Topics: Medicare funding announcement; cleaning up Labor’s Medicare mess; interest rate cut; Labor’s homegrown inflation; Labor’s bloated bureaucracy; Whyalla Steelworks; nuclear power plants; 2025 Budget; election timing; small business tax policy; Labor’s politicisation of Treasury; Chinese warships

 

E&OE   

 

ANDREW CLENNELL:

Joining me live is the Shadow Treasurer, Angus Taylor. How are you? Thanks for joining me.

 

ANGUS TAYLOR:

Good to be with you, Andrew.

 

ANDREW CLENNELL:

Most important question of the day, I think, will the Coalition support the funding announcement by the government on bulk billing this morning?

 

ANGUS TAYLOR:

Well, Andrew, the important point here to start with is that this is necessary because of Labor's abject failure when it comes to health. What we have seen is a collapse in bulk billing rates from 88% when we were in government to 77%, a 45% increase in out of pockets being paid by people when they go to the doctor. 40 million bulk billing sessions that have disappeared since we were in government, and so people are feeling this because of Labor's failure. Their homegrown inflation …

 

ANDREW CLENNELL:

Is that a yes?

 

ANGUS TAYLOR:

Well, I'll come to that. Their homegrown inflation has extended to health. Now, we're not going to get in the way of Labor cleaning up the mess that it has made, and it's important that that mess be cleaned up. What should have happened is we should have kept the gains or the benefits that we'd had when we were in government, that higher level of bulk billing, that lower level of out of pockets, but Labor's failed again. I mean, in sector after sector after sector we see their failures.

 

ANDREW CLENNELL:

Well I must admit, I'm surprised. I mean, I thought the whole thing from you and Peter Dutton was fiscal restraints. The go. We're going to spend a lot less. Here they are splashing all this cash to try and get re-elected and you're saying, “yeah, well, we're not going to stand in the way.”

 

ANGUS TAYLOR:

Well, we've opposed over $100 billion of unnecessary Labor spending in this term of Parliament, Andrew. There's no shortage of areas where we've said Labor spending is not appropriate, and there's a whole lot of frolics Labor’s gone on. Adding 36,000 Canberra-based public servants, investing in so-called manufacturing projects that are not in manufacturing whatsoever. We've said no to all of those things, but Labor has absolutely failed when it's come to delivering affordable health for Australians and getting access to the doctor, which is a huge challenge …

 

ANDREW CLENNELL:

So, you're saying they're just playing catch up?

 

ANGUS TAYLOR:

Well they're playing catch up. I mean, getting back to the numbers they're talking about is getting back to the numbers that we achieved when we were in government. When we were in government. And so this is Labor's failure. This is how they fix it. I think there's a big question for them. It’s where's the money going to come from? And we will work through that over the next little while. But I tell you what, we'll continue to oppose bad Labor spending proposals, as we have throughout this term of Parliament.

 

ANDREW CLENNELL:

This is a cost of living promise, and leads to an inevitable question I keep asking for which there isn't a clear response from the Opposition. Is it your and Peter Dutton's intention to promise further tax cuts at the election?

 

ANGUS TAYLOR:

Well, we've already promised important tax reform over the past year or so. I mean, we have said that small business in particular needs to be put back in a place where it can survive and prosper …

 

ANDREW CLENNELL:

What income tax cuts though?

 

ANGUS TAYLOR:

Well, we'll see what money's left. I mean, and this is the real challenge right now.

 

ANDREW CLENNELL:

Well, you’ve just given away $8 billion today.

 

ANGUS TAYLOR:

Well, let's be clear, Andrew. We've opposed over $100 billion of unnecessary Labor Government spending. Show me an Opposition in recent history that has done that. You have to go back to Malcolm Fraser, who blocked supply …

 

ANDREW CLENNELL:

Are you not going to promise income tax cuts after suggesting you would give some of the stage three back?

 

ANGUS TAYLOR:

We will always look to reduce taxes. We won't be imposing unrealised capital gains tax on hard working Australians, farmers and small businesspeople who shouldn't be paying those taxes. We will be delivering accelerated depreciation to small businesses where we're seeing record levels of insolvencies.

 

ANDREW CLENNELL:

Will you be promising income tax cuts?

 

ANGUS TAYLOR:

Well, I'm not going to, I'm not going to give you our election policies today, Andrew. I know you're going to ask me all morning or for as long as we're sitting here …

 

ANDREW CLENNELL:

Well this is my third attempt.

 

ANGUS TAYLOR:

… but I'm not going to go through all of our election policies today. But what I will say is that we'll continue to manage Australians’ tax revenues, the revenues we get from Australians, very carefully, as we have during this Parliament, as we've opposed over $100 billion of Labor spending.

 

ANDREW CLENNELL:

This health promise, can you see a lot more examples of this? Maybe even on both sides, where someone promises something and in such a tight election race, the other side immediately says, “me too.”

 

ANGUS TAYLOR:

I mean, this is cleaning up Labor's mess. This is cleaning up Labor's mess. I mean, we had bulk billing rates at 88% when were in government, it's now down at 77% and they're talking about taking it back to close to where it was when we were in government. I mean, this is all Labor is doing, is fixing their mess from their homegrown inflation, from their failures when it comes to health and their failures when it comes to …

 

ANDREW CLENNELL:

When was it at 88%?

 

ANGUS TAYLOR:

When we were in government.

 

ANDREW CLENNELL:

Well in 2014 it was 82 and a half then it was 84 then in 2019 it was 86.

 

ANGUS TAYLOR:

It got up … It peaked at 88%.

 

ANDREW CLENNELL:

Do you know when?

 

ANGUS TAYLOR:

I haven't got the date in front of me, but it peaked at 88%.

 

ANDREW CLENNELL:

But it was 82 and a half in 2014.

 

ANGUS TAYLOR:

Yeah, and we increased it over the time we were in government and this is exactly the point, Andrew. Is Labor has failed on this. In the course of two and a half years, they've taken it down to 77% and we have seen Australians having to pay more in out of pockets. 45% increase in out of pockets. We've seen 40 million bulk billing sessions that have disappeared and all Labor is doing is trying to get back to where it was when we were in government.

 

ANDREW CLENNELL:

I tell you what else they're doing. They're bringing back something that's 10 years old, that infamous 2014 Budget where Peter Dutton was Health Minister, and the government suggested, at the time a co-payment, $5 or $7 whatever it was, on every doctor's visit. Are you concerned that’s …

 

ANGUS TAYLOR:

Are you suggesting that Labor is playing politics with this?

 

ANDREW CLENNELL:

All I'm saying is, are you concerned that could hurt you, that narrative?

 

ANGUS TAYLOR:

Well, I tell you what I'm concerned about. I'm concerned about the standard of living of Australians, Andrew, that has collapsed and unprecedented, unparalleled. We've never seen a collapse in Australian standard of living like we've seen in the last two and a half years. Health has been part of that, but it's also been energy, it's been insurance, it's been increased personal income taxes being paid.

 

ANDREW CLENNELL:

What about when there were 17% interest rates and 11% unemployment? That was a pretty big collapse in living standards.

 

ANGUS TAYLOR:

No. And can I correct you on this? And this is incredibly important. The data goes right back to the 50s. We have never seen a collapse in real disposable income per person in Australia like we have seen in the last two and a half years. Never. And I should add to that, no other peer country has seen this collapse in standard of living. That's what Labor has done to Australians. We simply can't afford another three years of this.

 

ANDREW CLENNELL:

Well there's been higher inflation and interest rates elsewhere. But notwithstanding that, the Reserve Bank cut rates during the week. Did you support that?

 

ANGUS TAYLOR:

Can I just … your comment at the end there. This is incredibly important. Standard of living is what matters. It's what your income can buy and the truth is that Australians’ standard of living has never seen what it's seen in the last two and a half years …

 

ANDREW CLENNELL:

What's the measure?

 

ANGUS TAYLOR:

Real disposable income per person and worse than that, Andrew, we're not going to see, we're not going to see the standard of living we had when Labor came to power until 2031 according to the Reserve Bank.

 

ANDREW CLENNELL:

Let’s move on …

 

ANGUS TAYLOR:

… this is a disaster that’s happened …

 

ANDREW CLENNELL:

The Reserve Bank cut rates. Do you agree with that decision?

 

ANGUS TAYLOR:

I'm not going to get into commentary on the Reserve Bank. I never do, but what I will say is that inflation has been too high for too long in this country. Core inflation has been higher …

 

ANDREW CLENNELL:

So you're not going to say you support that decision.

 

ANGUS TAYLOR:

Well, I'm not going to get into Reserve Bank commentary. I don't. I never have. But I will say that core inflation …

 

ANDREW CLENNELL:

It sounds like you don't think they should have cut rates.

 

ANGUS TAYLOR:

(Laughs) I just never make comments on the Reserve Bank decisions, and nor should politicians, in my view. What I will say, what I will say is that core inflation has been too high for too long, that Labor's homegrown inflation has contributed to that, that Labor hasn't taken the right steps to make it easy for the Reserve Bank to bring inflation and interest rates down earlier, and the result is our standard of living has collapsed, and the average Australian family with a mortgage in this country has paid an extra $50,000 in interest payments, Andrew, $50,000 in interest payments, over and above where they were before Labor came to power, since Labor came to power.

 

ANDREW CLENNELL:

Do you think, as the markets do, we'll see more rate cuts this year?

 

ANGUS TAYLOR:

Again, I'm not going to get into commentary on the Reserve Bank, but I'll say this. I will say this: is that the context within which the Reserve Bank makes its decisions is incredibly important, and in particular the government's policies. If the government doesn't have a focus on productivity, if the government thinks the only way to grow the economy is to grow the population, if the government wants to keep spending at the rate that it has and as I say, we've opposed over $100 billion of that spending, then it is incredibly difficult for any Reserve Bank to bring down inflation, interest rates at the pace that people want. And we have seen Australia at the back of the pack in bringing down rates compared to the US, the UK, New Zealand …

 

ANDREW CLENNELL:

Their rates were higher. But the fact underlying inflation is down to nearly 3% and unemployment is just 4%, that's good news, isn't it? Finally.

 

ANGUS TAYLOR:

Well, you know, prices aren't coming down, Andrew. This is incredibly important. Inflation is the change in prices. Prices continue to go up, and core inflation is still above the target range.

 

ANDREW CLENNELL:

Do you want disinflation?

 

ANGUS TAYLOR:

Well, no. I'm saying that core inflation is above the target range. It’s too high, and prices continue to go up, so …

 

ANDREW CLENNELL:

Well forecasts suggest it'll be under and it's pretty much on the 3% now.

 

ANGUS TAYLOR:

Well you know what? The government's forecasts haven't been reliable. They thought …

 

ANDREW CLENNELL:

I’m talking about the bank.

 

ANGUS TAYLOR:

Well, and let's talk about the bank's forecast. The bank's forecast is that it's going to take until 2031. 2031 for Australians’ standard of living to get back to where it was, to where it was when Labor came to power. That's the government's plan in action. That is where we're at right now. We have to accelerate that, and it does mean sensible policies on driving productivity, on making sure we clean up our construction sector, on getting affordable, reliable energy into our system, on financial services and making sure people have access to affordable loans. All of these things are absolutely essential if we're going to make sure that we get our standard of living back to where it was when we were in power.

 

ANDREW CLENNELL:

And cutting spending. Ans cutting spending. So what are you planning to cut if you hit office? Would you look at introducing efficiency dividends for public service departments because that is something to make sure the Federal Public Service actually does cut when a Minister asks them to.

 

ANGUS TAYLOR:

Yeah, and you know, Labor's added 36,000 Canberra-based public servants. We've said that's too many. We've said it should be under 200,000. We'll say more about the details of that.

 

ANDREW CLENNELL:

Efficiency dividends. Are they on the table?

 

ANGUS TAYLOR:

Well, we'll say more about the details of that as we get closer to the election. The election hasn't been called yet, but, but we've been unambiguous in saying that addition in public servants is inappropriate. We don't want to cut essential services, but we do think adding bureaucracy is not appropriate.

 

ANDREW CLENNELL:

Could you cut this 36,000?

 

ANGUS TAYLOR:

Well, I'm not going to give you the number today. We've been clear that it'll be under 200,000 but what I will say, what I will say is that you don't strengthen the economy, you don't make sure you beat inflation and boost growth by adding bureaucracy. We need to build businesses, not building bureaucracy and that's what we've seen under Labor.

 

ANDREW CLENNELL:

What's your view of the government’s subsidy of Whyalla Steelmaking?

 

ANGUS TAYLOR:

Well, I mean, there's a lot of details we haven't seen on this. We've been very clear that we don't think putting money into the green hydrogen project that Chris Bowen has been on about since forever is appropriate. That's not how taxpayer money should be spent. We want steel making, but we think that's a completely unrealistic time frame for green hydrogen to be part of that steelmaking process and so there's another bit of government spending that we think is inappropriate at this time. What we do want to see is steelmaking survive and prosper in this country. That is important, Andrew, and we'll continue to look at options to do that. What we don't think the right answer is for the government to run the steel mill. We've got a Prime Minister who can't run a government, let alone a steel mill.

 

ANDREW CLENNELL:

But you want to run a nuclear … well, seven nuclear power stations. That's your own big government spend … Peter Dutton indicated in recent remarks that after a time, these nuclear power plants could be privatised. Is that the Coalition’s plan?

 

ANGUS TAYLOR:

Yeah, right now our focus is on getting affordable, reliable energy into the system. In the short term, it'll be gas. We know we've got to get more gas into the system alongside the record level …

 

ANDREW CLENNELL:

… and eventually, you want to build seven nuclear power plants …

 

ANGUS TAYLOR:

… and the base load zero emissions power we get from nuclear power stations are part of our policy, Andrew.

 

ANDREW CLENNELL:

Will they eventually be privatised?

 

ANGUS TAYLOR:

Well, I'm not going to get into … I'm not going to get into ... we've been clear that these will be publicly built, and that will deliver a return on investment, and that's all been part of our budgeting for the nuclear power stations.

 

ANDREW CLENNELL:

But eventually they could be privatised?

 

ANGUS TAYLOR:

Again, you know, our focus is on publicly built nuclear power stations. Look, utilities are different to other parts of the economy. They always have been.

 

ANDREW CLENNELL:

Where are you getting the hundreds of billions for that?

 

ANGUS TAYLOR:

Well, let's be clear, this is out to the 2030s and …

 

ANDREW CLENNELL:

Borrowing?

 

ANGUS TAYLOR:

… and this is investment, this is not on-budget spending, so it's very different, Andrew.

 

ANDREW CLENNELL:

You certainly criticised them for off-budget spending. Now the government, what will it say if, as expected, the government decides to go to an election before delivering a budget?

 

ANGUS TAYLOR:

Look, who knows. I mean, what goes on inside Anthony Albanese’s head when he’s thinking about when to decide on election? Well, the one thing I know is he'll focus on the politics. He'll focus on the politics. What we do know from their past budgets is that there's red ink as far as the eye can see, and no doubt there will be in this one. So does he want to reveal that again to the Australian people? I'm not sure. That's a question for him. But what I do know, Andrew, is if we get another three years of Labor, we'll continue to see the economic mismanagement we've seen in this three years and Australians have paid a high price for that.

 

ANDREW CLENNELL:

Briefly, do you think Jim Chalmers should deliver an economic statement if he doesn't deliver a budget?

 

ANGUS TAYLOR:

Well, I do think he's got to clarify a number of the issues in his agenda that we don't know the answers to. I mean, of the $110 billion of spending we've opposed, how much of it has he spent? How much of it has he spent? What's happened with the contingency fund? I mean, how much of this health announcement has already been budgeted for, and how much is not? We don't know the answer to those questions. There's a lot of government spending that we don't know about. We don't know how he's going to pay for all these extra public servants a couple of years [inaudible].

 

ANDREW CLENNELL:

Speaking of spending, your policy of a tax break on work lunches for small to medium business, how much do you believe it will cost the budget? The government says over a billion.

 

ANGUS TAYLOR:

Well, the government, is making this stuff up. I mean, really, honestly, it's pathetic.

 

ANDREW CLENNELL:

Well, it’s Treasury right?

 

ANGUS TAYLOR:

Well, except it's clear that the government was seeking to politicise Treasury. The government asked Treasury to model Coalition policy. You know that that is a complete breach ...

 

ANDREW CLENNELL:

Well, how much does it cost?

 

ANGUS TAYLOR:

Well, we've been clear that it'll be under $250 million and we'll come out with the detailed costings for that and everything else in the lead up to the election and we don't know when the election is even going to be.

 

ANDREW CLENNELL:

Just lunch? Not golf?

 

ANGUS TAYLOR:

It's been clear, it's been clear all along. This is focused on meals. That's the focus.

 

ANDREW CLENNELL:

Can’t play golf first? Okay. I wanted to ask finally, sorry, and on a serious note, about these Chinese live firing exercises between Australia and New Zealand. The government doesn't seem too concerned. Although Penny Wong has spoken to Wang Yi about it. They seem concerned about the notice, as opposed to the practice. What's your reaction?

 

ANGUS TAYLOR:

Oh, well, I just think they're not standing up for the national interest. I mean, there needs to be mutual respect in these relationships, and that's about more than just notice. I mean, saying you need notice for someone to sit off your coast and engage in gunboat diplomacy, which is exactly what's happened here. I mean, that's completely unacceptable, and the government needs to say that very clearly. I mean, look, it's important we have the best possible relationship we can with China. There is no doubt about that, but it has to be in the context of mutual respect and what's happened here and what's been happening in recent days, more generally, with the flaring we saw a week ago or so, is not within a relationship of mutual respect.

 

ANDREW CLENNELL:

Angus Taylor, thanks so much for your time.

 

ANGUS TAYLOR:
Good to be with you, Andrew.

 

ENDS.