Peter Stefanovic:
We’ll learn tomorrow whether or not we get an early rate rise this year, as CPI data, which covers the Christmas spend, will be announced. A hotter number, following surprisingly healthy recent employment data, would almost certainly lock in a rate rise. And bad news often comes in twos, with a second rate rise a possibility in the early part of this year as well.
Joining us live now is the Assistant Treasurer, Dan Mulino. Good to see you, Dan. Thanks for your time, as always. So, a rate rise certainly wouldn’t be a good start to the year for your government.
Daniel Mulino:
Well, thanks for having me on, Pete. And look, I’ve got to say I’m very glad to be on at 8 am so that I can walk back to the office in 20 degrees rather than 45 degrees here in Melbourne today. But look, what we’ve seen with inflation is, inflation is a global phenomenon at the moment, and we’ve seen inflation jumping around a bit month to month, partly due to some temporary factors. But it is higher than we would like.
And I just step back a minute to the fact that when it comes to what the government can do, we’ve taken something in the order of $200 billion off the budget over the course of this government, which is the largest nominal improvement in the budget in Australia’s history. And that’s a really significant contribution to putting downward pressure on inflation. But clearly, the RBA will look very closely at the CPI numbers coming out tomorrow.
Stefanovic:
You must be braced for bad news, though, tomorrow, right, Dan?
Mulino:
Well, look, I don’t try to forecast what the RBA will do, but I think when it comes to what the government has within its control, we’re doing a lot to put downward pressure on inflation. We’ve seen it come down from 6 and rising to 3.4. The other thing is the government has put in place a whole lot of measures to help people with cost of living, which is something that’s really important at this time.
Stefanovic:
So, politically, Dan, I mean, as the Opposition fights itself and it squabbles, does that take the heat off you, you think in the short term?
Mulino:
Well, I’ve got to say it was a bit ridiculous last week that, you know, we had the Opposition imploring us to come back early, criticising us, if anything, that we didn’t come back before Christmas. Then we come back last week with carefully prepared bills and then they say that it’s too rushed, and then as a result of their own internal discord over all of that, they imploded.
Look, we’ll see what happens over the coming week or 2, but we’ve already seen, over the course of the weekend and today, senior people in the Opposition not ruling out leaders, a leadership challenge, saying that they need to be better. So, look, the Opposition themselves do need to do better, and I agree with those comments.
Stefanovic:
Yeah, but I mean, the politics of, you know, a bad set of numbers this week, potential rate rises, I mean, that is likely to take the heat off you, at least in the short term, is it not? Because, I mean, you don’t really, you don’t have an Opposition at the moment.
Mulino:
Oh, look, I think there’s never a place for hubris in politics, and that’s certainly the government’s attitude. It’s certainly my attitude and those of all the members of the caucus that I talk to. So, look, we’ve got our eye on what is the central set of issues that Australians want us to be focusing on, which is cost of living and providing services that they need.
Stefanovic:
Here’s an interesting one that I spotted in the AFR today. So, Labor is going to fast‑track power‑hungry data centre approvals. So, you’re going to do that rather than offering up subsidies. And we’re going to need these data centres as part of the AI boom. But they suck up a lot of energy, so how are you going to power them?
Mulino:
Yes, I agree that it’s a huge opportunity, and I think when you look right around the world, data centre demand is increasing in all major OECD countries and Australia in particular, because we’re seen as a really safe jurisdiction. If you look at data centres, they do require significant amounts of energy. When we look at some of the major investors in data centres in Australia to date – the Googles, Microsofts and so forth – they’ve already entered into power purchase arrangements which have supported investment in renewables, and we’ll need to see more of this. So, we’ll need to see these major data centres becoming a significant part of the grid.
There is the potential for data centres, when set up properly, to actually become a stabilising part of the grid. But you’re right, they will become a very significant part of our energy demand. The other thing is there’s the water management side, and I think what Minister Ayres and Minister Charlton are saying is that we need to have a very coordinated approach across federal and state governments.
Stefanovic:
Yeah, just get nuclear. That’ll help, Dan.
Mulino:
[laughs] Maybe in 30 years.
Stefanovic:
[laughs] All right, Dan Mulino, good to see you. Good luck with that heat today. Oh, seriously, do take care out there, folks. It’s going to be a hot one, but Dan, we’ll talk to you again next week.