Topics: Labor’s homegrown inflation crisis, Federal Budget

E&OE

CHRIS KENNY:

Now, when I caught up with Shadow Treasurer Angus Taylor just a short while ago, I started by noting how after Labor broke an election promise, so it could reduce tax cuts for high income earners, it seems strange that they're now handing out taxpayer funded energy rebates to everyone, including millionaires and billionaires.

ANGUS TAYLOR:

That's exactly right, Chris. Help with their power bills, but also provide them with production tax credits, which is a policy that we haven't seen before. And to put that in perspective, that means every unit of production of these businesses often owned by billionaires are going to get a big subsidy from the government. So this is a very different approach. But can I step back for a moment and say, what is the real problem with all of this, Chris is this is a big spending budget, you're seeing Labor, massively increasing the amount of spending $315 billion since they came to power, and it's increasing over the next couple of years sharply. That's because there's an election coming up. It's a political budget, and that's inflationary. They're throwing fuel on the inflationary fire. Of course, they haven't delivered on their energy price promises. We all know that because we see that in our electricity bills, and they're promising this so called relief, and they're putting a band aid on a bullet wound. But the underlying problem is they have absolutely failed to slay this homegrown inflation, which has been raging on their watch.

CHRIS KENNY:

There's no doubt about that. But when it comes to this $300 Energy rebate, is there any way that you can force the government to means test it?

ANGUS TAYLOR:

Well, we're certainly asking the questions and we'll keep asking the questions about how they're proposing to do it, they're proposing to put it in people's energy bills from what we can understand. And that would be very difficult to means tests. And they want to do it that way, because they think they can artificially reduce the price index. So it's all a bit of a con. It's all a bit of smoke and mirrors. And really what they're trying to do is buy an interest rate cut, Chris, but the truth is, the Reserve Bank will see through all of that. But the idea again that the billionaires should get a $300 price relief, and they should get these production tax credits, I mean, seriously, we need a budget for the battlers not a budget for the billionaires.

CHRIS KENNY:

Yeah well, I said at the outset of this program, that this was a trick to try and force down the statistics for sort of a trick reduction, if you like, of inflation. The RBA will surely know that a lot of people will spend any savings elsewhere. Plus, at the end of the year, when this rebate only lasts a year, then power prices go back up again. And you're stuck with the same problem, surely.

ANGUS TAYLOR:

Exactly right. So at the very best, it defers. It only defers inflation that's going to happen anyway. The RBA will see through it. They look at underlying inflation, not headline inflation. So they'll see straight through this con job. And S&P have told us that as a result of this budget, they expect that there's more upward pressure on interest rates. And they're not the only one saying it. This is a budget that has thrown a fuel on the inflation fire. And that means there's more pressure on interest rates to stay higher for longer and every Australian pays a high price for that. Australians are poor under Labor and sadly, this budget is not going to alleviate that situation.

CHRIS KENNY:

The other point with this energy rebate, so called energy rebate, is doesn't it tell us that Labor has just actually given up on fixing the electricity system mess and lowering prices? They just, they can't lower prices, they're spending $3.5 billion on these rebates. That could build an enormous amount of generation if they knew what they were doing.

ANGUS TAYLOR:

Exactly right. So of course, everyone remembers they promised a $275 reduction when they came to power, we've seen bill increases of around $1,000 for Australians since Labor has come to power. They have no pathway to deliver reductions so now they're just throwing money around. But you know, we've seen all this before, Chris, this is what governments did back in the 70s and the 80s and it failed. Inflation rages when you have these sorts of policies. Disposable incomes go backwards, as they have in Australia, 7.5% reduction since Labor's come to power on average, huge, huge reductions in the standard of living for Australians with a mortgage, and there's no end in sight with these policies. This is a bad budget. It's not a budget that will alleviate Australians' standard of living woes. And it's politically motivated at the end of the day for an election that will be sometime in the next year.

CHRIS KENNY:

Now, you talked before about some of the other measures. These tax credits that are going to be driven towards the green hydrogen and the like and billionaires like Twiggy Forrest will be lining up for that. And then as we mentioned, they've done nothing to actually fix the electricity system themselves with the renewable transition. Does this mean that tomorrow night Peter Dutton will reveal the details of his planned nuclear energy transition?

ANGUS TAYLOR:

Well, we'll certainly continue to lay out the next part of our policy focus, Chris. We haven't been small target. We've shown a real contrast to the Labor Party. We showed a real contrast on the Voice referendum of course, we're showing a real contrast as we lay out the most significant change in energy policy that this country has seen in a long while with a shift towards nuclear and we'll continue to talk about that. But we'll also talk about the cost of living crisis and the housing crisis Australians are facing. We've seen again, a very sharp increase in immigration numbers. They went up again, in this budget to 1.7 million over the coming years. For that time period, it was closer to a million when we were in power...

CHRIS KENNY:

We'll talk about two immigration tonight as well, but on related issues on border protection. This there's precious little in this budget when it comes to savings yet Labor is suggesting in the budget that they'll save $250 million by essentially mothballing the detention processing center on Nauru. Now with six boats already arriving, I don't see that they can actually shut down Nauru.

ANGUS TAYLOR:

Well, exactly right. You’ve got two hapless Ministers looking after border security right now and of course the boats are lining up. I mean, the real problem with this whole issue is if you send the signal that you're weak, if you send the signal that you haven't got it under control, if you send the signal that you've got Ministers who really don't want to control the borders then the people smugglers get going again. And that's exactly what's happened. And that doesn't just have tragic implications for those trying to get into the country, it has huge implications for costs and budgets. So the idea that this is not a real risk now, well, looks to me like a serious risk. And I've got to say, at a time like this, who would you want controlling and managing your borders? Those hapless Ministers or Peter Dutton who, as we know, has been able to control borders in the past.

CHRIS KENNY:

Just finally, one of the astounding thing about this Budget from my point of view is Jim Chalmers banks his second surplus. Great, good on him. Good fortune but good on him. But then he looks out four years hence and it's just deficits, deep deficits as far as the eye can see. He seems to have no ambition to return the budget to a structural balance or surplus. Would you undertake to get the budget back to a balanced situation in the first term of a Coalition government?

ANGUS TAYLOR:

Well, absolutely. But I'll go one step beyond that, which is to reestablish the rule that the budget must strive towards structural balance. That means you grow the economy faster than your spending. That's a crucial rule that has been in place, a structural balance or a move towards structural balance, since the 1990s, Chris. It was part of the Charter of Budget Honesty, it's been taken out by Jim Chalmers so that he can throw fuel on the fire as we go into an election year. But we'll all pay a high price for that and that is a very, very bad move by this government. But it's one that means that they're not taking the fight against this homegrown inflation under their watch, they're not taking that fight seriously.

CHRIS KENNY:

Thanks for joining us Angus Taylor. We'll tune in tomorrow night with great interest.

ANGUS TAYLOR:

Good on you Chris, thanks for having me.

ENDS.