Topics: Reserve Bank decision; inflation; decline in living standards; energy subsidies 

 

E&OE

 

ANGUS TAYLOR:

Well, welcome relief today for long-suffering Australian borrowers, small businesses, bigger businesses, families, of course, who have been suffering under heightened interest rates and core inflation, which has been well above target for a sustained period of time. It has been a long time coming. It has been a long time coming. We've seen interest rate cuts in peer countries around the world, between 1 and 2% in countries including Canada, US, Europe, New Zealand and Australians have been suffering in the meantime with high interest rate and in the course of the last two and a half years or so since interest rates have been rising, a typical Australian household has paid an extra $50,000. An extra $50,000 in interest rates than they had expected to pay and that has been a huge impost, of course, on Australian families who have been doing it very, very tough.

 

Now, despite the welcome cut today, it's a long journey back to the standard of living Australians had when these interest rate increases began. We've seen 12 interest rate increases under Labor and one down now, but we've also seen the biggest collapse in living standards in our history. It has been completely unprecedented. It's also been unparalleled relative to other peer countries around the world. The living standard collapse in Australia has been bigger than peer countries around the world, and indeed, in the forecast today from the Reserve Bank, there is a downgrade in living standard forecasts. Despite the interest rate cut, the Reserve Bank is expecting that living standards will be worse than in their previous forecasts, and this is more pain for Australian families.

 

The journey is far from over here. The journey is far from over. Now, let me make a critical point about how we've got to where we are. Australian families have done the hard work here, and they deserve this interest rate cut because they're the ones that have done the work. To get interest rates down demand has to come into balance with supply, and we've seen rapid growth in public demand, rapid growth in government spending, but indeed, we've seen households tightening their belts. Households have had to tighten their belts because governments haven't tightened their belts. And the fact of the matter is, households have had to do the work and we see this every day. We see it in the living standard outcomes that I described a little earlier.

 

Now Labor's own forecasts, Labor's own forecasts don't get us back to the living standards that they inherited back when they won the election in 2022, they don't get us back to those living standards until 2030 with further downgrades today, it's a long way back to where Australians were when Labor came to power, and we know that the critical issue now for government is to accelerate that pathway back, accelerate the pathway to restoration of Australians’ standard of living that they had when the interest rate increases began. That means beating inflation once and for all. Sustainably beating inflation. It means making sure government does tighten its belt, that it grows spending at a manageable rate, not at the rapid rate we've seen in recent times, 36,000 additional Canberra-based bureaucrats. That is not how you sustainably beat inflation. It does mean boosting growth and making sure there isn't red tape being wrapped around small businesses who are trying to invest and create jobs, take risks, all the things that businesses have to do to create opportunities for themselves and for all Australians. It does mean making sure we've got cheaper, more affordable energy for all Australians, getting the underlying cost of energy down in this country, and it does mean, of course, making sure that there are affordable homes for Australians, breaking those infrastructure bottlenecks, as we've outlined with our $5 billion fund, to make sure those critical bottlenecks that are holding back the supply of housing are fixed, and we get that supply really needed. We have had a very, very tough two and a half years for Australian families. Australian families are poorer than they were two and a half years ago. We cannot afford, we cannot afford another three years, like we've seen over the over the term of this Parliament. Happy to take questions.

 

JOURNALIST:

You say that Labor's predictions show that they won't restore living standards until 2030. How soon do you think a Coalition Government will be able to do that?

 

ANGUS TAYLOR:

Well, we've got to accelerate it. That was my point. That means beating inflation sustainably and as I pointed out, you don't do that by having rapid growth in government spending. Indeed, government spending as a percentage of the economy is at record levels across state and federal government. I mean that's not how you sustainably beat inflation. In fact, Australian households have had to do the work to get demand and supply in the balance because governments haven't done their work. So you've got to get those things right. You've got to make sure you boost growth, and that means getting red tape out of the way, letting businesses get on and do what they have to do to invest. Investment drives productivity and it drives prosperity, but we're not seeing enough of that. We're not getting the approvals through under this government. I mean, this is getting the basics right, making sure small businesses have got the cash flow so they can invest and that means making sure our tax regime is incenting and encouraging small businesses to make those investments. This is getting the basics right. We know we can accelerate it, and that is the task of government. This government we have right now has taken Australians backwards. We need to accelerate the journey back to where they were.

 

JOURNALIST:

What specific cost of living measures are you offering Australian households at the next election?

 

ANGUS TAYLOR:

Sustainably lower inflation and lower interest rates than they would otherwise have had. Accelerating the pathway back to the standard of living that they enjoyed before Labor came to power. It's pretty basic stuff. Look, let's be clear about economic management. Labor doesn't know how to manage the economy, and if you want to beat a cost of living crisis, you cannot beat a cost of living crisis if you can't manage the economy and that's exactly what we've seen under Labor. Seven consecutive quarters GDP per capital going backwards. That is not good enough management

 

JOURNALIST:

Voters, though, you know, will be looking at what's on the table for them. They might hear this rhetoric and think yes, you know, we like the idea of that, but it's a broader picture. What tangibles are you offering them in terms of cost of living?

 

ANGUS TAYLOR:

You know, I’ve got to say, if you're suggesting for a second, I'm not saying you are, but if you're suggesting that sustainably lower inflation and lower interest rates are not tangible, then I think you're at odds with the views of Australian households. I mean, this is what's caused them pain. It's the combination of three things: sustained high inflation. Our core inflation has been above key countries. When you benchmark Australia against other countries around the world, we've been at the wrong end of it. We've been at the back of the pack. We've had interest rates that have been sustainably higher, and of course, we've seen cuts in other countries. And we've also seen a record increase in personal income taxes being paid. Over 20%. So those things have caused enormous pain for Australians, and I've just laid out the core priorities that we launched a number of weeks back early in the year, which will be our focus and which we know from history are the way to get the standard of living back to where it should be.

 

JOURNALIST:

If you win the election, would you extend the $300 a year power bill subsidy, both beyond July?

 

ANGUS TAYLOR:

Well we'll wait and see what the government's proposing on this, if they’re proposing anything at all, and we'll make comments down the track. I tell you what we will focus on though. We'll focus on sustainably getting down the underlying cost of energy. And the reason Labor has had to put a band aid on a bullet wound is they haven't dealt with the source of the problem. If you don't deal with the source of the problem, you end up dealing with the symptoms. We know it's critical to get more supply in the system fast. We know that gas is critical. Natural gas is critical to getting those prices down quickly. We know we need a longer-term pathway to zero emissions base load power. I mean, these are the basics that need to happen if we're going to get underlying costs of energy down, and that has to be the primary focus. Labor has failed on that, and it continues to fail on it. We'll look to see what they might announce in the lead up to the election, and we'll make comments then.

 

JOURNALIST:

So you'll only give a yes or no answer once you know what their position is on it?

 

ANGUS TAYLOR:

Well, I said we're going to say something more about energy. We'll say a lot more about energy in the lead up to the election, as we've said a lot already. But you know, the key to this is to sustainably get the underlying cost of energy down and that's where Labor has completely and utterly failed. All good? Thanks very much.

 

ENDS.