Peter Stefanovic:
You’re with First Edition on this Tuesday morning, folks. Well, around 3 million of the nation’s lowest paid workers will learn in a few hours’ time what sort of pay rise they get next month when the Fair Work Commission hands down its latest decision on the minimum wage.
Wherever the commission lands, it will be another cost for small business though, who will pass those costs on to the consumer, leading to questions about a wage‑price spiral.
Joining us live this morning, the Assistant Treasurer, Dan Mulino, the Shadow Home Affairs Minister, Jonathon Duniam. Good morning, gentlemen.
So, Dan, whatever the raise today, won’t it just be swallowed up by inflation?
Daniel Mulino:
Well, morning, Pete, and thanks for having me on. So, look, we’re arguing for a sustainable, an economically sustainable increase in the real wage for those on the minimum wage, and that’s really important so that they can continue to cope with cost‑of‑living pressures, and we’ve argued for that throughout our time in government and seen so far $9,000 increase in the minimum wage.
This is the economically responsible way to make sure that those on the minimum wage – those who work in security, retail, hospitality, cleaning – that they can continue to get by, and we support that by the way also with tax cuts, which has been so critical in helping them to keep more of what they earn.
Stefanovic:
Right. But won’t it just be swallowed by inflation, which critics will argue is caused by your economic policies?
Mulino:
No, well, we don’t think that this is material contributed to inflation, that’s clearly coming from international factors at the minute, and that’s reflected in the RBA’s observations about the macro economy.
But it’s the fact that there is elevated inflation because of the international conflict that we’ve seen that we need to make sure that the minimum wage reflects that and that people are given compensation for that inflation.
The thing is those who are on the one hand saying that these wage rises aren’t enough or that they’re going to be, you know, simply reflecting what’s happening with inflation. Those people, it’s particularly the Opposition, invariably don’t support increases in the minimum wage.
I can’t remember a time when the Opposition supported an increase in the minimum wage, let alone an economically responsible real increase in the minimum wage.
Stefanovic:
Okay.
Mulino:
So those opposite are constantly wanting to stall it.
Stefanovic:
Okay. I well, I mean do you support a raise to the minimum wage today, Jonno?
Jonathon Duniam:
Well, I’ll tell you what, the fact is that everyone on the minimum wage across our country has been left high and dry by this government. And so, of course, if the Fair Work Commission hand down a decision to increase that minimum wage, well then, that’s a decision that we have to follow through with.
But the problem is, this government, who say that inflation has nothing to do with them, right. That was one of the most extraordinary contributions to our morning panel debate I’ve ever heard. That, ‘It’s all international factors, nothing to do with us, nothing to do with government spending or poor energy policy’ or the like, all of this driving up cost of living, which is now what we’re treading through trying to bring up wages, rather than dealing with these increased costs of living, including with energy, of course, the cost of doing business in this country, all of these things that the government have some control over. And most importantly the one thing this government never talk about is reining in government expenditure, which is a massive driver of inflation in this country.
So if we want to bring down the cost of living and make things more sustainable for people, how about we deal with the other end of the spectrum as well, which is the costs driven by government.
Stefanovic:
And is that something – I mean have you paid enough attention on that, Dan? As we see, debts as far as we can see are heading towards $1.2 – $1.3 trillion?
Mulino:
Well, look, I think it’s remarkable for an Opposition that achieved literally zero dollars in saves in their last Budget, you compare that to the government who has achieved $64 billion in saves and reprioritisations –
Mulino:
– in this most recent Budget, when you look at the NDIS we’ve made some tough decisions, some necessary decisions, which get that scheme, which we inherited growing at double digit off the Opposition, that scheme was completely unsustainable under them.
We’ve made some tough decisions, we’ve made $170 billion plus now over 4 years in reprioritisations and saves. They had a shocking record when it came to fiscal management. All they’ve got is rhetoric on this point. We’ve got the track record, and what we’re doing with fiscal management is aligned with and supporting what the RBA is doing.
Stefanovic:
Sounds like – looks like you’ve got something to say, Jonno.
Duniam:
Well, this word ‘reprioritisation’ means, ‘We have just taken it from one expenditure and put it into another’. There is no save in that at all. They’re still spending as much, if not more than they were, and again, ‘It’s not our fault – we inherited – last government, overseas.’
When does a government start to take responsibility for the situation a country faces? When is it time to draw a line under all of these things outside of your control and actually do something? I say that time has well passed, and blaming everyone and everything else ain’t going to work.
Stefanovic:
Okay. Well, let’s switch topics. Dan, RBA officials have judged Labor’s first‑term housing agenda saying it did little to improve supply and possibly raised prices with particular criticism of the government’s Help to Buy Scheme. So that’s the 5 per cent deposit for the folks out there who are just catching up.
But Dan, now that house prices and interest rates are going up, how many – house prices are coming down, I should say, and interest rates are going up – how many of those first‑home buyers have negative equity – meaning the house is worth less than the total debt?
Mulino:
Well, Pete, when it comes to the housing market, we have had increasing supply as the number one priority right throughout the term of government, and it was a real priority in this Budget. We know that increasing supply is the main game.
But we also know that the tax system is not working in the favour of young people, that when they turn up at an auction, they’re bidding against people who have the entire tax system standing beside them helping them. And that’s why in addition to boosting supply it’s critical that we realign the tax system so that it works more in the advantage of young people –
Stefanovic:
Okay, but as –
Mulino:
– and that’s why these –
Stefanovic:
But as for the 5% Deposit Scheme, I mean do you concede that there will be folks out there who now have a bigger debt than their house is actually worth?
Mulino:
Well, what I would say when it comes to housing policy is – as I said – supply is the main game, but it is appropriate to also have –
Stefanovic:
Yeah, but on –
Mulino:
– a range of targeted measures –
Stefanovic:
Sure, sure, but on –
Mulino:
– that benefit first‑home buyers, and the 5 per cent is one example.
Now what we’re going to see in Australia is over the medium term every model points to an expectation of house price growth. That will vary from time to time and it will vary across markets. But it’s entirely appropriate, the government believes, and I think this is being borne out by the fact that the 5% Deposit Scheme has helped so many people get into the housing market.
It’s a scheme that again re‑balances things in favour of young people and first‑home buyers in an environment where over the last 20 years house prices have increased twice what wages have, and the Opposition seems to be saying the whole system’s fine.
Stefanovic:
Does that show it’s a flawed policy, the Help to Buy Scheme, Jonno?
Duniam:
Yeah, well, it does. I mean to use the Assistant Treasurer’s own words there, you know, it helps first‑home buyers get into the market. But I think to your point, and there are many analysts who’ve echoed this point, that they may well end up with debts greater than the value of the property they hold, and that is not a good outcome here. And to suggest that they’re dealing with supply side issues and when their own Budget papers suggest there will be less homes built, is just madness.
So, look, honestly, this is a flawed set of policies. There’s a lot more they could be doing with state and territory governments to, I don’t know, unlock land and increase supply that way, but instead we tinker around the edges with the tax system. No one’s saying it’s fine, everyone says change needs to occur, but the change this lot are serving up will only do bad things to our economy.
Stefanovic:
Okay. Dan Mulino, Jonathon Duniam, thank you so much. We will talk to you again next week.