Topics: Labor’s homegrown inflation crisis, Federal Budget

E&OE

SARAH FERGUSON:
For his reaction to the budget, I'm joined now by Shadow Treasurer, Angus Taylor. Angus Taylor, welcome to the program.

ANGUS TAYLOR

Good to be with you, Sarah.

SARAH FERGUSON:

We just heard a discussion, some debate there, from Tom Crowley about the way in which this may or may not influence an election. Are we looking at a pre election budget?

ANGUS TAYLOR

It's certainly a political budget, an extra $315 billion in spending since Labor came to power. That's over $30,000 for every Australian household, Sarah.

SARAH FERGUSON:

I'm just going to push back on that figure, because I think my colleague, David Speers did the same thing at the weekend. Which is that's not since Labor came to power, that's a figure that spreads over the forward estimates.

ANGUS TAYLOR:

It's very important this. The baseline was the last budget, they were left from us. Since then, over the forwards, they've added $315 billion. Well, except they plan to, and this is the point. If you plan to spend a lot of money, it's inflationary. We've got a 16% increase in spending over two years, and the economy is only growing at closer to 7%. So that's spending growing at double the pace of the economy. That takes you to a $43 billion structural deficit in two years time. Now that's inflationary, Sarah. When you've got $4 of spending for every dollar of savings, you're not fighting the inflation dragon. That homegrown inflation that so many Australians are suffering from.

SARAH FERGUSON:

Anyway, back to your point. We've just had a long discussion about that. The results on that will come but let me talk to you about the Budget today and your immediate thoughts on it. Earlier on today, you were talking about the great pain beating down on households, pensioners, young people, those with mortgages. So, do you support the government's billions of dollars in subsidies to those struggling Australians? Do you support that?

ANGUS TAYLOR:

Well, what's clear in this budget is they're not going to the source of the problem. They're putting a band aid on a bullet wound.

SARAH FERGUSON:

Let's stay with that particular question, do you support it?

ANGUS TAYLOR:

The context is incredibly important and I will answer that question. But the context is hugely important. You should be dealing with the source of the problem when inflation is raging. The government isn't because it's a political, big spending budget, designed for an election, not for an inflationary, cost of living crisis. When all you've got is a band aid to put on the bullet wound, that's what you do. That's all that Labor is offering here. So, we will support that, but not because we think that's ultimately the right answer. Labor has failed to deliver the energy price reductions they promised before they came to power.

SARAH FERGUSON:

That is not due until next year, but let's just talk about that. So you will support the government's cost of living relief going out to Australian households?

ANGUS TAYLOR:

Sure. But this budget makes clear that they're not going to deliver that promise on electricity price reductions and the result of that is this is the only band aid to put on the bullet wound as Labor's left it.

SARAH FERGUSON:

If you'd been in government, what specific measures would you have brought in to squeezing inflation?

ANGUS TAYLOR:

We would have in the energy sector, for starters, been driving more supply. Most of all, we would have been showing restraint, making sure that the fiscal rules are in place to fight inflation. What does that mean in practice? It means having a rule in your budget, where you grow the economy faster than your spending. Well, we've got spending in this budget over two years growing twice as fast as the economy.

SARAH FERGUSON:

Does that mean that the opposition would have been looking at an austerity budget?

ANGUS TAYLOR:

No, it's just restraint. It's what every economist is saying right now, there needs to be restraint. It's not scorched earth, it's just sensible. Now, this is not a restrained budget. Four dollars of spending for every dollar of savings, Sarah. That's not restraint. We've got $13.7 billion in this budget, billions dollars of handouts to billionaires in production tax credits. I mean, that's not a restraint.

SARAH FERGUSON:

So, you don't you don't support money going to Twiggy Forrest or to Gina Rinehart as part of Future Made in Australia,

ANGUS TAYLOR:

We do not support those production tax credits. I mean, $13.7 billion is a massive spend. If you want to get those resources sectors really firing, I worked in those sectors for many years before politics, you've got to drive down energy prices. You have to make sure you do the approvals in a timely way, not 14 years, which is the average ...

SARAH FERGUSON:

But on the principle of Future Made in Australia, you don't object to the idea of, in a sense, picking winners? You don't object to that? You just don't like these winners?

ANGUS TAYLOR:

We want to see a successful manufacturing sector, and particularly minerals processing, which is what a lot of the focus is on there.

SARAH FERGUSON:

You would be prepared to pick and back specific individuals and companies?

ANGUS TAYLOR:

That's not what I said, if I can finish. We strongly support having those sectors being strong. We want them to be strong, and they have been strong in this country for a while. But the way to get there is to focus on the fundamentals, not to throw money at them with subsidies. We don't support the $13.7 billion of production tax credits. There's much else in that MIA Bill that we'll work our way through and there's many many questions we have about ...

SARAH FERGUSON:

To be clear, you would take away those tax credits to Twiggy Forresst, Gina Rinehart?

ANGUS TAYLOR:

We cannot support billions in handouts to billionaires, no.

SARAH FERGUSON:

Angus Taylor, it was brief but thank you very much indeed. We look forward to hearing more from you in the days ahead.

ANGUS TAYLOR:

Good on you. Thanks, Sarah.

ENDS.