Latest / The Morning Edition / ‘Popcorn out’ for Farrer by-election, plus the RBA’s pointed comments on government spending

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‘Popcorn out’ for Farrer by-election, plus the RBA’s pointed comments on government spending · The Morning Edition

0:02
S1: I'm Jacqueline Maley, and you're listening to Inside Politics from
0:05
S1: the newsrooms of the Sydney Morning Herald and The Age.
0:08
S1: Joining me today, as usual, we have our chief political correspondent,
0:11
S1: Paul Circle from Canberra. Hello, Paul.
0:14
S2: Good morning. Great to be with you.
0:16
S1: How are you?
0:17
S2: We're good. The budgetary is a deep red. Yep. Jim
0:20
S2: Chalmers is looking very serious. He's doing back to back
0:23
S2: interviews with ten print reporters in a row. It's all.
0:26
S2: It's all heating up. This is what you live for
0:28
S2: in Canberra.
0:29
S1: And this is what you live for. I think when
0:30
S1: you're the federal treasurer or one hopes you do anyway.
0:33
S1: But first I want to talk about something else, Paul.
0:35
S1: This Saturday, May the 9th, I will be preparing an
0:39
S1: elaborate birthday party for an 11 year old. But other people,
0:43
S1: in fact, the entire nation will have their eyes trained
0:45
S1: on the electorate of Farah, which is having a by election,
0:48
S1: a long awaited by election. That's shaping up to be
0:50
S1: very interesting, and we just wanted to check in on
0:52
S1: it because we haven't done that for a while for
0:54
S1: our listeners. So people will recall that the by election
0:57
S1: was triggered by the resignation of Sussan Ley from politics.
1:00
S1: So the former opposition leader, after she was ousted by
1:03
S1: Angus Taylor in a leadership coup in February. She's held
1:07
S1: the seat since 2001. So that's 25 years as my
1:10
S1: maths is correct. And before then it was a national
1:13
S1: seat held by nationals leader Tim Fischer. It's a lovely
1:16
S1: rural seat in New South Wales on the border of Victoria,
1:19
S1: and it's a seat that is basically a coalition stronghold
1:22
S1: and has been for most basically its entire existence. The
1:26
S1: coalition has held it by about a ten percentage point margin,
1:29
S1: more or less since the 1980s, although the independent candidate,
1:34
S1: Michelle Milthorpe, knocked a fair bit off Susan Lees margin.
1:38
S1: It's probably not going to be a coalition stronghold for
1:40
S1: much longer, is it, Paul?
1:42
S2: It's almost certainly not going to be, and I'd rather
1:46
S2: be organising the 11 year old birthday party than Angus
1:49
S2: Taylor on Saturday night, because he's going to have to
1:52
S2: put on a brave face and pretend that this is
1:55
S2: not the disaster. It appears he's been handed a pretty poor, uh,
2:00
S2: deck of cards. In truth, he took over the leadership. Uh,
2:04
S2: in February, the coalition's primary vote was at literally historic lows,
2:09
S2: hovering in the late teens, maybe early 20s. There have
2:12
S2: been two coalition bust ups. Uh, the national primary vote
2:16
S2: was in the low single digits, as you say, Jack.
2:19
S2: This is a seat that runs between Albury in the
2:22
S2: East and Pine Camp all the way to the South
2:24
S2: Australian border in the west. So it's a huge seat,
2:27
S2: has lots of little, small little towns, but also the
2:29
S2: more slightly more cosmopolitan regional city of Albury. Sussan Ley
2:35
S2: has held this seat since 2001, when she won it
2:37
S2: off the nationals. Her primary vote has steadily eroded from
2:40
S2: the mid 60s. In 2004, when it was, you know,
2:44
S2: the halcyon days of the Howard era, and in the
2:46
S2: last election, she dipped down into the low 40% region,
2:50
S2: which was due to the emergence of a kind of centrist,
2:55
S2: maybe slightly progressive independent Michelle Milthorpe, who's one of the
2:59
S2: now network of community independents that have bobbed up in
3:02
S2: regional areas with the backing of climate 200, which funds
3:05
S2: the teal movement also. But these regional independents color themselves
3:09
S2: in orange, and they are a slightly different political makeup
3:12
S2: to the teals. Less progressive, more interested in regional issues,
3:16
S2: but still, you know, focused on climate change as well.
3:19
S2: And so it's right in that hitting zone for the
3:20
S2: coalition to lose a seat like that. But the big
3:22
S2: new factor is the emergence of One Nation, which is
3:25
S2: hoovering up conservative coalition voters across the regions and the suburbs.
3:30
S2: And I expect there'll be a really big One Nation
3:32
S2: vote at this election. Perhaps not enough to win. I
3:35
S2: think it's probably 5050 between this centrist, slightly progressive, independent
3:38
S2: and One Nation. But the Liberals and Nationals are likely
3:41
S2: to be a distant third unless they have a great
3:43
S2: final week of the campaign.
3:45
S1: Yeah, it's amazing though, isn't it? That what should be
3:48
S1: and has been a coalition stronghold is now like neither
3:51
S1: coalition partner is basically in the running to win this election.
3:54
S1: So yeah, we've got Michelle Milthorpe, who's the community independent.
3:57
S1: And in many ways, even though she's slightly, I think,
4:00
S1: lower odds to win than the One Nation candidate who
4:02
S1: we'll get to in a sec. She is in some
4:05
S1: ways the bigger threat to the coalition, because the thinking
4:09
S1: is if she wins, she's more likely to become a
4:12
S1: rusted on committee independent. Like other community independents in rural
4:17
S1: and rural New South Wales and Victoria, who stay for
4:19
S1: the long haul, basically in that seat. Tell us a
4:21
S1: little bit about Michelle Milthorpe.
4:24
S2: Yeah, you're spot on. That's the that's some of the
4:26
S2: thinking inside the coalition is that it might be better
4:28
S2: for one nation to win this seat because David Farley,
4:31
S2: the candidate who will get to has been a bit
4:33
S2: of a train wreck and may flame out in Canberra,
4:35
S2: whereas Michelle Milthorpe is a more, uh, seemingly a more reliable,
4:40
S2: well known entity in the community, has a big network
4:44
S2: of independent supporters behind her. She's a former teacher, uh,
4:47
S2: sex assault victim advocate. She's had to tread this delicate
4:53
S2: balance between labeled appeal by the coalition. Not without any basis,
4:57
S2: I should say I know several teal campaigners from Kooyong
5:00
S2: and Goldstein in Victoria who have actually travelled up to Farrer.
5:03
S2: I know her research has been done by people linked
5:06
S2: to the teal movement, and she's certainly been funded by,
5:09
S2: in part by climate 200 and the Regional Voices Fund,
5:12
S2: which was also funded other climate 200 independents as well
5:16
S2: as teal. So there's not zero basis in that claim. However,
5:20
S2: to portray her as some raging leftie is also misleading
5:23
S2: because she's talked about the need to revitalize our oil
5:27
S2: refining capacity. She strikes a kind of balanced tone on
5:30
S2: climate change, but she yeah, she's I think you're right, Jack.
5:33
S2: She's she's in a $3 region in the betting. I
5:36
S2: think one Nation is around $1.80 or $1.90. So pretty,
5:39
S2: pretty solid favourite. Extraordinarily the Liberal candidate something like $15
5:43
S2: which is a exemplifies the times.
5:45
S1: Just for any punters among our listenership. Our colleague Rob
5:49
S1: Harris has done some great reporting on the One Nation candidate,
5:51
S1: David Farley, who I think is shaping up. If he
5:54
S1: does get elected this Saturday, he could shape up to
5:56
S1: be one of the great, perhaps short lived, you know,
5:59
S1: political characters in our colorful history. Tell us a little
6:03
S1: bit about David Farley.
6:05
S2: Well, you're right. Every day there's been a kind of
6:07
S2: really eye catching story about David Farley the past week.
6:10
S2: This is a relatively old I don't know how quite
6:13
S2: how it looks. I think he's in his mid 60s.
6:15
S2: I should know the answer to that. I don't mean
6:17
S2: to be disparaging about his age. He's had a really
6:19
S2: successful business career. He's an agribusiness man. This is a
6:22
S2: guy who's been profiled in the AFR, has had a profile,
6:27
S2: a case study of his business in a Harvard business
6:29
S2: course unit. So he's well known in the political world
6:33
S2: in that part of New South Wales. And Rob Harris,
6:36
S2: our colleague, the national correspondent, has done some extraordinary reporting.
6:40
S2: And I suspect if the Liberal candidate does have a
6:43
S2: total upset win, Rob Harris might surely need to be
6:47
S2: passed some brown paper bags under the table from the
6:49
S2: Liberal Party because it will be down to Rob.
6:51
S1: Not that we do that kind of thing.
6:53
S2: Not that we do that.
6:54
S1: David Farley. I mean, he's a bit of a political chameleon.
6:58
S1: I don't know if he was ever a member of
7:00
S1: the Labour Party, but he's given to Labour Party campaigns.
7:02
S1: He's sounded out the possibility of being a Labour candidate
7:06
S1: under the Albanese government, and he was knocked back primarily
7:10
S1: because he extraordinarily misogynistic remarks. I would say, in my opinion,
7:14
S1: that he made about Julia Gillard calling her a nonproductive
7:17
S1: old cow or likening her to one. He was also
7:21
S1: floated as a replacement for Barnaby Joyce in the Senate
7:23
S1: in 2013. He's earlier praised his opposition. Michelle Milthorpe he
7:29
S1: made he's made a lot of comments about immigration and
7:32
S1: even foreign aid that are sort of contrary to the
7:34
S1: One Nation platform. So who I mean, who is this guy? Like,
7:37
S1: he's kind of all over the place. He's all things
7:39
S1: to all people.
7:41
S2: Well, I think that would be a fair criticism that
7:43
S2: the Liberal Party is pumping out in all their advertising.
7:45
S2: And the extraordinary part of this, one of the extraordinary
7:48
S2: parts of this story from Rob Harris, is that David
7:50
S2: Farley did not inform Pauline Hanson or Barnaby Joyce that
7:53
S2: this information was going to emerge. He knew Rob's story
7:56
S2: was going to be published. This is about a fortnight
7:58
S2: ago now, and instead of informing the people who he
8:01
S2: is who are leading his party, that this very damaging
8:05
S2: information was going to be put forward, those individuals read
8:08
S2: about it when the story was published. And so there
8:10
S2: was a phone hook up that night between, um, don't
8:13
S2: know if Joyce was on it, but Hansen was on it.
8:15
S2: Her chief of staff, James Ashby, was also a well
8:17
S2: known figure, was on it, and Farley was on it.
8:19
S2: And he said, look, guys, yeah, I did. I did
8:21
S2: have a look at Labour. I didn't really like what
8:23
S2: I saw. He's managed to, in explaining himself further inflame
8:27
S2: tensions with the leaders of his party. And yeah, as
8:31
S2: you say, Jack, this information is that he tried to
8:33
S2: be a Labour candidate as recently as 2022. He then
8:36
S2: donated to the Labour Party campaign in the seat of Aston,
8:40
S2: where Peter Dutton lost the Liberal seat in 2023 for
8:43
S2: the first time as an opposition in modern history. He's
8:46
S2: also flirted with the National Party and at the last
8:49
S2: election in 2025, he endorsed on Facebook Michelle Milthorpe, the
8:53
S2: candidate he's coming up against now. he said. She was
8:56
S2: a good woman and a straight shooter and nationals people
8:59
S2: on the boost this week, including Darren Chester, the deputy leader,
9:02
S2: has been telling people that David Farley actually was handing
9:05
S2: out how to vote cards for Michelle Milthorpe. So maybe
9:08
S2: we need more.
9:09
S1: People like him in politics who can see all sides
9:11
S1: of every argument. I mean.
9:13
S2: He's a nuanced thinker.
9:13
S1: Yeah, that's right. He's a nuanced guy. This goes to
9:17
S1: the sort of the crux of the One Nation problem,
9:20
S1: and by which I mean the problem that One Nation
9:23
S1: has actually cohering as a party and actually getting up candidates,
9:27
S1: finding candidates, and then keeping candidates that will be voted
9:30
S1: to the lower house because no one nation candidate has
9:33
S1: ever been voted as a one nation candidate to the
9:37
S1: lower house. Even Pauline Hanson wasn't. People may forget that
9:41
S1: almost 75% of their state and federal representatives don't complete
9:45
S1: or have never completed their first term. So it's. Even
9:48
S1: though it's sort of emerging as this incredible political force
9:52
S1: at the moment and really threatening the coalition in particular
9:55
S1: when it comes to their track record, they're not very
9:57
S1: good at staying the course in representation, and they're not
10:00
S1: very good at selecting candidates who actually get along within
10:04
S1: the party structure. I mean, David Farley kind of looks
10:07
S1: like he's heading in that direction if he does get elected.
10:10
S2: Yeah. There is fear inside One Nation at the moment
10:12
S2: that because Farley is a difficult to control character who's
10:15
S2: been a really successful. He's got strong views. People. People
10:19
S2: respect Farley for his business acumen. He's. He's got a
10:23
S2: lot to him as a person. But as a political candidate,
10:25
S2: as you say, clearly not an ideal pick. And so
10:28
S2: there's worry in one nation at the moment that if
10:30
S2: he does win, as they expect he will, then he
10:33
S2: might drift away from one nation over time and become
10:35
S2: another statistic of the drifters away from Pauline Hanson. But
10:38
S2: the fact that he is still in the box seat
10:40
S2: is telling in and of itself, right? Because it shows
10:43
S2: that Pauline Hanson's brand at the moment, she's polling at
10:46
S2: plus 20 and plus 18 in 2 of the leading
10:49
S2: national polls. The prime minister is in negative territory. Angus
10:52
S2: Taylor is in negative territory. She's in some polls by
10:55
S2: far the most popular politician in Australia. Her brand is
10:58
S2: carrying David Farley. And by elections like this, it's two
11:02
S2: years away from an election. So for the coalition trying
11:05
S2: to convince voters there that you need to stick with
11:08
S2: the party of government to get rid of labor, it's
11:10
S2: a difficult sell when voters know the election's so far away.
11:14
S2: It's been seen by many voters as an easy protest,
11:17
S2: consequence free. Give the major parties a kick. Oh, yeah.
11:20
S2: Pauline sounds okay at the moment. She's telling it how
11:22
S2: it is on Islamic extremism and migration and the things
11:25
S2: that are my bugbears. And so I'll give them a
11:27
S2: go because, you know, what's the coalition done for me lately?
11:30
S1: Yeah. It is still a historical anomaly, though, for a
11:33
S1: third party to pick up a seat in a by election.
11:36
S1: Usually the by election swings to the party. That's not
11:39
S1: in government as a protest. So I just want to
11:41
S1: talk about what this means for the coalition, because they're
11:44
S1: usually seen as a referendum on the government. But labor
11:47
S1: is completely sitting this one out. They've grabbed the popcorn.
11:50
S1: They're going to be watching it just like we are
11:51
S1: on TV on, on Saturday. And it's such an interesting
11:55
S1: contest because it's really a microcosm of the pressures that
11:57
S1: the coalition is under from, you know, community independents, teal
12:01
S1: independents on the one hand and on the left, and
12:04
S1: one nation to the right. What is the libs campaign
12:07
S1: been down like down there? And also, how heavily involved
12:11
S1: has Angus Taylor been in it?
12:13
S2: MM. Well yeah as you say Labor's not there. So
12:17
S2: that's probably shrewd politically because it had little to win
12:19
S2: from it. But it does go to the point that
12:21
S2: labor is disconnected from large parts of regional Australia as well.
12:24
S2: A big healthy labor party with connections into slightly more
12:28
S2: conservative parts of the world. Primary industries would have contested
12:31
S2: this election. And there is a kind of deception that
12:33
S2: goes on at the moment, because labor just doesn't contest
12:35
S2: seats where climate 200 campaigners are a chance of winning
12:39
S2: and all of their votes tactically drift to the climate
12:42
S2: 200 candidate who portray themselves as non-progressive. Anyway, to the
12:45
S2: to your actual question, Angus Taylor's been keen to emphasise
12:50
S2: from the get go that this is going to be
12:52
S2: a really difficult fight. There's a view among people close
12:55
S2: to Taylor. Uh, there's contested, um, opinion on this that
13:00
S2: Suzanne Lee left this seat in a state of total disarray,
13:03
S2: that there were no contact lists of voters, that she
13:05
S2: was just not attending school visits and hospital visits and
13:09
S2: all the things a local MP does. For many years,
13:11
S2: she was in she was in the seat for 25 years.
13:15
S1: It sounds like a very self-serving argument for the Liberals
13:20
S1: who know that they're going to lose the seat. I mean,
13:22
S1: certainly it has appeared to me that the Liberal candidate,
13:25
S1: Reza Bartkowski. Forgive me if I pronounce that incorrectly. Um,
13:30
S1: is there doesn't seem to be any love lost between
13:33
S1: her and Sussan Ley. But then also, there's probably not
13:36
S1: many people in Suzanne Lee's position who would do a particularly, um,
13:40
S1: conciliatory handover. I'm going to say.
13:42
S2: Yeah. No, exactly. Why would she? Right. She was rolled
13:45
S2: less than a year into.
13:46
S1: Her and that and that. Sorry to interrupt you, but
13:48
S1: that sort of says everything you need to know about
13:50
S1: the internal cooperation of the Liberal Party and the culture
13:53
S1: of the Liberal Party right now. They're kind of not
13:55
S1: all pulling in one direction, right?
13:57
S2: Totally. And haven't been for a long time. I mean,
13:59
S2: this by election couldn't have come at a worse time
14:01
S2: for the Liberals. Susan Lee left the party with very
14:04
S2: little policy because she abandoned policies after the last election,
14:08
S2: because she was from the more she wasn't really a moderate,
14:10
S2: but she was backed by the moderates. She never really
14:13
S2: had a clear run. But even even, you know, her
14:17
S2: own supporters wouldn't say that she ever, you know, uh,
14:20
S2: really set the party on a trajectory to grow their
14:23
S2: voter base. She was kind of paralyzed from the get go.
14:26
S2: And so with the Liberal Party polling in the high teens,
14:29
S2: the National Party had also gone through hugely tumultuous period. Eventually,
14:33
S2: David Littleproud succumbed to that pressure and hand it over
14:36
S2: to Matt Canavan. Surprisingly, the party's still trying to rebuild itself. Uh,
14:41
S2: regain internal unity. It's totally broken trust with voters after
14:45
S2: both a terrible election result and a period of, you know,
14:48
S2: coalition splits. So it doesn't have a clear policy agenda
14:52
S2: yet it doesn't have a period of internal unity to
14:55
S2: prove to coalition voters that it is a serious party
14:57
S2: of government. One nation is ascendant. One nation has zeal
15:00
S2: and energy around it. Pauline Hanson is talking as if she's,
15:05
S2: you know, in a Farage Trumpian moment and she's about
15:08
S2: to take the country over. There hasn't yet been an elongated,
15:12
S2: elongated period of scrutiny to bring Hanson down, so it
15:16
S2: just really couldn't have come at the worst moment. And so, Taylor,
15:19
S2: to answer your question, has been in Farah a little bit.
15:23
S2: Matt Canavan actually hilariously has literally been camping out in
15:26
S2: Farah with a swag bag, wearing a beanie and things
15:29
S2: to exemplify that he is not abandoning conservative seats. Taylor
15:33
S2: has been more circumspect because he knows the party is
15:35
S2: on track to lose, but if they have a result
15:38
S2: that doesn't have a, you know, if they're in the mix,
15:41
S2: I think the Liberals will portray that as a strong result,
15:44
S2: which is a sign of the parlous state they're in.
15:46
S1: Yeah. Okay. We'll be interested to see what happens. It's
15:49
S1: going to be it is actually going to be really
15:51
S1: fascinating one to watch.
15:53
S2: Yeah.
15:53
S1: I want to switch gears now and talk about our
15:55
S1: hip pockets, because that really was the big news of
15:57
S1: the week. The RBA board obviously met and decided to
16:00
S1: lift interest rates by 0.25 of a basis point. So
16:05
S1: our cash rate is now 4.35%. RBA governor Michele Bullock
16:09
S1: acknowledged that this was going to be incredibly painful for
16:12
S1: a lot of Australian families and that, you know, she
16:15
S1: sort of talked about the income shock, but she also
16:17
S1: talked about the underlying pressures in our own economy. She
16:20
S1: said all Australians were going to be poorer or were
16:22
S1: poorer because of the income shock of the oil crisis.
16:25
S1: But she also had some pointed words for governments, Australian governments,
16:29
S1: didn't she, Paul?
16:30
S2: She certainly did. This was a really difficult decision for
16:34
S2: Jim Chalmers and Labor. We talked last week, Jack, with
16:37
S2: Shane Wright, our good friend, about how difficult a decision
16:40
S2: this would be for the reserve Bank this week. The
16:42
S2: last vote was split five four, so a more contested
16:44
S2: decision in the board. This decision was eight one. So
16:48
S2: nearly unanimous. Yeah. And what Michele Bullock had to say
16:51
S2: was troubling for the country and troubling for the federal
16:54
S2: and state governments. She said that, yes, the inflation shock
16:58
S2: caused by the war had made their decisions more tricky.
17:01
S3: Developments in the Middle East remain highly uncertain, but under
17:04
S3: a wide range of possible scenarios, the conflict adds to
17:08
S3: global and domestic inflation.
17:11
S2: And might prolong. This inflation shock inevitably will. However, the
17:15
S2: decisions that the bank are making, she said, are largely
17:18
S2: driven by the the sticky underlying inflation that had emerged
17:22
S2: late last year and in the early part of this
17:24
S2: year across various sectors of the economy. Because once our
17:29
S2: economy started to rebound last year just a little bit
17:32
S2: through business investment, primarily data centers and other things, our
17:35
S2: economy is so constrained on the supply side because Productivity's
17:39
S2: been so poor for so long. And this labor government
17:41
S2: has been in power for four years to try and
17:43
S2: start to fix that. It started to run too hot.
17:46
S2: And so these interest rate rises are to deal with
17:49
S2: that inflation primarily, as well as what's been driven by
17:53
S2: the war. Two.
17:54
S3: When inflation is already too high and the economy facing
17:57
S3: capacity pressures, it doesn't take much additional spending to make
18:01
S3: the job of returning inflation to target more challenging. This
18:04
S3: means spending will need to grow more slowly for a
18:07
S3: time to help restore the balance between demand and supply.
18:12
S2: So what that what that means is that when the
18:13
S2: government says that the war is the sole cause of this,
18:17
S2: that comment from Michelle Bullock shows that to be a
18:19
S2: slightly misleading comment. Now, the war has obviously had a
18:22
S2: huge effect. And you're right, she did talk about the
18:24
S2: income shock caused by the war. And the government will
18:26
S2: continue to emphasise that, but there's more to it.
18:29
S1: The actual comments that she made, you know, that the
18:32
S1: government's need to, quote, think about whether or not there's
18:34
S1: ways they can help the inflation problem by looking for
18:36
S1: ways to constrain demand. Um, and the extent to which
18:39
S1: governments make up the shortfalls for households by giving them
18:42
S1: more money, it makes us makes it harder to dampen demand. Now,
18:46
S1: she could have been talking about state governments as well.
18:48
S1: And the Victorian government has just spent a whole bunch
18:50
S1: of money and has a huge deficit. But it was
18:53
S1: a week before, you know, the federal budget. So no,
18:56
S1: no prizes for guessing really who she's got in her
18:58
S1: sights with those comments. The reserve Bank is independent, but
19:02
S1: it is quite unusual for a governor to give such
19:04
S1: a direct instruction to a treasurer or to a government.
19:07
S1: So I just kind of wanted to point that out. Chalmers,
19:10
S1: in response, said, you know, the government wants to be helpful,
19:12
S1: not harmful in their role in the fight against inflation.
19:16
S1: But at the same time, this week, we had some
19:18
S1: reports that the government is going to give some tax
19:21
S1: relief to individuals working Australians. What do you know about that?
19:27
S2: Yeah. This is a report in The Australian who's a journalist.
19:31
S2: Matthew Cranston, their economics correspondent, has got an incredible source
19:35
S2: inside Treasury because he's just getting pure budget leaks and
19:38
S2: ruining every surprise that Jim Chalmers had for us. So
19:41
S2: this report, and we think it's largely accurate, is that
19:44
S2: there will be a tax offset either paid this year
19:47
S2: or next year. We're not quite sure. Somewhere in the
19:49
S2: vicinity of 200 to $300 as a kind of, you know,
19:52
S2: just repayment on your credit, on your tax.
19:55
S1: Yeah. Only for salary earners. Only for wage earners.
19:58
S2: That's right. Not for people who are making passive incomes
20:00
S2: on investment. So this story was published on the same
20:03
S2: morning that Michelle Bullock made a call on interest rates
20:06
S2: and gave her press conference. As you say, her comments
20:09
S2: were quite blunt. She would not describe them as an
20:12
S2: instruction to government. She would say that all she was
20:15
S2: doing was pointing out how the components of consumption across
20:20
S2: the economy and demand government public spending being one of them.
20:24
S2: And if government public spending is too high, that makes
20:26
S2: it more difficult for her to do her job of
20:28
S2: constraining demand to bring inflation down. So she was pointing
20:32
S2: out economic facts. But the pertinent point about that is
20:36
S2: that for many months now, she's faced these really tricky
20:39
S2: questions in her every couple of month press conferences when
20:41
S2: she makes decisions to call out government spending, which has
20:44
S2: been at a record level nearly at at from the
20:47
S2: federal government for a few years outside of pandemics for
20:50
S2: about the last 40 years. But she's been she's she's
20:53
S2: decided not to weigh into that debate even by pointing
20:56
S2: out the economic fundamentals of it. She made a decision
20:59
S2: this week to do that. There's been quite a lot
21:01
S2: of pressure from some of the financial commentators for her
21:04
S2: to weigh into it. Yeah, but her decision to do so, which,
21:08
S2: you know, most economists would say was totally appropriate for
21:10
S2: her to do, has been controversial. Inside the cabinet has
21:14
S2: been some ministers who would have liked her not to
21:16
S2: make those comments ahead of such a sensitive federal budget
21:19
S2: where there is so much scrutiny on the spending level.
21:22
S2: But Jim Chalmers has been saying, and we reported on
21:25
S2: Thursday that deficits will actually be smaller over the next
21:28
S2: four years. There's the huge savings measure on the NDIS.
21:31
S2: The government has is probably not going to do major stimulus,
21:35
S2: even though they might do the tax offset. But, you know,
21:38
S2: Chris Richardson, the economist, has a rule of thumb that
21:40
S2: $7 billion in public spending by the government equates to
21:44
S2: about one interest rate rise in terms of how much
21:46
S2: money it puts in the economy. This is probably going
21:49
S2: to be $3 billion and it might be next year.
21:51
S2: So we're not talking huge money, but this is all
21:53
S2: about signal.
21:54
S1: So yeah that's right. So people. So people wage earners
21:57
S1: being given a little bit of their own tax back
21:59
S1: in the, you know, a few hundred dollars over the
22:00
S1: course of a year is not going to make us
22:02
S1: all go out and buy flat screen TVs and Lamborghinis.
22:05
S1: As much as I would love a Lamborghini, I think.
22:07
S2: Well, I think frankly, you deserve one. Yes, I do.
22:10
S2: But but what I was just going to say that Wayne,
22:13
S2: against the views of economists and the opposition, who will,
22:16
S2: you know at all times say that the government needs
22:18
S2: to hold back. There's huge political imperative at the moment
22:21
S2: to protect households through a, you know, generational, uh, oil crisis.
22:27
S2: People are doing it tough before that. I mean, there
22:29
S2: are savings buffers have been built up, have been built
22:32
S2: up since the pandemic. Unemployment's not high at all. But
22:36
S2: no one's having a great time of it at the moment.
22:38
S2: So the government, while there's a lot of pressure for
22:40
S2: them to take heat out of the economy. On the
22:42
S2: other side, the Prime Minister is trying to protect his
22:44
S2: voting coalition, keep trust with different groups, and there is
22:48
S2: a huge imperative in their minds to do what they can.
22:52
S2: Without going too far to keep people on side. And.
22:55
S2: The fuel excise cut was one part of. That this
22:58
S2: tax offset might be another. And maybe there's some more.
23:00
S2: So the balance is hard.
23:02
S1: It's really hard. And I mean particularly I would say
23:04
S1: for for for low income households, because the costs of fuels,
23:08
S1: the cost of housing and the cost of groceries, they're
23:10
S1: all the things that you really worry about. And if
23:12
S1: you're in a low fixed income, there's not a lot
23:14
S1: you can do about them. Just lastly, it already looks
23:17
S1: like the opposition is going to attack Anthony Albanese hard
23:21
S1: on breaking a promise at the last election because he
23:23
S1: ruled out in a debate he had with Peter Dutton
23:26
S1: during the election campaign. He ruled out changes to negative
23:29
S1: gearing and capital gains tax. Um, now it looks like
23:32
S1: they're going to they are going to make changes to those, um,
23:35
S1: to those tax breaks.
23:36
S2: They will.
23:37
S1: Do you think that that will be a patient attack line,
23:39
S1: the broken promise attack line. It killed Julia Gillard's leadership
23:43
S1: in extremely different circumstances. You know these tax changes, as
23:48
S1: we've discussed before on this podcast, Bill shorten took a,
23:51
S1: you know, similar measures to the 2019 election and got
23:54
S1: killed on the basis of of his waging a class war, allegedly.
23:58
S1: Are they going to be able to survive that attack
24:00
S1: campaign from the coalition as it's shaping up?
24:03
S2: Well, they've made a calculation in the cabinet and the
24:05
S2: Prime Minister has made and the Prime Minister is a
24:09
S2: cautious and highly shrewd operator when it comes to calls
24:13
S2: like this. If there's if there's one thing his colleagues
24:16
S2: trust him for, it's making calls like this about whether
24:19
S2: he can survive political firestorms, whether he can get away
24:21
S2: with a measure and how he times things, and how
24:24
S2: he strategizes political thrusts like this. So he's made a
24:27
S2: call that he can. The 2019 measures that you referenced
24:30
S2: from Bill shorten are very similar to these. Bill shorten
24:33
S2: had lower approval ratings. Scott Morrison was a new entity
24:38
S2: who cast himself as a, you know, Daggy dad, who
24:41
S2: was looking out for battlers and mums and dads who
24:43
S2: had aspiration. There was also more older people voting at
24:47
S2: that time than there are now. The housing crisis was
24:50
S2: not as starkly, uh, you know, not not so sharply
24:55
S2: in focus. So the government believes that the demographics and
24:58
S2: politics have changed to the point about the broken promise
25:02
S2: and the opposition's attack. This puts them into obvious political terrain.
25:08
S2: You're in opposition. You believe in lower taxes. You should
25:10
S2: hold the government to account for their broken promises so
25:13
S2: they'll do all those things. How much hay will they
25:15
S2: actually make? Well, is anyone listening to the opposition at
25:18
S2: the moment even they would admit. Not really. Do they
25:21
S2: want to be speaking only to their quite narrow boomer
25:26
S2: asset owning voter class, or do they want to be
25:29
S2: broadening a little bit? Andrew Hastie would say they should
25:31
S2: broaden a little bit. Angus Taylor would say, yeah, we'd
25:34
S2: like to broaden, but I've got my principles on this stuff. Uh,
25:37
S2: so the lie attack is it should be potent because
25:42
S2: you go to an election and there's some clips of
25:44
S2: Anthony Albanese in the election campaign, getting really snippy with
25:48
S2: journalists saying, I've told you 50 times, I'm not touching
25:51
S2: negative gearing. Stop asking me why do I have to
25:53
S2: say it again? And then there's tabloid headlines this week
25:56
S2: branding him a liar in massive headlines. And people in
26:00
S2: the cabinet feel aggrieved by those headlines. But without impugning
26:03
S2: the Prime Minister's direct character, there's some basis to the
26:05
S2: claim that there was a broken promise here.
26:07
S1: Yeah, there's a big difference between a broken promise and
26:10
S1: a lie. And certainly Julia Gillard on the carbon tax
26:12
S1: always regretted that that their government and she allowed herself
26:17
S1: to be framed as a liar, when in fact what
26:19
S1: she'd done was break a promise. Now, I mean Anthony Albanese,
26:23
S1: I think obviously as you say, he backs himself in
26:25
S1: to explain this to the electorate, just as he did
26:27
S1: with the stage three tax cuts, and to come out
26:30
S1: and own it and say, yep, I did say that.
26:32
S1: And I've changed my mind because the circumstances are so
26:34
S1: different now. So it'll be interesting to see whether or
26:37
S1: not he's successful in that. And Jim Chalmers obviously I
26:40
S1: think is a pretty good communicator. So he'll be selling
26:43
S1: his budget hard in the weeks to come. Paul, what
26:45
S1: are you going to be doing on Saturday?
26:48
S2: All I know about my Saturday is I'll be at
26:50
S2: home on the couch in the evening watching Sky news.
26:53
S2: You know, between 10 and 15 person panel trawl through
26:56
S2: the FA results. And because I'm a sicko, that excites me.
27:01
S1: Well, I'll probably be doing the same from the shelter
27:04
S1: of my bedroom, having made a three layer funfetti cake.
27:07
S1: Wish me luck on that.
27:08
S2: Good luck with that, Jack.
27:09
S1: See you next week.
27:10
S2: Bye.
27:15
S1: You can read all of our political news on our websites,
27:17
S1: theage.com.au or sm.com.au. Today's episode was produced by Kai Wong
27:24
S1: with help from Debbie Harrington. Our executive producer is Tammy Mills,
27:28
S1: and our podcasts are overseen by Lisa Muxworthy and Tom McKendrick.
27:32
S1: Before you go, follow Inside Politics and leave us a
27:35
S1: review on Apple or Spotify. I'm Jacqueline Maley. Thank you
27:38
S1: for listening.