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The budget drop-a-thon · Inside Politics

• 0:01
  S1: From the newsrooms of the Sydney Morning Herald and The Age.
• 0:04
  S1: This is inside politics. I'm Paul chuckle, filling in for
• 0:07
  S1: Jacqueline Maley. It's Friday, March 21st. Just as Treasurer Jim
• 0:13
  S1: Chalmers puts the final touches on his pre-election budget, the
• 0:16
  S1: local threat emanating from Donald Trump's global trade war is
• 0:19
  S1: becoming clearer. Labor is boosting Australia's subsidised medicine scheme, but
• 0:24
  S1: US big pharma companies want to boost their profits Down Under. Meanwhile,
• 0:29
  S1: Peter Dutton is under huge pressure to set out a
• 0:32
  S1: clear platform before the election in May. And in his
• 0:35
  S1: budget in reply speech next week, it will be one
• 0:38
  S1: of his last big chances. Joining me to discuss are
• 0:43
  S1: chief political correspondent David Crowe and our senior economics correspondent,
• 0:47
  S1: Shane Wright. How are you?
• 0:48
  S2: Good day, Paul, and good day Shane. Lovely to see
• 0:50
  S2: both of you gentlemen.
• 0:51
  S1: You've both covered more budgets than I've had hot dinners.
• 0:54
  S1: How many is that for? You two.
• 0:56
  S2: Combined. Combine them. But I've really lost count And it
• 1:00
  S2: hurts a bit to actually think back at how many
• 1:03
  S2: there have been. I wish they were getting better.
• 1:05
  S3: It tests my mathematical ability to count them all up.
• 1:08
  S3: Give us a ballpark. Um, 27 ish. Because we're in
• 1:15
  S3: the weird situation. Jim Chalmers is going to give his
• 1:18
  S3: fourth budget in three years. The last time a treasurer
• 1:21
  S3: did that. It's even older than I am. Ben Chifley
• 1:24
  S3: did it during the war years, so it's very unusual
• 1:27
  S3: the situation.
• 1:28
  S1: So have they retained their importance in terms of the
• 1:31
  S1: the political moment they represent in a in a term
• 1:33
  S1: of parliament, the budget, or does the kind of new
• 1:36
  S1: media cycle and the speed at which we move on
• 1:38
  S1: from things.
• 1:39
  S2: It's true. There was this, um. Well, that's a fair point,
• 1:41
  S2: because Howard brought in this idea of the constant campaigning. Right.
• 1:45
  S2: And so it wasn't just the budget, you know, there
• 1:48
  S2: was a lot of constant work through the term. Um,
• 1:52
  S2: and so I do think that's been a factor. And
• 1:54
  S2: now you get what what is really like a drop
• 1:57
  S2: a thon before a budget where they hand out information
• 2:00
  S2: about what's going to be in the budget for a
• 2:02
  S2: good two weeks before the budget dropping it out the
• 2:05
  S2: drop a thon. So I think you should.
• 2:07
  S3: Trademark that term drop a thon. I've never heard that
• 2:10
  S3: one before.
• 2:10
  S2: Extends the media focus on all the budget measures. And
• 2:13
  S2: I also think another thing is happening, which is there
• 2:17
  S2: used to be a lot more focus on deficit surplus.
• 2:20
  S2: It was a test of a government's capability surplus or deficit.
• 2:24
  S2: And during the Howard years there were continued surpluses and
• 2:28
  S2: surprise surpluses because the going was good on iron ore
• 2:32
  S2: and so forth. And privatization made a big difference as well.
• 2:36
  S2: I don't think there's the same focus on that. Now.
• 2:38
  S3: I think I'm going to challenge you a little bit
• 2:41
  S3: on this. No, I don't think.
• 2:43
  S2: It cuts through to voters in the same way. And
• 2:45
  S2: so that so the, the, the big moment of the
• 2:47
  S2: budget isn't quite the same.
• 2:49
  S1: What do you think?
• 2:49
  S3: Well, budgets up until Paul Keating were beer and cigars
• 2:53
  S3: up like they weren't big things. And Keating and Hawke
• 2:58
  S3: really consolidated the importance of them as a major political event.
• 3:05
  S3: And Keating wasn't dropping out stuff. It just coalesced everywhere.
• 3:10
  S3: It was coalescing. Everyone was really focused on what would
• 3:13
  S3: be the big agenda. And that's where you get the
• 3:15
  S3: focus on surpluses. Because Keating delivered surpluses, and then you
• 3:20
  S3: get through the problems through the early 90s, the recession,
• 3:23
  S3: then and then numbers in politics like John Howard really
• 3:27
  S3: faltered as a shadow treasurer in the is it the
• 3:30
  S3: 87 or 90 campaign where he actually miscalculated all these numbers?
• 3:35
  S3: And they had a huge hole going into an election campaign,
• 3:38
  S3: and it really cost them dearly. But the change now,
• 3:42
  S3: because economics has accelerated as well as politics over the last. Well,
• 3:48
  S3: since these bloody iPhones got created. Yeah. And social media,
• 3:52
  S3: the acceleration that you see in the media has come
• 3:54
  S3: to big political set events like a budget.
• 3:57
  S1: Yeah. And I wonder what the Covid pandemic meant for
• 4:00
  S1: the idea of debt as well.
• 4:01
  S2: Yeah, people became accustomed to spending, and the importance for
• 4:05
  S2: the election campaign is we haven't we don't know yet
• 4:09
  S2: how both sides will line up on who's got the
• 4:11
  S2: better budget. Bottom line. That's been a big issue in
• 4:14
  S2: the past. I'm not sure it's really going to cut
• 4:16
  S2: through in the same way in this election because let's
• 4:18
  S2: face it, we've had two years of surpluses. We know
• 4:21
  S2: we're going into a deficit. So really between labor and
• 4:24
  S2: the coalition, it's a question of who's got a slightly
• 4:27
  S2: better deficit.
• 4:28
  S3: Angus Taylor is not going to be promising. I'll deliver
• 4:31
  S3: budget surpluses within four years, which is where Joe Hockey
• 4:34
  S3: got himself into running into 2013.
• 4:36
  S1: He has committed to, I think, one of the only
• 4:38
  S1: things he's really put as a, as a point of
• 4:41
  S1: clarity is that they will have a better budget bottom
• 4:43
  S1: line than labor. How much better how they get there?
• 4:46
  S1: Who knows? Yeah.
• 4:47
  S3: And what what does a better budget line mean? Like
• 4:50
  S3: we I remember 2016, which is when Scott Morrison announced
• 4:55
  S3: robodebt like the element of robodebt was announced as this
• 4:58
  S3: big saving that would improve the budget. Chris Bowen was
• 5:03
  S3: the shadow treasurer, had gone out with this idea of
• 5:05
  S3: putting out budget estimates out over ten years, and the
• 5:09
  S3: Liberal Party said, oh, what stupidity. We've focused on four years,
• 5:13
  S3: not ten years. Get to the 2019 election. Are the
• 5:17
  S3: Liberal Party endorsing embrace ten year forecasting? So in terms
• 5:23
  S3: of the politics and the focus of those budget bottom line, yes,
• 5:27
  S3: I think it is. It's really important to the state
• 5:33
  S3: of the economy, the state of the budget, the nation's finances.
• 5:35
  S3: But politically, like I think we've become a bit more
• 5:39
  S3: insular into what the what voters are actually looking for.
• 5:42
  S1: Well, Shane, you're well known around these parts for wearing
• 5:44
  S1: a tie with pigs flying on them during budget week,
• 5:47
  S1: which I am.
• 5:48
  S3: My.
• 5:48
  S1: Friend symbolises kind of the heroic assumptions that usually underpin
• 5:52
  S1: budget forecasting. What do you expect from the treasurer, Jim Chalmers,
• 5:56
  S1: on Tuesday next week when he stands up in the
• 5:58
  S1: House of Representatives, what kind of spin are we likely
• 6:00
  S1: to see? What's the government likely to say?
• 6:01
  S3: Well, let's see, they are going to produce deficits. Like, remember,
• 6:05
  S3: we've come out of two budget surpluses, which Jim Chalmers
• 6:09
  S3: puts on his on his breastplate and proudly thumps it
• 6:13
  S3: and says how fantastic spinning back into right, we're going
• 6:17
  S3: to have a deficit maybe this financial year, around 20 billion,
• 6:20
  S3: around $40 billion. That's a lot of money that's going
• 6:25
  S3: out the door, which normally would be a death knell,
• 6:28
  S3: like in terms of if we went back into the, oh, say,
• 6:31
  S3: the noughties for an election campaign, no opposition could come
• 6:35
  S3: up with those sorts of numbers, or a government can
• 6:37
  S3: come up with those sorts of numbers.
• 6:38
  S1: A lot of luck involved there, right?
• 6:39
  S3: Revenue upgrades and downgrades, I think. So the numbers are
• 6:43
  S3: almost secondary because people just go glaze over. Oh, there's
• 6:47
  S3: another few billion dollars. We've already seen the spin about
• 6:50
  S3: Cyclone Alfred or Alf, depending on where you're coming from.
• 6:53
  S1: 1.2 billion, 1.2 billion.
• 6:56
  S3: In an economy that's 2.6 trillion. Yeah. It's barely it's
• 7:00
  S3: barely touching the knees. So you'll get that spin. And
• 7:04
  S3: then how? And this week he gave a speech, a
• 7:07
  S3: really interesting speech in Brisbane where he talked about Australian
• 7:10
  S3: exceptionalism because this is lining up to the election. So
• 7:13
  S3: they're going to focus on interest rates are falling. Unemployment
• 7:18
  S3: is the biggest success story of this government by some margin,
• 7:23
  S3: like a million jobs created almost on their watch. The
• 7:26
  S3: fact that interest rates have gone up so far, but
• 7:28
  S3: the jobs market is still strong. Real wages growth, which
• 7:31
  S3: we weren't having previously.
• 7:33
  S4: For a moment, what Australians have achieved together in our economy. Inflation,
• 7:38
  S4: a third of its peak, are now in the lower
• 7:40
  S4: half of the target band, the lowest average unemployment rate
• 7:44
  S4: for any government in 50 years. Stronger employment growth.
• 7:48
  S3: He will focus on those positives and then tie it
• 7:52
  S3: up with a bow, saying it's all because of our
• 7:53
  S3: great budget and economic management. Why would you risk that.
• 7:56
  S1: In that speech, Shane? The treasurer effectively say that there
• 8:00
  S1: might be some new cost of living announcements, but a
• 8:02
  S1: lot of what the government has to say between now
• 8:05
  S1: and the election in terms of new policy will be
• 8:07
  S1: announced after the budget in the election campaign.
• 8:09
  S3: Yeah. And I think for David and myself, one of
• 8:14
  S3: the biggest things will be just how much they expend
• 8:18
  S3: in terms of energy supplements or some sort of cost
• 8:21
  S3: of living payment. We've already seen some of the speculation.
• 8:25
  S3: Last year it was $300, which everyone got. I think
• 8:29
  S3: that'll be for David and myself. That'll be a key
• 8:31
  S3: part of it. It's the politics and the economics of
• 8:34
  S3: giving money to people to try and reduce their cost
• 8:37
  S3: of living pressures.
• 8:38
  S4: It'll be a responsible budget, which helps with the cost
• 8:41
  S4: of living, builds our future, and makes our economy more
• 8:45
  S4: resilient in this new world of global uncertainty.
• 8:49
  S1: Well, I wanted to ask you, David, this will be
• 8:51
  S1: the last big set piece before the election campaign. We
• 8:53
  S1: expect it to be called possibly the Sunday after the budget,
• 8:56
  S1: or maybe the week after that. I think more likely
• 8:58
  S1: the Sunday right after. It puts Jim Chalmers, who's the
• 9:01
  S1: best communicator in the government, according to lots of analysts
• 9:04
  S1: right at the center of the government's message over the
• 9:06
  S1: next week. What's the opportunity here for the government and
• 9:10
  S1: how does how could this be a nice pathway into
• 9:13
  S1: an election campaign for them? And what are the risks?
• 9:15
  S2: Yeah, the bigger opportunity for the government, the most important
• 9:19
  S2: opportunity is to convince Australians that they've got everything under
• 9:24
  S2: control and that they've got better times ahead, and they've
• 9:28
  S2: got a frame that as the best choice at the election,
• 9:32
  S2: compared to the risk of choosing a different government, the
• 9:36
  S2: risk of Dutton versus all these good things that the
• 9:39
  S2: budget shows. But as we've mentioned, it'll show a deficit, right.
• 9:43
  S2: So it's not that rosy. However, they will be able
• 9:46
  S2: to point to unemployment. That's not too bad. Real wages
• 9:49
  S2: that are actually getting ahead of inflation, inflation being lower
• 9:53
  S2: than it was when they came into government. And the
• 9:56
  S2: growth forecasts for the economy being pretty reasonable in the circumstances.
• 10:01
  S2: In a time of terrible global volatility and interest rates
• 10:05
  S2: being lower after 12 rate rises on their watch, they've
• 10:09
  S2: got to convince people about those better times ahead. And
• 10:12
  S2: in a sense, that is the most important thing, more
• 10:15
  S2: important than individual measures, even like the cost of living.
• 10:19
  S2: So they will have energy bill relief and some other
• 10:21
  S2: cost of living measures, I think. And we've also seen
• 10:24
  S2: they're acting on the cost of medicine, for instance, straight
• 10:26
  S2: to the to the hip pocket. So that is the opportunity.
• 10:30
  S2: And they will be focusing very strongly on something which
• 10:34
  S2: is part of Budget week every year. But this time
• 10:37
  S2: even more important. And that's Peter Dutton's budget reply on
• 10:39
  S2: Thursday night.
• 10:41
  S1: Huge.
• 10:41
  S2: That sets up a very big contest on the economy,
• 10:45
  S2: and we haven't seen a very high quality economic debate
• 10:49
  S2: from the coalition yet. So the acid test is that
• 10:53
  S2: Thursday night budget reply and then the government will want
• 10:56
  S2: to really go after Peter Dutton on his budget reply.
• 11:01
  S2: The morning after on Friday of budget week. And I
• 11:04
  S2: expect that to get really serious about, you know, the
• 11:07
  S2: election the morning after Peter Dutton's budget reply. I think
• 11:11
  S2: it's the Friday morning, the news cycle on the Friday morning,
• 11:14
  S2: the breakfast television on the Friday morning that would maybe
• 11:18
  S2: be owned by the coalition because they would get to
• 11:21
  S2: talk about everything that Peter Dutton said on the Thursday night.
• 11:23
  S1: They've got a big idea.
• 11:24
  S2: If they've got a big idea, they better have a
• 11:26
  S2: big idea. I think. I think we're getting to a
• 11:29
  S2: real stage of the of the, of the political debate where,
• 11:33
  S2: you know, the coalitions have has got to have something
• 11:35
  S2: on the economy that's significant. But then I think the
• 11:39
  S2: task for labor will be to throw everything at it
• 11:42
  S2: on the Friday and to make the weekend after the
• 11:45
  S2: budget all about whether the coalition idea flies or not
• 11:50
  S2: and what the what the choice is for voters.
• 11:52
  S1: We'll get back to policy in a second. But now
• 11:54
  S1: that we're on politics in the election, just wanted to
• 11:57
  S1: talk about the Coalition and Peter Dutton. He's set the
• 12:00
  S1: agenda so much in this term, and he's so often
• 12:03
  S1: leading the media cycle and shifting the narrative to where
• 12:06
  S1: he wants to get it. And the government's often on
• 12:08
  S1: the back foot in this term, particularly on culture war issues,
• 12:10
  S1: on national security, energy. The last three weeks, he's looked
• 12:15
  S1: a bit out of sorts. Peter Dutton, we've had this
• 12:17
  S1: period of time post the cyclone when we thought the
• 12:20
  S1: election was going to be called, where we're effectively just
• 12:23
  S1: waiting for the budget. The coalition was expecting to go
• 12:25
  S1: to a campaign. They were in their campaign office. Labor
• 12:28
  S1: had announced most of their policy and Peter Dutton seemed
• 12:30
  S1: a bit aimless. He's had some missteps on back to
• 12:33
  S1: work on insurance company breakups, this idea of a referendum
• 12:37
  S1: clamouring for more economic policy from his backbench. Personally, I'm
• 12:41
  S1: surprised he had no policy to announce in this period
• 12:44
  S1: to react to the fact that there were three new
• 12:46
  S1: weeks that were effectively time come out of thin air. David,
• 12:50
  S1: do you think the wheels are falling off the opposition,
• 12:52
  S1: or is this a minor blip that we're noticing more
• 12:55
  S1: than the general public because we're paying close attention.
• 12:57
  S2: Yeah, we are paying close attention to it because we
• 12:59
  S2: find it so interesting. We find that the coalition is
• 13:02
  S2: not working as smoothly as they have at other times
• 13:04
  S2: in this term, and we find really curious moments where
• 13:08
  S2: shadow frontbenchers are at odds with Peter Dutton on whether
• 13:13
  S2: insurance companies are going to be broken up, or whether
• 13:16
  S2: there should be a referendum on tougher laws on citizenship
• 13:20
  S2: to cancel citizenship of criminals. These things have been missteps
• 13:26
  S2: for the coalition, which are things we haven't seen before.
• 13:29
  S2: On working from home, Peter Dutton went hard, realized that
• 13:33
  S2: that was probably a really bad message for a lot
• 13:36
  S2: of women who like working from home, and he seemed
• 13:38
  S2: to be against working from home, so they softened the message.
• 13:42
  S2: This is a really interesting sign. And I and I'm
• 13:45
  S2: hearing this from people inside the coalition. I know that
• 13:47
  S2: others here, you know, Paul, you've reported on it. They
• 13:51
  S2: don't seem to have their machine working smoothly. We're getting
• 13:55
  S2: signs of sand in the gearbox. And if they don't
• 13:58
  S2: get it together, they'll be very scrappy. During the election campaign,
• 14:02
  S2: you would expect better and a smoother operation at this
• 14:06
  S2: stage of the cycle.
• 14:07
  S1: Shane, some changes in polling the last few weeks.
• 14:11
  S3: Now, this is where the political pollsters and the economic
• 14:15
  S3: nerds like myself, are slightly at loggerheads and not at loggerheads.
• 14:20
  S3: But I have always maintained that what we get good
• 14:24
  S3: measures of consumer sentiment, of consumer confidence, and it's a
• 14:27
  S3: great leading indicator for polls, always has been.
• 14:30
  S1: This is how people are feeling about the economy and
• 14:32
  S1: how much they can buy.
• 14:33
  S3: So the RBA cuts rates in mid-February okay. Consumer confidence
• 14:38
  S3: has stepped up like it had been in the doldrums,
• 14:42
  S3: and it has demonstrably stepped up since that point in time.
• 14:46
  S3: It was. And the government knew if the RBA didn't
• 14:49
  S3: cut that cut rates, then it was going to be
• 14:51
  S3: a really hell of an issue. But you can see
• 14:55
  S3: that the fact that consumers happy consumers mean happier voters
• 15:00
  S3: always have, and consumer confidence always has led what shows
• 15:05
  S3: up in opinion polls. It's up to a month ahead,
• 15:08
  S3: even six weeks. But you can see that the consumer
• 15:11
  S3: confidence surveys and the ANZ and Westpac have different ones,
• 15:15
  S3: and they're both showing the same thing is also and
• 15:18
  S3: we'll come to the orange man in the white House.
• 15:21
  S3: They are worried about Donald Trump. It's hurting consumer confidence
• 15:26
  S3: in the United States because they are looking like they'll
• 15:28
  S3: have a recession through the first 3 or 6 months
• 15:30
  S3: of the year, but people are aware of Donald Trump
• 15:35
  S3: and the damage he poses, that risky challenges to Australia.
• 15:38
  S3: And they're not blaming the government for that.
• 15:48
  S5: Well, Aussies will be able to access cheaper medication under
• 15:51
  S5: a re-elected labor government, pledging a $25 cap on medicines
• 15:55
  S5: under the Pharmaceutical Benefits Scheme. But the PBS.
• 15:58
  S1: David, you reported a story about the risks from the
• 16:01
  S1: Trump administration for our PBS game. Can you tell us
• 16:03
  S1: what you found out and what you reported?
• 16:05
  S2: What I found was the formal message from a very
• 16:08
  S2: powerful lobby in the US, the pharmaceutical companies, all the
• 16:12
  S2: big brand name pharmaceutical companies telling the Trump administration, formally
• 16:18
  S2: the Australian Pharmaceutical Benefits Scheme is a problem. We want
• 16:22
  S2: that addressed. And this was in the argument for reciprocal
• 16:26
  S2: tariffs by the Trump administration. The US trade officials are
• 16:30
  S2: fielding these submissions to then enact reciprocal tariffs from April 2nd.
• 16:35
  S2: So this is very, very real. It's not just an,
• 16:38
  S2: you know, a theoretical argument in Washington DC, we've got
• 16:41
  S2: a very unpredictable and powerful president in the white House.
• 16:44
  S2: We don't know how it's going to hit us, but
• 16:46
  S2: I think it's going to hit us in some way.
• 16:48
  S2: They don't like the PBS. And just to cover the
• 16:51
  S2: basics on the PBS for a moment. It's a government
• 16:54
  S2: scheme that basically decides which drugs are worth subsidizing. And
• 17:00
  S2: when the experts in Canberra decide on those drugs, they
• 17:03
  S2: can delay the entry of a US drug, which really
• 17:06
  S2: irritates the US drug maker because they're locked out of
• 17:09
  S2: the market and they call that a denial of market access.
• 17:14
  S2: But it also dictates terms on pricing to those American companies.
• 17:19
  S2: And they don't like that either. But the net effect
• 17:22
  S2: is fantastic for Australian consumers, because it means they get
• 17:26
  S2: this check by the government to push down the price
• 17:29
  S2: of the drug and to subsidise it, so that it
• 17:31
  S2: costs Australian patients much less than it would in a
• 17:35
  S2: totally open slather free market. And so the message from
• 17:38
  S2: the pharmaceutical companies in the US is that they don't
• 17:42
  S2: want that delay to the introduction of their drugs into Australia,
• 17:46
  S2: they want a free market. So they just come in
• 17:49
  S2: and sell what they want when they want also, they
• 17:52
  S2: don't want this price setting mechanism, which sets a price
• 17:56
  S2: below what they think they should be getting for their
• 17:58
  S2: new drugs. Now, that doesn't mean that they can force
• 18:02
  S2: change on the PBS. All of that comes down to
• 18:05
  S2: whether Anthony Albanese or Peter Dutton would be willing to
• 18:08
  S2: change the PBS, and they would be mad to do that.
• 18:10
  S2: But it does highlight this pressure on Donald Trump to
• 18:13
  S2: find other ways to punish Australia. It's been very interesting
• 18:16
  S2: that Anthony Albanese and senior leaders in the coalition have
• 18:21
  S2: all said the PBS is not on the table in
• 18:24
  S2: any negotiation, so that's an assurance for voters that they
• 18:27
  S2: will get subsidised medicine here.
• 18:29
  S6: We will do everything again we can to protect the PBS.
• 18:32
  S6: It's simply not up for negotiation, whether with America or
• 18:36
  S6: any other country for that matter.
• 18:37
  S5: What does that look like?
• 18:38
  S2: But just bear in mind that that powerful lobby group
• 18:41
  S2: in Washington, which dines with Donald Trump and donates $1
• 18:45
  S2: million to his inauguration, will be influencing his thinking about
• 18:49
  S2: what to do about tariffs on Australia. So it's a
• 18:52
  S2: very live situation and it works in a very interesting
• 18:56
  S2: way domestically because Anthony Albanese, you know, is very firm
• 19:01
  S2: in his public remarks in the wake of that story
• 19:04
  S2: backing in the PBS. But so is the coalition. So
• 19:07
  S2: it's not really easy to see which way it might
• 19:10
  S2: pan out, but it could have that rally around the
• 19:11
  S2: flag kind of effect that we're talking about here.
• 19:14
  S3: I think it suits the incumbent.
• 19:16
  S1: It's got to say the same thing.
• 19:17
  S3: Well, great minds think alike or fools never differ. One
• 19:20
  S3: of whichever one you want to take.
• 19:21
  S1: Quicker on the buzzer.
• 19:23
  S3: But yeah, I think that's the PBS because like PBS
• 19:27
  S3: starts under Ben Chifley, like, labor went down this path many,
• 19:31
  S3: many years ago, and now both sides see it. I
• 19:34
  S3: think James Massola, our colleague, said it best when he said,
• 19:38
  S3: if either side gave up on the PBS, it's like
• 19:40
  S3: it's like a bucket of warm sick. Like that's the
• 19:43
  S3: sort of impact it would have if you gave up. Like,
• 19:46
  S3: I think you'd be consigning yourself to opposition for a
• 19:48
  S3: very long time.
• 19:49
  S1: Why would anyone do that?
• 19:50
  S3: That's right. And the fact is, Canada has its own
• 19:54
  S3: central pharmaceutical system. Japan. Does everyone in the Western Europe, British.
• 20:00
  S3: This is this is the US pharmaceutical industry looking to
• 20:04
  S3: increase its profits at the expense of Australians and everyone
• 20:06
  S3: else's healthcare.
• 20:07
  S2: Just quickly, there's probably one way in which to alleviate
• 20:10
  S2: a bit of concern. If American drug companies want faster
• 20:13
  S2: approval and bigger profits for their new drugs. One way
• 20:18
  S2: to achieve that is even more money into the PBS
• 20:22
  S2: to approve more drugs and to subsidize them with even
• 20:24
  S2: more public taxpayer funds in Australia. So it would be
• 20:28
  S2: a very expensive option for an Australian government. It still
• 20:32
  S2: doesn't resolve the key American complaint about the PBS, which
• 20:36
  S2: is that it is a single buyer in the market
• 20:40
  S2: because it minimizes the market power of those big drug makers,
• 20:44
  S2: because there's one buyer, the Australian government, and it sets
• 20:47
  S2: the terms and it sets the pricing deal and they
• 20:50
  S2: hate that and they'll always hate it.
• 20:52
  S1: And Shane, final one what effect is Trump's trade war
• 20:56
  S1: and the potential upside risk to global inflation going to
• 20:59
  S1: have on the budget.
• 21:00
  S3: Well this is one of the biggest questions. And we
• 21:03
  S3: actually saw it this week from the Federal Reserve, the
• 21:07
  S3: central bank of the United States, where their chairman, Jerome Powell,
• 21:11
  S3: actually said Donald Trump's tariffs are going to push up
• 21:14
  S3: inflation and they had to downgrade their economic outlook. Um,
• 21:19
  S3: they they've wiped 0.4 percentage points of economic growth this
• 21:22
  S3: year for the US. They are right at the at
• 21:26
  S3: the heart of it. But this is the ripple effect.
• 21:28
  S3: And so we've seen like even the early drops out
• 21:32
  S3: of this budget suggesting a 0.1 percentage point effect to
• 21:39
  S3: GDP over just from steel and aluminium, just from something
• 21:44
  S3: as small as steel and aluminium, like it's about $1
• 21:47
  S3: billion of exports. if it ends up in pharmaceuticals, if
• 21:51
  S3: it ends up in beef, it ends up in almost
• 21:54
  S3: everything else that we that we send around the world.
• 21:58
  S3: Then whoever wins the next election is going to face
• 22:02
  S3: a really tough time. And you will see Chalmers pointing
• 22:07
  S3: to a bit of that in his budget speech on
• 22:09
  S3: Tuesday night.
• 22:11
  S1: Thanks for joining us, guys.
• 22:12
  S2: Thank you all.
• 22:13
  S3: It's been lovely.
• 22:16
  S1: Today's episode of Inside Politics was produced by Julia Carcasole
• 22:20
  S1: with technical assistance from Debbie Harrington. Our executive producer is
• 22:23
  S1: Tammy Mills. Inside politics is a production of The Age
• 22:26
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• 22:44
  S1: Thank you for listening.