Latest / Inside Politics / Bonus episode: ‘I should make more time for my colleagues’: Chalmers on party tensions

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Bonus episode: ‘I should make more time for my colleagues’: Chalmers on party tensions · Inside Politics

• 0:03
  S1: The Treasurer's position is known to be one of, if
• 0:06
  S1: not the most difficult spots in any Australian cabinet in
• 0:10
  S1: modern history, and now is no different. On the domestic front,
• 0:14
  S1: interest rates are at a 15 year high and maybe
• 0:16
  S1: an 18 year high. If the RBA jacks up rates
• 0:19
  S1: again on Cup day overseas, Donald Trump's war is keeping
• 0:23
  S1: prices elevated. All of this as labor comes under considerable
• 0:27
  S1: political pressure from a grumpy electorate, which demands more and
• 0:30
  S1: more spending and a persistent populist insurgent. Jim Chalmers is
• 0:35
  S1: in the middle of all of it. As signs of
• 0:37
  S1: tension emerge in the cabinet over Labor's economic stewardship, Chalmers
• 0:42
  S1: at times testy relationship with Anthony Albanese has also been
• 0:46
  S1: in the spotlight. Jim Chalmers joins me. Paul Circle and
• 0:49
  S1: a senior economics correspondent. Shane Ryan. Treasurer, thanks so much
• 0:54
  S1: for joining us today.
• 0:55
  S2: Thanks for having me on, guys.
• 0:57
  S1: It's a difficult week for political establishment, but really just
• 1:01
  S1: for the country. So it would be remiss of us
• 1:02
  S1: to not just touch on the attack on Helen Haines.
• 1:04
  S1: Just quickly at the time of recording, we know that
• 1:07
  S1: she's extremely, unfortunately lost two legs, but in a stable
• 1:10
  S1: condition down at the Alfred. Treasurer, do you have any
• 1:14
  S1: reflections on that issue? First, you've been overseas, so I'm
• 1:17
  S1: not sure you've commented on it yet. How. How did
• 1:19
  S1: it make you feel when you heard the news?
• 1:21
  S2: Oh. Devastated. Um, it would be distressing and devastating no
• 1:27
  S2: matter who this happened to. But I think, you know,
• 1:30
  S2: it's not lost on anyone that probably the most reasonable, rational,
• 1:36
  S2: respected person in the parliament, uh, has been a victim of, uh,
• 1:42
  S2: this irrational violence. Um, and Helen is probably as close
• 1:46
  S2: as you get to the, the perfect temperament in a
• 1:50
  S2: very imperfect workplace. Uh, and so we're all thinking of,
• 1:55
  S2: of Helen. I saw the news on the way, you know,
• 1:59
  S2: on on plane Wi-Fi on the way to Hong Kong
• 2:03
  S2: for the engagements I've just come back from. And it's
• 2:05
  S2: just like everyone just devastated. Just absolutely love Helen. And
• 2:10
  S2: we're thinking of her, obviously, but also, uh, her family,
• 2:13
  S2: her staff, her local community. You know, politics has become
• 2:18
  S2: a much more dangerous place. Uh, the rhetoric has become
• 2:21
  S2: more violent, the threats have become more serious and more frequent. Uh, and,
• 2:29
  S2: you know, we can't pretend, uh, that the sort of
• 2:32
  S2: violence we see around the world associated with politics, um,
• 2:37
  S2: can't replicate itself here. It's, it's, you know, in the
• 2:41
  S2: same week that we saw riots on the streets of Paris,
• 2:45
  S2: we saw this unspeakable act of political violence in the
• 2:48
  S2: main drag at Wangaratta.
• 2:50
  S1: MM. Do you see this as potentially a moment of
• 2:54
  S1: reckoning around security of politicians, and will that inevitably lead
• 2:57
  S1: to more spending pressure on domestic security?
• 3:00
  S2: Well, I think one of the elements of this, which
• 3:05
  S2: is really concerning there's lots about this, is obviously concerning
• 3:09
  S2: and distressing, but, uh, the more available you are, the
• 3:13
  S2: more vulnerable you are. Uh, and this country's got a
• 3:16
  S2: really proud history and heritage of politicians being not just
• 3:23
  S2: from communities, but, but in communities. I mean, one of
• 3:28
  S2: the most important elements of our work, uh, certainly one
• 3:32
  S2: of the most enjoyable parts of, uh, the work that
• 3:35
  S2: I do is, is interacting with real people in real
• 3:38
  S2: communities like this one in Logan City where I live.
• 3:41
  S2: And it is the case, the more available you are,
• 3:43
  S2: the more vulnerable you are. And so there'll be a
• 3:46
  S2: lot of reflecting on what's happened here. Um, it is,
• 3:50
  S2: it is shocking, but not surprising what happened, because we
• 3:55
  S2: have seen this quite extraordinary spike in violent rhetoric and
• 3:59
  S2: violent threats, and it will play out in our politics. And,
• 4:03
  S2: and and, you know, as the as the authorities, the agencies,
• 4:08
  S2: the police, the government and others work out the best
• 4:11
  S2: way to respond and go forward from here. We want
• 4:14
  S2: to make sure that we don't lose the, you know,
• 4:18
  S2: essential element of our democracy, which is people being available
• 4:21
  S2: in local communities.
• 4:23
  S1: Mhm. Acknowledging the importance of that issue. We might just
• 4:25
  S1: shift on to normal domestic politics. Treasurer, inflation is in
• 4:31
  S1: a place nobody expected earlier this year. Rates could soon
• 4:34
  S1: rise to an 18 year high. You were just with
• 4:37
  S1: IMF and G20 leaders in Asia, all worried about Trump's
• 4:41
  S1: ongoing war and the exacerbating effect that's having on inflation
• 4:44
  S1: and the challenge that's creating for the budget. You said
• 4:47
  S1: last week to us that, you know, the government is
• 4:49
  S1: under severe political pressure. Do you have a pathway out
• 4:52
  S1: of this moment?
• 4:53
  S2: Well, first of all, to pick up a couple of
• 4:55
  S2: those important points that you made. I mean, in all
• 4:58
  S2: of the engagements I've been doing in in Asia the
• 5:02
  S2: last few weeks, I mean, it's really clear that there
• 5:05
  S2: is a lot of inflationary pressure in the global economy,
• 5:09
  S2: and we're seeing that in our own economy as well.
• 5:11
  S2: Obviously made worse by the war in the Middle East,
• 5:14
  S2: which has dragged out for much longer than anyone was
• 5:18
  S2: anticipating and kind of exacerbating some of our own domestic
• 5:22
  S2: challenges around inflation and productivity and the like. So first
• 5:25
  S2: of all, to, uh, to acknowledge that, um, in terms
• 5:30
  S2: of the way out of this, um, the, the best
• 5:34
  S2: response to the complex combination of conditions that we are
• 5:38
  S2: confronting right now is to continue to manage the budget
• 5:40
  S2: in a responsible way. And you'll see in the mid-year
• 5:43
  S2: budget update that that will be the ninth consecutive budget
• 5:46
  S2: update from this government that will have, uh, savings in it.
• 5:51
  S2: So that's part of it. Uh, we've got the cost
• 5:53
  S2: of living help rolling out by our tax cuts and
• 5:55
  S2: bulk billing help and cheaper medicines and the like. That's
• 5:58
  S2: an important part of it as well. And if you
• 6:01
  S2: look at the forecast from the reserve Bank and the Treasury, uh,
• 6:04
  S2: they expect that this time next year will have inflation
• 6:08
  S2: back in the band. But there's more than the usual
• 6:10
  S2: amount of uncertainty about all of that, as you know,
• 6:12
  S2: and as Shane certainly knows, covering this closely as well. Uh, so, uh,
• 6:17
  S2: our job is to, uh, roll out the economic plan
• 6:21
  S2: that we outlined in the budget, uh, fuel security, cost
• 6:24
  S2: of living help productivity package, the tax reform package, and
• 6:27
  S2: also budget repair, uh, acknowledging that these are really difficult
• 6:32
  S2: circumstances in the around the world. And they're playing out, uh,
• 6:35
  S2: for people in our country too.
• 6:37
  S3: But just touching on that, the oil spike, I think today,
• 6:40
  S3: Brent crude hit 110 a barrel. That is such an
• 6:44
  S3: inflationary impact. But government spending as a share of the economy,
• 6:49
  S3: the budget, even just the just completed one spending was
• 6:52
  S3: back at the same level. It was when your beloved
• 6:56
  S3: Brisbane Broncos before they started playing in the National Rugby League.
• 7:01
  S3: So you've talked about savings, but you can't continue with
• 7:05
  S3: spending it around almost 27% of the economy, can you?
• 7:09
  S2: Well, first of all, we haven't just talked about savings. Um,
• 7:11
  S2: eight consecutive budget updates with savings in there, a record
• 7:15
  S2: amount of savings in the last budget. You would know
• 7:18
  S2: that the last budget of our predecessors didn't have any
• 7:20
  S2: savings in it. We delivered eight savings packages in a row.
• 7:24
  S2: And there'll be a ninth, uh, towards the end of
• 7:26
  S2: last year. Uh, that's one of the reasons why the
• 7:29
  S2: budget's in better condition now than it was expected to be, uh,
• 7:33
  S2: a few years ago. So. So that's the first thing. Uh,
• 7:37
  S2: in terms of spending as a share of the economy, again,
• 7:39
  S2: you know, that's come down substantially from that Covid peak.
• 7:42
  S2: There are good reasons for that. There's also a lot
• 7:45
  S2: of pressure on the budget, whether it's pressure that comes
• 7:48
  S2: from the care economy and aging, other kinds of pressures.
• 7:52
  S2: I think it's, uh, understood that, uh, there is upward
• 7:57
  S2: pressure on the budget. That's why we're making room for
• 7:59
  S2: it with these savings packages, including that record effort, uh, in,
• 8:03
  S2: in May this year. Uh, but when it comes to
• 8:06
  S2: the interaction of, of government spending and inflation, um, I
• 8:11
  S2: think as, as you would know, Shane, uh, if you
• 8:13
  S2: look at the comparison between, uh, private demand growth and
• 8:17
  S2: public demand growth, you look at the last full year
• 8:19
  S2: of that, uh, private demand growth has tripled compared to
• 8:23
  S2: the year before in the last full year, while public
• 8:26
  S2: demand growth has halved. And what that tells us is
• 8:30
  S2: that there are other factors at play here. Uh, you're
• 8:33
  S2: right to acknowledge the role of much higher global oil prices,
• 8:36
  S2: 110 bucks a barrel this week, uh, over 100 bucks
• 8:40
  S2: really since, uh, the re-escalation in September. And so that
• 8:45
  S2: is a big driver of inflation. We will see that
• 8:48
  S2: in the inflation figures which come out on Wednesday, which
• 8:51
  S2: you'll be, uh, hitting the refresh on your keyboard from
• 8:54
  S2: 1128 or 29, like the rest of us to see
• 8:57
  S2: what that number says. And, and obviously, fuel prices will
• 9:00
  S2: be a big part of that when it comes to
• 9:02
  S2: government spending. We know that we've got a responsible role
• 9:05
  S2: to play there. We take those responsibilities very seriously. Uh,
• 9:09
  S2: but the fact that private demand growth has escalated while
• 9:12
  S2: public demand growth has come off substantially compared to the
• 9:16
  S2: year before, I think that tells us there are other
• 9:18
  S2: factors at play.
• 9:19
  S3: But do you think government spending as a share of
• 9:21
  S3: the economy like it is higher than it was pre Covid? Yes,
• 9:24
  S3: it's come down, but that was a 1 in 100
• 9:27
  S3: year pandemic. Do you think government spending as a share
• 9:31
  S3: of the economy is just going to be higher than
• 9:34
  S3: it was pre Covid?
• 9:36
  S2: Well, first of all, I think it is a relevant comparison, uh,
• 9:39
  S2: to the peak a few years ago because it still
• 9:42
  S2: requires effort, uh, to get that spending as a share
• 9:46
  S2: of the economy down. Um, you know, people will have
• 9:50
  S2: different views about what the optimal level is. Uh, from
• 9:54
  S2: our point of view, it needs to recognize, you know,
• 9:57
  S2: some of these pressures in the care economy and elsewhere,
• 9:59
  S2: defense spending, uh, and the like, uh, we have been
• 10:03
  S2: able to make, I think, a substantial difference to our budgets,
• 10:07
  S2: you know, speaking with my, with our peers and partners
• 10:09
  S2: around Asia the last few weeks, you know, the fact
• 10:12
  S2: that we've delivered a couple of surpluses and got our
• 10:14
  S2: deficits much smaller, the fact that we've got that debt
• 10:17
  S2: trajectory down, the fact that we've been finding savings and
• 10:20
  S2: banking upward revisions to revenue, that's not especially common, uh,
• 10:24
  S2: in economies like ours around the world. The fact that
• 10:28
  S2: our debt as a share of GDP is a sliver
• 10:30
  S2: of what we see in comparable economies. Um, and so
• 10:35
  S2: I understand your question. Uh, I'm not prepared to put
• 10:38
  S2: a specific number on the optimal, uh, spending as a
• 10:42
  S2: share of GDP. But I do recognize that we've got
• 10:45
  S2: a there's a role for us in making sure our
• 10:48
  S2: budgets are responsible as possible. And we've embraced that. Uh,
• 10:51
  S2: eight consecutive times with savings packages and a ninth on
• 10:54
  S2: the way.
• 10:55
  S1: Just on your comparisons to the emergency spending during the pandemic, treasurer,
• 10:59
  S1: there's been a growing line of criticism from economists, quite
• 11:03
  S1: fervent ones like Richard Holden, but also commentators in the
• 11:06
  S1: press gallery making the point that it's four years ago,
• 11:10
  S1: that was an emergency. A lot has changed. There was
• 11:13
  S1: a huge revenue uptick from the Ukraine war and lower
• 11:15
  S1: unemployment and better tax receipts since then. Do you accept
• 11:19
  S1: that that argument is wearing thin, and that part of
• 11:22
  S1: the criticism towards the government is stemming from this consistent
• 11:25
  S1: comparison with a point which many observers have viewed as
• 11:29
  S1: not comparable to the current moment?
• 11:31
  S2: Well, it's more than four percentage points lower than during
• 11:34
  S2: that time. And so we're not making an argument that
• 11:36
  S2: spending as a share of GDP should be the same
• 11:39
  S2: as it was. uh, in the depths of Covid. Uh,
• 11:43
  S2: but it's not an irrelevant comparison either. Uh, when it
• 11:47
  S2: comes to the views of, of commentators, including, uh, those
• 11:51
  S2: who work in the same hallway as you guys or,
• 11:53
  S2: or further afield, you know, it's not unusual for governments
• 11:57
  S2: of either political persuasion to get a lot of free
• 12:00
  S2: advice to try and be respectful about that. There are
• 12:03
  S2: a range of views. Uh, some commentators think that we
• 12:06
  S2: should be investing more in certain areas, and some think
• 12:08
  S2: that we should be cutting spending dramatically. Uh, the government's approach. Uh,
• 12:14
  S2: the approach that I'm responsible for is to find savings
• 12:17
  S2: where we can. Working closely with Katy Gallagher, more than
• 12:19
  S2: $60 billion of savings in the last budget, precisely $0
• 12:23
  S2: of savings in Josh Frydenberg's last budget. And I think
• 12:26
  S2: that is evidence that we take this challenge very seriously
• 12:30
  S2: when it comes to making the budget more sustainable. Look
• 12:32
  S2: at the the effort that Mark Butler and Jenny McAllister
• 12:36
  S2: and Katy Gallagher and I and the Prime Minister have
• 12:38
  S2: put into NDIS reform, for example. Uh, this is, uh, this.
• 12:42
  S2: All of this represents a very serious effort, uh, to
• 12:45
  S2: make sure that spending in the budget is sustainable. Of course,
• 12:48
  S2: there'll be commentators who say that we should cut harder
• 12:52
  S2: and faster. Uh, of course, our political opponents will say
• 12:55
  S2: that at the same time as they've come up with
• 12:57
  S2: more than $110 billion of unfunded commitments. And so, uh,
• 13:02
  S2: for people who think we should cut much harder, they
• 13:04
  S2: should nominate, I think, uh, those areas that should be
• 13:06
  S2: cut more substantially. But we have been finding, uh, savings
• 13:10
  S2: much more, many more savings than our predecessors. And that's
• 13:13
  S2: because we take the hard yards of budget sustainability. Sustainability seriously.
• 13:19
  S3: The other side of the budget is always is revenue
• 13:22
  S3: and tax. And even though you've got a tax cut
• 13:25
  S3: this financial year and there's another one coming July 1st,
• 13:28
  S3: tax is a share of the economy is back at
• 13:31
  S3: its highest level since Costello was treasurer. And you are
• 13:34
  S3: about to. Your forecast is for a deficit of 31.5 bil.
• 13:39
  S3: If I'm an ordinary member of the community of Logan,
• 13:42
  S3: I'm going. Hold on. You're saying yep, there are spending pressures.
• 13:46
  S3: We're delivering tax cuts and I'm running a budget deficit
• 13:49
  S3: that is 31.5 bil. Can't you understand? Like if I'm
• 13:53
  S3: that ordinary person saying the budget priorities are out of kilter?
• 13:57
  S2: Well, I think you've touched on a couple of essential
• 14:00
  S2: elements in your in your question. First of all, we're
• 14:03
  S2: cutting taxes. Secondly, uh, taxes as a share of the
• 14:06
  S2: economy is still a little bit lower than it was
• 14:08
  S2: in the Howard-costello years. I understand the point that you're
• 14:11
  S2: making about it getting closer. Uh, the tax to GDP
• 14:16
  S2: came up a bit in the final budget outcome really
• 14:18
  S2: for two reasons. One, the labor market held up a
• 14:22
  S2: bit better than expected, I think, from memory. And so
• 14:25
  S2: that means more people are earning, more and more people
• 14:28
  S2: are working and earning more. And the second thing, uh, which, uh,
• 14:32
  S2: might not be the central part of the discussion I
• 14:34
  S2: had with my constituents in and around here in Logan City.
• 14:38
  S2: But you would know, Shane, certainly, that one of the
• 14:41
  S2: reasons why it came up a little bit is because
• 14:44
  S2: nominal GDP came in lower. Uh, and that's part of
• 14:48
  S2: the calculation. When you're calculating tax to GDP, nominal GDP
• 14:52
  S2: coming in lower has has implications for the calculation. That's
• 14:56
  S2: you know we can let's not go down that particular
• 14:59
  S2: rabbit hole Shane. But that that's part of the reason
• 15:01
  S2: why I ticked up a bit. We've been up.
• 15:03
  S3: But are you comfortable with the deficit of 31 bill.
• 15:07
  S2: Oh what. I would like to get it down lower.
• 15:09
  S2: Of course I would. Uh, and as evidence of that,
• 15:12
  S2: have a look at the, you know, the two surpluses
• 15:15
  S2: that we delivered on the first treasurer in a decade
• 15:18
  S2: and a half to deliver a surplus. And we delivered
• 15:20
  S2: two um, we got the two subsequent deficits down quite
• 15:25
  S2: substantially as well. And so we're always looking for ways, uh,
• 15:29
  S2: to get those deficits down. Uh, they were huge. Uh,
• 15:33
  S2: when we came to office, we turned two of them around.
• 15:35
  S2: We got two of them much smaller. And so that
• 15:38
  S2: hard work, the hard yards of fiscal sustainability, uh, is ongoing.
• 15:42
  S2: All of that work is ongoing, and we're engaged in
• 15:45
  S2: a bit of that right now when it comes to
• 15:46
  S2: the mid-year update, which is due before long.
• 15:49
  S1: You've started to emphasize that savings package, treasurer, particularly since
• 15:52
  S1: the last rate rise and the final budget outcome in
• 15:56
  S1: recent weeks, some commentators have noted that a lot of
• 15:59
  S1: the savings so far have been around reduction in consultants,
• 16:02
  S1: as well as reining in blowouts in existing programs. One
• 16:06
  S1: of the first actual savings of a genuine cut was
• 16:09
  S1: the private health insurance rebate, which the Greens and the
• 16:12
  S1: coalition have teamed up to block. And I acknowledge that's
• 16:14
  S1: not your doing. That was quite a cynical move by them.
• 16:16
  S1: But in the budget update, the Myefo sorry, are we
• 16:19
  S1: likely to see some new actual cuts to programs, not
• 16:23
  S1: just reining in blowouts? Can you commit to that?
• 16:25
  S2: Yeah, I mean, first of all, um, I haven't just
• 16:28
  S2: been emphasising that savings package in the last few weeks.
• 16:31
  S2: We emphasized it in the budget, one of the five
• 16:34
  S2: key ingredients in that budget was budget repair and a
• 16:36
  S2: bigger than usual effort on savings. In terms of the
• 16:39
  S2: mid-year update, the Myefo, um, we are still doing that
• 16:44
  S2: work with ministers right now, as I think you probably
• 16:47
  S2: understand why I wouldn't want to kind of pre-empt that. Um,
• 16:51
  S2: because that works ongoing that that particular piece of homework
• 16:54
  S2: is not due for a few weeks yet. Uh, and
• 16:56
  S2: so we'll continue to work with ministers on that. And
• 16:59
  S2: on your point about the parliament, I think that just
• 17:01
  S2: reflects the reality of our politics. No one political entity
• 17:05
  S2: has the numbers on their own in the Senate. So
• 17:07
  S2: we play the cards we're dealt and we do the
• 17:10
  S2: best that we can. Uh, but there'll be additional savings
• 17:13
  S2: in the mid-year update. We're working on them right now. Uh,
• 17:17
  S2: and when they are finished and packaged up, uh, then
• 17:20
  S2: I'm happy to, uh, to run through them at the
• 17:23
  S2: appropriate time.
• 17:25
  S1: You've been dangling the prospect of larger tax cuts, treasurer,
• 17:28
  S1: we know you have delivered several different tax cuts in
• 17:31
  S1: different ways, as you are want to point out. Do
• 17:35
  S1: you think that the next budget in May, I know
• 17:37
  S1: of a ways off is a time when you could
• 17:40
  S1: deliver those larger tax cuts, or is that more a
• 17:42
  S1: question for the pre-election budget, potentially in 28?
• 17:46
  S2: I think it remains to be seen. I mean, obviously,
• 17:48
  S2: it depends very heavily on the fiscal situation. Uh, and, um,
• 17:55
  S2: you know, we're working on the mid-year update right now.
• 17:57
  S2: We'll start working on the budget kind of the day
• 17:59
  S2: after we release that, uh, most likely in December. Um,
• 18:04
  S2: and so we're not anywhere near kind of determining that,
• 18:07
  S2: that yet. Uh, but I mean, the people, people engaged
• 18:12
  S2: enough to, to tune into this podcast, I think would appreciate, uh,
• 18:17
  S2: that from budget to budget, we, we, we weigh up
• 18:19
  S2: the pressures that people are under. Key indicators in the economy,
• 18:22
  S2: the fiscal pressures on the budget. And we do the
• 18:26
  S2: best we can. And so I don't think it's clear yet. Uh,
• 18:29
  S2: when the next round of tax cuts, uh, would be responsible. Um,
• 18:34
  S2: but I'm actually really grateful, Paul, for you mentioning, uh, that,
• 18:39
  S2: you know, we, we have cut taxes a bunch of times.
• 18:41
  S2: And the reason this comes up and the reason why,
• 18:44
  S2: you know, I've made it clear that, of course we
• 18:47
  S2: would like to cut income taxes more when the budget
• 18:50
  S2: can afford can afford that and carry that and sustain.
• 18:53
  S2: That is because and it goes to Shane's earlier question
• 18:55
  S2: about tax to GDP. You look at the intergenerational report,
• 18:59
  S2: you look at the final budget outcome, you look at
• 19:01
  S2: all of our budgets. Uh, and it's clear that governments
• 19:05
  S2: of either political persuasion will return bracket creep in one
• 19:08
  S2: form or another, uh, when they can afford to do that. Uh,
• 19:11
  S2: and so when I talk about this, I try and
• 19:14
  S2: be upfront with people and say, of course we will
• 19:17
  S2: look to cut taxes again. Uh, but it's not clear yet, uh,
• 19:20
  S2: what the best way to go about that would be,
• 19:22
  S2: or the most appropriate time to do that would be
• 19:24
  S2: given the really substantial fiscal pressures that we're under right
• 19:27
  S2: now as well.
• 19:28
  S3: Apart from the fiscal situation, there's the economic situation, the like.
• 19:33
  S3: We're talking before the RBA's November meeting, markets say 5050
• 19:37
  S3: for a rate increase. But this week, both the chief
• 19:40
  S3: economists of the Commonwealth Bank and British Air said the
• 19:44
  S3: RBA is at risk of pushing the economy into recession
• 19:48
  S3: or over the edge was the term that Luke Yemen
• 19:50
  S3: from the CBA referenced. Do you share those concerns?
• 19:54
  S2: Oh, look, I don't want to wander into any territory
• 19:56
  S2: that could be misconstrued as giving free advice to the
• 20:00
  S2: independent reserve Bank. Uh, you know, Shane, you're probably the
• 20:04
  S2: the authority on the reserve Bank in the press gallery.
• 20:07
  S2: And you know that there are good reasons why treasurers
• 20:09
  S2: don't do that. So, so, um, you know, putting that
• 20:13
  S2: to one side, I think more broadly, the job for
• 20:16
  S2: all of us, uh, certainly the, the job, uh, the
• 20:20
  S2: responsibility that I have is to, is to strike a
• 20:22
  S2: series of balances here recognizing, that the war in the
• 20:26
  S2: Middle East is pushing up inflation, but it's also weighing
• 20:28
  S2: on growth. And we did see in a in a
• 20:32
  S2: labor market, which is still by historical standards and in
• 20:35
  S2: average terms, uh, pretty resilient and pretty robust. We did
• 20:39
  S2: see a tick up in unemployment in the most recent figures.
• 20:42
  S2: We have seen a softening in the labor market. And
• 20:46
  S2: so whether it's the independent reserve Bank weighing up all
• 20:48
  S2: of those things, or the government weighing up all of
• 20:50
  S2: those things in the lead up to Myefo, uh, obviously
• 20:53
  S2: we've all got balances to strike. Uh, but I'm not
• 20:56
  S2: going to give free advice to, to the reserve Bank.
• 20:59
  S2: There's good reasons not to do that. They'll weigh all
• 21:02
  S2: of this up when they, uh, meet early in November.
• 21:06
  S1: You were once treasurer, and I think it was in
• 21:09
  S1: the first term, heavily criticised for saying that the RBA was, quote,
• 21:11
  S1: smashing the economy. That tapped into, I think, a growing
• 21:14
  S1: sense in the caucus. Some economists on the left, groups
• 21:18
  S1: like the Australia Institute, who say that the RBA's misreading
• 21:21
  S1: the inflation problem effectively, that the source of the inflation
• 21:24
  S1: problem is not the consumer base of Australian people going
• 21:27
  S1: out and buying too much, but that it's problems outside
• 21:30
  S1: the RBA's control. And so they're using an arbitrary blunt method. Now,
• 21:33
  S1: that view is heavily contested by most Orthodox economists, and
• 21:36
  S1: most of your colleagues are not really willing to say
• 21:38
  S1: that publicly. What's your view on that, on that debate
• 21:41
  S1: about the adequacy of monetary policy?
• 21:44
  S2: Well, again, I want to be careful here because I
• 21:47
  S2: don't want to be seen to be kind of pre-empting
• 21:50
  S2: or positioning the discussions and deliberations that they'll have around
• 21:54
  S2: the table in, uh, a couple of weeks time. Um,
• 21:58
  S2: you know, when I made those comments, uh, a while
• 22:00
  S2: ago now, I, you know, for me, it was a
• 22:04
  S2: sort of a self-evident, uh, piece of economic analysis, but
• 22:07
  S2: I can understand why it got covered the way that
• 22:11
  S2: it did. And so that's another reminder, uh, that we
• 22:14
  S2: need to be treasurers, need to be really careful talking
• 22:16
  S2: about monetary policy. Uh, the, the Reserve Bank's got its
• 22:21
  S2: job to do. Uh, it will do that free of
• 22:24
  S2: interference from me. I've got my own job to do. Uh,
• 22:27
  S2: managing the budget responsibly, rolling out this cost of living
• 22:31
  S2: relief via the tax system and in other ways. Uh,
• 22:34
  S2: those are my responsibilities, and I'm focused on them. The
• 22:36
  S2: reserve Bank and the government have got the same objectives here,
• 22:40
  S2: you know, uh, price stability and full employment. Uh, and,
• 22:45
  S2: but we've got different responsibilities. And so I stay out
• 22:48
  S2: of their way when it comes to these discussions that
• 22:51
  S2: they'll be having, uh, early in November.
• 22:54
  S1: Do you acknowledge, treasurer, that at points this government has
• 22:57
  S1: made the Reserve Bank's job harder? Now, I acknowledge all
• 23:00
  S1: those savings. The opposition gives you no credit for them.
• 23:03
  S1: But if you listen to most economists, they would say
• 23:06
  S1: that some of the subsidies you've done, some of the
• 23:07
  S1: non means tested welfare supports you've done have made the
• 23:11
  S1: RBA's job objectively harder. Do you acknowledge that or is
• 23:14
  S1: that not something you concede?
• 23:15
  S2: I wouldn't I wouldn't sign up to that line of argument.
• 23:18
  S2: Obviously I read it from time to time. Um, but
• 23:22
  S2: we've been really careful. Uh, we've got the budget in
• 23:25
  S2: substantially better condition than it was when we, when we
• 23:28
  S2: came to office. Uh, we've made sure that when we
• 23:31
  S2: roll out cost of living help, we've done it in
• 23:33
  S2: the most responsible way that we can. We found savings
• 23:36
  S2: and banked upward revisions to revenue and all of these
• 23:38
  S2: things that the three of us have been talking about today.
• 23:42
  S2: And that's because, you know, we know that budgets aren't
• 23:45
  S2: the primary driver of prices in our economy right now.
• 23:48
  S2: Of course they're not. But we can and are, uh,
• 23:51
  S2: playing a helpful role in the fight against inflation.
• 23:54
  S3: Just not to make this a be a love in
• 23:56
  S3: or attack point, but Andrew Hauser, their deputy governor, an Englishman, uh,
• 24:01
  S3: he this week, he got asked about productivity.
• 24:04
  S1: Why is it relevant that he's an Englishman?
• 24:05
  S3: Well, I will get to that very point because he
• 24:07
  S3: said there's all these complaints saying that people say the
• 24:11
  S3: government must solve productivity. He says that is a very
• 24:15
  S3: Australian approach to take that the government is the arbiter,
• 24:19
  S3: the solver of productivity. And he made a pretty compelling point,
• 24:22
  S3: saying there'd been a global slowdown in productivity over the
• 24:25
  S3: last ten, 15 years. And it's been tied to a
• 24:28
  S3: drop off in business investment. And does he have a point?
• 24:33
  S3: He said business itself has to embrace productivity. This is
• 24:37
  S3: not just a government will come in and solve the situation.
• 24:41
  S2: Well, of course that's the case. I mean, if you
• 24:44
  S2: go all the way back, I think to my first
• 24:46
  S2: speech in the Parliament, you know, I made it clear
• 24:48
  S2: that how we perform as the economy is partly a
• 24:51
  S2: function of economic policy, but also the decisions taken by
• 24:55
  S2: business about how they adapt and adopt technology and how
• 24:58
  S2: they invest in their human capital and their capital more broadly.
• 25:03
  S2: And so, of course, everybody's got a role to play
• 25:06
  S2: in turning around a couple of decades of very ordinary
• 25:09
  S2: productivity growth, performance. It is a global phenomenon. Uh, and
• 25:14
  S2: it has been a historical reality in Australia for too long.
• 25:17
  S2: And that's why, you know, recognising the key role of
• 25:20
  S2: the private sector. You know, governments again have got a
• 25:23
  S2: meaningful and a helpful role to play. I, I don't
• 25:25
  S2: think you could point to a budget in the last
• 25:27
  S2: couple of decades which hasn't had a broader or a
• 25:30
  S2: more serious, uh, crack at the productivity challenge in our
• 25:34
  S2: economy than the one that Katie and I released in May.
• 25:36
  S2: And that's deliberate. Uh, and in order to turn around productivity,
• 25:40
  S2: it will take some time. Uh, it means operating on
• 25:43
  S2: a number of fronts simultaneously. You know, approval times, foreign investment,
• 25:47
  S2: human capital, national competition policy, uh, tariff reform, uh, artificial intelligence.
• 25:53
  S2: All of these are the essential elements of a more
• 25:56
  S2: productive economy. And we're working away on all of these
• 25:59
  S2: fronts simultaneously, even this week. You know, a bigger effort
• 26:04
  S2: this week on, uh, in the financial sector, uh, trying
• 26:08
  S2: to make sure that regulation better reflects, uh, our aspirations
• 26:12
  S2: for growth and productivity in our economy. So we've all
• 26:15
  S2: got a role to play. The government is playing a role.
• 26:18
  S2: We work very closely with business in this regard, and
• 26:21
  S2: businesses have got a very substantial role to play as well,
• 26:25
  S2: as deputy governor, Houser pointed out.
• 26:27
  S1: Might just end on a few questions on the budget
• 26:29
  S1: and the politics of the moment. Treasurer, several of the
• 26:32
  S1: budget measures, particularly the negative gearing change, have been widely
• 26:35
  S1: supported by credible economists and other experts and think tanks
• 26:39
  S1: for years. In combination, though, all the tax changes at
• 26:43
  S1: the time they were made, was it the right time
• 26:46
  S1: to proceed with a largely redistributive, big taxing budget at
• 26:50
  S1: a time when inflation was just starting to tick up?
• 26:53
  S1: Important to note that we got a rate rise very
• 26:54
  S1: early this year before the war started. Uh, was it
• 26:58
  S1: the right time to plow forward with such an ambitious, big,
• 27:01
  S1: taxing budget at a time when the economy was both slowing,
• 27:05
  S1: the inflation pressure was becoming more severe. And now we
• 27:09
  S1: know the speed limit on the economy was tightening in
• 27:12
  S1: a way we didn't expect. Was it the right timing?
• 27:14
  S2: It was a heap of important elements to your question, Paul.
• 27:17
  S2: But first of all, I mean, on your characterization of taxing,
• 27:20
  S2: don't forget, uh, that over the four years of the budget,
• 27:24
  S2: we're returning, uh, to the proceeds from the tax changes
• 27:29
  S2: to workers and businesses is a $4 billion tax cut
• 27:33
  S2: package for businesses and start ups. There's the income tax
• 27:36
  S2: cuts that we're talking about. And so revenue neutral over
• 27:40
  S2: the four years of the budget. That's the first point.
• 27:42
  S2: Just in terms of your characterization. Now on your broader points.
• 27:46
  S1: Revenue, um, rises in the.
• 27:48
  S2: But over the, over the four years of the budget,
• 27:50
  S2: we're returning the proceeds of the, of the tax reforms
• 27:53
  S2: deliberately in the form of tax cuts for workers and
• 27:55
  S2: tax cuts for businesses. I just didn't want to skate
• 27:58
  S2: past your characterization, Paul, in case people thought that I
• 28:01
  S2: was that I was signing up to it. But on
• 28:03
  S2: your on your bigger point, your broader point around timing,
• 28:06
  S2: I think if you wait for, uh, calm in the world, uh,
• 28:11
  S2: you'll be waiting forever. You know, the relative calm of
• 28:14
  S2: the post Cold war period has been replaced by chaos.
• 28:20
  S2: And these rolling economic shocks mean that we are in
• 28:24
  S2: a very substantial period of global economic uncertainty, volatility, risk
• 28:29
  S2: and flux. And so waiting for that to end, I think,
• 28:33
  S2: would mean waiting forever. And it means that some of
• 28:35
  S2: these challenges will become harder to deal with, including the
• 28:38
  S2: fact that too many people, especially young people, have been
• 28:41
  S2: locked out of the housing market for too long. So.
• 28:43
  S2: So I don't think it was an option to wait
• 28:46
  S2: for calm because that calm might never come. Uh, in
• 28:49
  S2: terms of the, the domestic economic conditions, I mean, I
• 28:52
  S2: see the budget very much as responding to, uh, the
• 28:56
  S2: heightened pressures, uh, inflation, productivity, and global economic uncertainty. The
• 29:00
  S2: five elements of the budget, you know, energy security, cost
• 29:04
  S2: of living, tax reform, productivity reform, and budget repair. Uh,
• 29:08
  S2: they are arguably the five best things that you could
• 29:11
  S2: be doing in the context of this volatility in the
• 29:15
  S2: global and domestic economies. And so, um, you know, people
• 29:20
  S2: will make the case that now is not the right time,
• 29:23
  S2: I think, in a lot of instances, to be fair, uh,
• 29:26
  S2: those are people who would argue that it's never the
• 29:28
  S2: right time. Uh, there are a lot of people who
• 29:31
  S2: disguise their, uh, their arguments in all kinds of ways.
• 29:35
  S2: Some people in our community would like everything in the
• 29:38
  S2: tax system and the housing market to stay exactly as
• 29:40
  S2: it is, and they'll mount all kinds of arguments against, uh,
• 29:44
  S2: changing it. For us, the least surprising thing has been
• 29:48
  S2: that these ambitious tax reforms have been contested and contentious.
• 29:51
  S2: Of course they are. They always are. When you're reforming
• 29:54
  S2: the economy and especially tax the tax system, you get
• 29:57
  S2: all kinds of feedback. But I don't think that that's
• 30:00
  S2: a reason to delay, uh, these really important reforms.
• 30:04
  S1: The Prime Minister was very strong in the lead up
• 30:05
  S1: to the budget. I can't recall if you made similar points,
• 30:08
  S1: but that a big, uh, kind of activist move was
• 30:12
  S1: needed to show, particularly voters drifting off into the hands
• 30:16
  S1: of populists, that the government was working for them. The
• 30:19
  S1: primary voters just drifted southwards since the budget as it
• 30:22
  S1: was before the budget, really, we'd know no change in
• 30:25
  S1: the downward shift. Uh, is there a pivot required in
• 30:30
  S1: the way the government talks about the economy? Do you
• 30:32
  S1: give any weight to these calls to have a more
• 30:34
  S1: pro-growth agenda? Do you need to do something different or,
• 30:38
  S1: you know, I don't I don't really understand the argument
• 30:40
  S1: that if this was meant to stem the bleed into
• 30:42
  S1: one nation, the primary votes dropped, that this has been
• 30:45
  S1: a success politically.
• 30:46
  S2: Well, we see the budget in economic terms and the
• 30:48
  S2: reform agenda in economic terms. I know there's political commentary
• 30:52
  S2: around that. And when people are under pressure, of course,
• 30:54
  S2: you see that reflected in politics and in opinion polls. Again,
• 30:59
  S2: that's that's not, uh, it's not especially surprising, nor is
• 31:04
  S2: it irrelevant to us. Of course. Uh, of course we
• 31:07
  S2: notice that um, in terms of, um, the, the, the
• 31:12
  S2: risk that people feel disconnected and disregarded in our economy, uh,
• 31:17
  S2: that is a good reason to change the status quo.
• 31:19
  S2: The status quo is not working for people, uh, in
• 31:23
  S2: the housing market, in the tax system and in other ways.
• 31:26
  S2: And so, you know, when you're, when you're, when you're
• 31:29
  S2: a decision maker in Australian politics, you've got really two
• 31:33
  S2: options when you see all of this discontent. One is
• 31:36
  S2: to just pick at it and try and prey on it.
• 31:38
  S2: That's what the Liberals, nationals and One Nations, One Nation does,
• 31:42
  S2: or to try and address it. And that's what we're doing. Uh,
• 31:45
  S2: and you know, there is there are the legitimate underlying
• 31:51
  S2: sources of discontent. I think the housing market is, is
• 31:54
  S2: really probably the defining issue when it comes to intergenerational
• 31:57
  S2: unfairness in our economy and in our country. And so we,
• 32:01
  S2: we took hard decisions to deal with that, not because
• 32:03
  S2: we expected that to play out at immediately and politically,
• 32:07
  S2: and to pay off in opinion polls and in other ways,
• 32:09
  S2: but because it's the right thing to do. And I
• 32:11
  S2: think over time that will become clearer to people now
• 32:15
  S2: on the growth agenda. Uh, it hasn't we haven't, uh,
• 32:19
  S2: we haven't come to this realization in the couple of weeks,
• 32:21
  S2: last couple of weeks or the last couple of months.
• 32:24
  S2: Have a look at the budget, the productivity package in
• 32:26
  S2: the budget, bigger, broader effort on productivity than what you
• 32:29
  S2: would have seen in any budget in the last couple
• 32:31
  S2: of decades. And so we do have a very substantial
• 32:34
  S2: growth agenda, uh, across all of that productivity package and
• 32:39
  S2: elements of the tax reform plan as well. Uh, this
• 32:43
  S2: is not a government which is solely focused on distribution.
• 32:47
  S2: We're focused on growth as well and making sure that
• 32:50
  S2: more people, uh, can have more opportunities, uh, in a
• 32:55
  S2: more productive, more competitive, more dynamic growing economy. That's our mission.
• 33:00
  S3: This is a left field just to finish up, uh, Treasure,
• 33:03
  S3: but the Western Sydney airport will open and there's more
• 33:07
  S3: than $5 billion of federal taxpayers money in that. It's
• 33:10
  S3: the first time that the country has actually had competing airports,
• 33:14
  S3: major airports in the same capital city. I'm just wondering,
• 33:18
  S3: you've talked about productivity. You've talked about competition, whether the
• 33:21
  S3: fact that Western Sydney Airport's opening will put downward pressure
• 33:24
  S3: on airfares into Sydney in particular, or provide an outlet
• 33:29
  S3: for some more competition to our Qantas slash Virgin duopoly
• 33:34
  S3: on the domestic market.
• 33:35
  S2: Well, I mean, it certainly means more competition in terms of, uh, gives, uh,
• 33:39
  S2: the good people of Sydney another option and obviously freight
• 33:42
  S2: options and all the rest of it as well. So
• 33:43
  S2: it can only be a good thing for competition and
• 33:46
  S2: for the economy more broadly. It's a really exciting development.
• 33:49
  S2: I mean, it's a long time coming. Uh, again, you know,
• 33:53
  S2: for a time, incredibly contentious and controversial. Uh, but I
• 33:59
  S2: see it as a really exciting development. Some of my
• 34:02
  S2: colleagues and counterparts in other parts of Asia raised it
• 34:04
  S2: with me. In the course of the last couple of weeks.
• 34:06
  S2: It's a really big deal. Uh, it's a really big deal.
• 34:10
  S2: It's a really great thing for, uh, the economy of
• 34:13
  S2: Western Sydney, which is massive and growing in very welcome ways.
• 34:17
  S2: And it will make a difference to the national economy
• 34:19
  S2: as well. Now, when it comes to the particular elements
• 34:22
  S2: around ticket prices and freight charges and all the rest
• 34:26
  S2: of it, uh, we'll see how that plays out. But
• 34:28
  S2: in aggregate, uh, in principle, a very good development for competition. Uh,
• 34:33
  S2: but more than that, a good development for, uh, that
• 34:37
  S2: really important part of our national economy.
• 34:39
  S1: I didn't know Shane was going to jump to airline
• 34:41
  S1: competition quite so, quite so aggressively.
• 34:44
  S2: He likes to surprise us both.
• 34:46
  S1: He does, he does. I'll just quick jump back. I
• 34:47
  S1: know you're tight for time treasurer, but if I could,
• 34:50
  S1: you know, I'm obsessed with the internals of the government.
• 34:52
  S1: I'm a bit of a freak like that, so I
• 34:53
  S1: might just quickly jump onto the politics again. Um, outside
• 34:57
  S1: of the policy critique, which we've gone through, um, in
• 35:00
  S1: quite a lot of detail here. Another part of the
• 35:01
  S1: debate around the economic narrative at the moment has been
• 35:04
  S1: around your internal style. Treasurer, you said in comments to
• 35:08
  S1: our newspaper last week, you made the point to your colleagues,
• 35:10
  S1: to the caucus, the very large caucus that you like
• 35:13
  S1: and respect your colleagues. I thought that was a striking comment.
• 35:17
  S1: There is a there is a view that the Prime
• 35:18
  S1: Minister's kind of factional master always trying to seek to,
• 35:22
  S1: you know, solidify his internal position, whereas you're more of
• 35:26
  S1: a lone wolf in the government. Explain to listeners and
• 35:30
  S1: to us, treasurer, what you meant by that comment. Why
• 35:32
  S1: did you feel you needed to tell your colleagues that
• 35:34
  S1: you like and respect them? And what is your internal
• 35:36
  S1: clout and position in the government in your mind?
• 35:39
  S2: Well, I mean, if you just take a step back
• 35:40
  S2: for a moment, when you when you contacted me as
• 35:43
  S2: as you did being a good professional journalist, when you
• 35:46
  S2: contacted me last week, uh, about that absolute stinker of
• 35:50
  S2: a piece that you wrote about me on Saturday. Um,
• 35:54
  S2: I tried to be really up front with you and,
• 35:56
  S2: and say that, you know, I acknowledge, that the government
• 36:00
  S2: is under pressure. I do genuinely take some responsibility for that.
• 36:04
  S2: I'm driving some really difficult reforms through the parliament. Uh,
• 36:09
  S2: and I know that that's playing out makes life tougher
• 36:13
  S2: for for some of my colleagues in particular. And I
• 36:15
  S2: do care about that. And I do care about them.
• 36:17
  S2: And I know you've picked up on this thing about
• 36:20
  S2: liking and respecting my colleagues. I mean, I do, um, and, uh,
• 36:25
  S2: if you're asking me about my kind of internal political
• 36:28
  S2: or factional management style, I think it is a fair
• 36:32
  S2: criticism of me to say that I spend, uh, a
• 36:36
  S2: lot of time locked in windowless rooms, working very hard
• 36:40
  S2: on some of these difficult economic challenges. You know, I'm
• 36:44
  S2: not a, um, you know, I, I, I should make
• 36:48
  S2: more time for my colleagues. I see a lot of them.
• 36:50
  S2: They come around and talk to me about the economy
• 36:52
  S2: all the time. I do as much as I can,
• 36:53
  S2: but if the message is that I need to do
• 36:55
  S2: more of that, then I take that message seriously. I
• 36:58
  S2: took your piece seriously and I took the feedback at
• 37:01
  S2: the core of your piece seriously as well. And I
• 37:04
  S2: have tried to operate, and I've known you for a
• 37:06
  S2: little while. Paul Shane's known me for a long time.
• 37:09
  S2: I have always tried to operate on the basis that
• 37:11
  S2: none of us is beyond criticism. Uh, of course we
• 37:15
  S2: can all do better. Of course we can. Uh, me included.
• 37:18
  S2: And so I tried to acknowledge that in the spirit
• 37:21
  S2: of humility, uh, responding to that, that piece that you ran, uh,
• 37:25
  S2: on the weekend about, about all of these, uh, uh,
• 37:29
  S2: about all of these questions.
• 37:30
  S1: Yeah. I did appreciate the frankness of the comments treasurer.
• 37:33
  S1: And that's why I found them striking, because you can
• 37:34
  S1: often get a quote from a minister that says absolutely nothing.
• 37:37
  S1: Your your comments said said something of substance, but they
• 37:41
  S1: intrigued me just on the Prime Minister's treasurer. I mean,
• 37:43
  S1: you're you you are the minister in charge of the
• 37:45
  S1: budget with Katy Gallagher, but you carry the can for
• 37:48
  S1: the government's whole economic agenda. And there are lots of
• 37:50
  S1: big spending pressures. You spend many billions on subsidies for
• 37:55
  S1: low paid workers, which is, of course, an important imperative.
• 37:59
  S1: There's billions going into the suburban rail loop, which some
• 38:01
  S1: of your ministerial colleagues do not believe is an important imperative,
• 38:04
  S1: but is something the Prime Minister cares about deeply. Do
• 38:07
  S1: you do you wish that your Prime Minister was in
• 38:11
  S1: the Hawke or Keating mould, and someone who took the
• 38:14
  S1: economic challenge to be at the absolute highest level of
• 38:18
  S1: his priority?
• 38:20
  S2: I think he does. I genuinely think he does. And,
• 38:25
  S2: you know, without talking out of school about cabinet meetings
• 38:28
  S2: or irks and the like. I mean, he's incredibly engaged, uh,
• 38:32
  S2: in the key economic challenges and circumstances that confront us. Uh,
• 38:38
  S2: and I see that as a very good thing. We actually,
• 38:41
  S2: you know, I see commentary from time to time, but
• 38:43
  S2: we actually work really closely together. He's very engaged in
• 38:46
  S2: ways that I welcome, uh, on some of these, uh,
• 38:49
  S2: some of these key questions. Um, and that's a good
• 38:52
  S2: thing for the government. And when it comes to treasuries.
• 38:55
  S2: Treasuries are lightning rods when the government is under pressure.
• 38:59
  S2: It's not unusual. Throughout the course of the modern history
• 39:03
  S2: of our country and our politics that, uh, that treasuries
• 39:07
  S2: are often lightning rods. I'm okay with that. Genuinely okay
• 39:10
  S2: with that. I understand when I signed up for this gig,
• 39:12
  S2: when I got sworn into this gig, uh, and I
• 39:15
  S2: genuinely take responsibility for some of the hard stuff that
• 39:19
  S2: we're pushing through the Parliament, which is being reflected in
• 39:22
  S2: politics and opinion polls. And as I said before, you know,
• 39:26
  S2: I know for, for colleagues, um, it puts pressure on
• 39:30
  S2: them when you're doing hard things in the Parliament. I
• 39:32
  S2: understand that, but I, I know that people think and
• 39:35
  S2: understand how important it is that we reform the housing market,
• 39:38
  S2: reform the tax system, not because it's easy, but because
• 39:41
  S2: it's the right thing to do.
• 39:42
  S1: You've said that you take your share of the blame
• 39:44
  S1: for the difficult political moment. Is the rest of that blame.
• 39:49
  S1: Can some of that be shared at home to a
• 39:51
  S1: prime minister who has lost quite a lot of his
• 39:54
  S1: skin in terms of approval ratings over the past year.
• 39:57
  S2: Well, I mean, obviously I'm not going to come at
• 39:59
  S2: it that way. I mean, the government's lost some paint
• 40:02
  S2: through the over the course of, uh, not just the
• 40:06
  S2: last six months or so, but, but, uh, over a
• 40:08
  S2: longer period than that, it's up to, it's up to
• 40:11
  S2: other ministers and the prime ministers, how they describe their
• 40:15
  S2: part in that. I mean, I, you know, I'm being
• 40:18
  S2: upfront and saying, uh, that when the government's under pressure
• 40:21
  S2: and partly because we're doing difficult things, there's a difficult
• 40:25
  S2: things in my portfolio. And so I think it's only right, uh,
• 40:28
  S2: and only fair that I put my hand up and
• 40:30
  S2: take responsibility for my share of that. The way that
• 40:33
  S2: other people describe their role in that and their responsibility
• 40:36
  S2: for that is up for them, up to them.
• 40:38
  S1: This has this has just been a bugbear of mine.
• 40:40
  S1: And it's not relevant to what we're talking about. But
• 40:41
  S1: it will be my final question, treasurer. Are you tempted
• 40:44
  S1: to take more credit for what's happening with house prices?
• 40:48
  S1: I've heard from some of your ministerial colleagues who just
• 40:50
  S1: say we should stop tiptoeing around this issue. As Shane's
• 40:53
  S1: reported repeatedly, polling does suggest that the majority of Australians
• 40:56
  S1: are comfortable with prices decreasing. Are you tempted to just
• 40:59
  S1: say we've made tax changes that are contributing in part
• 41:02
  S1: to that drop off? That correction. And we we own
• 41:05
  S1: that and it's good.
• 41:06
  S2: Well, I think we've said part of that. I mean,
• 41:08
  S2: we've acknowledged that there's a few things going on in
• 41:10
  S2: the housing market. The tax changes are one of a
• 41:13
  S2: number of influences, including interest rate changes and broader macro conditions.
• 41:20
  S2: And so I think it would be dishonest to say
• 41:25
  S2: that the tax changes are solely responsible, uh, or that
• 41:29
  S2: they're not responsible at all. They're part of a number
• 41:32
  S2: of reasons why house prices have softened a bit. It's
• 41:35
  S2: not actually that unusual to see house prices come off,
• 41:37
  S2: even in the last couple of decades of extraordinary house
• 41:40
  S2: price growth, we've had at least seven times where prices
• 41:43
  S2: have come off, including under previous governments. And so it's
• 41:47
  S2: a factor, but not the only factor. Uh, we do
• 41:51
  S2: want to make it easier for first home buyers to
• 41:53
  S2: get a toehold in what is a market that's been
• 41:56
  S2: too difficult for too long, but it would be wrong
• 41:58
  S2: to attribute all of the recent movements in house prices
• 42:01
  S2: to the changes that we brought in in the budget.
• 42:04
  S1: Treasurer, we have kept you for too long, and we
• 42:07
  S1: genuinely do appreciate you coming out at a at a
• 42:09
  S1: tough moment. Thank you. Thanks, treasurer.
• 42:11
  S2: Appreciate your time too. Thanks very much, guys.
• 42:16
  S1: You can read all of our political news on our website,
• 42:19
  S1: theage.com.au or smh.com.au. Today's episode was produced by Julia Carcasole
• 42:25
  S1: with help from Debbie Harrington. Our executive producer is Tami Mills,
• 42:28
  S1: and our podcasts are overseen by Lisa Muxworthy and Tom McKendrick.
• 42:32
  S1: Before you go, follow Inside Politics and leave a review
• 42:35
  S1: for us on Apple or Spotify. I'm Paul Satchell. Thanks
• 42:38
  S1: for listening.