my experience with state ministers and Treasurers in the energy area, and I've had quite a lot of that experience is over time, they see the reality of the situation. Often it will take bad times for them to see the need. And we've seen this in Victoria. So we've seen this with Lily D'Ambrosio, I'll give you an example of this. We saw the Labor energy minister. She's been Labor energy minister for a long while, absolutely refused to ever consider keeping a coal fired generator open any longer than it absolutely has to. And now she's gone and done backroom deals with them to keep them there so she can keep the lights on and presumably try to get prices down, although not succeeding on that. I mean, we're even seeing turnarounds from Labor governments on gas, where they were dead opposed to gas, and now they realise they need it. I mean, I think reason prevails in time, and this is a big step we've announced over recent months, not just last week, in terms of getting that debate moving and ensuring that reason does prevail in delivering Australians a lower electricity costs over the course of coming decades.
JOURNALIST
Just on the nuclear policy yesterday, the Opposition Leader said that it would bring down power prices by 44% compared to Labor's plans. Is that accurate?
ANGUS TAYLOR
Well, it will bring down electricity bills by 44% there's no doubt about that. I mean, that's over time, that's, you know, to the extent that over time, what you see basic economics, as long as you have good competition policy in place, and we absolutely intend to do that, that prices paid reflect costs - underlying costs. That's, that's what you expect to see. And that's economics 101, we've always been committed to appropriate competition policy in the energy sector, which ensures that what you pay in your bills reflects the underlying costs. In fact, we did see in the time I was energy minister, we went very hard on putting in place the default market offer and putting in place changes to the consumer competition legislation to make sure that we got appropriate competition outcomes in the sector. That means bills paid reflect underlying costs. And that's where we're sitting.
JOURNALIST
Jim Chalmers, yesterday said the coalition was coming after Medicare and pensions and Anne Ruston came out said this was lie. But can you actually rule out?
ANGUS TAYLOR
Well, you know, I would say, look at where we've opposed Labor's big spending agenda. Where are those places? I went through them earlier, a moment ago. It's not underlying services to Australians. That's not where we're focused. It's actually a whole lot of initiatives that Labor is bringing that are delivering nothing, that are unnecessary. Big spending initiatives from Labor that are not appropriate at a time like this. But I tell you what the real threat to Australians is when it comes to essential services, having an economy that is not moving forward strongly, and having a budget that's driven into the red, big time, a huge turnaround in the budget into the red b the Treasurer, I mean the way you pay for essential services, the way you pay for national security, the way you pay for health, the way you pay for disability support is to have a strong economy, with high productivity levels, getting the basics right. And on the back of that, that positions you in a place where you can deliver to Australians And that is what has been threatened by this Labor government. We're seeing it in the numbers. We keep seeing it and this MYEFO is not a plan. It's a series of slogans hashed together by this Treasurer who is simply not across the economics, frankly, is more interested in politics than he ever is in the underlying economics of Australian households.
JOURNALIST
Angus, just on the nuclear costs, so just to 100% clarify you are saying that will lower costs or prices for consumers by 44% because, as you well understand, there's the generation costs, there's the distribution costs, and there's the retail cost as well.
ANGUS TAYLOR
So the underlying costs of the system were modelled by Frontier Economics, and as long as we've got genuine competition policy in place, and certainly you'll get that under us, and you were watching as we brought in a number of those competition measures, then prices and costs paid, bills paid by customers, will reflect those underlying costs. That's how economics works. It's pretty straightforward, so there's nothing confusing about this. Now, if Jim Chalmers thinks that he's going to allow big monopolies to emerge from the energy sector, who are going to take higher profit margins he should be upfront about that. But that's certainly not our plan.
JOURNALIST
Can I just go back to the question about nuclear and taking nuclear policy off budget? So you said that the Treasurer whatever he said when he says black, it's white. So are you committing, then to not taking nuclear off budget?
ANGUS TAYLOR
No my point was we see a Treasurer who has just put out a plan with $233 billion of red ink in the headline, cash balance over the forwards, and he wants to lecture on expenditure to bring down the cost of energy bills, to strengthen the economy through lower energy costs. He wants to criticise that after bringing down a plan like this, quite frankly, I'm not going to take lectures from a Treasurer who has shown such fiscal irresponsibility.
JOURNALIST
I understand that point but sorry, are you going to take nuclear off budget? Yes or No?
ANGUS TAYLOR
Well, we've always been clear about that, that it would be off budget. I don't think there's anything new in that. But you know, when you say off budget, I mean the headline cash balance is a real number. And of course, that's why I have included it, we are not ignoring it.
JOURNALIST:
Just going back to you said before we will bring down power bills by 44% -
ANGUS TAYLOR
The cost of electricity to Australians in this modeling is 44% lower under our plan than Labor's, the underlying cost and as long as there is strong competition policy in place, and there will be under us, then that should be reflected in Australian's bills. It's simple, its economics 101.
JOURNALIST
[Inaudible]
ANGUS TAYLOR
We'll give everyone a go. We'll give everyone ago. Sorry if you think costs don't reflect bills - I can't help you. We'll go to the question in the corner.
JOURNALIST
You said earlier you wanted to reduce the growth in the size of the bureaucracy here in Canberra. Where specifically would you like to reduce that?
ANGUS TAYLOR
Yeah, well, we've seen under Labor, a plan which is largely delivered now to increase the number of bureaucrats by 36,000. The last numbers have increased by 26,000 I think we're well above that now, and I'm sure it will continue to grow. Right now, look, you've got Australian households who are struggling to make ends. They're having to work extra hours. They've had to crack open the Piggy bank, dig deep into their savings, having to cut back on essential spending. Now is not the time to be growing the bureaucracy. Now is not the time to be making government bigger. Now is the time to focus government on delivering to Australians those essential services that they want to see, and the national security we all want to see, and that that means ensuring that we have a bureaucracy that is the right size to deliver that. Now, Labor will always want a bigger bureaucracy. We see Labor state governments will always want to expand the bureaucracy. You only have to look at Victoria to see that, but you also see over time what that does to the economy, and it's a big cost all Australians have to pay. Right now is not the right time to be growing that bureaucracy.
JOURNALIST
Which department have had the biggest growth?
ANGUS TAYLOR
Well, there's been - you know, that's a very good question to ask Jim Chalmers, but we have seen it across many. I don't think it's anyone that has been the source of all of that growth.
JOURNALIST
Just to clarify on the 44% bill reduction, is the 44% reduction relative to current levels or relative to the counterfactual?
ANGUS TAYLOR
Relative to Labor. You've seen the plan. This is a 44% reduction relative to Labor, and that is the benchmark. That's the baseline that matters.
JOURNALIST
Just to go back to the iron law of economics. Frontier has a big assumption on a reduction in demand for electricity. My supply and demand curve show, if you reduce the price of energy, of anything, demand goes up. So how does price come down? And demand comes down?
ANGUS TAYLOR
This is over the long term, and you know, that's how you need to look at the scope.
JOURNALIST
But the step change [inaudible]
ANGUS TAYLOR
The reason why costs come down is because you got lower cost system.
JOURNALIST
But why does demand then still come down.
ANGUS TAYLOR
Well, the difference look, let's be clear, to the extent there's a difference in demand, is because we think that Labor is planning to overfill the grid. Now we've also seen, as those of you who are, who are energy geeks, might have followed over quite a long period of time, AEMO has tended to grossly overforecast demand. That's been something that they've consistently done. They tried, I remember quite well back in 2011, 2012 to work out why they keep getting it wrong, but they've kept getting wrong. And so there tends to be overbuild. If there is overbuild, as you know, Shane, if there is overbuild, that has to be paid for by Australians, and that is not, that is not something we want to see. But I would also say if you use the same demand scenarios, you're still seeing a very significant reduction in energy costs. I'll take one more.
JOURNALIST:
Just to go back, you said today's statement had honeypots, there are honey pots in there, please be specific.
ANGUS TAYLOR
Well, the $5 billion dollars the Treasurer talked about. We're going to have a good look at that, and I strongly encourage you to ask him some questions about that. There's still quite a lot in the budget that we still don't know about, in the contingency fund. So I would strongly encourage all of you to be asking the Treasurer lots of questions about all the hidden spending. There's lots of spending that's transparent in the budget. A hell of a lot of it. We see that in those numbers that I've just outlined. But there's a lot of hidden spending too. And of course, this is a Treasurer and government that loves to spend and I think Australians deserve to know what they're going to spend all that money on. So thank you very much. Thanks.
ENDS.
