Sally Sara:
Staying with federal politics and turning to the government, joining me now is Assistant Treasurer Daniel Mulino. Welcome back to Breakfast.
Daniel Mulino:
Thanks for having me on, Sally.
Sara:
Fresh data from the Bureau of Statistics shows that Australians pay rises are not keeping pace with the rising cost of living. How disappointed is the government that workers’ real wages are going backwards?
Mulino:
Well, you know, we would have liked to have seen inflation lower at the last readout, and we’ve said that on a number of occasions, but what I would say in relation to real wages is that we’re coming off a period where real wages have grown for 2 years now and that’s the longest period of growth in real wages for over a decade.
In the last quarter it was slightly negative, but that period of real wages growth was very substantial and is in direct contrast to what we inherited. It was a very long period of wage stagnation or going backwards under the previous decade of the Opposition, and that was actually something that they conceded was by design.
So we want to keep seeing real wages grow, but yes, it is true that inflation is a bit higher than we would like.
Sara:
The Opposition spokesperson for finance says that wage figures are a direct consequence of unchecked government spending. How much is government spending contributing to inflation?
Mulino:
Well I think if you look at the RBA’s latest statement coming out of their decision, they identified an unexpected tick up in private demand as the main driver, and they didn’t mention government demand, public demand.
If you look at this government’s performance over the last 4 years, we’ve delivered 2 surpluses, the overall fiscal position is $233 billion better than the trajectory that we inherited, which is the biggest nominal turnaround in Australia’s history, and there’s over $100 billion in savings. And again, to contrast with the Opposition, they found exactly zero dollars in savings in their last budget.
So this government’s fiscal position has actually put downward pressure on inflation, and the RBA has conceded that that our surpluses and that our banking of the fiscal uplift has done that.
And again, we can compare that to the Opposition, who might be making those claims, but the policies they took to the last election were for higher taxes and higher deficits, and as far as I understand, that’s still their policy.
Sara:
Yesterday, the Treasurer, Jim Chalmers, criticised former Reserve Bank Governor Philip Lowe after Mr Lowe’s analysis of government spending. Jim Chalmers suggested that Philip Lowe is being vocal because he wasn’t reappointed as RBA Governor. Is that playing the man rather than the issue?
Mulino:
Well, I think in those broad comments from the Treasurer, he also said that he has respect for Phil Lowe and his experience and his positions, but that he respectfully disagrees with his analysis, and I take the same position. I’ve interacted with Phil Lowe a lot over the years in relation to issues like inflation, monetary policy, fiscal policy.
To the extent that he’s making observations about public demand and government spending I would disagree and for the reasons I just outlined. I don’t think that you can read the RBA’s latest statement any other way than saying that it was an unexpected tick‑up in private demand that was their focus. That was the key finding, number one key finding –
Sara:
With a contribution also from public spending as well.
Mulino:
Yeah, but if it you look at their statement, if you look at the focus of that statement, they explicitly mention private demand. They don’t mention public demand in their statement. And in the broader, longer statement of monetary policy, there are a number of key findings. The number one key finding was private demand being higher than had been modelled.
So, look, I would respectfully disagree with those observations. We have to continue to manage the budget responsibly and continue to put downward pressure on inflation and that’s exactly what we’ll do.
Sara:
On a separate issue, in Victoria. Multiple Victorian government MPs have told the ABC that they believe the Premier should set up a Royal Commission or inquiry over alleged corruption within the Construction, Forestry and Maritime Employees Union. Do you think there should be an inquiry? We’re talking around, allegations of around $15 billion.
Mulino:
Well, what I would say is that it’s processes that have been set up by this government that are actually identifying a lot of the issues that we’re seeing. And it was processes set up by this government, and not arrangements set up by the previous government, that actually identified problems and are now setting them out very clearly, where –
Sara:
But are these mechanisms inadequate, particularly when we’re looking at the remit and abilities of organisations like IBAC?
Mulino:
Well, look, I think the administrator that has been put in place is making a lot of progress. And as I say, significantly more progress than the processes that had been put in place by the previous government. The previous government had systems that, frankly, were looking at not material issues and were at times falling into anti‑union kind of agendas. I think –
Sara:
But these allegations are under a Labor government –
Mulino:
– this is actually getting to the underlying issues.
Sara:
– aren’t they?
Mulino:
Well I would say that the administrator is doing effective work and that letting that process run through is delivering clarity, and that’s a sensible way to progress.
Sara:
Should taxpayers have confidence that sums as large as $15 billion are properly accounted for?
Mulino:
Well, look, my understanding is that a lot of the allegations that are being thrown around in the public realm were not found to have been well‑founded or that there’s clear evidence. So, we need to let these processes run their course. I think, we need to be –
Sara:
Are you discounting Geoffrey Watson’s report?
Mulino:
No, no, but we need to, I think, be very careful about throwing numbers around. I think let’s let this process run its course and I think, as I said, we’re actually identifying significant issues that had been completely left dormant by the Opposition when they were in government.
Sara:
Daniel Mulino, Assistant Treasurer, thank you.
Mulino:
Thank you very much, Sally.