Latest / The Morning Edition / Interest rates and Labor's spending, and the Greens look to Mamdani

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Interest rates and Labor's spending, and the Greens look to Mamdani · The Morning Edition

0:01
S1: I'm Paul Satchell, filling in for Jacqueline Maley, and you're
0:04
S1: listening to Inside Politics from the Age and The Sydney
0:06
S1: Morning Herald. Anthony Albanese is back from a trip to
0:13
S1: the United Nations in New York. His approval ratings have
0:16
S1: slumped and a period of economic pain lies ahead.
0:19
S2: Now, I know this decision is difficult for households with
0:21
S2: a mortgage and businesses with loans, but high inflation hurts
0:25
S2: all Australians, especially the most vulnerable.
0:28
S1: The RBA raised interest rates to a 15 year high
0:31
S1: on Tuesday and more hikes are expected in coming months.
0:34
S1: But politics never stands still, and the Greens elected their
0:37
S1: third leader in 18 months this week.
0:39
S3: We're here to beat down One Nation, and we're here
0:42
S3: to replace labor and return hope and faith to politics.
0:46
S1: We'll get stuck in to both issues on this week's episode.
0:49
S1: Let's get started. Matt, thanks so much for joining us.
0:52
S4: Very good. Good to hear you.
0:53
S1: A pretty big week in economic news to be filling
0:56
S1: the big shoes of Shane Ryan. And it's great to
0:58
S1: have someone so accomplished doing that job, it does feel
1:02
S1: like the economic debate will dominate for months. Matt, given
1:05
S1: markets are now forecasting more rate hikes after the one
1:08
S1: delivered on Tuesday. Can you just explain to us, why
1:11
S1: did the RBA raise rates to a 15 year high
1:14
S1: on Tuesday when the economy feels pretty flat?
1:17
S4: Well, it is an unusual combination of things going on really,
1:20
S4: because you're right, there are a whole lot of economic
1:23
S4: indicators out there that are kind of contrary to what
1:25
S4: you'd expect with rates reaching like a 15 year high.
1:29
S4: So let me go through a few of them. And
1:31
S4: in fact, it's interesting, when I went to the reserve
1:34
S4: Bank governor's press conference after interest rates were increased on Tuesday,
1:39
S4: and this is exactly the question I asked. I said
1:41
S4: inflation is high, but we've also got unemployment at a
1:44
S4: five year high. We've got house prices falling quite sharply
1:49
S4: and growth is pretty anemic, especially if you look at
1:52
S4: it on a per capita basis. So they're not really
1:55
S4: the sort of the conditions you'd expect for a rate
1:59
S4: hike of this magnitude, because I think it has really
2:03
S4: sent shock waves through the economy, through the community, obviously
2:06
S4: through politics, because we are at that 15 year high
2:10
S4: at 4.6%. So, look, the short answer is, as the
2:16
S4: reserve Bank governor and other officials keep saying inflation is
2:20
S4: too high, notwithstanding those other factors like rising unemployment and
2:25
S4: falling house prices. Uh, the economy is in such a
2:28
S4: state that the factors at work mean that prices are
2:32
S4: still rising at a rate that the reserve Bank is
2:34
S4: uncomfortable with. And so they've decided to keep putting on
2:38
S4: the brakes.
2:39
S1: Just to go back in time here, the government and
2:42
S1: the RBA both thought about a year and a half
2:45
S1: ago that we'd got on top of the inflation problem.
2:48
S1: Rates were jacked up in 2023, people will recall was
2:51
S1: the last rate hiking cycle, and that had a lot
2:54
S1: to do with pandemic era stimulus. A lot of money
2:56
S1: was pumped into the economy and perhaps too much from
2:59
S1: the last Morrison government, and the economy was running too hot.
3:03
S1: What's actually caused this recent inflation bout? And did both
3:08
S1: our monetary policy makers and the federal government, with its
3:12
S1: recent stimulus on electricity subsidies and various other universal welfare programs?
3:20
S1: Have we made a mistake in underestimating the amount of
3:24
S1: money sloshing around? And have we got it wrong on
3:27
S1: the inflation challenge? Did did we go too soon?
3:30
S4: Look, it's a it's a really good question, Paul. I
3:32
S4: think I would start answering that by saying we've got
3:35
S4: to view what's going on now in the context of
3:40
S4: the past 4 or 5 years. It's not long ago
3:44
S4: that interest rates were literally nearly zero. That was the
3:49
S4: official cash rate. And so mortgage holders were home borrowers,
3:54
S4: I should say, were paying a little bit more than that,
3:56
S4: of course. But, you know, interest rates were literally at
4:00
S4: the lowest level ever in history as far as economic
4:03
S4: historians can tell, interest rates had never been lower in
4:05
S4: the history of the world. It was an extraordinary time,
4:08
S4: and in a way, it wasn't surprising that the aftermath
4:12
S4: of that was going to be difficult because we had
4:15
S4: this massive stimulus with the the Covid sort of economic response.
4:19
S4: Then we had these other extraneous or offshore issues like
4:24
S4: the Ukraine war first and now, of course, the Middle
4:26
S4: East conflict. So it has been a bit of a
4:29
S4: wicked combination. And so that's the way we need to
4:32
S4: sort of think about it now that, you know, borrowers
4:36
S4: had it good for a long time. It's extraordinary that
4:39
S4: interest rates remain so low for so long. As you
4:42
S4: mentioned at the beginning of the show, I'm filling in
4:45
S4: for my colleague Shane Wright, who's the economics correspondent for
4:49
S4: the Herald and The age. And I used to do
4:51
S4: that job. And when I was for half of my career,
4:54
S4: I've been in journalism now for nearly 25 years. Interest
4:57
S4: rates were around where they are now 4.5%. If you
5:01
S4: look at it over that 20 year period, it's not
5:04
S4: as though we're at a place where, you know, it's
5:06
S4: that unusual. So I think we have seen in the
5:09
S4: last year or two the whole global economic system, if
5:13
S4: you like, getting back to a place where it perhaps
5:15
S4: once was, as all that Covid effect started to wear off.
5:19
S4: I mean, there's a big debate at the moment about
5:21
S4: global interest rates, which have gone back also to sort
5:25
S4: of 20 year highs. The benchmark US ten year bond
5:28
S4: is now above 5% for the first time in a
5:30
S4: long time. Now economists sort of say, well yeah, that's
5:33
S4: because there's inflation pressure in the economy. And that's kind
5:36
S4: of where that bond yield used to always be. So
5:40
S4: in a way, that's the context for what we're talking
5:42
S4: about now. But at the same time, it's very true
5:46
S4: to say that there's other issues at stake in the
5:49
S4: Australian economy or other issues at work that are contributing
5:52
S4: to the inflation issue. And then we've also got the
5:55
S4: Middle East crisis.
5:56
S1: Yeah. As you say, or as you point to, it
5:59
S1: might be that the long period of cheap money and
6:02
S1: cheap debt is over. And we're returning to what was
6:06
S1: the old normal, what feels like a new normal where
6:08
S1: debt's a bit more expensive and you can't borrow on
6:11
S1: the cheap. And that feeds into the next two issues
6:13
S1: we're going to talk about, which is house prices and
6:16
S1: government spending, maybe just on house prices first. We've already
6:20
S1: seen prices come down about 8.6% off their February peak
6:24
S1: in Sydney, due to a combination of existing interest rate hikes,
6:27
S1: the three that were earlier this year, as well as
6:30
S1: potentially and we don't know the extent of this, the
6:32
S1: government's property tax concession changes. The RBA said that the
6:36
S1: only factor working in the direction of maintaining rates, rather
6:40
S1: than hiking them, was the potential for a more severe
6:43
S1: property market downturn. What could the increase rates this week,
6:48
S1: as well as in future? And where markets are priced
6:50
S1: in one or maybe two more due to the housing market.
6:53
S1: And how worried is the RBA about that?
6:55
S4: Look, I'd say that they're they're not overly worried. You're
6:59
S4: right that they said that this is one of the
7:01
S4: downside risks as economists always say. It was interesting too,
7:06
S4: that at the reserve Bank board meeting the other day
7:09
S4: where they decided to jack up rates, the governor did
7:12
S4: say that they considered pausing. And one of the reasons
7:15
S4: they considered pausing was because of the housing market and
7:19
S4: the way that prices have fallen so far. Look on
7:22
S4: house prices. It depends what you call a crash. Certainly
7:25
S4: a correction. You know, as you say in Sydney, it's
7:27
S4: down nearly 9% since the peak earlier this year. As
7:30
S4: I keep telling everyone, prices went up 6% last year. So,
7:34
S4: you know, we've taken back a little bit more than
7:37
S4: increases that house prices moved last year. And if you
7:41
S4: look back again to that Covid period, prices in Sydney
7:44
S4: and other parts of the country are literally 50% higher
7:47
S4: than they were. So again, you know, we've had an
7:50
S4: unprecedented run up in house prices in the past 5
7:54
S4: or 6 years. I think as soon as interest rates
7:57
S4: started to rise, we were always going to see a
8:00
S4: response in the price. Price of houses, and that's what
8:03
S4: we're seeing. I do think that if things get, again,
8:06
S4: in economic parlance, get disorderly. And that is we see
8:10
S4: some sort of markets not working very well. Then the
8:13
S4: bank would get very worried. But I think there's also
8:16
S4: some fundamentals out there that will mean eventually we see
8:20
S4: prices stabilize, notwithstanding the fact that migration is a big
8:25
S4: debating point in federal politics, and there's pressure to cut
8:29
S4: total numbers or net overseas migration over time, we're still
8:32
S4: getting a fairly good flow of migrants arriving in the country.
8:35
S4: All of those people have to be housed. So we've
8:37
S4: still got population growth. Um, and, you know, in the
8:40
S4: grand scheme of things, interest rates, while they feel high
8:43
S4: to people who have maybe got in the housing market recently,
8:47
S4: they're not that high. And I think we will see people,
8:50
S4: you know, start to buy housing again. It's also interesting
8:53
S4: to look to when we talk about prices, that's a median.
8:57
S4: So that's the middle value of every house purchased in
9:00
S4: the country or the city, depending on which measure you're using.
9:04
S4: And from what I can tell, we're seeing much bigger
9:07
S4: price movements at the top end of the market in
9:10
S4: more expensive houses than we are in those properties that
9:14
S4: are being purchased by first home buyers or those on
9:17
S4: lower incomes. So that's an important thing to keep in
9:19
S4: mind as well. The other the other factor here is
9:22
S4: the property sector is a very vocal and powerful interest.
9:27
S4: And often I think we pay undue attention to the
9:32
S4: thoughts of some people in that industry relative to, say,
9:35
S4: normal buyers and sellers out there in the market.
9:37
S1: Mhm. Just on the the recent correction, there's some good
9:43
S1: data in the AFR today, off the back of the
9:45
S1: same story, you wrote, Matt, on the totality data, but
9:47
S1: it put it in a put it in a broader
9:48
S1: graph of all the other housing downturns over the last
9:51
S1: few decades, and it shows that this current one is
9:54
S1: by just a small margin, the most severe and the quickest.
9:57
S1: But as you say, who knows when that plateaus? And
10:00
S1: that's yet to play out. Michelle Bullock was alive to
10:03
S1: the concern from homeowners and mortgage holders around the pain
10:07
S1: that increased rate hikes would would place on them. And
10:10
S1: she was keen to point out that that interest rate
10:14
S1: rises don't cause inflation to come down purely through one channel,
10:18
S1: as in the one of the effects of interest rate
10:21
S1: rises is to cause mortgages to be more expensive, which
10:24
S1: hopefully reduces spending. But there are various other channels through
10:27
S1: which it works and through which it brings down inflation.
10:30
S1: Can you just explain those other ways that that interest
10:33
S1: rate hikes work to bring down demand and also the
10:36
S1: exchange rate dynamic too.
10:38
S4: At moments like this, all of a sudden we all
10:41
S4: get this crash course in monetary policy, which of course is,
10:45
S4: you know, a whole field of economics that people spend
10:48
S4: their whole life looking into working on. So it is
10:51
S4: true that when interest rates rise, there is a lot
10:54
S4: of focus on that group who are highly indebted. People
10:58
S4: estimate that's about a quarter of the population. And it's
11:02
S4: true if you've got a big home mortgage, relatively small
11:04
S4: rate hikes really hurt you. Your your budget is affected.
11:08
S4: At the same time, we've got a whole lot of
11:09
S4: people out there who are home borrowers who have pretty
11:12
S4: small amounts of their loan outstanding. They've paid off most
11:16
S4: of their loan. They're not so badly affected. That's all
11:18
S4: part of the story. But then, as you pointed out,
11:21
S4: we've got these other ways that interest rates affect the economy.
11:24
S4: One of them is called the exchange rate channel, and
11:27
S4: that is interest rates relative to other countries has a
11:30
S4: big influence on the level of our exchange rate. And
11:33
S4: of course, that influences the cost of imported goods. And
11:37
S4: we consume a lot of imported goods here in Australia.
11:40
S4: So that actually has an effect on prices. So it
11:42
S4: affects inflation.
11:43
S1: By making imports cheaper because our exchange rate goes up. Right.
11:46
S4: That's right. Um, so so it means that you might
11:49
S4: be attracted to different goods and you might pay different prices.
11:53
S4: So it has an effect on the price level overall
11:55
S4: is the point. Another one they talk about is the,
11:59
S4: the wealth channel. That is we've seen this big correction
12:02
S4: in house prices. And now that's a little bit more indirect.
12:05
S4: But it's true to say that when people watch the
12:08
S4: value of their house fall 10% or whatever it is
12:12
S4: in Sydney, that's almost the case. It has effect on
12:14
S4: their feeling about how they're going to behave. They might
12:17
S4: put off purchases or whatever as a result. So that
12:20
S4: has effect on demand and the price of goods. The
12:23
S4: other one is what they call it's a bit more complicated,
12:27
S4: but obviously if interest rates rise, consumers are faced with
12:32
S4: a choice. Maybe I'll save a bit more because I'm
12:34
S4: going to get more. If I put my money in
12:36
S4: the bank relative to spending it, I might put off
12:39
S4: buying a new fridge and I'm going to save because
12:41
S4: I'm getting a higher interest rate. So the point that,
12:45
S4: you know, the reserve Bank has been making in the
12:47
S4: last couple of weeks with this rate hike is that,
12:50
S4: you know, it's far more than just the borrowers who
12:53
S4: are highly indebted. They even have said that that may
12:58
S4: not even be the most important part of the way
13:00
S4: interest rates work. These other ones are very important too.
13:04
S4: And they use the sort of analogy that it gets
13:07
S4: into every nook and cranny. A rate rate changes get
13:10
S4: into every nook and cranny of the economy. And so
13:14
S4: it's far too simplistic to say it's just about the
13:17
S4: highly indebted borrowers.
13:19
S1: And the other factor that I heard a few weeks
13:21
S1: ago that I'd never heard before is that if you
13:24
S1: if you do have a downturn in the property market,
13:26
S1: you get less turnover of sales, too, which causes people
13:29
S1: to spend much less on new furniture, landscapers. Removalists. So
13:33
S1: there's a whole industry around that too, which is quite fascinating.
13:35
S4: Yeah, absolutely. And then there's also state governments because, you know,
13:40
S4: prices are the thing that we always focus on. But
13:43
S4: in much of the economy and especially in state government financing.
13:46
S4: It's the turnover that's the big issue. That's what really
13:49
S4: makes the the revenue. So, you know, this is another
13:53
S4: good example of how, you know, interest rates do have
13:56
S4: an effect on the economy. That's fairly, very broad.
14:01
S1: Mhm. And I guess the trade off there is a
14:03
S1: downturn might be good for first home buyers. But if
14:05
S1: you tumble too quickly you create potential issues for economic
14:09
S1: growth which is already quite weak.
14:11
S4: Yeah. And I think I think what the bank would
14:13
S4: say is any market, you've got to let it be
14:16
S4: a market, you know, and what they're most worried about
14:20
S4: is if the market starts to not function well. Mhm.
14:23
S4: And that doesn't apply to just housing. That's especially relevant
14:26
S4: on financial markets, which also have an effect on our economy.
14:29
S4: So that's what the reserve Bank is really focused on
14:32
S4: that markets are working efficiently. Prices go up, prices go
14:35
S4: down as long as the markets are functioning well. They're
14:38
S4: less bothered by the value, the rate or whatever.
14:42
S1: Mhm. Just from very wonkish and technical to the very
14:45
S1: political and vibes based. And this will be my final question, Matt.
14:49
S1: The coalition spent months and really years at various points
14:52
S1: saying that Labor's near-record spending is the key driver of
14:58
S1: the inflation problem in the economy. They say labor is
15:00
S1: addicted to spending. It can't belt tighten and that's keeping
15:04
S1: prices up for a long time. Michelle Bullock, the reserve
15:08
S1: Bank governor, has been pretty reluctant to weigh into this debate.
15:12
S1: In her written statement before speaking on Tuesday, she spoke
15:17
S1: emphasized the Middle East war and how that was pushing
15:19
S1: up the price of fertiliser and fuel, increasing the cost
15:22
S1: of production and keeping prices embedded by allowing business to
15:26
S1: kind of expect and embed higher prices in the longer run.
15:30
S1: But when she spoke verbally and stood up in front
15:32
S1: of you, Matt, in Sydney, she did emphasise quite strongly
15:35
S1: domestic price pressures. And she said that we have a
15:37
S1: productivity problem. Our economy, due to, you know, years of
15:40
S1: slow productivity, is not able to sustain the level of
15:43
S1: demand in the economy. And she indicated, at least was
15:47
S1: my reading, that domestic pressures were the primary driver. Inflation
15:51
S1: was increasing before the war, but the war has had
15:53
S1: a seriously exacerbating effect and has made this problem last
15:58
S1: for longer and become worse. Was that your reading, Matt,
16:01
S1: and what does that mean for the political debate? Does
16:03
S1: it prove the coalition was right, or is it not
16:05
S1: so simple?
16:06
S4: It's it's a very tough question to answer in the
16:11
S4: political debate. People have an interest, I guess, to emphasize
16:14
S4: one or other of those two factors. My reading of
16:17
S4: what the governor said was, sure, we have these. She
16:21
S4: keeps calling them domestic constraint issues. So there is a
16:24
S4: homegrown element to this. And, you know, she says that
16:27
S4: both private and public sector spending. So the spending of
16:31
S4: consumers and businesses, as well as the spending of governments,
16:35
S4: are all playing a role in those price pressures coming
16:38
S4: from within Australia. It's really hard, though, to say that
16:43
S4: the Middle East conflict is not a big part of it.
16:46
S4: You know, and look, we're not alone. You know, these
16:49
S4: global benchmark interest rates that really have a big effect
16:54
S4: on the global economy. They've also been rising, too, for
16:57
S4: the same reason. I think we've got to be a
16:59
S4: bit more nuanced about it. It is true that if
17:02
S4: the government were to pare back spending, it would help
17:06
S4: with the inflation problem. Would it fix it? Perhaps not.
17:11
S4: They'd have to probably cut quite a lot for it
17:13
S4: to make a big difference. If not, cut, raise taxes.
17:16
S4: You know, this is the point. There are fiscal policy
17:19
S4: tools that the government could use that would be unpopular.
17:22
S4: And that's probably why they're not doing them.
17:24
S1: Mhm.
17:25
S4: So I think it is a complex blend. And I
17:28
S4: think the governor sort of walked a fine line in.
17:32
S4: I think if you wanted to ask her or if
17:34
S4: you were sort of saying, which is more important, which
17:37
S4: one of these two. Mhm. You might be able to
17:40
S4: come up with an answer to that, but the fact
17:42
S4: is they're both playing a role and that's the challenge.
17:46
S4: The problem is that the the petrol price, one that's
17:50
S4: being caused by the Middle East conflict, that's way, way,
17:53
S4: obviously beyond our control. Look, I think it's fair to
17:56
S4: say that, you know, had the government chosen to just
18:01
S4: run a bit tighter with its fiscal policy, it would
18:05
S4: be helping more. I'm not sure that, you know, I
18:08
S4: couldn't say how much. All I'm saying is that we
18:12
S4: learnt the other day in their final budget outcome for
18:15
S4: the last year of the federal spending, they were still
18:17
S4: in deficit. And my point would be at least balancing
18:21
S4: the books would have been a helpful thing to do
18:24
S4: on the inflation front.
18:25
S1: Mhm. Matt, you talk about complex blends of arguments and nuance,
18:29
S1: and often those things don't factor into debate in Canberra.
18:32
S1: So it's been so good to have such a wise
18:35
S1: voice join us. Thanks so much.
18:37
S4: Very welcome. Good to see you.
18:46
S1: To shift gears. The Greens elected their third leader in
18:49
S1: less than 18 months this week. The experience and relatively
18:53
S1: moderate former environmental lawyer Larissa Waters stepped down due to
18:56
S1: illness in her place is a very different figure. The
18:59
S1: confrontational and clever New South Wales senator David Shoebridge, who
19:03
S1: comes from the state's hard left faction. Joining us to
19:06
S1: discuss is Natassia Chrysanthos, our political correspondent. Tas lovely for
19:10
S1: you to join us.
19:11
S5: Lovely to be here.
19:12
S1: Tell us what David Shoebridge election means for the Greens.
19:16
S1: And what does it tell us about the current political moment,
19:19
S1: particularly on the left?
19:20
S5: I guess the first thing to note was this wasn't
19:23
S5: a leadership change that anyone planned. Um, you know, Larissa
19:28
S5: Waters resignation this week came as much of a shock
19:31
S5: to her team and to her colleagues. So it's not
19:34
S5: part of any grand strategy for the Greens. That being said,
19:38
S5: there has been a lot of commentary, conversation and debate
19:42
S5: for most of this year, both within the party and
19:45
S5: and also outside it about, you know, what they're doing basically.
19:50
S5: We've seen successive some of these kind of populist left
19:55
S5: leaders overseas in in somewhat analogous contexts, the chief of
19:59
S5: those being the election of Zoran Mamdani, for example, in
20:03
S5: the US. Um, and then a period of polling success,
20:07
S5: which it's worth noting, has come down a bit in
20:10
S5: the UK under Greens leader Zack Polanski. The question people
20:15
S5: are asking has been, well, why haven't the Greens capitalised
20:19
S5: on this kind of broad voter dissatisfaction with the major
20:23
S5: parties anti-establishment vibe in the way that One Nation have?
20:27
S5: And what we've seen with the Greens is the. Remain
20:29
S5: relatively stagnant around a 12% share of the vote over
20:33
S5: the last two elections. Larissa Waters, like you said, you know,
20:37
S5: she's very experienced. She's been around a lot. She's very
20:39
S5: well liked and well respected. It's not like people were
20:42
S5: agitating to replace her. However, I think the way that
20:46
S5: she came into the leadership, which was after this real
20:48
S5: shock loss of Adam Bandt, um, where there was no
20:51
S5: natural successor because the party wasn't expecting itself to be
20:56
S5: in the position of needing to elect a new leader
20:58
S5: means that kind of waters came into it as this
21:01
S5: somewhat reluctantly, um, as a, as a kind of person
21:05
S5: to keep the party together in what was quite a
21:07
S5: destabilising time for it. Was she necessarily the leader that
21:10
S5: was going to come in and inject fresh energy in
21:12
S5: a Mamdani like fashion? Probably not. And so Shoebridge now
21:17
S5: comes in at an interesting time. He. He's a very
21:20
S5: energetic character. He's been around for a long time. And
21:23
S5: we heard him take the leadership on Wednesday talking the
21:26
S5: talk of these other guys overseas. This kind of populist
21:30
S5: left language of the 1% talking about, you know, replacing
21:34
S5: the Labor Party, um Leary came in promising to be,
21:38
S5: you know, constructive and consultative. Shoebridge made no such promises
21:41
S5: on Wednesday. Um, quite the opposite. Um and so I
21:46
S5: think it signals that we are going to see a
21:48
S5: bit of change in strategy from the Greens for the
21:50
S5: remainder of this political term.
21:52
S1: I can think of two immediate critiques to this argument
21:55
S1: that the Greens should be writing some populist left wave
21:59
S1: that we're seeing in the UK and the US. One
22:02
S1: is is more obvious. It's that there is no figure
22:06
S1: on the left who is anywhere near as charismatic or
22:08
S1: just fundamentally likable as Zoran Mamdani or Zack Polanski. I
22:12
S1: don't mean I like them, but voters have clearly, uh,
22:15
S1: had that view. But the second one is that, particularly
22:19
S1: in the US, there is an onslaught from what left
22:23
S1: wingers would see as the far right to, uh, attack
22:27
S1: liberal rights around abortion, uh, economic rights. There is a
22:31
S1: sense on the left that if you're a progressive, you
22:33
S1: are under attack, whereas that's not the case in Australia.
22:37
S1: And there's been a centre left government that's held power
22:39
S1: for nearly five years now. And so there's not the
22:42
S1: same zeal on the left to kind of resist an
22:45
S1: attack on liberal rights. So I don't think the environment's
22:48
S1: the same. But that's not the feeling among Greens supporters. Right, Natasha.
22:52
S1: They do want to see some more firebrand energy, I think.
22:54
S5: Yeah, for sure. And I think there's been some frustration,
22:58
S5: particularly among the kind of more activist and excitable parts
23:02
S5: of the membership, that they haven't gone further. Um, putting
23:06
S5: the hat back on. You know, there are obviously other
23:08
S5: people who've been around the traps for a while and
23:10
S5: are also skeptical of that framing. Like the other two
23:13
S5: pushback points that I heard yesterday were, you know, looking
23:17
S5: at Mamdani, New York is not the United States, you know,
23:20
S5: so we're talking about very different constituencies here. Um, and
23:24
S5: then be pointing to Polanski in the UK. Yeah. They
23:27
S5: were riding high, something like 16 or 17% maybe six
23:30
S5: months ago under Keir Starmer. But that's dropped back down to,
23:34
S5: I think, 10% in most recent opinion polling in the
23:36
S5: UK since.
23:37
S1: Andy Burnham has really grown them down.
23:38
S5: Yeah, yeah. And so this person was kind of making
23:41
S5: the point that when you are a kind of minor party,
23:44
S5: you are really subject to the whims of broader political trends.
23:47
S5: And so it's, it is hard to draw concrete parallels. And,
23:51
S5: and in that sense, you know, some people in the
23:54
S5: Greens are also kind of they point to the fact
23:56
S5: that their vote hasn't really dropped substantially. Um, when labor
24:00
S5: and the coalition have. So the fact that they're holding steady.
24:02
S5: Some people see as a win. But then again, it
24:04
S5: goes back to this question, what is the point of
24:06
S5: the Greens and what we heard articulated from Shoebridge? You know,
24:09
S5: we've heard from Max Chandler-mather as well who's the head
24:11
S5: of the Greens Institute now, which is the party's kind
24:14
S5: of policy think tank. Their view is the Greens aren't
24:16
S5: there to rubber stamp labor to make labor better. They're
24:19
S5: there to replace labor. Um, and so I think this
24:21
S5: is the kind of new language that we're going to
24:23
S5: see either way, because these guys think that it is possible. Um,
24:27
S5: and their intent now is to mimic the kind of
24:32
S5: method of those other guys overseas and build what they're
24:35
S5: calling a mass movement of people. And there is a
24:38
S5: lot of research going on being led by Chandler Mather
24:41
S5: and the Greens Institute to do that. Whether they get
24:45
S5: something like that off the ground in the next 18
24:47
S5: months is probably a tall order. But between those two guys,
24:52
S5: you do see a lot of energy and passion for
24:54
S5: the cause.
24:54
S1: Yeah, I'm really interested in this line from Shoebridge, which
24:56
S1: he used on his first day about replacing labor, not
24:59
S1: working with them. It was characterized as a as a
25:02
S1: new stance yesterday by quite a few observers. But it's
25:05
S1: actually something Bob Brown has been saying for decades. It's
25:08
S1: core to Greens dogma that they are there in the
25:11
S1: long run to replace labor, something they've never been able
25:13
S1: to achieve. Anthony Albanese today touched on this. He went
25:16
S1: out of his way to make a little clip against
25:18
S1: the Greens, which he has a long history of feuding
25:21
S1: with at a local level, and he's quite sharply critical
25:23
S1: of Shoebridge and Marine Faruqi as well. Albanese said on
25:27
S1: Thursday that Shoebridge, his comment about replacing labor as a
25:31
S1: sign that the Greens will be obstructionist. They don't stand
25:34
S1: for progressive policy. They stand for protest. This was an
25:39
S1: important debating point at the last election, when Albanese was
25:43
S1: able to steal a few seats off the greens by
25:45
S1: characterizing them as too hard line and standing in the
25:49
S1: way of progressive reform. This was an attempt to kind
25:52
S1: of slice the Greens base in half. Albanese knows he's
25:56
S1: not able to win over the younger, more hardline Greens supporters,
25:59
S1: but he does believe he's able to appeal to older,
26:03
S1: slightly more moderate Greens voters who believe that the minor
26:06
S1: party should be there to effectively push labor to be
26:09
S1: a bit more progressive. So do you think that argument
26:12
S1: has been won by Shoebridge here? Natazia is the consensus
26:15
S1: in the Greens. Now, a year and a half on
26:18
S1: from losing several seats at the last election, including their leader,
26:21
S1: Adam Bandt and Chandler-mather, do you think the consensus, just
26:24
S1: because of global factors is now that the party does
26:28
S1: need to be more zealotry in its approach?
26:29
S5: Yeah, I think so. And I also think that was
26:34
S5: what the Greens took from the 2025 election. Um, while
26:38
S5: I think, you know, Albanese's framing is that they lost
26:40
S5: those seats because they were obstructionist and two hardline. And
26:43
S5: that's a lot of the kind of, um, media commentary
26:46
S5: around it as well. That's not the conclusion that the
26:48
S5: Greens came to their election review, which I was looking
26:53
S5: over earlier today. It wasn't really covered because it wasn't
26:57
S5: made public. We will have a little snippets of it
27:00
S5: in our feature story that is out on the weekend
27:02
S5: that our readers can read.
27:04
S1: Hashtag. Buy the paper.
27:05
S5: Yeah, yeah yeah yeah, or read the website. But their
27:09
S5: take home message from the election was that they didn't
27:11
S5: go hard enough on labor. Like they looked at their messaging,
27:14
S5: which was very focused on Keep Dutton out. And they've
27:18
S5: come to the view that they were kind of doing
27:20
S5: Labor's work for them in focusing on that kind of
27:22
S5: meta political picture. Not enough on why people should vote
27:25
S5: the Greens and presenting an alternative. So they've actually taken
27:28
S5: a very different view, which is their messaging was wrong
27:32
S5: at the election, not because they had taken the fight
27:35
S5: to labor, but because they didn't take enough of a
27:37
S5: fight to labor.
27:38
S1: There could be rocky times ahead inside the Greens party room, though, right, Natasha?
27:42
S1: Maureen Farooqi, who was the deputy leader until this week,
27:45
S1: threw her hand up to be the leader, didn't garner
27:48
S1: enough votes, and then subsequently suggested that if there was
27:51
S1: a vote of all party members in grassroots people in
27:54
S1: the suburbs, rather than just the MPs, she might have
27:57
S1: actually won the vote. What has she suggested for her
28:00
S1: future and how is that likely to play out?
28:02
S5: I think the line she had was what that she's
28:05
S5: her kind of role is is better served outside the leadership. Um,
28:09
S5: I think there's a bit of speculation about whether that
28:12
S5: meant that she would play a bit of an undermining
28:14
S5: role in the party. I don't think that's likely. And
28:17
S5: I don't quite think that's what was meant by it. Um,
28:20
S5: I think the context and it's been written about this
28:23
S5: over the years, there is a bit of a kind
28:25
S5: of personal beef between Faruqi and Shoebridge, which, you know,
28:30
S5: kind of colors the whole thing. As for whether she
28:34
S5: would have won a membership vote, which again, was what
28:38
S5: Max Chandler-mather was pushing for this week. It's what he
28:41
S5: sees is an important part of building this mass movement,
28:44
S5: of people, getting them more involved in like, direct democracy
28:46
S5: within the party. You never know. I've spoken to people
28:49
S5: who think that she she would have had a good chance.
28:51
S5: I've spoken to other people who think Shoebridge probably would
28:54
S5: have won it anyway, but I don't think it's in.
28:56
S5: And I think Faruqi would not think it's in her
29:00
S5: interest or the Greens interest to really kind of undermine
29:02
S5: the party. What they do want to do is kind
29:04
S5: of consolidate and grow from here.
29:07
S1: I do wonder on another point that hasn't got much
29:09
S1: air time in the last couple of days in terms
29:11
S1: of what this means for the Greens positioning in the
29:14
S1: Senate and how amenable they might be to passing bills
29:18
S1: with labor. It's there's a Labor Greens majority in the Senate.
29:22
S1: Is there a chance that Anthony Albanese finds it a
29:25
S1: bit more difficult to get his legislative agenda through and
29:28
S1: is forced to work more commonly with the coalition.
29:31
S5: I think so. Anthony Albanese doesn't like setting ground to
29:36
S5: the Greens or handing Greens wins, but again, there's plenty
29:40
S5: of ledge that labourers wanted to put through in this
29:42
S5: term of parliament. The key to that being its budget
29:45
S5: tax package, that it would never have passed with the coalition.
29:48
S5: So it will still have to work with the Greens
29:51
S5: on issues like that. Um, I just think yeah, we're
29:54
S5: probably going to see Shoebridge make try to make life
29:57
S5: harder for labor. And as many have pointed out this week,
30:01
S5: he probably has the capacity to do so. He's a
30:02
S5: very adversarial guy. He's very good at parliamentary process. He
30:08
S5: knows his way around all kinds of issues and and
30:10
S5: how to use the Senate, use the order of production
30:12
S5: of documents and so forth to embarrass the government. And
30:16
S5: I would expect that that's what we will see from
30:19
S5: him over the next little while.
30:21
S1: He's a very strong parliamentarian, but I do wonder if
30:23
S1: his radical edge Shh. Will, uh, cause a bit of
30:27
S1: trouble for him now that he's leading a minor party.
30:29
S5: Well, and, yeah, being a great parliamentarian is not the
30:32
S5: same as is kind of winning hearts and minds of
30:34
S5: the people. They're very different skill sets. You know, they
30:37
S5: can be married. But I think it'll be interesting what
30:40
S5: we see from Shoebridge, because I don't think we've seen
30:41
S5: him really perform that public leadership role. Um to the
30:47
S5: extent you know, that he started doing Wednesday.
30:51
S1: Tas you've joined us when sick, which is a sign
30:54
S1: of your commitment. So thank you.
30:55
S5: You're welcome.
30:56
S1: See you soon. You can read all of our political
31:00
S1: news on our websites, theage.com.au or smh.com.au. Today's episode was
31:05
S1: produced by Tammy Mills with help from Chee Wong. Our
31:08
S1: podcasts are overseen by Lisa Muxworthy and Tom McKendrick. Before
31:11
S1: we go, follow Inside Politics and leave a review for
31:14
S1: us on Apple or Spotify. I'm Paul Seckel, thank you
31:17
S1: for listening.