Andrew Clennell:
Joining me live now is the Assistant Treasurer Daniel Mulino, who last week released a consultation paper on new legislation which will see social media companies charged to pay for traditional media unless they reach agreement with media companies to run their content.
Mr Mulino, thanks for your time. I can’t pretend myself and my coworkers don’t have skin in the game here. Are you here to save journalism?
Daniel Mulino:
Thanks very much for having me on. Andrew. Look, this is a really important reform that reflects the fact that a strong, independent and diverse media is incredibly important for our society. And in particular, that public interest journalism is an underpinning of democracy and our democratic institutions.
So what this reflects is the fact that digital platforms have grown to a very significant size. And what we’re seeing is that a lot of news content is being distributed on digital platforms without fair and appropriate remuneration, and that’s affecting the sustainability of our media sector.
Clennell:
There was an original scheme set up by Josh Frydenberg and Scott Morrison. How does this one differ? And how does it differ from the model explored in Canada, where Meta just blocked new sharing on Facebook and Instagram?
Mulino:
So this builds on the code that the previous government brought in. That was an important reform, which we supported. This builds on that, basically to provide an incentive to ensure that large digital platforms will enter into commercial agreements and that they can’t avoid that incentive by withdrawing news.
It differs from a range of other measures overseas, including what we saw in Canada, in that it’s not designed to raise any revenue. And this is unlike a lot of measures in my portfolio, I might say. But this is designed as an incentive to ensure that large digital platforms come to the table in a fair way, in good faith, and enter into commercial agreements. It’s designed so that it incentivises agreements at around the same total amount that we saw under the code that the previous government had brought in.
Clennell:
So they either reach the agreements or they cop a levy. Is that how it works?
Mulino:
Yes, exactly. And there is an incentive in the way that this is structured, so that it incentivises them to enter into agreements rather than pay the levy, and that’s an appropriate design feature. We would rather have them enter into commercial agreements than pay the levy.
And if they pay the levy, then I will work with my colleague, the Minister for Communications, to ensure that any of the money raised under that mechanism is then distributed to the media in an appropriate way.
Clennell:
And it’s only for quite large digital platforms. So who qualifies for that?
Mulino:
So in the consultation paper, we’ve proposed a 3‑part test. There’s a gross revenue limb to that, which is at around which is set at $250 million dollars, or proposed at that $250 million threshold. There then needs to be the provision of social media or a search engine. And then there’s a significance test.
Now our expectation is that Meta, Google and Tiktok would fall within that. As for whether other organisations would fall within that definition depends upon exactly how we end up defining those limbs, but we would expect that those 3 entities would fall within.
Clennell:
Have you had any blowback from the US administration in relation to this, or are you expecting any?
Mulino:
I’ve been consulting since my time in this role, the last 6 months or so, extensively with media here in Australia, at all levels, with the digital platforms, and we’ve also been briefing the US Government along the way.
The response so far to the release of the consultation paper is that we’re seeing a reflection from stakeholders that they’re keen to engage constructively with the government. All of the digital platforms have indicated initially that they’re really keen to engage, and that’s a very welcome thing from my perspective.
Clennell:
Let’s move now to issues of the general economy in Australia, the latest inflation figure, tipping over 3 per cent was a concern, wasn’t it? Do you expect over the next quarter will have an even bigger figure, potentially because of the weak December quarter figure last year.
Mulino:
So I don’t want to speculate on particular quarter to quarter movements in CPI. But I would note that the previous amount for CPI, which did tick up a little bit, was in part reflecting the fact that some state government energy rebates had come off.
I think it’s really important to note the longer term trend when we came to office, inflation was over 6 per cent and indeed some of the monthly readings were even higher than that. What we’ve seen is that both headline inflation and core inflation have come down in a sustained way and are both at around half the level when we came to office. And core inflation, or trimmed mean, has been 3 per cent or lower. So in other words, within the band the RBA looks at for the last 3 quarters.
So there’s been a lot of progress made, and the Treasurer and the PM have acknowledged the hard work of the Australian people in that but it’s certainly not a job done. There’s more work to be done, and that’s where the RBA comes into play, but also our fiscal management.
Clennell:
Well, that’s right, and in saying that, do you concede there’s got to be efforts for the next Budget to cut back on spending?
Mulino:
So when it comes to fiscal management, I’d say this government has delivered 2 surpluses, which is not straightforward. And of course, the previous government promised a whole swag of surpluses and delivered none. So those 2 surpluses were critical, not just in putting downward pressure on inflation, and were a significant part of why we are where we are here today. They’ve also put a lot of downward pressure on our debt and our debt payments, so they’ve been really significant.
But the other thing is that over the last 3 years, this government has booked in structural savings, budget after budget, tens of billions of dollars of savings, and we need to maintain that effort. And again, that’s in contrast to the previous government, which achieved zero dollars in savings in their last Budget. So there’s a lot of work still to be done, but this budget is in much healthier shape than it was when we inherited.
Clennell:
All right. So when you say there’s a lot of work to be done, I just want to draw you on what you’re doing now. You guys have been in almost 4 years now, as opposed to what the last mob did, we’ve seen this effort, which is still under pressure, I guess, in terms of reaching an agreement with the states to curtail NDIS spending, that’s one area. Can you nominate any other areas where the government will be looking at cutting spending?
Mulino:
So the NDIS arrangements have already led to significant savings. So that’s been an area where significant reductions have been achieved. The other area that I would point to coming out of the last term is aged care, where the work of Annika Wells, who is now the Minister of Communications, and it’s being followed on by my colleague, Sam Rae, has achieved real structural savings. And that was something which was achieved in a bipartisan manner.
So I acknowledge the fact that the Opposition towards the end of last term came on board in a constructive way, but that was really difficult work which the previous Minister for Aged Care achieved, and which is now being built on by the current minister. So that’s another area which the Treasurer had identified, is a long term area of cost pressure in an aging society.
So those are 2 areas where there’s really significant work already underway. And as I said, if you look at the fact that over the last 3 Budgets, we’ve achieved tens of billions of dollars of saves, that’s ongoing, structural saves that this government is banking, which benefits the government, but also the broader population, in reducing debt and debt payments going forward.
Clennell:
Some experts are now predicting no interest rate cut for 2026 is that possible? And how do you think the Australian people would take that?
Mulino:
Well, look, I don’t want to get into speculating on what the RBA may or may not want to do, obviously. But I do go back to the fact that inflation has come down very significantly, and that’s very welcome. I do go to the point when we’re looking at the broader macro economy that this government has created more jobs than any other first term government for decades, that unemployment remains low, that real wages growth remains high and is growing in a much at a much faster rate than it has for many years.
So there’s a lot of positive aspects to the broader macroeconomic trajectory. Now, of course, people want to see further interest rate cuts. We’ve had 3 interest rate cuts, which is very welcome. I understand that households want further cuts, and that’s why our government is continuing to do the hard work on the fiscal side that I alluded to earlier.
Clennell:
You know, over time in Australia, the average interest rate is probably about this level, 3.6 isn’t it? So we’re nearly at where we’re going to be at in terms of interest rates in Australia.
Mulino:
Well, look, I don’t want to speculate on the particulars of the cycle, but as I mentioned, I fully understand that people in the community would like to see further cuts, and that’s why this government will continue to do what it can through its strong, sensible economic management, to add fiscal downward pressure to inflation.
The other thing I’d add is that this government is now also turning its attention to some of the longer‑term challenges. So we’re looking at the longer term productivity opportunities in the economy. We’re looking at resilience. The 3‑day Economic Reform Roundtable is already paying dividends. We’ve seen on the housing front, the National Construction Code frozen for a longer period than it would have been, which will reduce red tape and see more houses built. And we’re seeing really significant progress made on the EPBC Act, which will lead to faster and more sensible decisions. So these, these are all things that can spar activity, growth…
Clennell:
If it’s passed.
Mulino:
…and that, yeah, so what I really implore the Greens political party and the Opposition to engage in that process. Because what we’re seeing is that at the 3‑day Economic Reform Roundtable, stakeholders from right across the spectrum called for this act to reflect the recommendations of the Samuel review, which was handed down to Sussan Ley when she was Environment Minister, and that’s what this draft does.
Clennell:
The Opposition has indicated, and we’ve heard it again this morning, they’re soon to come out with an immigration policy, looking to have a position of drastically curtailing immigration. And we had another poll in the newspaper, the Nine newspapers today saying people want lower immigration. What effect would that have on the economy?
Mulino:
So look, we’ve set a permanent migration target that is sensible and realistic, and that reflects the longer term trends in the economy, but that also reflects the fact that there are areas in our economy where we do need skilled migration. So this government has a broader policy of trying to build the skills base in this economy through, primarily through training people here in Australia – whether it be young people leaving school or whether it be people through mid‑career changes. And I see that in my electorate constantly, with people changing careers through TAFE training. So free TAFE, stronger support for apprenticeships is critical.
We do need to supplement that with skilled migration in some areas, and that’s really the focus now of our permanent migration. I do think that if the Opposition is going to come up with headline grabbing numbers, they need to explain how it’s possible to do that while supporting skilled migration at appropriate levels and supporting our higher education exports. So I do feel that over the last couple of years, the Opposition has tried to grab headlines on this issue without really drilling down into the detail and providing anything realistic.
Clennell:
What is the government expecting from the COP conference this week, now that the US has pulled out of Paris?
Mulino:
Well, I think that the COP conference – conferences plural – are really building on each other in a sustained way over time. And what I would say is that recent Treasury modeling released by the Treasurer shows that what is a so called orderly transition over time. Where you make a sustained effort and maintain that over time is much better for the economy and for the environment than a disorderly transition, which is defined as basically doing not much for a period of time and then acting in a rush right at the end.
Both for the economy in terms of GDP levels, GDP per capita levels, jobs and wages growth and also energy prices, an orderly transition is far better. And that’s why the COP is so important at the international level, to make sure that countries are as much as possible, coming together and maintaining their effort.
Clennell:
And finally, Daniel Mulino, what’s your reaction to Donald Trump’s decision to take tariffs off various food exports, including beef exports?
Mulino:
Well, look, it’s very welcome for our producers, and I think it reflects the fact that the government has engaged very constructively with the US administration. We saw a very positive meeting between the PM and the President recently, recently, which dealt with a wide range of issues, including critical minerals. But I do want to pay tribute to Don Farrell and all that he’s achieved in a wide range of areas, on trade developments and…
Clennell:
This was a domestic, a domestically‑driven decision wasn’t it? It was about price.
Mulino:
I think that there were affordability issues in play there, for sure. But I don’t think it’s unfair to say that the strength of our relationship with the US means that it puts us in a better position when it comes to these kinds of situations to get a better deal for Australia.
Clennell:
Assistant Treasurer Daniel Mulino, thanks so much for your time.