Peter Stefanovic:
Welcome to First Edition, folks, thanks for your company. Well from tomorrow motorists should start to see savings at the bowser after the government cut fuel excise in half. Joining us live on this Tuesday morning, the Assistant Treasurer Dan Mulino, the Shadow Home Affairs Minister Jonathon Duniam. Good morning to you, gentlemen.
So the government was resisting this measure for so long, Dan, did you capitulate and take the bait though?
Daniel Mulino:
No, no. Look, I think this is a really sensible and strong measure. It’s targeted relief for people that are doing it tough. This cut in the excise will have a really important impact right across the economy, but it’s going to have a particular impact for those people who can’t adjust at the margin. So tradies who really need to drive, for people in the outer suburbs and regional areas.
The other critical thing from a policy perspective is that this will have a real impact in supply chains, and this is something that a lot of organisations who represent companies in supply chains had been calling for for some time. So this is something the government considered carefully and I think it’s a really sensible move.
Stefanovic:
Won’t this lead to a bigger inflation problem in the long run though?
Mulino:
No, so I think this is a measure that I would look through the prism of a targeted assistance. So it’s temporary, and it’s something which, as I said, will have a particular impact for people who can’t adjust at the margin, people who have to travel, people like tradies. And so I think that there’s a real role for temporary targeted assistance.
Stefanovic:
Sure.
Mulino:
We’ve seen the government doing this in a range of areas over the last few years. That’s exactly the role that governments need to play –
Stefanovic:
Yeah.
Mulino:
Where there are economic disruptions.
Stefanovic:
But then what we see is when they’re taken away, inflation goes up.
Mulino:
Well, so inflation will come down when this is brought in and there will be a step up when it’s taken off, and that’s the nature of these kinds of temporary adjustments. But the whole point of the adjustment is that it provides assistance during the worst impacts of this dislocation in global energy markets.
So that’s why I’d say – the prism I look at this through is the fact that there’s a whole bunch of people out there who need assistance in this difficult time. This will have very wide‑ranging benefits for motorists right across Australia, but I think it really has particular benefits for those who really need to travel and who have particularly high bills.
Stefanovic:
So the Coalition drove this one, Jonno. I remember Tim Wilson on this program raising it here a couple of weeks ago now, but it’s quite clear what sugar hits do to the economy; they prolong inflation when they’re taken away, as Dan just referred to. So how come lessons from the past weren’t learned when you put this one forward?
Jonathon Duniam:
Well, I think a couple of things that what Daniel has said they’re important to bring into context here, and of course the fact that this is a temporary targeted measure is important. Yes, accept that anything we do by way of altering something like fuel excise will have a broader impact. But at the base of this is the need to assist Australians who are doing it tough, who do need to fill their cars to get to work, to fulfil their obligations to their family and society, and I think it would be unconscionable for us to, in this temporary way, not provide this support.
So we’re pleased the government finally came on board, having said for days after we’d announced it that it was unnecessary and not the right way to go, and they then mirrored, replicated our announcement of the reduction in the excise. But look, there are other things the government can be doing. Fuel excise is not the only input into inflation, not the only driver. We’ve talked about it previously here. They’ve got a spending addiction, something they need to and probably could take this opportunity to reflect upon. So perhaps while providing support for Australian households and businesses they might look at ways of reducing their spending addiction.
Stefanovic:
But haven’t you just backed in their spending addiction?
Duniam:
Well there’s a difference between some of their over‑the‑top schemes that are doing nothing to assist Australian households, the multi‑billion‑dollar schemes that are just draining the budget, versus the sorts of measures we’re talking about here, which is a direct piece of assistance. It doesn’t involve bureaucrats moving bits of paper around. It is literally cutting tax on fuel. That is a good measure. Measures that prop up government spending like tens of thousands of bureaucrats here in Canberra, that’s not good government spending.
Stefanovic:
Okay. Dan, where’s the money going to come from to pay for this? How is it being offset?
Mulino:
Well so I think the important thing here is that this government has spent the last 4 years strengthening our budget position, and so, look, I reject the notion that this government has any issue with spending. In fact I’d say the reverse is true, in the sense that we’ve delivered 2 surpluses, and we’ve got a situation where our overall fiscal position is $230 billion better off than it would have been –
Stefanovic:
Yeah, but how are you going to pay for this one?
Mulino:
If we’d continued on the trajectory we inherited.
Stefanovic:
Which particular part?
Mulino:
And so it’s because we’re in a strong fiscal position that we’re able to put in place targeted measures like this. And so this is something that is appropriate for this time and it’s something which can be accommodated in the Budget.
Stefanovic:
But I mean the Opposition said perhaps it should come from the batteries; the money raised from – or the savings that people have from buying batteries for their homes. Have you got an idea of how this is being offset?
Mulino:
Well I think the worst thing to do at this point in time, when we’re trying to deal with international supply chains which are problematic, is to slow down the transition to clean energy. That seems to me to be cutting off your nose to spite your face. I mean it’s ridiculous to say –
Stefanovic:
It sounds like you don’t know how it’s being offset.
Mulino:
That we should be slowing down something which is a clear productivity boost over the longer run. So I wouldn’t accept that approach.
Stefanovic:
But it just sounds like you don’t know how you’re going to pay for this, how it’s being offset. Is there a particular part of the budget or the economy that you’re going to pay for this excise cut?
Mulino:
Well so we’re in the process of working through the Budget and that Budget will involve a lot of saves and will involve a responsible fiscal envelope. So it’s going to be looked at in that broader context.
Stefanovic:
Okay. Can I just close out with this, Jonno, to you, and on the Iran war actually, the Foreign Minister saying a short time ago still no offer from the US to help but should we be more – just getting off the back of my conversation with Annalise Nielson a short time ago – given Iran and its proxies affect us, should we be more forward whether it comes to the war effort, or even just opening up the Strait of Hormuz?
Duniam:
Well certainly I think that there is a case to be made for anything that would assist us in terms of protecting our sovereignty and protecting us from that insidious long reach of evil that you do get driven by Iran. On clearing out the Strait of Hormuz, well then I think that is something that if a request is made we should be actively considering.
But more importantly, broadly on what role Australia plays in this conflict, I hope that the government is picking up the phone saying, ‘Hey, strong, long‑time ally, United States, what do you need from us?’ Not waiting for a request. Because as we’ve just discussed, this conflict is having a massive impact on our way of life, let alone the evil that Iran spreads around the world, so we should be leaning in, saying, ‘What is it you need from us’ and considering then what it is we should be offering.
Stefanovic:
Yeah, yeah. Again, Penny Wong said no call planned at this stage between the Prime Minister and the President. Gentlemen, we’ll leave it there. Dan, Jonno, appreciate it, thank you.