Latest / The Morning Edition / The welcome miss on inflation, and the Victorian leadership fallout

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The welcome miss on inflation, and the Victorian leadership fallout · The Morning Edition

0:01
S1: I'm Jacqueline Maley, and you're listening to Inside Politics from
0:04
S1: the newsrooms of the Sydney Morning Herald and The Age.
0:08
S1: This week we have our very special guest star and
0:10
S1: favourite of the podcast, Shane Wright, chief economics correspondent, joining
0:14
S1: me from Canberra. Hello, Shane.
0:16
S2: Hello. And I think it's about time we had the
0:17
S2: Melrose Place music playing. As I come on.
0:21
S1: Every time we make that reference, we age ourselves because
0:24
S1: you know, we're both generation X, so Melrose Place was like,
0:27
S1: it takes up. It looms large in our consciousness, but
0:30
S1: not for anyone younger than.
0:33
S2: Don't go there. Just don't go there with any definitive
0:37
S2: figure in that space.
0:38
S1: No. Anyway, we are here to talk about figures. Thank
0:41
S1: you for that segue, because it's been a bit of
0:43
S1: an emotional rollercoaster this week for Mortgagees. As you know,
0:47
S1: I am one of those, so I take these matters
0:50
S1: very seriously. On Tuesday, the reserve Bank governor, Michelle Bullock,
0:53
S1: gave a speech where she said that inflation was too high.
0:57
S1: The bank was going to do whatever it took to
1:00
S1: get inflation back into the acceptable target range of 2
1:03
S1: to 3%. She said that putting off mortgage rate hikes
1:06
S1: would only lead to more pain down the track. There's
1:08
S1: no point delaying, you know, ripping off the band aid.
1:11
S1: Higher unemployment and higher inflation would only ensue. So on
1:15
S1: Tuesday she was talking tough and things were looking grim.
1:18
S1: I was quaking in my boots. But then on Wednesday,
1:21
S1: the clouds parted a little bit. What happened on Wednesday, Shane?
1:25
S2: Well, your boots got cheaper.
1:27
S1: The literally the.
1:28
S2: Price. The price of footwear actually fell according to the ABS.
1:33
S1: I don't know, not at the not at the places
1:35
S1: I'm buying it, but carry on.
1:37
S2: This says more about where you buy rather than anything else,
1:40
S2: but also that you're a woman of high taste. Um, yeah.
1:43
S2: This the inflation figures that we got for June from
1:47
S2: the ABS on, on Wednesday morning. We're very interesting in
1:52
S2: the fact that they really showed, particularly at the headline level.
1:57
S2: We'll get to the underlying level in a second. But
1:59
S2: headline that inflation is much lower than what the Bank feared,
2:04
S2: what Treasury feared, and what a lot of analysts had feared.
2:07
S2: Like it came in, it dropped from 4 to 3.8%.
2:12
S2: To put it in perspective, the RBA had in early
2:15
S2: May said we get to June. Inflation will be running
2:19
S2: at 4.8%. Federal Treasury thought it could even be five.
2:23
S1: So it's terribly high.
2:24
S2: That is a big miss. And remember they made that
2:27
S2: calculation knowing that the say the federal government's cut in
2:32
S2: excise and the the little slice that's been taken off
2:35
S2: because of GST that had been fully factored into what
2:38
S2: had happened. So inflation, the big headline number was lower.
2:43
S2: Petrol is lower. But there are other things that are falling, aka,
2:48
S2: the new pair of boots that you've been eyeing off
2:50
S2: have got cheaper. Men's clothing has got cheaper. I know
2:53
S2: you love it. I know you love scrambled eggs for
2:56
S2: breakfast in the morning the price of eggs had come down. uh,
3:00
S2: veggies had come down. Even even if you want to
3:03
S2: have a tipple at the end of the day, wine
3:06
S2: had got cheaper through the last month.
3:08
S1: And furniture, household appliances, Lamb lamb's been very expensive for
3:12
S1: a long time. Yeah. And then on the other side,
3:15
S1: the biggest price rises were in building and construction, which
3:18
S1: is bad news for anyone who hopes that the housing
3:21
S1: pressures will ease further and also electricity prices, which is
3:25
S1: confusing because we keep hearing from the national regulator that
3:28
S1: wholesale prices are actually going down and they're being cut.
3:31
S2: That's right. And you'll actually see electricity prices fall in
3:34
S2: the next month. So this is if just think of it,
3:39
S2: you've got to think of inflation as one big pie
3:42
S2: divvied up into 12 pieces, one month for one for
3:46
S2: each month. The July slice from last year will come out.
3:51
S2: This in the next measure. That July slice last year
3:55
S2: includes a 30% increase in electricity prices in Sydney and Canberra,
4:00
S2: and a big one in Melbourne, which is all to
4:02
S2: do with the end of subsidies that the states and
4:05
S2: the feds had put in place. So you will that
4:09
S2: like there's going to be an uplift from petrol prices,
4:11
S2: but the electricity prices are finally going to get back
4:14
S2: to something that is measurable and understandable fairly soon, even
4:19
S2: in the the housing construction stuff, which is a really
4:23
S2: big part of the the CPI picture, the pace at
4:26
S2: which the, um, that inflation in that area had been
4:31
S2: going up is actually subsiding a little bit. Some of
4:34
S2: it's due to perhaps oil not being as quite as expensive,
4:37
S2: but I think the federal budget is actually taking a
4:41
S2: bit of demand out of that sector. Um, which that's
4:44
S2: not the normal way that federal budgets, a lot of
4:47
S2: macro economists think federal budgets should work. You should be
4:50
S2: taking money out. They don't often go have a hit
4:53
S2: to confidence, which stops consumers spending, which has an inflationary
4:56
S2: or deflationary effect. That might be what we're seeing play
4:59
S2: out at the moment.
5:00
S1: Yeah, I want to get on to that in a
5:02
S1: minute and ask you more about that. But in terms
5:04
S1: of the political effects of this sort of ease off
5:06
S1: of inflation, inflation is the most pernicious kind of really
5:11
S1: economic force in terms of people's living standards, the way
5:13
S1: people feel, I think, within an economy and also politically,
5:17
S1: it just makes us so angry at the government when
5:19
S1: we feel like our living standards are going backwards and
5:22
S1: it's in our faces all the time, because we're going
5:23
S1: to the petrol bowser or we're going to the supermarket,
5:26
S1: we're like, wow, things are so expensive and my wages
5:28
S1: aren't keeping up. There's. Inflation has now fallen for three
5:31
S1: consecutive months, and the One Nation vote has sort of
5:34
S1: flattened over the last few months. Is this causation or correlation? Shane. Right.
5:39
S2: It may be too early to say causation, but there's
5:41
S2: definitely a correlation going on. And I think like, and
5:44
S2: you can see that around the world where you have
5:46
S2: high inflation, populists on the left or the right always
5:52
S2: do well. And I don't think I'm getting too far
5:55
S2: out of the political mainstream in and saying One Nation
5:59
S2: is a right wing populist force, and they have really
6:02
S2: been buoyed by what's going on in terms of cost
6:05
S2: of living. And you can see the way, say, Pauline
6:08
S2: Hanson talks about it. She she understands that quite well
6:11
S2: in terms of trying to say, we will do something
6:13
S2: to make cost of living more affordable. And you're exactly
6:18
S2: right in terms of, say, the price of oil and
6:21
S2: petrol that is always in people's faces. And so people
6:27
S2: feel real. It's always a discussion point, even in the workplace.
6:32
S2: How much did you pay for petrol? One thing there's
6:35
S2: not as many people using petrol like we can see
6:37
S2: the use of unleaded has is falling really quickly.
6:41
S1: Is that because of the introduction of EVs into the market?
6:44
S2: EVs are saying you can start to see the impact
6:47
S2: of them. And the fact that like the I was
6:50
S2: actually looking at some work, some data out of the
6:53
S2: industry department just this week where the amount of unleaded
6:57
S2: petrol being used Is has fallen by about 3,040% over
7:02
S2: the last 15 years, and it's really falling quickly.
7:06
S1: Michelle Bullock, the RBA governor, did allude to that on
7:09
S1: or she talked about that on Tuesday because she said
7:11
S1: that basically the economy is much more resilient to oil
7:14
S1: shocks than it used to be, because we're not as
7:16
S1: dependent on oil as we were, say, in the 1970s.
7:19
S1: There is a. But though I want to ask about
7:20
S1: petrol prices, because the halving of the fuel excise that
7:23
S1: the government announced back in April and then extended for
7:26
S1: a month very benevolently, that's finally ending this Sunday, I believe.
7:30
S1: So aren't we going to see petrol prices just shoot
7:32
S1: back up again and then fuel inflation? Pun intended.
7:36
S2: Yes, I love I love a good pun. I love
7:39
S2: a good pun. And you're right. You will see petrol
7:42
S2: push up towards $2 a litre again. But it. Remember we.
7:47
S2: Was it the second or third week of March? It
7:49
S2: was $2.50 a litre. So these are huge swings. What
7:55
S2: that does to people and their spending patterns, and it'll
7:59
S2: come back to what else is going on through the
8:02
S2: economy right at the moment will be really interesting in
8:04
S2: terms of the overall. And this gets to the underlying
8:07
S2: inflation story, which is where the Reserve Bank's really focused,
8:10
S2: because the underlying inflation measure, which strips out the price
8:15
S2: of oil, uh, because it tries to lop out the
8:19
S2: big things, the things that go up the most and
8:21
S2: the things that fall the most. And believe me, things
8:24
S2: do their prices that do fall, they lop them out.
8:28
S2: And that that was actually a bit lower than what
8:30
S2: the reserve Bank had been anticipating as well. And that's
8:33
S2: why there's been this big change in what people's expectations
8:36
S2: are around where interest rates are going to go through
8:38
S2: this year and into next.
8:40
S1: Okay. You talked about the budget before and the measures
8:43
S1: that were taken by the government. They copped a lot
8:45
S1: of bad publicity after that budget in May. A lot
8:48
S1: of people, particularly investors, business people, were criticising the taxation measures,
8:52
S1: mostly the capital gains tax changes. I wonder, did all
8:56
S1: of that negative media coverage actually impact demand and people's
9:00
S1: feeling about the economy more generally, do you think, and
9:03
S1: maybe lead to this result, which is taking a bit
9:05
S1: of demand out of the economy because people are scared
9:08
S1: or cautious or anxious?
9:09
S2: All three. But I think you're right. I think you
9:12
S2: could mount that argument. And we saw it in, say,
9:14
S2: the consumer confidence measures, which really nosedived very quickly after
9:18
S2: the budget, even though. And it's that has been that
9:22
S2: has rebuilt because ultimately people have worked out. Hold on.
9:25
S2: I'm not a I'm not a property investor. I don't
9:28
S2: hold I'm not negatively gearing a property and I'm not
9:31
S2: a hi tech start up entrepreneur like they are. That
9:37
S2: Venn diagram is a pretty small Venn diagram of people. Um, and,
9:42
S2: but there is definitely been that hit to confidence, which
9:45
S2: I think is what's feeding into it. Like there is
9:48
S2: like even on Thursday, uh, NAB announced that they'd seen a,
9:53
S2: like a fairly sizable fall in the number of people
9:55
S2: wanting housing loans. I will guarantee you now that they
9:59
S2: are from investors, which was the whole which is ultimately
10:03
S2: the government's whole aim. The government has not been shy, saying, look,
10:07
S2: we want we don't want as many investors buying existing homes.
10:11
S2: We want first home buyers to be doing that. Yeah.
10:14
S2: So you look at that, you look at what's been
10:15
S2: going on in terms of house values. The property market has.
10:19
S2: It was already Sydney and Melbourne even before well before
10:23
S2: the the budget came out with the three interest rate rises,
10:27
S2: which they haven't fully flowed through the economy yet. Sydney
10:31
S2: and Melbourne were going backwards. It now looks like Perth, Adelaide, Hobart,
10:38
S2: Canberra have joined them. And this goes to an issue
10:42
S2: called the wealth effect, which Michelle Bullock touched upon this week, saying, well,
10:47
S2: if that if the housing market is slowing rather quickly,
10:51
S2: consumers don't feel as confident. They don't use their their
10:54
S2: homes as a bank card. They don't need to go
10:56
S2: buy new furniture. What was one of the things prices
11:00
S2: fell this in the last month? The price of furniture, uh,
11:03
S2: household textiles and household appliances, other things that you'd need
11:07
S2: to buy if you're if you wanted to buy a
11:09
S2: new home or you're updating a home. They also fell.
11:12
S2: So I think that's telling you something about the broader
11:16
S2: impact of the budget, what it's done to confidence and
11:19
S2: feeding into inflation.
11:21
S1: They're all sort of highly discretionary spends, I suppose. Everybody's
11:25
S1: sitting on old couches quite happily, including myself. Michelle Bullock
11:29
S1: did mention low productivity growth as a major problem in
11:33
S1: our economy. This is an increasingly a sort of political issue.
11:37
S1: She said it was that productivity growth was the only
11:39
S1: way to lift living standards. And I was reading about this.
11:43
S1: Weak productivity in this country has barely grown since 2016,
11:47
S1: which is ten years. You'll compliment me on my maths there.
11:50
S1: What can the government do to lift productivity because this
11:53
S1: is such a handbrake on economic growth, isn't it. And
11:55
S1: we're not going to sort of see lifting living standards
11:58
S1: and better ourselves and better our children's lives until the
12:01
S1: government gets its act together on this.
12:03
S2: Well, I'm going to push back and say it's not
12:05
S2: the government's job around productivity. It's like this like, and
12:12
S2: around the world, people, especially in this country, what will
12:15
S2: the government do for X, Y, Z? The history of
12:18
S2: productivity is technology. Now we actually like from the Industrial
12:23
S2: Revolution onto the advent of refrigeration powered flight. The government
12:28
S2: didn't have a role in those sorts of things. It
12:30
S2: was it was new. They were new ideas. And we're
12:33
S2: actually seeing new ideas, aka artificial intelligence. The country that's
12:39
S2: at the epicenter of AI, right at the moment, is
12:42
S2: the only country where productivity growth has lifted, and that's
12:45
S2: the United States.
12:47
S1: So is there nothing the government can do? I mean,
12:49
S1: can it not sort of boost investment in technology or,
12:53
S1: you know, back certain technologies that are going to improve productivity.
12:56
S1: I mean, the government subsidizes all kinds of industries. Why
12:59
S1: can't it back ones that that improve productivity?
13:01
S2: And there was a $10 billion productivity package in the budget,
13:04
S2: which most people have missed. A lot of that was
13:07
S2: to do with red tape, which yep, that is one
13:10
S2: thing you can do. But there was some really good
13:13
S2: research out about a month ago from E61, which actually
13:18
S2: went to your very question. And they were saying, well,
13:23
S2: managers are in this country, probably aren't as good as
13:25
S2: those in the United States or elsewhere. And this is
13:28
S2: where this is the deployment of knowledge, which is ultimately
13:33
S2: that's how you improve the operation of a business. They
13:35
S2: become more productive. And they actually gave very good examples
13:39
S2: of American firms that might set up shop here in Australia.
13:43
S2: Have they face the same IR laws, the same planning laws,
13:47
S2: the same workforce laws as their Australian based competitors, but
13:52
S2: they outperform them on productivity.
13:54
S1: They get better.
13:55
S2: At. They better at it. They gave a good example,
13:57
S2: say Costco versus Woolworths and Coles. And Aldi is also
14:01
S2: in that space as well. They are from outside, but
14:04
S2: they have different managerial operations and systems.
14:09
S1: What about AI then? Because we are seeing data centres
14:11
S1: being built in Australia, is that the solution here that
14:14
S1: we just need data centres, we need to become full, fully,
14:17
S1: sort of adoptive of AI technology, and then our productivity
14:21
S1: might boost itself just like the United States is.
14:24
S2: Look, this is like if we're in the back, we
14:27
S2: move back. You know, you and I love the 1980s.
14:30
S2: The music was better. We went back to the 90s.
14:32
S1: I was I was a child in the 1990s. I
14:34
S1: was a baby. But anyway.
14:35
S2: Oh come on. You go back to the 1980s and say, right, Australia, look,
14:39
S2: these these things called personal computers. No, we won't use them.
14:43
S2: I'm going to stick with my typewriter. Imagine where Australia
14:46
S2: would be if the nation's companies said no to new technology.
14:51
S2: And it's the it's, it's not just the technology itself,
14:54
S2: it's the use of it.
14:56
S1: But is that what Australian companies are doing? Because we're
14:58
S1: always hearing the narrative that Australians are early adopters of technology.
15:01
S1: We love our technology.
15:03
S2: Like how in the 1980s, where the fastest adopters of VHS. We.
15:07
S2: We were.
15:09
S1: But what about now? I mean, what about the adoption
15:11
S1: of AI? And can we see how quickly that's being
15:13
S1: rolled out across the economy?
15:14
S2: Look, that's why I'm not going to be overly critical
15:17
S2: of Australian business because this is relatively new. The US
15:20
S2: is really at the leading edge like companies like Commonwealth Bank, Qantas.
15:28
S2: They are using AI in really interesting ways to try
15:32
S2: and boost their productivity levels. And that's what that is
15:35
S2: actually what you want to see. Building the data centres
15:38
S2: is one thing, but it's using the power of AI
15:43
S2: that those data centres enable. That's where we actually need
15:47
S2: the business, the business sector to lift its game and
15:50
S2: their workers even even in a workforce, people using AI
15:54
S2: in different ways and then passing that information around. That's why,
15:57
S2: like we're almost into the whole argument about work from
16:00
S2: home if people aren't in the room with other people. Mhm.
16:04
S2: You can't it's harder to bounce ideas off each other.
16:07
S2: That's why there are a lot of businesses say, I
16:09
S2: want my staff out in the business because they're better
16:13
S2: bouncing ideas off that generates ideas, generates productivity.
16:17
S1: Yeah, that's absolutely true. I mean, the way that I
16:19
S1: use AI in my work now, which is never to
16:22
S1: craft copy, I make that very, very clear. None of
16:24
S1: us use it for that, but we use it for
16:26
S1: research and for transcription and all sorts of things. And
16:28
S1: I've learned all of that from being with my very
16:31
S1: clever colleagues. Shane. We've got to leave it there. I
16:34
S1: do thank technology because technology means that I get to
16:36
S1: talk to you in Canberra, and here I am in Sydney,
16:38
S1: and yet we get to connect via the power of
16:40
S1: the internet.
16:41
S2: Thank goodness for the internet. So many good things. And
16:44
S2: so you and I can go on YouTube and watch
16:46
S2: 80s 90s TV shows. Even better.
16:49
S1: Actually, I'm taking my daughter through the 80s and 90s
16:52
S1: movies now. So we're about to do back to the future.
16:54
S1: And we just did Karate Kid, which really holds up.
16:57
S2: My wife is rewatching charmed at the moment. If you're interested.
17:00
S2: You'd be a charmed fan.
17:02
S1: Yeah, I loved charmed. It was great. It was really
17:04
S1: great TV. All right, Shane, it's always a pleasure. Thank you.
17:08
S2: Always a pleasure. Good to see you again.
17:18
S1: Okay, we're going to segue now to sunny Melbourne, where
17:21
S1: there's been plenty of political action this week. Joining us
17:24
S1: from the age we have Chip Le grand Victorian state
17:26
S1: political editor who is a first I think on our podcast.
17:29
S1: So welcome.
17:30
S3: Thank you. How are you?
17:31
S1: Good. It's such a pleasure to have you. And you've
17:33
S1: been so busy. Listeners will no doubt know by now
17:36
S1: that Victorians have a new premier. Ben Carroll, I just
17:39
S1: want to ask you a few questions about the federal
17:41
S1: implications of the Victorian leadership change, because Ben Carroll, when
17:45
S1: he gave his first speech as newly anointed premier, he
17:48
S1: very much framed his takeover of the leadership as essential
17:53
S1: to guard against what he said was the risk of
17:55
S1: a coalition One Nation government being formed at the next
17:58
S1: Victorian election, which is in November. What do you make
18:01
S1: of that justification from Ben Carroll?
18:04
S3: So where Victoria's sitting right now is, we are the
18:08
S3: first state where one nation is coming for a labor government.
18:13
S3: So in the federal sphere, particularly and in South Australian election,
18:20
S3: we saw what happens to the coalition when one nation
18:25
S3: gets a surge of support. And and obviously, that's that's
18:29
S3: been a very destructive impact on the federal coalition in
18:33
S3: terms of their their polling numbers. And we saw what
18:36
S3: happened to the number of Liberal MPs who were wiped
18:40
S3: out of the the South Australian Parliament because of the
18:44
S3: support for One Nation. So here what's happening is that
18:48
S3: even though. Yes, one Nation has also damaged the coalition
18:53
S3: and is a threat to the coalition, particularly in regional seats.
18:57
S3: And the National Party is really feeling the brunt of
19:00
S3: that here. As you know, they are elsewhere. One nation
19:05
S3: is eating into labor support in traditional labour seats in
19:09
S3: the outer suburbs of Melbourne's west and north. Now, these
19:15
S3: are seats that, even if you had a surge of
19:18
S3: support for the coalition for a Change of Government, the
19:21
S3: Liberal Party doesn't win those seats. One nation could. And
19:25
S3: so this is a different level of threat to the
19:29
S3: Labor Party. And it's that, uh, and it's really the
19:33
S3: culmination of that pressure and the likelihood that they're going
19:36
S3: to lose the election that led to the change of leadership.
19:40
S1: Okay. So is it possible to say then, on what
19:43
S1: basis people would change their vote from labor to one nation? Because,
19:47
S1: as you say, the eating into the coalition. Support from
19:51
S1: One Nation has been. I suppose you could say around
19:53
S1: conservative issues, right wing populist kind of issues, some economic narrative,
19:58
S1: some culture war issues, but mostly as well that the
20:01
S1: coalition is completely sort of collapsed as a party. What
20:04
S1: kind of a person is moving from a labor vote
20:06
S1: to a one nation vote in Victoria, in those outer
20:09
S1: urban seats that you're talking about? And what issues are
20:11
S1: they moving on?
20:12
S3: Well, I mean, so the classic case is a, um, say,
20:17
S3: you know, someone who works in a, whether it's a
20:20
S3: working class profession or a lower wage profession, life's difficult.
20:26
S3: You're living in, um, suburbs that are poorly relative to
20:32
S3: the more established eastern suburbs, poorly serviced by public transport,
20:35
S3: by schools, by other services. So these are people who
20:38
S3: have lived for the past 12 years under a labor government.
20:42
S3: And indeed, don't forget in Victoria, we've we've only had
20:45
S3: four years this century where there hasn't been a labor government. Mhm.
20:48
S3: And they feel they're not being looked after. And so
20:52
S3: these are these are areas where that are growing really quickly.
20:56
S3: So you've got a mix of new migrants, new arrivals,
21:01
S3: but also people that feel like the population growth is, is,
21:05
S3: is faster than the government's capacity to keep up and
21:08
S3: to provide them what they need. So there's that real
21:12
S3: sense of resentment and, and, and a sense that you're
21:17
S3: being let down by, by a Labour government.
21:20
S1: Yeah. Okay. So you might be a traditional Labour voter,
21:23
S1: but Labour is basically taking you for granted and you're
21:26
S1: under a lot of pressure and you don't see anyone who,
21:28
S1: at a political level, who's looking to credibly ease that pressure.
21:32
S1: So you may as well sort of chuck a vote
21:34
S1: one nation's way because they're making some big promises.
21:37
S3: Yeah. You're you're really looking to kind of to blow
21:40
S3: up the system and force them to start again and
21:43
S3: start thinking about you in a different way.
21:45
S1: Okay. So we're talking about voting intention based on polls,
21:48
S1: because when it comes to reality, One Nation doesn't actually
21:51
S1: have much of a presence in Victoria, does it? I
21:53
S1: think you said yesterday when we were talking that they
21:55
S1: have two candidates in the whole of the state of Victoria,
21:58
S1: and they don't have an official leader. So if you're
22:01
S1: going to vote one nation at the next Victorian election,
22:03
S1: it's going to be a zombie vote, isn't it?
22:06
S3: We had we had got one upper house MP who
22:09
S3: was there since the previous election who got in on
22:12
S3: a very small vote. Um, we've got one other declared
22:16
S3: candidate who ran in the by election and did quite well.
22:20
S3: Um pushed the libs quite hard there. Um but yes,
22:23
S3: beyond that, uh, Pauline Hanson hasn't said who her leader
22:27
S3: is going to be here. Rob Harris reported this week that, uh,
22:32
S3: they're expected to announce a bunch of their upper house
22:35
S3: MPs on Friday. Maybe the lower house MPs will follow.
22:40
S3: So this is a deliberate strategy by One Nation. We're
22:42
S3: going to have like a candidate dump on a Friday,
22:44
S3: which will make it very hard for for anyone to
22:47
S3: go around and scrutinize who's who in the zoo as
22:49
S3: far as the One Nation candidates. But until this point,
22:52
S3: we don't really have any Victorian policies other than a
22:55
S3: promise to scrap the treaty that the government reached with
22:59
S3: First Nations people. There's no Victorian specific policies that One
23:04
S3: Nation is talking about. It's very much a hand-me-down grab
23:08
S3: bag of their their policies that that that Pauline Hanson
23:11
S3: talks on any given day about in in Canberra.
23:13
S1: Yeah. So if they don't have enough particularly lower house
23:17
S1: candidates to field, you know, enough seats in the in
23:19
S1: the lower house in Victoria, aren't those votes just going
23:22
S1: to flow back to the coalition. And they could end
23:24
S1: up benefiting Jess Wilson, the Liberal opposition leader.
23:29
S3: They look they've said they're going to stand in most
23:32
S3: seats or if not in all seats, I think they
23:34
S3: might have promised to stand in all seats. So look,
23:36
S3: if it's not all it'll be close to. Um, and,
23:40
S3: you know, there are a lot of seats where one
23:43
S3: nation is going to have a serious impact. I mean, the,
23:46
S3: the contest that we're heading into in November is going
23:48
S3: to be a genuine three way contest. Whatever the merits
23:51
S3: of One Nation's policies and and their political organization, all
23:55
S3: the polls suggest we're headed for a genuine three way contest.
23:58
S3: And that's going to play out in so many different ways,
24:01
S3: depending on depending on where you are. So, um, I mean,
24:05
S3: for the Liberal Party, they think they're in a good
24:08
S3: position because so long as they can finish second in seats,
24:12
S3: then they can win those seats either on One Nation
24:15
S3: preferences or on the preference of labor voters who under
24:19
S3: no circumstances are going to want to want to preference
24:21
S3: one Nation. Um, but but it's going to be such
24:24
S3: a complicated election, like the old pendulums that we used
24:27
S3: to refer to. When you look at your sort of
24:29
S3: your half dozen or your eight marginal seats that are
24:31
S3: the ones in the in play in a traditional red
24:33
S3: blue contest, that's not really what this election is about.
24:36
S3: There's going to be, you know, um, uh, red on
24:40
S3: orange contest, blue on orange, you know, blue on green,
24:44
S3: teal on blue. It's a, it's a bit of a
24:46
S3: kaleidoscope of colours really.
24:48
S1: It's going to be exciting and very interesting. Victorians are
24:51
S1: obviously very fed up with the close and the potentially
24:55
S1: corrupt relationship between the labor machine and the CFMEU, which
24:59
S1: has sewn up various big construction projects in your state,
25:02
S1: costs the taxpayer many, many billions of dollars and normalised
25:07
S1: a lot of very thuggish and criminal conduct on building
25:10
S1: sites there. I wonder, what's your opinion tip on how
25:14
S1: that taint spreads to federal labor and to the Prime
25:17
S1: Minister himself, or did he inoculate himself when he put
25:20
S1: the CFMEU into administration and he kicked John Setka, the
25:25
S1: former head of the CFMEU, out of the Labor Party?
25:28
S3: Yeah, I mean, it's not I mean, obviously it's not
25:31
S3: limited to Victoria because we can see what's going on
25:33
S3: with Queensland and the inquiry up there into the into
25:36
S3: the CFMEU. But there is something particular but and particularly
25:40
S3: Victorian about the this political nexus that developed between the
25:46
S3: CFMEU who was run by completely odious people and particularly the, um,
25:52
S3: the previous administration of Daniel Andrews, Daniel Andrews as Premier, um,
25:57
S3: you know, drew a lot of factional support, um, from that,
26:01
S3: that part of the, a part of the left faction
26:04
S3: and really the, the rise of the CFMEU here coincided
26:09
S3: with a realignment of the sort of factional tectonic plates
26:12
S3: under Andrews where, um the right was diminished. Um the
26:17
S3: left expanded, almost developed a political monopoly and that flowed
26:22
S3: through to the kind of leverage then that the CFMEU
26:26
S3: had in terms of, um, ensuring which government sites they
26:30
S3: got to control.
26:32
S1: Mhm. And do you think, I mean, do you think
26:34
S1: it's bad for the entire labor brand, like federally as well,
26:37
S1: or as Anthony Albanese sort of done enough to separate himself.
26:40
S1: He's obviously not from Victoria. And he did take a
26:43
S1: stand against John Secker in particular, only after his thuggish
26:47
S1: and criminal behavior was sort of, you know, reported on
26:50
S1: extensively by Nick McKenzie and others from our stable.
26:53
S3: I'd be I'd be surprised if this taint spreads to
26:57
S3: Anthony Albanese, mainly because, I mean, one of the big
27:00
S3: differences in state and federal governments is state governments have
27:03
S3: to deliver projects like rail tunnels and road tunnels and
27:08
S3: and big infrastructure projects in a way that the federal
27:10
S3: government doesn't really have to do. So they don't get
27:13
S3: their hands dirty in the same way, I think where the, um,
27:19
S3: probably the similarities for, for Anthony Albanese or the concern
27:25
S3: if he was looking on in terms of what happened,
27:27
S3: what's happened in Victoria is that having a political dominance
27:33
S3: over a party by a by a particular faction, the
27:36
S3: left being in sort of Uber control of the Labor Party,
27:41
S3: and one person in the case of, say, going back
27:43
S3: to Daniel Andrews, having so much personal control over the
27:47
S3: affairs of of the party in the way that we
27:50
S3: saw on display with Anthony Albanese at the at the
27:53
S3: national conference last week. That's not healthy and it can
27:59
S3: come unstuck really quickly. I mean, it's the speed of
28:03
S3: which with things have happened here. I think that's taken
28:06
S3: a lot of people by surprise. And now you have
28:10
S3: Ben Carroll, who's from the from the right faction. And
28:14
S3: he is busy, um, dismantling some of the key things
28:17
S3: that happened under, under the, the nearly 12 years of
28:21
S3: his of his predecessors. So I think the lesson is
28:27
S3: that the Labor Party is a much healthier place when
28:31
S3: the party is balanced in terms of the competing interests
28:33
S3: of the different factions. And when you don't have too
28:36
S3: much power concentrated in the hands of any particular individual.
28:39
S1: Mhm. Mhm. Let that be a lesson to Anthony Albanese. Chip,
28:43
S1: thank you so much for coming on, and we might
28:45
S1: have you back at least in November, if not before, because,
28:48
S1: as you say, it's going to be a fascinating election.
28:51
S1: And it's such a test case for the electoral support
28:54
S1: of One Nation in real time on the ground. So
28:57
S1: we'll definitely be seeking your insights again. And we thank
28:59
S1: you so much for coming on and making time.
29:01
S3: Thanks, Jack. It's a pleasure.
29:08
S1: You can read all of our political news on our
29:10
S1: website dot com.au or smh.com.au. Today's episode was produced by
29:16
S1: Kai Wong with help from Debbie Harrington. Our executive producer
29:20
S1: is Tammy Mills, and our podcasts are overseen by Lisa
29:23
S1: Muxworthy and Tom McKendrick. Before you go, follow Inside Politics
29:28
S1: and leave a review for us on Apple or Spotify.
29:32
S1: I'm Jacqueline Maley, thank you for listening.