JOHN LAWS:
Well, Labor's first budget in nine years was handed down last night, as you know, with promises to build more houses, reduce the cost of child care, increase renewable energy uptake. The Treasurer painted a pretty grim picture of the economy in the in the face of a likely global downturn, rising inflation and increasing bills for natural disasters. So we thought we'd get some more information about this and to tell us more Assistant Treasurer and probably one of the most qualified politicians in Canberra, Andrew Leigh, joins me on the line. Andrew, good morning and welcome to the program.
ANDREW LEIGH:
Good morning, John, great to be with you.
LAWS:
Thank you. Your commitment to reduce power bills by $275 has been replaced with predictions prices are going to increase by 50 per cent over two years, what happened there?
LEIGH:
Well, that's a forecast for 2025 based on the information we had before us at the election. Obviously the war in Ukraine is biting hard and creating challenges, particularly for electricity markets that are reliant on gas coming on in. You're relying on globally traded commodities, then your prices are at the whim of the international markets. The nice thing about wind and solar is they're not tradable. And so you're not subject to what's going on in Europe.
LAWS:
The Shadow Minister Jane Hume says families are going to be $2,000 worse off by Christmas, is that correct?
LEIGH:
Well, we're making sure we're putting in place cost-of-living relief, John. We recognise that Australian families are doing it tough. This inflation crisis is hitting Australia hard as it's hitting other countries. We're trying to ensure we invest in cheaper child care, cheaper medicines, expanding parental leave, we supported a pay rise for minimum wage workers. We understand that for many households, we need to do more to provide cost-of-living relief. But at the same time, John, it's really critical that we're not working against what the Reserve Bank is doing. With the Reserve Bank's interest rate rises, they're seeking to cool off demand. We're aware as a government that if we simply engaged in an unfunded cash splash, that all the Reserve Bank would do was to raise rates.
LAWS:
Tell me this, will families be worse off, $2,000 worse off by Christmas? Is that right or wrong?
LEIGH:
Oh look there are big inflation challenges in the economy... We know that...
LAWS:
No no, no, no, no, no, you didn't answer the question. Is that right or wrong?
LEIGH:
John, I don't have the specific answer to that. What I know is there's price pressures for households, which are taking place particularly in the areas of food and electricity. We've seen in Australia inflation largely confined to the goods sector, in the United States, they've got it spilling over to the services sector as well. And that means that inflation is more likely to be ongoing. We understand these are serious challenges for families. And that's why we as a Commonwealth, have looked to rein in unnecessary spending, scaling back some of the rorts and waste of the Coalition years, things like the car park program that were simply not sustainable in the face of a trillion dollars of debt.
LAWS:
Okay, but you said you don't have the answer to that. You're the shadow finance minister. I mean, you're the Assistant Minister for Treasury, and probably one of the most qualified politicians in Canberra. Shouldn't you have the answer to that?
LEIGH:
John, if your question is whether inflation is hitting household hard, then yes, absolutely. That inflation impact is going to be different across households, it's going to depend on how much you're spending, and it's going to depend on how much you're spending in the categories where prices are rising fast. If you're a household that spends a lot on electricity and food, then that makes it tough. We know fuel prices are high, although the international oil price has come down a little and that's provided some modest relief, but they're still considerably higher then they were a couple of years ago. That's why that the budget is so focused on providing relief for Australian households and for those cost-of-living challenges.
LAWS:
All right, but will families be $2,000 worse off by Christmas?
LEIGH:
John, it's going to depend on different families. But there are challenges that inflation causes in Australia. We've got Australian inflation forecast to go higher before it comes lower. And in the face of that, we need to make sure we’re making these responsible decisions. So the investment in education, for example, providing more fee-free TAFE places, and university places. The investments in infrastructure, particularly through the National Broadband Network, and expanding the road and rail network. All of those are essential investments in the nation's productivity. And we're doing that in the face of some really challenging international economic headwinds. We're seeing this with Britain now, the economy potentially sliding backwards, and in many other countries.
LAWS:
The point is, we're not in Britain or any other country. We're here. There's not a single short term cost-of-living relief measure. How do you expect Australians to continue paying bill after bill after bill in the face of rising inflation, and rising interest rates as well.
LEIGH:
There's immediate measures in terms of cheaper medicines: we're reducing the PBS maximum co-payment to $30 a script. There's immediate measures flowing through from cheaper child care that will be starting in the middle of next year. That will benefit 1.2 million families. 96 per cent of families with kids in child care will be benefiting from that. Our housing measures are aiming to get more housing supply out there, building tens of thousands more social and affordable homes. And so we've got cheaper housing for the young families who are looking to make a transition into homeownership for the first time. We're looking to get wages moving again. In the face of Coalition opposition we supported that pay rise for the lowest paid workers in Australia, and we've backed a pay rise for aged care workers, because we recognise that you do need wages to keep pace with the cost of living.
LAWS:
One of the one of the centrepieces of the budget is a huge investment into child care. You better tell us about that, if you could?
LEIGH:
Yes so 96 per cent of families will benefit through cheaper child care measures. And this is important, John, not just for those families who have kids in care, but also for the businesses that rely on them. I've spoken to too many mums who just say, look, it's just not worth working that third or fourth day, because the cost of child care is bigger than what I earn through my wages. We've got to turn that around, because that's a huge drag on productivity for Australia, when we're having talented workers staying home because it's just not worth their while to come into work. And then suddenly, kids leave childcare, they go into school, and the situation is completely different. There's no economic logic behind that. One of the benefits of school is that the parents are able to work in those years. And that should be the case in the child care years as well.
LAWS:
It should. You've scrapped $2 billion worth of coalition grants. Is Nationals leader David Littleproud, is his assertion it'll badly impact on the regions fair. Is that a reasonable statement?
LEIGH:
No, we're investing very strongly in the regions. It's just we're not going ahead with National Party slush funds to boost their re-election prospects. We understand that the regions are absolutely critical, and that we need to do more investing in regional infrastructure, regional road and rail. But we don't believe that it was responsible to proceed with the Hell’s Gate dam. We don't believe that it was responsible to proceed with a range of schemes, which were frankly being run out of Coalition Ministers' offices based on colour-coded spreadsheets rather than where the need was greatest on the ground.
LAWS:
Yes, well, that was a mistake, wasn't it?
LEIGH:
The Coalition's mistakes? Absolutely. I mean, their waste and rorts are legendary. And I think it's one of the reasons that they saw such a strong swing against them in May. Just that community frustration that they were spending taxpayer dollars like they were Liberal party dollars.
LAWS:
I don't know might be a little bit tough. But you've probably got a legitimate point there. The bills for floods continues to rise with your government refuses to share the cost of raising the Warragamba Dam wall. Wouldn't it make sense to help out now and save money in the long run?
LEIGH:
Well there are ongoing discussions with the New South Wales Government about that, and that's taking place at direct Premier-to-Prime Minister level. Those conversations are constructive. I know Prime Minister Albanese has been touring flood-affected areas with Premier Perrottet. They're both aware of the importance of getting that right.
LAWS:
Well it is important, but do you both understand it?
LEIGH:
Yes, absolutely. The Prime Minister recognises the need there. And as he's engaging with the New South Wales Government, I understand those conversations are well advanced, but I don't know exactly where they're going to land at this stage.
LAWS:
Alright, Andrew Leigh, thank you very much for giving us as much time as you have, you've been very generous.
LEIGH:
Always a pleasure, John, thank you very much.
LAWS:
Okay, Andrew, goodbye.