MATTHEW DORAN:
Well, the Assistant Treasurer is Stephen Jones, and he joins us now live from Wollongong. Stephen Jones, I could see you out of the corner of my eye shaking your head listening to Angus Taylor there. Right of reply?
STEPHEN JONES:
The guy’s jumped the shark. He wants Australians to forget that five months ago he and his mate Scott Morrison delivered a Budget that didn’t see a deficit beyond the next 10 years. So, what’s happened in the last five months, Angus? Apparently, we’re supposed to do in five months what you couldn’t achieve in nine years. Australians know that we’ve inherited a tough situation. A trillion dollars’ worth of debt and big budget deficits. That’s why we delivered a very responsible, measured, sober Budget. Put a lid on spending, tried to direct any funds that we had available towards productive investments – child care, infrastructure, fixing up the mess in aged care. We’ll continue to do that. In fact, we know they’re the right things to do because they were our promises, and the Libs know they’re the right thing to do because two days ago Peter Dutton stood up and said he agreed with every one of them. So, you know, enough of the politics, Angus. People haven’t got the memory of a goldfish.
DORAN:
Well, let’s have a look at this situation that you’ve described as having inherited there. I don’t think there’s anyone out there who is going to argue that the economic circumstances facing Australia and more broadly the world aren’t anything other than difficult at the moment. But it seems based on the Budget that was delivered last week that effectively when it comes to curbing inflation, when it comes to dealing with those cost‑of‑living pressures, you’re effectively asking Australian households to do the brunt of the heavy lifting, or at least deal with the pressures as they currently stand because the government’s hands are tied in some respects.
JONES:
Can I put it to you like this, Matt? In budgetary terms, we’ve got two choices. We can bring a mallet down on Australian households by cutting all the services and the expenditure. Should we start with health care? Should we start with medicine? Should we start with aged care, child care? Where would the opposition or others like us to start? Or we can have a gentler glide path to ensure that over time we’re bringing inflation down, we’re not adding to the pressure that we have in the economy at the moment. So, keeping a lid on spending, which is exactly what we have done. If Angus thinks we should be going further, he should say exactly how because two days ago his boss stood up and gave the big tick to all of the initiatives we’ve had in our Budget. So, frankly, actually, I don’t want to talk about what he’s talking about. I actually want to talk about the plans that we’ve got in place to deal with the challenges we face. We know that we’re going to come out of this situation. We know that inflation will peak next year, and it will come down again. It’s why our wages policy is critical because we want to see wages moving again. And you had a good interview with Tony Burke earlier explaining the importance of our bargaining policies to get wages – particularly for the lowest‑paid Australians moving again. That’s critical. We’ve got some detailed work going on at the moment to see where we can provide greater relief from energy prices. The war in Ukraine is having a massive impact on global energy prices. We want to bring them down, so we’ve got some detailed work going on with that at the moment. At the same time, we’re just going to do what we promised to do in the election – and that is our commitments around child care, our commitments around energy and rewiring the nation, aged care and skills and the like. We’re not going to be blown off course by silly comments by Angus and others.
DORAN:
I’ll get to the issue of energy in just a moment, but if we pick up on the rates decision today, one of the clear impacts of that lifting of the RBA cash rate is how it affects mortgages. Do you fear that there are thousands if not maybe even tens of thousands, hundreds of thousands of Australians out there who are going to be sent to the wall because of these interest rates, given the fact that, of course, they had to correct themselves after those record lows during the pandemic, but many people didn’t ever expect that they would go up so quickly?
JONES:
Yeah, look, a couple of things. Firstly, we know that households are doing it tough. This is an additional $75 a month for somebody with a $500,000 mortgage. And that money is going to come from somewhere and in already stretched budgets that’s going to be tough. But I do take some hope from the fact that banks have got pretty stringent lending criteria and they would have factored rates increasing over the life of the mortgage. Not as rapidly as they have, but they would have factored in rates increasing over the life of the mortgage when they signed new people up to home loans over the last couple of years. People that I’m most concerned about are the people who are late into the market and didn’t have a fixed‑rate mortgage. They’re the ones who are going to be facing immediately over the next two months those increases in rates. Those people who have got a fixed mortgage are going to have a bit more buffer to deal with these changes and hopefully by the time their fixed mortgage comes off we can start to see rates come down again as inflation eases off over the course of next year.
DORAN:
Are there any projections coming across your desk suggesting just how bad the situation could get for people? Are we looking at, you know, foreclosures on a grand scale?
JONES:
The discussions I’ve been having with all the banks have been around forbearance. The last thing they want to do is foreclose on a mortgage, particularly when they understand the crisis and the pain we’re going through at the moment is not going to endure forever. Inflation will come down, interest rates will come down, wages will stay up and increase over the course of next year. So, we’re asking banks and other lenders to see through the short term. Hang in there with your customers because the last thing – it is in absolutely nobody’s interests to see people having to foreclose on a mortgage. That is in nobody’s interest. Forbearance is king at the moment.
DORAN:
Just before we lose you, Stephen Jones, I do want to ask you quickly about energy. When do you expect we’re going to see some sort of announcement about the next steps with tackling that energy crisis? Because it seems like some of your colleagues are a bit worried that leaving it until after parliament returns next week could be politically tricky for the government.
JONES:
Look, this is going to be determined. Our policy deliberations are being determined by the needs of Australian households and businesses, not the politics of parliament next week. You can be guaranteed, Matt, that as soon as we get these things knocked into shape we’ll be wanting to go out to the Australian people because they deserve some certainty. So do the businesses, by the way, and the energy generators who are trying to lock in medium‑term gas contracts at the moment. So, it’s in the interest of everybody that we get this right. It’s also in the interest that we get this done as soon as possible.
DORAN:
Stephen Jones in Wollongong, thank you.
JONES:
Good to be with you.