Latest / Inside Politics / The melon story – Is the prime minister just really bad at saying sorry?

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The melon story – Is the prime minister just really bad at saying sorry? · Inside Politics

0:00
S1: I'm Jacqueline Maley, and you are listening to Inside Politics
0:03
S1: from the newsrooms of the Sydney Morning Herald and The Age.
0:08
S1: And joining me this week, we have Paul Satchell coming
0:11
S1: in from a very busy Parliament House in Canberra. Paul,
0:15
S1: have you had any melons lately? Crown melons. Have you
0:19
S1: ever tasted one?
0:20
S2: I'm learning a lot about crown melons, including that they
0:24
S2: are very prized in Japanese culture, and some of them
0:27
S2: cost about 250 bucks a pop. And they're they're pruned
0:31
S2: in a way so that there's only one melon on
0:33
S2: each tree, so that each one sucks up all the
0:36
S2: nutrients and flavour. So I wonder if there'll be a
0:39
S2: kind of, uh, on crown melons as a result of
0:43
S2: this Australian diplomatic fracas.
0:45
S1: Yeah. Look, I think it's been really good for the
0:47
S1: profile of the crown melons, particularly in Australia. And as
0:50
S1: you say, they're amazing fruit. They one tree, one fruit.
0:53
S1: They're like the treasured sort of precious only child of
0:56
S1: the fruit tree. And they had polished. However, they have
1:01
S1: been causing some consternation and difficulty for our Prime Minister
1:04
S1: this week. Can you just tell us why? Why we
1:07
S1: are talking so much about melons in Canberra this week?
1:09
S2: Well, my recollection is that we talked about this on
1:12
S2: a podcast at the time, and I think you possibly
1:16
S2: called it. I'd have to go back and listen. But
1:18
S2: you called it pretty early, that the Japanese prime minister
1:22
S2: comment was perhaps the worst of the bunch, and potentially
1:27
S2: likely to cause a spat in.
1:29
S3: The corridors of Parliament ripe for melon melodrama.
1:32
S4: What's happened? Has the Prime Minister dropped dead or what?
1:36
S4: Over the melons. You know.
1:38
S5: Seriously, the Liberals are losing the plot here.
1:42
S6: Why won't the Prime Minister stop treating us like fools?
1:45
S6: Man up and say sorry to the Prime Minister of Japan.
1:49
S7: The Prime Minister of Japan is a good friend of Australia.
1:56
S2: It's taken a long time for that spat to materialize,
2:00
S2: and even calling it a spat might be debatable, because
2:03
S2: the government's view is that this has been generated by
2:07
S2: media coverage, and the reason it entered the debate once
2:10
S2: again was because there was a story in the Australian newspaper,
2:13
S2: the News Corp broadsheet this Monday, which had the former
2:17
S2: Japanese ambassador to Canberra, who was quite a hawkish figure,
2:21
S2: viewed by the labor government to be coalition aligned. And
2:24
S2: he made comments in the Australian saying that this. These
2:26
S2: were effectively tasteless comments from the Prime Minister. And so
2:29
S2: we've spent the week in Parliament talking about it in
2:32
S2: a in and among many other quite important policy debates.
2:36
S1: Yeah. So basically this goes back to this podcast that
2:38
S1: we talked about previously. It was called the Bush Deep Podcast.
2:42
S5: Cheers.
2:43
S7: Welcome to Canberra.
2:44
S8: Why thank you very much.
2:45
S7: And the Lodge.
2:45
S8: Yes. In your joint. No one gets in your joint.
2:48
S7: Got through security.
2:49
S1: The biggest comments out of that interview that made the
2:52
S1: headlines for his ones about wanting to date, marry or
2:55
S1: shag Kylie Minogue and other female Australians, famous Australians. But
3:00
S1: he also made these comments about the melons because he
3:02
S1: was asked by this podcaster, what is the crap, the
3:06
S1: most crap gift you've ever received?
3:10
S8: What's the most crap gift you've ever received on an
3:12
S8: overseas jaunt?
3:14
S7: Oh gee. I tell you something I got recently here
3:17
S7: that was pretty strange, but ended up being quite good. Yeah,
3:21
S7: it was a melon. The Japanese Prime Minister brought a
3:25
S7: melon here.
3:27
S8: Where did he get that? Through customs.
3:29
S7: She. It's a royal melon.
3:31
S8: Oh. She smuggled. It was a she.
3:33
S7: She.
3:33
S8: Did she smuggle.
3:34
S7: It? I don't know.
3:35
S8: Oh I'm expecting.
3:36
S7: Got a couple of melons.
3:38
S8: She brought two.
3:39
S7: She brought two as you do.
3:40
S8: She just came in looking like Pamela Anderson.
3:43
S7: She brought two.
3:43
S8: Yes.
3:44
S7: And they're beautiful.
3:45
S8: Speaking of melons, I've got you a crap gift. Hang on.
3:48
S8: I wonder what that could be.
3:49
S1: And there was a hand gesture from the Prime Minister.
3:51
S1: So he's. His line on this is basically. I didn't
3:54
S1: say anything untoward. The other podcaster I did, but I didn't.
3:58
S2: That's right. And listeners may recall that there was a
4:01
S2: pretty quick apology from the Prime Minister's Office on the
4:04
S2: comments in relation to Kylie Minogue.
4:06
S8: We're at rapid fire questions now. Every guest gets asked
4:09
S8: these shag, marry, date Kylie Minogue, Nicole Kidman or Rhonda Burchmore.
4:14
S7: I've just got married. I'm only six months in.
4:17
S8: But if it goes tits up, let's just pretend.
4:19
S7: Oh.
4:21
S8: Clearly you'd marry Kylie and Shag and data.
4:24
S7: All of the above.
4:25
S8: All right. It's a triple.
4:26
S7: She's terrific.
4:27
S8: All right, that's fair.
4:28
S2: He said they were. They shouldn't have made those comments
4:31
S2: about Kylie Minogue, even though they were made in jest.
4:33
S2: But at the time, there was no blanket apology for
4:36
S2: engaging in, you know, several questionable moments in this podcast.
4:41
S2: It was quite it was quite narrow around the Kylie question.
4:44
S2: And so when this emerged again this week, it was
4:47
S2: a kind of open question that the Prime Minister hadn't
4:49
S2: yet cleaned up, as you say, the PM and the
4:52
S2: people around him who all, by the way, now belatedly
4:55
S2: acknowledged that it was a mistake to do this podcast
4:58
S2: and to even engage in some of these questions, which
5:01
S2: he either should have batted away or not been involved
5:03
S2: in in the first place, by lowering himself to doing
5:06
S2: a podcast that just kind of so crude. His line
5:09
S2: on the Japanese element is that he insists the hand
5:12
S2: gestures were not made, uh, in a, in a kind
5:16
S2: of sexualized manner. They were not meant to symbolize the
5:18
S2: cupping of, of breasts. They argue that he talks with
5:22
S2: his hands. And that is true, uh, his critics or
5:26
S2: the people who just don't believe the line from him,
5:29
S2: which he hasn't actually said publicly. This is private messaging
5:32
S2: from the government to journalists and others. The people who
5:35
S2: don't believe that line say that even if he wasn't
5:38
S2: making a physical gesture that was designed to symbolize what
5:42
S2: critics believe he was, he was at least engaging in
5:44
S2: the conversation. Whether podcast host described talked about Pamela Anderson, uh,
5:49
S2: which is a clear reference. Yes. And also the Prime
5:52
S2: Minister's words back to that comment were, well, you bring
5:56
S2: two as you do. And so people have interpreted that
5:58
S2: as a clear reference to anatomy.
6:01
S1: He, I mean, he was sort of playing along. Yeah.
6:03
S1: I think that you can you can safely say that
6:06
S1: he didn't say anything in particular himself, but he was
6:09
S1: playing along with this crude or vulgar line of questioning
6:11
S1: or banter. It's been weaponized against the Prime Minister, as
6:15
S1: you say. It was sort of all kicked off again,
6:16
S1: because the Japanese ambassador wrote a piece for The Australian.
6:20
S1: The Australian newspapers going really hard on this coalition is
6:23
S1: asking him a lot of questions about it. I mean,
6:26
S1: they're saying it's disrespectful that, you know, that the Prime
6:28
S1: Minister has made a series of foulmouthed, classless comments about women.
6:32
S1: They're trying to insinuate that he's sort of somehow sexist or,
6:35
S1: you know, this indicates a bigger problem, that he has
6:38
S1: a character flaw, if you like, that he has with women.
6:41
S1: How well do you think that barrage of attacks is landing?
6:44
S1: Do you think it's actually affecting his reputation out there
6:47
S1: in voter land, or are the is the opposition overegging
6:49
S1: this a bit?
6:50
S2: Yeah. Well, this is the important question, and in some
6:52
S2: ways the answers I gave previously going into the detail
6:55
S2: are kind of irrelevant. This has become a perception. A
6:57
S2: question about perceptions, right? There's been some hyperbolic media coverage
7:01
S2: in some of the anti-labor media. Nobody can doubt that.
7:04
S2: But the Prime Minister's pretty hard and fast line to
7:08
S2: not engage with this question and allow the debate to
7:10
S2: run has brought up this more structural debate about what
7:16
S2: his critics believe to be a pattern of evasive or
7:20
S2: kind of gaslighting answers around, uh, defending himself for controversial moments.
7:25
S2: For example, when he fell off the stage in the
7:27
S2: election campaign, he insisted that he did not fall. Now,
7:30
S2: I know these things seem petty, and people will accuse
7:32
S2: me of being petty, and I understand that. But Australian
7:34
S2: politics has a track record of, you know, Non-substantive policy
7:38
S2: debates that relate to the Prime Minister's character or remarks
7:41
S2: or personality that engage voters because people are interested in
7:45
S2: the personalities and, you know, emotional makeups of prime ministers.
7:49
S1: Oh, absolutely. I mean, I would argue that prime ministers,
7:53
S1: for better or for worse, are usually remembered for those moments.
7:55
S1: For those gaffe moments are over and above any policy
7:58
S1: decisions or things that they might have done. Substantively. I
8:01
S1: can think of a of a raft of them with
8:03
S1: Scott Morrison. I actually did remember Scott Morrison made a
8:06
S1: comment about Pamela Anderson, too, in a radio interview.
8:09
S2: What did he say there?
8:10
S1: Well, it was to do with when there was negotiations
8:14
S1: around Julian Assange and whether or not he was going
8:16
S1: to the Australian government was going to step in to
8:19
S1: help him get out of jail. And Pamela Anderson, you'll recall,
8:22
S1: was one of his sort of biggest envoys. And Scott
8:26
S1: Morrison said on commercial radio, oh, yeah. I've had a
8:28
S1: couple of mates volunteer to help me out with, you know,
8:31
S1: with with talking to Pamela Anderson, wink wink, nudge, nudge.
8:34
S1: And I only bring it up because these things happen.
8:37
S1: Prime ministers, I guess, say these things in casual commercial
8:40
S1: type radio interviews or podcasts. But at the time, all
8:43
S1: of the people who were attacking the Prime Minister, the
8:45
S1: Prime Minister now for his classless comments about the melons,
8:49
S1: were not doing so when Scott Morrison made classless comments
8:51
S1: about Pamela Anderson. So there's a huge political element to this.
8:55
S1: But has it actually substantively damaged the relationship, do you think,
8:58
S1: between Japan and Australia, because the Japanese have actually made
9:02
S1: the unusual step of coming out and saying, we're cool,
9:05
S1: we're okay with it? We weren't offended. What do you
9:07
S1: think of that?
9:07
S2: Yeah. Well, there was this in a sign of how
9:11
S2: seriously the government is taking this behind the scenes and
9:14
S2: how sensitive they are to the questions around it. There
9:17
S2: was a leak to some of the newspapers, which had
9:20
S2: an email from Japanese officials, embassy officials to the Australian
9:24
S2: Department of Prime Minister and Cabinet, which said that according
9:28
S2: to the Japanese side, they believe these comments were sensationalised
9:31
S2: and they didn't think much of it. There was another
9:34
S2: revelation on Wednesday, which is that the Australian side tried
9:39
S2: to assure the Japanese side that the comments were not
9:41
S2: made as reported, and there was no no intent to offend.
9:46
S2: So on the face of it, there is an attempt
9:48
S2: from both sides to not let this spark up a
9:50
S2: diplomatic incident. But Japanese culture is famously underpinned by respect
9:56
S2: and face, and given the prized nature of melons in Japan,
10:02
S2: given the kind of conversation the Prime Minister was engaged in,
10:06
S2: regardless of his intent, one could plausibly assume that this
10:11
S2: has caused some consternation behind the scenes, and various various
10:15
S2: foreign policy types have made this point. But that's difficult
10:17
S2: to prove. Just on the broader question, just going back
10:20
S2: one step. I apologize. Yeah. Um, to to go through
10:23
S2: that pattern there, there has been a growing narrative around
10:26
S2: the Prime Minister that he's won't admit fault. There's the
10:29
S2: falling off the stage. There were the Grace tame comments.
10:32
S2: There was the insistence after calling the royal commission that
10:35
S2: he had actually planned to do so the whole way through. Now,
10:38
S2: none of these moments were viewed as plausible arguments. This
10:41
S2: is fed into a perception among his critics, which has
10:45
S2: the potential to metastasize over time and diminish goodwill for
10:49
S2: him over time, despite not being perhaps a critical, you know,
10:53
S2: a true crisis at the moment, but that could, you know,
10:56
S2: spiral into a diminished goodwill that would at a time
11:00
S2: when the government is in trouble, uh, mean that he's
11:03
S2: not able to rely on the goodwill of the public.
11:07
S2: And these things can come up in future, as we
11:08
S2: saw with Scott Morrison and the Hawaii moment. Now, I'm
11:11
S2: not forecasting that, but that's the risk here.
11:15
S1: Yeah. I mean, I think this is again, this is
11:17
S1: something that I've seen successive prime ministers. It's very hard
11:19
S1: for them to admit that they've made a mistake and
11:21
S1: backtrack and to take accountability. And Scott Morrison, that became
11:25
S1: really the defining characteristic of his leadership for a lot
11:28
S1: of people, was that he failed to take accountability for
11:31
S1: himself and for his government's mistakes. So yeah, it's sort
11:34
S1: of a broader perception thing. Also, I thought Tim Wilson,
11:37
S1: actually the shadow treasurer, had a good line on radio
11:40
S1: this week where he talked about the Les Patterson like
11:43
S1: comments that the Prime Minister had made.
11:45
S9: But part of part of getting things wrong, accepting it
11:48
S9: is learning from it and growing. And I would have
11:51
S9: thought that we want a Prime Minister who understands when
11:54
S9: they get something wrong, they grow and learn from the experience. Instead,
11:57
S9: we've got to kind of Les Patterson style prime minister
12:00
S9: who simply turns around, pretends nothing's wrong.
12:02
S1: It does make him look like sort of a bit unprofessional.
12:05
S1: Unstatesmanlike a bit of a buffoon, because it's like you're
12:08
S1: not just talking banter with a podcaster, you're actually representing
12:12
S1: Australia and you're talking about a very important Australian ally,
12:16
S1: a trade ally, someone who we need to work with
12:19
S1: to counter the China threat.
12:21
S2: So truly critical relationship. Yeah. And it's at that point
12:25
S2: from Wilson does go to a kind of interesting paradox
12:28
S2: in this government, which is that for quite a for
12:30
S2: quite long stretches of this government's life, the Prime Minister
12:34
S2: has had quite poor popularity ratings, particularly post Bondi. They've
12:38
S2: been really low. They're not hugely dissimilar to where Peter
12:41
S2: Dutton was before the election. Now, the paradox there is
12:44
S2: that it's been a remarkably stable government that has had
12:49
S2: a pretty for most, for the most part, quite a,
12:52
S2: you know, forward leaning agenda. Huge election win, caucus solidarity.
12:58
S2: There's been huge achievements from this government, but they've done
13:00
S2: so with a prime minister who has a set of
13:02
S2: really impressive skills around managing a government, managing a cabinet,
13:07
S2: laying out an agenda and working to an election. But
13:10
S2: he's always been someone who has never really captured public
13:13
S2: attention and who's gone through some personal crises himself, particularly
13:17
S2: around Bondi and at other moments. So these conversations are
13:20
S2: happening around the government, around, you know, not not to
13:23
S2: suggest there's any move on the Prime Minister, not even close. But,
13:27
S2: you know, some backbenchers thinking, oh, I just wish he
13:29
S2: wouldn't put his foot in it.
13:30
S1: Yeah. Well, as has been noted this week, he hasn't
13:33
S1: done any sort of jocular or fun podcast for a while.
13:35
S1: We've probably ruled him out of coming back on Inside
13:37
S1: Politics anytime soon. With all this criticism.
13:40
S2: He's dropped. He's dropped off his media profile considerably since
13:42
S2: the podcast in a number of fronts, FM a m
13:45
S2: press conferences with the Canberra journalists. We haven't had a
13:47
S2: press conference with him in the six weeks since the
13:50
S2: podcast before. Before then, he held a press conference on
13:53
S2: average once a week in Canberra. There's been almost no
13:56
S2: FM radio since that moment. Now I'm not I don't
13:59
S2: I can't prove that that's, uh, has a causal effect,
14:02
S2: but there's certainly a correlation. Now, just for a second,
14:05
S2: worth noting that there's a debate on whether it's a
14:09
S2: wise political strategy for the opposition to be focusing on this.
14:12
S2: There's been a winter break in Canberra, so politicians haven't
14:15
S2: been in Parliament for, I think, about six weeks. And
14:18
S2: this has been the opposition's key focus in Question Time. Now,
14:22
S2: even among labor MPs who would have loved it if
14:24
S2: the Prime Minister just gave a blanket apology, acknowledged that
14:28
S2: even if he didn't mean it, it could have appeared
14:31
S2: offensive and just moved on from it. Even among those
14:33
S2: critics on the labor backbench who are definitely in the minority,
14:36
S2: their view is still that the opposition's wasting its time
14:39
S2: on this, that they've fallen for a sugar hit in
14:42
S2: an attempt to tear strips off a powerful prime minister,
14:46
S2: but have taken their eye off the ball in focusing
14:48
S2: on the economy and other important policy questions that will
14:51
S2: be able to develop into a kind of sustained political
14:55
S2: argument that builds over time, and that's remembered at the election.
14:59
S2: So there's a strong view on the Labour side that
15:01
S2: even though this is a bad look for the Prime Minister,
15:03
S2: it's a waste of the opposition's time now. You can
15:06
S2: understand the opposition buying into this. There's a lot of
15:09
S2: media coverage around it. It's making the PM look silly.
15:12
S2: He's quite obviously uncomfortable talking about it because he's avoiding
15:16
S2: the question of press conferences. Chris Minns, the New South
15:19
S2: Wales Premier, had to kind of provide cover for him
15:22
S2: at an announcement of tomago the smelter this on Thursday
15:25
S2: morning and in Question time, the Prime Minister shut down
15:28
S2: questions on, I think it was Tuesday when he was
15:30
S2: about to be questioned for a second time by the
15:32
S2: by the Liberal backbencher Mary Aldridge. So he's uncomfortable on it.
15:36
S2: But there's still a serious question there about whether this
15:38
S2: can build up into a sustained campaign that drives vote
15:43
S2: to the opposition, or whether they've taken their eye off
15:45
S2: the ball on the main game.
15:47
S1: Yeah, you've certainly got to say the podcast has done
15:49
S1: much more harm than good otherwise in Canberra this week.
15:52
S1: It looks like the Prime Minister is ready to play
15:54
S1: ball on the gambling reforms. He's come to a compromise
15:57
S1: position with the coalition there. They've also come to a
15:59
S1: compromise position on the news media bargaining code, which is
16:03
S1: music to the ears of journalists such as ourselves. They've
16:06
S1: done sort of a deal which makes the big media
16:08
S1: companies like ours a little bit more happy. But the
16:10
S1: main game for the government always is economic management. And
16:13
S1: this week we had a reserve Bank meeting with the
16:15
S1: rates decision that left rates on hold at 4.35%, but
16:19
S1: RBA governor Michele Bullock was very sharp in her comments
16:22
S1: that she made after the meeting. She said she would
16:25
S1: not hesitate to raise rates again if necessary. She said
16:28
S1: the housing market, which of course has dipped, wasn't a
16:31
S1: particular concern of the reserve Bank. But all the big
16:34
S1: banks are forecasting big drops in house values to varying degrees.
16:38
S1: They're all saying that they've had a huge drop off
16:40
S1: in mortgage applications, which will presumably weigh on consumer spending
16:44
S1: and confidence, which could be good for the RBA's purposes
16:46
S1: because it will slow the economy. What else did she
16:49
S1: have to say about things that might touch on the
16:51
S1: government more directly, like capacity in the economy, productivity, growth,
16:55
S1: that kind of thing?
16:55
S2: Yeah. Michele Bullock was criticised for the early part of
17:01
S2: the period in which she started to give these press conferences,
17:03
S2: which were a labor reform. Previously, we only heard a
17:07
S2: we only had a written statement. So we're able to
17:09
S2: now hear a lot more about the RBA's thinking, which
17:11
S2: is at times a good thing for the government, but
17:14
S2: increasingly not so because Michele Bullock was, as I said,
17:18
S2: initially criticised for being a bit shy in pointing out
17:21
S2: some of the problems that the RBA need to contend with,
17:24
S2: some of which are of the government's making, particularly around
17:27
S2: spending and productivity. And in recent times she's been a
17:30
S2: bit more frank around that question of productivity. She's saying
17:34
S2: effectively that her hands are tied. If the economy starts
17:37
S2: to run a bit more quickly, inflation heats up because
17:39
S2: we don't have enough space. And the supply side and
17:42
S2: her hands are tied. And she's been pretty clear about
17:44
S2: this threat at the moment. You know, Shane Wright, our
17:47
S2: colleague and sometimes podcast host, has called this, you know,
17:50
S2: pretty naked example of Jawboning where she's trying to set
17:52
S2: expectations for where the RBA might go next to try
17:56
S2: and cause other actors in the economy to, to act
17:58
S2: in a certain way. And she's saying, we know people
18:01
S2: are struggling to get by at the moment, but we
18:04
S2: are not sustainably getting inflation back within that band. The
18:07
S2: last time inflation was at that midpoint of the 2
18:10
S2: to 3% band was sustainably was years ago. So we
18:14
S2: have this entrenched, higher than expected inflation around housing, around
18:18
S2: rents in the services economy. The Middle East has not
18:22
S2: been as big a factor in pushing up prices as
18:24
S2: most thought. But there's this big new factor, which is
18:28
S2: the AI data centre boom, which is pushing up construction
18:31
S2: costs and just pumping so much money into the economy,
18:34
S2: which is another interesting paradox, because AI may eventually have
18:38
S2: a huge disinflationary impact by making us do things more efficiently.
18:43
S2: But at the moment it's actually heating things up. And
18:46
S2: then the other huge elephant in the room is the
18:49
S2: housing price falls we're seeing at the moment. Shane Wright
18:52
S2: told me not to call it a collapse earlier, so
18:54
S2: I won't use that word. But there are now forecasts
18:56
S2: from the ANZ and Westpac that we might see between
18:59
S2: 10 and 15% falls in Sydney and Melbourne over the
19:02
S2: next year, and there's no doubt at all. Most economists
19:04
S2: say that even the falls we've seen so far have
19:07
S2: hit the government in the face because they were quicker
19:09
S2: and more severe than we expected. So people feel less
19:12
S2: wealthy when house prices fall. So that reduces spending, which
19:15
S2: might actually dip the economy, as you say, Jack. So
19:18
S2: there's all these very difficult, fast moving competing factors. But
19:22
S2: overall the economy's still looking in unhealthy shape.
19:25
S1: Okay. I mean, the inflation forecasts aren't really that bad though.
19:29
S1: I mean they're less than the original forecasts were. I mean,
19:33
S1: the outlook is not too bad. A lot of people
19:34
S1: were saying a lot of the commentary around the RBA
19:38
S1: decision on Tuesday was that while Michelle Bullock's comments were
19:42
S1: very hawkish And we're sort of trying to warn people
19:45
S1: don't relax because I might lay another rate hike on you.
19:48
S1: The actual forecast of the bank were telling a story
19:51
S1: that was not was reasonable, wasn't sort of disastrous.
19:54
S2: Yeah. Inflation's not going to go up as much as
19:56
S2: we thought it would earlier this year. There's no doubt
19:58
S2: about that. And that's a lot of that is due
20:00
S2: to the war in the Middle East. Somehow not getting
20:03
S2: as not not becoming as severe a local, uh, inflationary
20:07
S2: pressure as we thought. But there's just this structural underlying
20:10
S2: inflation problem. The RBA can't get it back within the band.
20:14
S2: It's it's been unable to do that. And you can
20:17
S2: hear in her tone and in her, uh, in her
20:20
S2: public messaging that the RBA is kind of sick of
20:23
S2: this entrenched inflation and they think we might need a
20:25
S2: more severe economic economic downturn to get there. But I
20:29
S2: agree with you.
20:29
S1: Yeah. I wonder, do you have any insight into how
20:33
S1: the treasurer and his office are feeling about their tax changes?
20:35
S1: Now that the dust has settled, I noticed that the
20:37
S1: Commbank CEO, Matt Coleman, you know, who's obviously a huge
20:41
S1: voice in this space on the front page of the
20:43
S1: Financial Review on Thursday was like, everybody needs to relax.
20:47
S1: There's not a big problem. House prices are going to drop.
20:50
S1: But we've got to you know, we've got to look
20:51
S1: beyond the short term into the intergenerational equity argument. And,
20:55
S1: you know, realize that some policy settings might hurt us
20:58
S1: in the long in the short term, but we'll be
21:00
S1: better for us in the long term. Now, I mean,
21:02
S1: he has obviously a lot of skin in the game,
21:04
S1: and it suits his company's purposes not to talk down
21:07
S1: the economy or the housing market too severely. But yeah.
21:10
S1: I just want to know, like now that the dust
21:12
S1: has settled a little bit, the negative gearing and the
21:14
S1: CGT changes certainly have obviously had an impact on house prices.
21:19
S1: It's unclear what the wider economic effect they've had is,
21:23
S1: at least at this stage. And in terms of business investment,
21:27
S1: does the treasurer or does his office consider those changes
21:30
S1: to have been a success, or is it sort of
21:32
S1: too early to call?
21:33
S2: Yeah, it's a it's a like a super important question.
21:36
S2: I think it is too early to call. You have
21:38
S2: different voices trying to tell the public different things. The
21:42
S2: treasurer and as you say, Matt Coleman, the Commbank CEO
21:46
S2: who's a close friend of the treasurer, by the way,
21:48
S2: is trying to tell the public, look, this feels like
21:52
S2: a shock in the short term. House prices rarely fall
21:55
S2: in Australia. They're such a critical part of our national psyche.
21:59
S2: But look, in the long run we've had prices go up.
22:02
S2: I think the figure is like 60 or 70% in
22:04
S2: the last six years. So a ten, 15, 5%, who
22:08
S2: knows where it lands. Downturn is a short blip in
22:11
S2: the overall scheme of things. On the other side, the coalition,
22:14
S2: much of the conservative media, but also probably a lot
22:17
S2: of mums and dads are thinking, oh, I don't know
22:19
S2: if this is really what I wanted to see here.
22:23
S2: Now there's again competing factors among those mums and dads.
22:25
S2: They want to see their kids own a home and
22:28
S2: so they see some benefit there. But most people gain
22:31
S2: their asset wealth and their spending power from the feeling
22:35
S2: of house prices rising, rising and the knowledge that they
22:38
S2: are sitting on something valuable. But on the actual financial
22:42
S2: stability side, there's been a lot of conversation about negative equity,
22:45
S2: which is where, you know, someone's loan is worth more
22:47
S2: than their home if prices fall. This is a particular
22:50
S2: concern around the 5% deposit scheme that's pumped a lot
22:53
S2: of young home buyers in. Michelle Bullock made interesting comments
22:56
S2: about this in her press conference. I hope I have
22:58
S2: the figures on this right, but she was effectively saying
23:00
S2: that even if house prices fall by, I think, 20%,
23:04
S2: which would be really severe, she's confident that will not
23:07
S2: rock the financial system in the way that some particularly
23:11
S2: conservative politicians are stating. So there are different voices and
23:15
S2: different directions. Jack.
23:17
S1: Yeah, she said even if there was a drop of 20%
23:19
S1: in house prices across the board, then that would push
23:22
S1: approximately 5% of home owners or mortgage holders into negative equity,
23:26
S1: which is obviously really bad if you're in negative equity
23:28
S1: or can be very bad, only bad, I should say,
23:31
S1: if you actually have to sell.
23:32
S2: If you're sacked or if you go through a divorce. Yeah.
23:34
S1: So that's right. If unemployment rises, then it becomes more
23:37
S1: of a problem. But on a macroeconomic level, That's not
23:40
S1: a worry, apparently, for the reserve Bank, but it will.
23:42
S1: Of course, it's anxiety provoking for any mortgage holder to
23:45
S1: hear talk of negative equity or negative equity rates growing.
23:48
S1: So and I also noticed that Matt Coleman was talking
23:51
S1: about how people some offset accounts have been people have
23:54
S1: been dipping into their offset accounts. So those people basically
23:57
S1: struggling to keep up with the cost of living and
23:59
S1: perhaps their own mortgage repayments as the rate rises come through,
24:03
S1: are dipping into their offsets more and more. So, yeah,
24:05
S1: it's a very mixed economic picture. But I'm Jim Chalmers
24:08
S1: who's had such a huge backlash and such sort of
24:11
S1: strong negative reactions to this budget. Will have been happy
24:14
S1: to have his mate Matt Coleman ride in, ride into
24:18
S1: battle for him. And just Paul.
24:19
S2: Just worth noting on that one, sorry to interrupt, is
24:21
S2: that unemployment is about to rise. So people in negative equity,
24:24
S2: they're probably there'll be more people on the unemployment queue
24:27
S2: in the next year than there were in the last year.
24:30
S2: And also, just on this question, you asked the question
24:32
S2: on how the politics is going for the government on, um,
24:35
S2: on the budget changes. The big argument that ministers put
24:38
S2: is that when they. MPs put. Is that when they
24:41
S2: go to auctions on weekends. Since the budget. First home
24:43
S2: buyers are getting a leg up and they can feel
24:45
S2: that they. They have younger people say, I'm more able
24:49
S2: to get my foot in the door. The problem at
24:51
S2: the moment is that because of the overall downturn and
24:53
S2: the negative sentiment out there in the community, loan approvals
24:57
S2: are dropping off drastically for investors, but also significantly for
25:01
S2: all other buyers, including first time buyers. So there are
25:04
S2: not more first time buyers getting into the market, at
25:06
S2: least now. Not now because of this negative sentiment, but
25:08
S2: perhaps in the medium term.
25:10
S1: I think it'll stabilise, as all things do, as people
25:12
S1: get used to the status quo and people start coming
25:14
S1: back in.
25:14
S2: Quite possibly.
25:15
S1: I mean, it's I keep an eye on I'm my
25:18
S1: local property market or the Sydney property market, and there
25:21
S1: are some bargains to be had, but there's also some very,
25:23
S1: very expensive properties there that are well above the sort
25:26
S1: of the national household average income in terms of repayments.
25:30
S1: So yeah, it's a mixed picture.
25:32
S2: Are you looking for one of those bargains.
25:33
S1: Oh yeah. I'm just going to snap up a few
25:35
S1: investment properties you know just to add to the portfolio.
25:38
S1: It's just nice to have coast, country, urban. Don't you think?
25:42
S2: I'm actually just personally going to get into melons.
25:46
S1: I think melons is. Well, I mean the the return
25:50
S1: on investment for the melon. The beautifully cared for polished.
25:54
S1: Hand polished melon must be pretty good. I'm hoping those
25:57
S1: price margins are good. So yeah, let's keep an eye
26:01
S1: on the melon market and let's meet again next week.
26:04
S2: Talk to you soon.
26:08
S1: You can read all of our political news on our website, theage.com.au,
26:11
S1: and sm.com.au. Today's episode was produced by Tammy Mills with
26:17
S1: help from Josh Towers and Debbie Harrington, and our podcasts
26:20
S1: are overseen by Lisa Muxworthy and Tom McKendrick. Before you go,
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S1: follow Inside Politics and leave a review for us on
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S1: Apple or Spotify. I'm Jacqueline Maley, thank you for listening.