Natalie Barr:
The Treasurer has rejected claims from the Opposition that government spending has fuelled the Reserve Bank’s decision to hike those rates, insisting in Question Time that private sector spending has kicked up inflation. The cash rate jumped 0.25 per cent yesterday. Economists warn more rate hikes could still be on the way. That has put pressure on the government to rein in spending before hip pocket pain becomes far worse.
For their take let’s bring in Housing Minister Clare O’Neil and Nationals Senate leader Bridget McKenzie. Morning to both of you.
Okay, Clare, families, I don’t know whether they care who started this or the actual details, they just want it fixed, it’s costing too much. Interest rates are now going up. I don’t know whether a lot of people expected this last year. What is your government doing to bring down inflation?
Clare O’Neil:
Well, Nat, this is a really tough moment for Australian households and, you know, will be very unwelcome around kitchen tables around the country, and our government right now is thinking really deeply about those families where you’re sitting around the kitchen table with a pile of unpaid bills next to you and thinking, ‘How are we going to make this work with an interest rate increase?’
The government’s got a really important job here and that is how we can provide as much cost‑of‑living support for families to help them manage this change without contributing to the inflation problem.
Now you saw our government do that over the last 3 and a half years. Tax cuts for every taxpayer, reductions in student debt, cheaper medicines, massive increases in bulk billing, energy bill relief, all of those things. They’ve been really important contributors, and I just want everyone at home to know that our government’s only focus right now is on you: Cost of living, cost of living, cost of living. What can we do to help relieve the pressure on your household without making this economic situation worse?
Barr:
Bridget, if you were in control of the books what would you do?
Bridget McKenzie:
Well I wouldn’t have the highest proportion of government spending across our economy that we’ve seen under Labor. You said it in your opening remarks, Nat. Under Labor we’ve seen government spending at its highest proportion of our economy since Living On A Prayer was in the top 10, that’s 40 years ago.
We’ve seen warnings from the IMF, from the OECD, from international ratings agencies, from economists, for a long time telling the Treasurer, telling the Labor government that this will lead to a spike in inflation, which means the cost of goods and services go up right across our economy, and eventually the Reserve Bank will have to pull the rate lever to actually try and cool the economy. And that’s exactly what’s happened.
And all the empathetic words that Clare’s uttered just now for families who have sat down last night and thought, ‘How are we going to pay the school fees and the mortgage and still put food on the table’, that is what’s actually happening here because they’ve failed to make the tough decisions that they had to make over the last 4 years. They’ve refused to do it.
Barr:
Okay. So there’s this big discussion about government spending and private sector spending, that’s the argument, right, and as the Treasurer said yesterday, the government spending has slipped below private sector spending just in the last few months, and that’s his argument. Clare, if the government is handing out all this cost‑of‑living relief, which you say, you know, people need, where’s the balance? Because do you now look and say is it a good idea to give wealthy people who can afford electric vehicles, for example, subsidies? Do we stop there? Great for the environment but is that somewhere where we cut? How do you know where to cut?
O’Neil:
Yeah, it’s a really important question, Nat, and I just remind your viewers, you know, when we came into office in 2022 the fiscal situation was terrible, you know. We inherited a trillion dollars of Liberal debt, and we’ve over the last 3 and a half years –
McKenzie:
It’s always someone else’s fault, Clare.
O’Neil:
And we over the last 3 and a half years have started to turn that situation around. So you remember we had 10 years of budget deficits, we turned that into 2 years of budget surpluses.
Barr:
Yeah, but you know what –
McKenzie:
Wow.
O’Neil:
And I’m answering your –
Barr:
I think 4 years in we need to talk about now.
O’Neil:
Well I’m actually talking about the government’s record, Nat, and the fact that we have done some really important work to bring the budget back into balance, but no one pretends that that job is finished or done. This is a generational challenge for the country to bring the budget back into balance. And the hard work on that happens each and every budget.
Now as we come into the next Budget in May –
McKenzie:
You’re not doing it.
O’Neil:
We’ll be doing more thinking about this, we’ll be thinking about that cost‑of‑living relief that we know households need and deserve. Remember those tax cuts for every taxpayer, everyone watching at home who’s a taxpayer will get another tax cut this year and another the year later. Something that Bridget voted against.
All of that relief that we’ve provided has been very important –
McKenzie:
Clare –
O’Neil:
But we do need to have a proper balance here.
Barr:
But does it go too far? Are you going into people who are too wealthy to get all that stuff, and is that pushing up inflation? Do you need to reassess? Have you got the balance wrong, Clare?
O’Neil:
Well no is the answer to your question. So Nat, we’ve come back to –
McKenzie:
Of course not.
O’Neil:
You know, what the RBA has said about this, the Reserve Bank has said about this, and that is that the government is contributing less to this problem over time. So this is the challenge for us, how do we make sure that we help households at home without contributing to the problem? We’ve made some really strong moves on this, but of course more work is needed.
McKenzie:
Clare, this is home grown and it’s projected to go higher. That’s what’s terrifying households right now. It’s not just the decision yesterday. Inflation is projected to get to 4 per cent and you can’t squib this any more. You can’t say that you’re not in charge, that you’re not responsible for the situation that our economy faces right now.
You told us that your green policies would be cheap. Turns out that they cost a lot more. The productivity drag with the industrial relations reform. Right through – the runaway NDIS. So on every single level, Clare, your government has failed to make the tough decisions which is why there is a $57 billion black hole. And you can come on these programs and tell Australians who are hurting that you’re going to do your best, cooee, you are in charge and have been for 4 years.
Barr:
Okay. Okay. A response to that, Clare, and then I just want one more question from Bridget.
O’Neil:
Yeah, yeah, and I might just respond to that, because that is an outrageous comment from someone who’s in a political party that’s coming to Canberra every week, not even thinking about the people they represent here but instead playing ridiculous parlour games, focussing on careers and ambitions and who’s the leader of what political party, I don’t even know. At least my party’s doing the hard yards, making sure we take responsibility for what’s happening in the country, and every single day focussing on the citizens who send us here and representing them properly.
McKenzie:
Wow, it’s not –
O’Neil:
This is not easy. Of course it’s not.
Barr:
Okay. Bridget on to you.
McKenzie:
You’re not good enough. It’s not good enough.
O’Neil:
We make sure as a government that we behave responsibly. We behave responsibly and we do that –
McKenzie:
And yet here we are.
O’Neil:
By representing our citizens faithfully.
McKenzie:
Here we are with rates going up.
O’Neil:
And I’ll keep doing that every day.
Barr:
Well here you are, Bridget –
O’Neil:
You spend all of your time, you know, playing parlour games. I mean, come on. People elected you here to represent them and you spend all your time, you know, in coffees and gossip and it’s just disgraceful. So yes, there are issues facing the country but at least you’ve got a government in charge that’s focussed on them.
McKenzie:
Clare –
Barr:
On to this, Bridget, I want to ask you –
McKenzie:
Yep.
Barr:
Sussan Ley and David Littleproud remain at this stalemate in reaching this deal to reunite the Coalition, we don’t have a Coalition at the moment. The Liberal leader wanting you, Bridget, and 2 other national senators to be suspended from the Shadow Ministry for 6 months for breaching shadow cabinet solidarity rules. Littleproud said no. They’re now trying to work on a last‑ditch offer. What are you going to do, Bridget?
McKenzie:
Well we took a principle decision on Labor’s pathetic hate laws, which will have unintended consequences for everyday Australians.
Barr:
But you also went against shadow solidarity.
McKenzie:
And Nat, and Nat –
Barr:
Shadow cabinet solidarity.
McKenzie:
And Nat, discussions between David Littleproud and Sussan Ley are obviously confidential, I’m not going to have a running commentary because Australians are actually sick and tired of politics and they want parliamentarians that are focussed on them, and that’s exactly why we voted against the hate laws and why today we’ll be bringing in a Senate inquiry into Labor’s failure on inflation.
Barr:
Okay. Are you going to get back together? Are we going to have a Coalition?
McKenzie:
Nat, I’ve said they’re confidential discussions between the 2 leaders and I’m not going to run a, you know, public commentary on it.
Barr:
Okay, so maybe, maybe not. Thank you very much, we’ll see you next week.