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

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  S1: I'm Jacqueline Maley, and you are listening to Inside Politics
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  S1: from the newsrooms of the Sydney Morning Herald and The Age.
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  S1: And joining me this week, we have Paul Satchell coming
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  S1: in from a very busy Parliament House in Canberra. Paul,
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  S1: have you had any melons lately? Crown melons. Have you
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  S1: ever tasted one?
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  S2: I'm learning a lot about crown melons, including that they
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  S2: are very prized in Japanese culture, and some of them
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  S2: cost about 250 bucks a pop. And they're they're pruned
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  S2: in a way so that there's only one melon on
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  S2: each tree, so that each one sucks up all the
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  S2: nutrients and flavour. So I wonder if there'll be a
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  S2: kind of, uh, on crown melons as a result of
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  S2: this Australian diplomatic fracas.
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  S1: Yeah. Look, I think it's been really good for the
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  S1: profile of the crown melons, particularly in Australia. And as
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  S1: you say, they're amazing fruit. They one tree, one fruit.
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  S1: They're like the treasured sort of precious only child of
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  S1: the fruit tree. And they had polished. However, they have
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  S1: been causing some consternation and difficulty for our Prime Minister
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  S1: this week. Can you just tell us why? Why we
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  S1: are talking so much about melons in Canberra this week?
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  S2: Well, my recollection is that we talked about this on
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  S2: a podcast at the time, and I think you possibly
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  S2: called it. I'd have to go back and listen. But
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  S2: you called it pretty early, that the Japanese prime minister
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  S2: comment was perhaps the worst of the bunch, and potentially
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  S2: likely to cause a spat in.
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  S3: The corridors of Parliament ripe for melon melodrama.
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  S4: What's happened? Has the Prime Minister dropped dead or what?
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  S4: Over the melons. You know.
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  S5: Seriously, the Liberals are losing the plot here.
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  S6: Why won't the Prime Minister stop treating us like fools?
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  S6: Man up and say sorry to the Prime Minister of Japan.
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  S7: The Prime Minister of Japan is a good friend of Australia.
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  S2: It's taken a long time for that spat to materialize,
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  S2: and even calling it a spat might be debatable, because
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  S2: the government's view is that this has been generated by
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  S2: media coverage, and the reason it entered the debate once
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  S2: again was because there was a story in the Australian newspaper,
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  S2: the News Corp broadsheet this Monday, which had the former
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  S2: Japanese ambassador to Canberra, who was quite a hawkish figure,
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  S2: viewed by the labor government to be coalition aligned. And
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  S2: he made comments in the Australian saying that this. These
• 2:26
  S2: were effectively tasteless comments from the Prime Minister. And so
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  S2: we've spent the week in Parliament talking about it in
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  S2: a in and among many other quite important policy debates.
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  S1: Yeah. So basically this goes back to this podcast that
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  S1: we talked about previously. It was called the Bush Deep Podcast.
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  S5: Cheers.
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  S7: Welcome to Canberra.
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  S8: Why thank you very much.
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  S7: And the Lodge.
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  S8: Yes. In your joint. No one gets in your joint.
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  S7: Got through security.
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  S1: The biggest comments out of that interview that made the
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  S1: headlines for his ones about wanting to date, marry or
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  S1: shag Kylie Minogue and other female Australians, famous Australians. But
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  S1: he also made these comments about the melons because he
• 3:02
  S1: was asked by this podcaster, what is the crap, the
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  S1: most crap gift you've ever received?
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  S8: What's the most crap gift you've ever received on an
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  S8: overseas jaunt?
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  S7: Oh gee. I tell you something I got recently here
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  S7: that was pretty strange, but ended up being quite good. Yeah,
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  S7: it was a melon. The Japanese Prime Minister brought a
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  S7: melon here.
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  S8: Where did he get that? Through customs.
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  S7: She. It's a royal melon.
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  S8: Oh. She smuggled. It was a she.
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  S7: She.
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  S8: Did she smuggle.
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  S7: It? I don't know.
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  S8: Oh I'm expecting.
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  S7: Got a couple of melons.
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  S8: She brought two.
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  S7: She brought two as you do.
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  S8: She just came in looking like Pamela Anderson.
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  S7: She brought two.
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  S8: Yes.
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  S7: And they're beautiful.
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  S8: Speaking of melons, I've got you a crap gift. Hang on.
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  S8: I wonder what that could be.
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  S1: And there was a hand gesture from the Prime Minister.
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  S1: So he's. His line on this is basically. I didn't
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  S1: say anything untoward. The other podcaster did, but I didn't.
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  S2: That's right. And listeners may recall that there was a
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  S2: pretty quick apology from the Prime Minister's Office on the
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  S2: comments in relation to Kylie Minogue.
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  S8: Where rapid fire questions now every guest gets asked these shag, marry,
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  S8: date Kylie Minogue, Nicole Kidman or Rhonda Burchmore.
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  S7: I've just got married. I'm only six months in.
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  S8: But if it goes tits up, let's just pretend.
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  S7: Oh, Kylie, clearly.
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  S8: You'd marry Kylie and Shagger and data.
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  S7: All of the above.
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  S8: All right, it's a triple.
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  S7: She's terrific.
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  S8: All right, that's fair.
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  S2: He said they were. They shouldn't have made those comments
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  S2: about Kylie Minogue, even though they were made in jest.
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  S2: But at the time, there was no blanket apology for
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  S2: engaging in, you know, several questionable moments in this podcast.
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  S2: It was quite it was quite narrow around the Kylie question.
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  S2: And so when this emerged again this week, it was
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  S2: a kind of open question that the Prime Minister hadn't
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  S2: yet cleaned up. As you say, the PM and the
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  S2: people around him who all, by the way, now belatedly
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  S2: acknowledged that it was a mistake to do this podcast
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  S2: and to even engage in some of these questions, which
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  S2: he either should have batted away or not been involved
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  S2: in in the first place, by lowering himself to doing
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  S2: a podcast that just kind of so crude, he's lying
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  S2: on the Japanese element is that he insists the hand
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  S2: gestures were not made, uh, in a, in a kind
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  S2: of sexualized manner. They were not meant to symbolize the
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  S2: cupping of, uh, of breasts. They argue that he talks
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  S2: with his hands. And that is true, uh, his critics
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  S2: or the people who just don't believe the line from him,
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  S2: which he hasn't actually said publicly. This is private messaging
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  S2: from the government to journalists and others. The people who
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  S2: don't believe that line say that even if he wasn't
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  S2: making a physical gesture that was designed to symbolize what
• 5:42
  S2: critics believe he was, he was at least engaging in
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  S2: the conversation. Whether podcast host described talked about Pamela Anderson, uh,
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  S2: which is a clear reference. Yes. And also the Prime
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  S2: Minister's words back to that comment were, well, you bring
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  S2: two as you do. And so people have interpreted that
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  S2: as a clear reference to anatomy.
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  S1: He, I mean, he was sort of playing along. Yeah.
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  S1: I think that you can you can safely say that
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  S1: he didn't say anything in particular himself, but he was
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  S1: playing along with this crude or vulgar line of questioning
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  S1: or banter. It's been weaponized against the Prime Minister, as
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  S1: you say. It was sort of all kicked off again
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  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,
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  S1: they're saying it's disrespectful that, you know, that the Prime
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  S1: Minister has made a series of foulmouthed, classless comments about women.
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  S1: They're trying to insinuate that he's sort of somehow sexist or,
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  S1: you know, this indicates a bigger problem, that he has
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  S1: a character flaw, if you like, that he has with women.
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  S1: How well do you think that barrage of attacks is landing?
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  S1: Do you think it's actually affecting his reputation out there
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  S1: in voter land, or are the is the opposition overegging
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  S1: this a bit.
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  S2: Yeah. Well, this is the important question and in some
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  S2: ways the answers I gave previously going into the detail
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  S2: are kind of irrelevant. This has become a perception. A
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  S2: question about perceptions, right? There's been some hyperbolic media coverage
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  S2: in some of the anti-labor media. Nobody can doubt that.
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  S2: But the Prime Minister's pretty hard and fast line to
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  S2: not engage with this question and allow the debate to
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  S2: run has brought up this more structural debate about a
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  S2: what his critics believe to be a pattern of evasive
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  S2: or kind of gaslighting answers around, uh, defending himself for
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  S2: controversial moments. For example, when he fell off the stage
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  S2: in the election campaign, he insisted that he did not fall. Now,
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  S2: I know these things seem petty, and people will accuse
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  S2: me of being petty, and I understand that. But Australian
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  S2: politics has a track record of, you know, Non-substantive policy
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  S2: debates that relate to the Prime Minister's character or remarks
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  S2: or personality that engage voters because people are interested in
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  S2: the personalities and, you know, emotional makeups of prime ministers.
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  S1: Oh, absolutely. I mean, I would argue that prime ministers,
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  S1: for better or for worse, are usually remembered for those moments.
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  S1: For those gaffe moments are over and above any policy
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  S1: decisions or things that they might have done. Substantively. I
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  S1: can think of a of a raft of them with
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  S1: Scott Morrison. I actually did remember Scott Morrison made a
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  S1: comment about Pamela Anderson, too, in a radio interview.
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  S2: What did he say there?
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  S1: Well, it was to do with when there was negotiations
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  S1: around Julian Assange and whether or not he was going
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  S1: to the Australian government was going to step in to
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  S1: help him get out of jail. And Pamela Anderson, you'll recall,
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  S1: was one of his sort of biggest envoys. And Scott
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  S1: Morrison said on commercial radio, oh, yeah. I've had a
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  S1: couple of mates volunteer to help me out with, you know,
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  S1: with with talking to Pamela Anderson, wink wink, nudge, nudge.
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  S1: And I only bring it up because these things happen.
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  S1: Prime ministers, I guess, say these things in casual commercial
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  S1: type radio interviews or podcasts. But at the time, all
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  S1: of the people who were attacking the Prime Minister, the
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  S1: Prime Minister now for his classless comments about the melons,
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  S1: were not doing so when Scott Morrison made classless comments
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  S1: about Pamela Anderson. So there's a huge political element to this.
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  S1: But has it actually substantively damaged the relationship, do you think,
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  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,
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  S1: we're okay with it? We weren't offended. What do you
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  S1: think of that?
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  S2: Yeah. Well, there was this in a sign of how
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  S2: seriously the government is taking this behind the scenes and
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  S2: how sensitive they are to the questions around it. There
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  S2: was a leak to some of the newspapers, which had
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  S2: an email from Japanese officials, embassy officials to the Australian
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  S2: Department of Prime Minister and Cabinet, which said that according
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  S2: to the Japanese side, they believe these comments were sensationalised
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  S2: and they didn't think much of it. There was another
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  S2: revelation on Wednesday, which is that the Australian side tried
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  S2: to assure the Japanese side that the comments were not
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  S2: made as reported, and there was no no intent to offend.
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  S2: So on the face of it, there is an attempt
• 9:48
  S2: from both sides to not let this spark up a
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  S2: diplomatic incident. But Japanese culture is famously underpinned by respect
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  S2: and face, and given the prized nature of melons in Japan, given, uh,
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  S2: the kind of conversation the Prime Minister was engaged in,
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  S2: regardless of his intent, one could plausibly assume that this
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  S2: has caused some consternation behind the scenes, and various various
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  S2: foreign policy types have made this point. But that's difficult
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  S2: to prove. Just on the broader question, just going back
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  S2: one step. I apologize. Yeah. Um, to to go through
• 10:23
  S2: that pattern, there has been a growing narrative around the
• 10:26
  S2: Prime Minister that he's won't admit fault. There's the falling
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  S2: off the stage. There were the Grace tame comments. There
• 10:33
  S2: was the insistence after calling the royal commission that he
• 10:35
  S2: had actually planned to do so the whole way through. Now,
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  S2: none of these moments were viewed as plausible arguments. This
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  S2: is fed into a perception among his critics, which has
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  S2: the potential to metastasize over time and diminish goodwill for
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  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,
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  S2: spiral into a diminished goodwill that would at a time
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  S2: when the government is in trouble, uh, mean that he's
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  S2: not able to rely on the goodwill of the public.
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  S2: And these things can come up in future, as we
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  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
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  S1: something that I've seen successive prime ministers. It's very hard
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  S1: for them to admit that they've made a mistake and
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  S1: backtrack and to take accountability. And Scott Morrison, that became
• 11:25
  S1: really the defining characteristic of his leadership for a lot
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  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
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  S1: comments that the Prime Minister had made.
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  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
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  S9: who simply turns around and pretends nothing's wrong.
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  S1: It does make him look like sort of a bit unprofessional.
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  S1: Unstatesmanlike a bit of a buffoon, because it's like you're
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  S1: not just talking banter with a podcaster, you're actually representing
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  S1: Australia and you're talking about a very important Australian ally,
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  S1: a trade ally, someone who we need to work with
• 12:19
  S1: to counter the China threat.
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  S2: So truly critical relationship. Yeah. And it's at that point
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  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
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  S2: he's always been someone who has never really captured public
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  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.
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  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.
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  S2: He's dropped. He's dropped off his media profile considerably since
• 13:42
  S2: the podcast in a number of fronts. FM am, um,
• 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
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  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, uh,
• 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 is a lot
• 15:09
  S2: of 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'll slow the economy. What else did she have
• 16:49
  S1: to say about things that might touch on the government
• 16:51
  S1: more directly, like capacity in the economy, productivity, growth, that
• 16:55
  S1: 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 in 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,
• 17:49
  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 overall,
• 19:22
  S2: the economy is 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'm I just want to know, like now that the
• 21:12
  S1: dust has settled a little bit, the negative gearing and
• 21:14
  S1: the CGT changes certainly have obviously had an impact on
• 21:18
  S1: house prices. It's unclear what the wider economic effect they've
• 21:22
  S1: had is, at least at this stage. And in terms
• 21:25
  S1: of business investment, does the treasurer or does his office
• 21:29
  S1: consider those changes to have been a success, or is
• 21:32
  S1: it sort of 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 it 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 right in right into
• 24:17
  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 home 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 will stabilise, as all things do, as
• 25:12
  S1: people get used to the status quo and people start
• 25:14
  S1: coming back in.
• 25:14
  S2: Quite possibly.
• 25:15
  S1: Yeah. I mean, it's I keep an eye on I'm
• 25:18
  S1: my local property market or the Sydney property market, and
• 25:20
  S1: there are some bargains to be had, but there's also
• 25:23
  S1: some very, very expensive properties there that are well above
• 25:25
  S1: the sort of the national household average income in terms
• 25:29
  S1: of repayments. 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,
• 26:10
  S1: theage.com.au and smh.com.au. Today's episode was produced by Tammy Mills
• 26:16
  S1: with help from Josh Towers and Debbie Harrington, and our
• 26:19
  S1: podcasts are overseen by Lisa Muxworthy and Tom McKendrick. Before
• 26:24
  S1: you go, follow Inside Politics and leave a review for
• 26:26
  S1: us on Apple or Spotify. I'm Jacqueline Maley, thank you
• 26:30
  S1: for listening.