ANDREW CLENNELL:
Joining me now is the Assistant Federal Treasurer, Stephen Jones. Stephen Jones, thanks for your company. Don't you wish you had Rob Stokes on board in 2019?
STEPHEN JONES:
Good to be with you, Andrew.
CLENNELL:
Sorry, I didn't mean to speak –
JONES:
Sorry Andrew, I missed that.
CLENNELL:
Don't you wish you had Rob Stokes on board in 2019? I'm speaking a bit facetiously, but I guess the point I'd make out of that is, is there still room to examine this issue of negative gearing, particularly whether people should be allowed to write off their tax when they have many, many properties?
JONES:
Andrew, as you say, this was a contentious issue in 2019. We went to the 2021 – no 2022 election with a series of promises around housing, and we're full‑strap implementing those policies; Julie Collins, Jim Chalmers, myself, working on the details and working through our housing policy, which includes the building of 30,000 additional homes in our first five years, plus more with the partnerships for superannuation. Rob's right to point out that the fact that the crisis at the moment is in supply, and that's where all our efforts are going to at the moment, ensuring that we can improve and lift up the housing stock of our nation.
CLENNELL:
He seemed to indicate some problems on the demand side too though, didn't he?
JONES:
Look, I think if you were to ask that question 12 months ago, you'd be absolutely right, but I think movements in interest rates over the last 12 months, and in addition to that, the heat out of the housing market has made a significant difference to some of those exorbitant increases that were finding their way through in the housing market. But all of that said, we've got a policy, and it's about improving the stock and lifting up the supply of housing, establishing a Housing Council, working with the state and federal governments, if the state governments want to put new and novel proposals on the table that haven't been put there yet, whoever wins the next state election I'm sure will come to our new housing, our State and Federal Housing Council, and put those proposals, mate.
CLENNELL:
All right. The political year ended all about electricity and gas bill relief, but we get the news this morning that gas prices are going up 25 per cent regardless. This is a tough pill for people to swallow, isn't it?
JONES:
Look, the important thing about ‑ I saw that story in The Australian and elsewhere this morning, Andrew, and the important thing about that is all of those price increases are essentially ones that were baked into the system before the government took the emergency action that we did, and that we legislated for capping at $12 a petajoule gas, and a cap in the coal price as well to bring downward pressure on household electricity bills. We expect the next round of market offers to hit the system after these emergency reforms are put in place to reflect the government action. Nobody wants to see the price increases that people have already experienced. The important thing about that is they were already baked into the system because of actions of the previous government. Because of our market reforms, we think we've stemmed those excessive increases, our emergency reforms will mean that we do not see a repeat of those 18 and 20 per cent increases, so that households and businesses should see some relief over the course of this year.
CLENNELL:
The Treasurer says he's working with the states on an electricity bill package of relief. Will it only be for people on Family Tax Benefit though, or will it go broader?
JONES:
The agreement that we reached with the State for, I think it was $1.4 billion worth of household and business relief in the case of households, for households on receiving government support and benefits, so, yes, Family Tax Benefits and other forms of relief. We want to do everything; of course you want to do everything, but this is new and additional expenditure to what we put in the previous budget, and I remind yourself and the listeners again, we've inherited a trillion dollars’ worth of debt and structural deficits within the budget. We want to look at what we can do to provide relief to households, and to businesses, which was why the emergency market measures, putting a price cap on gas and a price cap on coal to bring down electricity prices were so important, having household and business relief in there was also important.
CLENNELL:
Now these reports we've had this week, the gas suppliers aren't readily offering up $12 per gigajoule gas to retailers, does that surprise you? Are the gas companies acting in good faith?
JONES:
Look, I think there's been a bit of gaming going on, and a bit of brinkmanship. Clearly the gas industry didn't like what we did, and let's be frank, in normal times, we would not have moved and put in place this market intervention, we just wouldn't have done it. Emergency response to an emergency situation. The emergency going on at the moment is not a crisis in gas industry profits; the emergency that we have at the moment is manufacturing industry viability and households suffering under excessive energy bills. That's the one that we have the public interest in addressing. I hope that after, you know, the Christmas period, the ACCC providing further guidance to the industry on the mandatory Code of Practice, that some common sense, but more importantly some national interest will start to govern the behaviour of the gas industry to ensure that we can get contracts offered at a reasonable price to get business moving again.
CLENNELL:
All right. Still on the cost of living, we're probably about to get another interest rate rise, you know, on the first week of Parliament, February 7, I think it's due. You've got people ‑ people with average mortgage in a capital city are paying well in excess of $10,000 more than they were a year ago. Where does this end?
JONES:
The main gain, and the thing that is obviously driving the Reserve Bank is run‑away inflation, and while nobody wants to see, less more the government wants to see another rise in interest rates, which have a pernicious effect on households. What would be even more devastating to the economy is run‑away inflation, so getting inflation under control is in everyone's interests. The Reserve Bank and analysts are pricing in one, maybe two more rate increases, but then moderation and stability after that, and then hopefully towards the end of the year rates coming down again as the cycle completes. On the information available to us we see inflation easing off towards the end of the year, which means the interest rate battle can start to ease off towards the end of the year as well.
CLENNELL:
Yeah, just on that, does a collapse in inflation mean Australia's at risk of recession? And why is Jim Chalmers so confident we'll avoid recession?
JONES:
It's a very narrow path that we are going to have to tread, and if we avoid recession, and we think we can, we'll be one of the few developed economies in the world that does so; the UK, the US, North America, all of our major trading partners will probably fail to avoid recession, some of them are already in it. We think because of the steps that we've taken and because of the situation the Australian economy is in, we can get through, but we're going to be frank with people, it's going to be a very narrow path that we've got to tread to get there.
CLENNELL:
Sure.
JONES:
And fiscal policy working hand‑in‑hand with monetary policy, sensible, stable, responsible, sober decisions of government, including what we've done in the energy market, should hopefully get us through, bring that energy-driven inflation down, and therefore the pressures on interest rates removed.
CLENNELL:
Stephen Jones, I've been told we're out of time, but I'm going to ask you for a very brief answer here. Can we expect an increase to JobSeeker this year?
JONES:
Look, we'll look at all of those government benefits; some of them indexed, so some are automatically indexed, some of them not, so in the lead‑up to the budget, we'll be looking at JobSeeker as we're looking at all of those other payments, but I'm not going to make any sort of announcement or statement on that. We understand the pressure that people on benefits are on. The good news is there are fewer people on benefits because unemployment is at record lows. We want to see the number go down even further. We do understand that people on unemployment benefits are under pressure. If we could do everything, we would, budget circumstances mean that we can't.
CLENNELL:
Stephen Jones, thank you very much.
JONES:
Good to be with you.