ANGUS TAYLOR:
Well look, there’s global pressures, whether it’s in energy or more generally across the economy with inflation and interest rates. There’s no question about that. But of course, we’ve faced a whole series of global pressures over recent years right across the economy including energy, Ross, and we’ve had to manage them. That's what you do when you are in government. The real question for Labor is they've inherited a very strong economy. 3.9% unemployment rate we've learned just today, 0.35% cash rate and of course very low mortgage rates flowing from that. A very strong economy and significant reductions in energy prices in the last couple of years. The question is, what do they do now? And we're not in government they are, but you have to respond to the pressures that you have around you and there's no doubt there are real pressures. The question is what will Labor do and what will this look like over the next couple of years?

ROSS GREENWOOD:
Okay, so take me back to your time when you were a director at Port Jackson Partners. You ran a taskforce, a Victorian Government taskforce that recommend the development of coal seam gas, that Victoria ultimately did not do. If they'd followed the recommendation of that Victorian Government taskforce at that time, that you were on, what would the situation of energy be like on the east coast of Australia right now?

ANGUS TAYLOR:
Well, there's no doubt that supply is the answer to the problem. The question of how to reduce prices and increase reliability is have more dispatchable supply in your energy system. And of course, gas is enormously important to that source of dispatchable supply. Now, it's true, we've seen state governments, various state governments indeed, oppose development of gas resources in their state. We made progress on this when we were in government. We had the New South Wales government finally approve the Narrabri Gas Project and we hope that will continue through to fruition but the Victorian State Government maintained its onshore moratorium, which is maintained from right back all those years ago from before I went into politics, and there's no doubt that this is a real problem because we're seeing a run down in Bass Strait gas supplies. That's an old reservoir or set of reservoirs and they have to be replaced and the Victorian Government hasn't been replacing them. You need supply. The new Federal Government doesn't seem to be focused on supply, in fact, it was against new dispatchable supply in our energy system when they were in opposition. They opposed the Kurri Kurri gas generator. They resisted a technology neutral capacity mechanism that you and I have spoken about in the past, Ross, but supply is the answer and it's time for Anthony Albanese and Chris Bowen to step up and recognise that that is the solution to the problem.

ROSS GREENWOOD:
Okay, I want to take you to the economy now because you've got inflation higher, energy higher, interest rates going up, house prices going down. So can you level with us as the Shadow Treasurer? Is Australia headed for recession?

ANGUS TAYLOR:
Well, the capital markets certainly think that we are going into a very difficult patch right now and at the moment, they are predicting rightly or wrongly, that the cash rate will go above 4 per cent by the middle of next year and of course, that means mortgage rates of six, six and a half percent or so, Ross and that will obviously have a very big impact on the economy if that transpires. Government can play a role to reduce those pressures. You don't want to add fuel to the inflationary fire when you're in government, when you're in a situation like this, and that means prudent fiscal policy, not spending where you don't need to. $45 billion of off-budget spending that labor committed to during the election campaign which we didn't commit to because we felt it was the wrong time to be spending that kind of money. That sort of spending is exactly what will fuel the inflationary fire and push up interest rates. So there are things government can do. You can take responsibility to deal with the hand you have and Labor needs to do that right now.

ROSS GREENWOOD:
Okay, but then there's another aspect of this and that is the employment numbers that came out today. Right now that is the sweet spot for the Australian economy and for households coping with the higher prices and also with the higher interest rates. The real issue will be if suddenly we find unemployment rises as a result of the pressure on business. Do you believe there's a point in the future when that becomes a real issue for this country?

ANGUS TAYLOR:
Well, if interest rates went up to … mortgage rates went up to 6, or 6.5 per cent, I think there would obviously be very serious pressure on the employment market and an increase in unemployment. I mean, the question is whether that transpires and the question is whether the new government will take responsibility to pull the levers it can to reduce those pressures. Now, the the big lever that government has is fiscal policy, that is the big lever and that means containing spending. If you want to contain interest rates, and you want to contain inflation, then you need to contain your spending.  

ROSS GREENWOOD:
Shadow Treasurer, always good to chat to you and many thanks for your time today.

ANGUS TAYLOR:
Good on you, Ross. Thanks for having me.