Topics: Unemployment figures, Labor’s cost of living crisis, Defence funding

E&OE

KIERAN GILBERT:

Let's go live to the Shadow Treasurer, he joins us now from Goulburn today. Angus Taylor, thanks for your time. Is this a scenario where we're possibly seeing the government delivering the ultimate soft landing where unemployment remains low, but inflation is moderating?

ANGUS TAYLOR:

Well, inflation is persistent Kieran, and that's been very clear. In fact, The Economist has recently said again, that we have the most persistent inflation of any major country in the world. And that's consistent at the moment with losing jobs, as you just said, but that persistence of inflation is hurting households in many different ways. We've seen household disposable incomes, their standard of living, being smashed over the last two years since Labor came to power through a combination of higher prices, high interest rates, and of course, a 22% increase in personal income taxes being paid. And all of those things combined means this sure ain't anything like a soft landing for Australian households, Kieran, in fact, it's quite the opposite. Australian households are in deep pain. And they've already had a hard landing under Labor, because Labor simply doesn't know how to manage the economy under these sorts of circumstances.

KIERAN GILBERT:

Can the RBA move and cut rates with unemployment as strong as it is?

ANGUS TAYLOR:

Well, that's a decision for the RBA. But I tell you what, if the government manages its spending and stops wasting money on things like its failed referendum, then that takes pressure off interest rates, it takes pressure off inflation, and it takes pressure off the Reserve Bank. This is economics 101. We learned the last time we had rampant inflation in this country and around the world in the 70s and the 80s, that governments have to manage their spending. But we see another big spending announcement from the government over the last week with the MIA Bill, their so called Made in Australia bill, more spending from the government, they're going to pick winners. They think this is the way through but spending this kind of money we know has inflationary impacts. Just look at what's happening in the United States with the equivalent bill, their IRA Bill. The United States can't beat inflation. It's not beating inflation, and this government wants to go down exactly the same track. We simply aren't seeing the conditions we need to have a low inflation, low interest rate, high growth economy that we all want to see.

KIERAN GILBERT:

You say they're going down that track, but aren't the measures taken by the government being endorsed by the IMF, for example, they were ranked second this week in terms of fiscal management, the second best bottom line in the G20. Isn't that a vindication and endorsement of the government's approach?

ANGUS TAYLOR:

Well, that's the government's own assessment, it's spin from the Treasurer's office, Kieran, but what every economist knows, and we've heard it from former Productivity Commissioners, we've heard it from Gary Banks in the last 48 hours, Kieran, that this government is spending money in ways that they shouldn't, particularly in an inflationary environment. We've had economists across the board condemning the government, including the new Productivity Commissioner Danielle Wood, saying that this government is going down exactly the wrong path, picking winners, throwing money around at a time like this when we know household budgets have been squeezed. But it seems that the government budget is allowing Jim Chalmers to throw money everywhere. Well, that's the wrong answer for beating inflation, Kieran, and we know as I said from history, how you beat inflation, The Economist - we're talking about international organisations - The Economist has said, we've got the most persistent inflation of any major advanced country in the world. And it's clearly true, we are not beating it yet. We've got a long way to go. We want to see a low inflation, lower interest rate, a high growth economy, but that is not where we're at right now. And to put that in perspective, GDP per capita has stopped in this country, it's going backwards. Three consecutive quarters, that is a family recession, people are experiencing a recession in this country on top of inflation that's well above the target rate. There's no reason for this government to crow about how good Australians have got it. They haven't got it good right now and it needs to be fixed.

KIERAN GILBERT:

You're saying that was government spin, that was the fiscal monitor released by the IMF. It had Australia second in the rankings for the best budget bottom line. Isn't that some sort of endorsement though for their fiscal restraint?

ANGUS TAYLOR:

Yeah, the budget situation at the moment is an endorsement of years of approving projects in the resources sector that is giving a great windfall to Australia. And of course, this is a government now that's slowed those approvals down to the point where they're sclerotic. At the same time, what we're seeing with this government is they're stealing from the household budget, to bolster the government budget, so they can spend more money on their latest pet projects, which we're seeing this government doing and with their MIA Bill. So, you know, there's no reason to endorse the economic strategy of this government. And we've seen, as I say, many, many economists, in the last week condemning the direction that the government's gone, to the point where the Teasurer has had to scale back much of the tone that the Prime Minister took on his so-called MIA Bill. And, you know, it's very clear that they are being criticised widely for the approach they're taking.

KIERAN GILBERT:

Now, on the Defence funding, Andrew Hastie your colleague came out very quickly to say, you would outbid the government on military funding, where do you find that envelope, that funding?

ANGUS TAYLOR:

Well, I think the historical perspective is the important one here, is that we've always done better than Labor at finding money over time, necessary to support Defence. I'm not going to make our pre election budget announcements today Kieran much as you might want me to do that. I'm not going to do that. But what I am going to say is the history is very clear here. Coalition Governments find a way to make sure that we have the Defence forces that we need, we have the spending on the Defence forces that we need. We were the ones who announced AUKUS of course, and we always will. That's been the history in this country. And it's important because we're facing geopolitical threats right now, that we haven't seen for a long, long time, of course, and the test for Richard Marles is does he understand those threats? Does he know how to respond to them? And is he able to make sure that we've got the resources we need in place to respond to them, and right now, it doesn't appear to me that he's even close to meeting those tests.

KIERAN GILBERT:

Shadow Treasurer Angus Taylor, joining us live from Goulburn. Appreciate it.

ANGUS TAYLOR:

Good on you, thanks Kieran.

ENDS.