Press Conference on RBA decision - Tuesday, 10 December 2024

Topics: Reserve Bank decision on interest rates; Labor’s economic mismanagement; Australians’ collapse in standard of living; upcoming MYEFO; Paul Fletcher’s retirement; Rupert Murdoch

 

E&OE   

 

ANGUS TAYLOR:

Well, Reserve Bank decision today, obviously, and no change to interest rates. It will be relief for those with a mortgage that interest rates haven't gone up, disappointment that interest rates haven't gone down but it's true, and it's very clear from the statement that came from the Reserve Bank today that underlying inflation remains too high. Underlying inflation remains too high at 3.5%. It went up in the last monthly numbers, and that is not only pain that Australians are feeling as the prices of goods and services continue to rise, but it also makes it more difficult for the Reserve Bank to get interest rates down. The Reserve Bank has also made the point repeatedly and repeated it today that we don't expect, well, they don't expect any return to the midpoint of the target until 2026 – well over a year away before we can expect that. Now there are a number of points that the Reserve Bank highlighted today. The first is that the economy is seeing weak productivity outcomes. We're seeing weak productivity outcomes across the economy, and that makes it a lot harder for the Reserve Bank to get interest rates down. They emphasised in the statement that aggregate demand continues to outstrip the supply capacity of the economy, and that is exacerbated by the productivity outcome we saw in the National Accounts that only came out last week. They also highlighted just what an uncertain environment it is that we're facing right now, and that is very clear when we have seen disastrous economic outcomes in the National Accounts just last week. It is clear that this economy is sick and a Doctor of Spin is not going to fix it. You don't fix a sick economy with spin. You don't fix a sick economy with spin. But that's exactly what we've seen from this Labor Government. GDP per person has fallen for seven consecutive quarters. That's completely unprecedented. We haven't seen that before. Real disposable income, which is the standard of living of Australians has fallen more than any other OECD country and more than at any other time in our history. This is the worst in the OECD and the worst in Australian history.

 

The economy right now is being led by public spending and immigration when we need an economy that is led by the private sector and is delivering for Australians. That is clearly not the case right now, and we see that in the outcomes that I've just talked about. In fact, we know that 80 to 90 per cent of the jobs being created right now are driven by public funding, by government funding. The Australian taxpayer is paying for that. We want business-led growth. We want private sector led growth because that ensures that the taxes are paid that are necessary to build the schools and the hospitals and the roads that all Australians need. Now it is also very clear from what we've been seeing in recent days that Labor's plan is failing. After three failed budgets with MYEFO coming up, there's a chance for Labor to correct the course of the economy. It failed three times, but here's another chance to get it right and what does that mean? They need to make sure that we're spending money from the public purse within our means. We've seen dramatic growth in public spending across our economy. That is not the way, that is not the way to raise the standard of living of Australians. That has to be paid for by all Australians. But if you have business-led growth, private sector-led growth we can ensure that not only do we have rising real wages and a rising standard of living, we also have the taxes being paid that ensures that Australians can, at the same time, see the schools and the hospitals and the infrastructure we all need.

 

There is an opportunity in the upcoming MYEFO to get the settings right, to get the settings right. To get the settings right on housing. Right now we're seeing around half the houses being built necessary for the growth in population that we've seen since Labor came to power. To get the settings right on energy, making sure we've got enough supply from the full range of available technologies, not restricting the sources of energy that are available for our electricity system. Making sure that our financial services sector is not being wrapped in additional red tape as we've seen under Labor in recent years. All of these things can get us back on track, can get us back to basics and that's what we need right now if we're going to have the rise standard of living, falling interest rates and falling inflation that all Australians want to see. Happy to take questions.

 

JOURNALIST:

Another announcement apart from the RBA today, is Paul Fletcher's decision to leave politics. Does this leave Bradfield right for the picking by the Teals?

 

ANGUS TAYLOR:

Well, I think right now, what we're seeing is a situation across Australia where the only way we're going to be able to get our economy back on track is by getting rid of a bad, weak and incompetent government and a bad, weak, incompetent Prime Minister. Now I'm sorry to see Paul Keating … oh Paul Keating. That was another bad, incompetent Prime Minister. I'm sorry to see Paul leave. Paul Fletcher has been a wonderful colleague over many, many years for me. Throughout my time in Parliament. He's been an outstanding Leader of Business … Opposition Business in the House. He's been an outstanding local member in Bradfield. He was an outstanding colleague in the Cabinet and in the Shadow Cabinet in my time there and I will be sorry to see him go. I'm sure he will go on and continue to contribute to Australia in the way he has in the past. He's a good friend and a good colleague. I'm also very confident that people right across Australia, including in Bradfield, are seeing what bad government delivers – a falling standard of living, an economy that's sick and a government that is out of its depth. A Treasurer that is out of touch and out of his depth and we’ll continue to make the case leading up to the next election in Bradfield and right across Australia. But the only way to fix that is to change the government.

 

JOURNALIST:

Should the RBA have already cut interest rates? Should those cuts have already happened?

 

ANGUS TAYLOR:

Well, look, I tell you, if this government had got its settings right, it would be easier for the Reserve Bank to reduce interest rates, and we'd already be seeing inflation back at a lower level. I mean, there is no question that Australia is at the back of the pack when it comes to dealing with inflation and getting interest rates down. We've seen interest rates coming down in the UK, in the US, Canada, elsewhere across the world, but not here, but not here and the truth is that this government's had its settings wrong. It thinks that it can spend its way out of an inflation crisis. Well you can’t. We know that from history. It doesn't work. But that's the approach that Labor has taken and it's why we've said the fiscal guardrails that were in place prior to Labor coming to power should be re-established, making sure that we're taking pressure off inflation and therefore taking pressure off interest rates. But this government has failed. It's failed through three budgets, and the failures are coming home to roost for Australians who are struggling to make ends meet at a desperately difficult time with the biggest reduction in their standard of living that we've seen in this country.

 

JOURNALIST:

Mr Taylor, you … slightly unrelated topic … you scored an invite to the Murdoch Family Christmas bash last week. Did you see Mr Murdoch Senior there? Obviously, 93, hasn't been to Australia for six years. How's his form?

 

ANGUS TAYLOR:

Well, look, I got to see lots of people there, and it was a private event, and private events should stay private, but it was wonderful to have the opportunity to catch up with a range of people and as always, I'll continue to engage with people across our business community and across our community, right across this great country.

 

JOURNALIST:

Did you see Rupert Murdoch?

 

ANGUS TAYLOR:

As I say, it's a private event, and I'll leave it that way and I caught up with a lot of people. I didn’t catch up with everybody. Managed to get a little bit of time there and enjoy the opportunity because as I say, I mean, I'll continue to engage with people right across the community, including in my electorate, as I have been in recent days, and hear from them about the woes that we're facing as a country, about the weakness and incompetence of this Prime Minister, and about the absolute failure of Labor to get our country back on track.

 

JOURNALIST:

Was the was the Reno Nevada court case a topic of conversation at the party?

 

ANGUS TAYLOR:

(Laughs) I think I’ve answered your question.

 

JOURNALIST:

You say the government is spending too much. Wouldn't that lead Australia into a recession?

 

ANGUS TAYLOR:

Well, you know this, this is a government that believes the answer to every problem is more government spending. I accept that, except that it's not. It's not sustainable. The fundamental problem is, if your whole economy is being driven, the growth of it is being driven by government spending, it's not sustainable. Taxpayers can't continue to fund that. You need a private sector that's growing, that's investing, that's creating jobs and if you don't have that, you don't have the increases in prosperity, the increase in standard of living we all want to see. Now the numbers are in. I mean, we have never as a country seen a hit to our standard of living like this. We've never seen seven consecutive quarters of GDP per capita coming backwards and at the same time a Reserve Bank that says we still can't bring down interest rates. I mean, this is the worst of all possible worlds and that's what you get if you think the answer to every problem is more government spending. But that is how this Treasurer thinks, that's how this Prime Minister thinks. They're out of their depth, they're out of touch, and the failures are showing every single day. All good? Thank you very much.

 

ENDS.