PETER STEFANOVIC:
Well, joining us live now is the Assistant Treasurer and the Financial Services Minister, Stephen Jones. Minister, good to see you. Thanks for your time this morning. How troubled are you that inflation is still not under control?
STEPHEN JONES:
I’m deeply concerned and feeling the pain of Australian households who are seeing their mortgages go up and the cost of living go up. But our job, as the Prime Minister and the Treasurer and everyone has said, is that we can’t make a bad situation worse by letting our own spending get out of control. We are looking, as we speak, at measures that we can put in place to bring energy prices down, but it can’t be through a mechanism that’s going to just pump the fires of inflation.
STEFANOVIC:
Okay, I will ask you about that in a second, but back to inflation though, because people are seeing their mortgage payments go up, they’re seeing their energy bills go up, as we know. They’re looking to you for immediate answers, but you don’t have those answers yet. How will you help people in the short-term, or will they just have to cop it?
JONES:
Pete, what we’re looking at doing is putting in place some measures that are well-crafted. We don’t want to rush into something only to discover that something that has been designed to provide some short‑term relief is actually going to create a bigger problem than the one it was trying to fix. So, working closely with the officials, with experts, with industry to ensure that we get the right sort of measures in place. We understand the pain that households are going through and the pressure that households are under, but what we can’t do is make a bad situation worse by ill-thought-through policy and by reckless spending that just push inflation up and up and up.
STEFANOVIC:
So, what measures are you considering?
JONES:
Well, the Treasurer and the Prime Minister have already indicated that we’re looking at all things. In fact, we’ve got all measures on the table to look at what we can do in the area of energy. We’ve already put some stuff out around gas supply to ensure that at the very least, manufacturers and households can be assured that gas supply won’t be interrupted. The next measure is to look at prices and, of course, the price of gas is flowing through into the price of electricity right throughout the economy as well. So, the price of gas - absolutely critical. Pretty clear message has been sent to the exporters that we expect that Australian‑based businesses are looking after Australian consumers first, and that’s what our measures will be doing.
STEFANOVIC:
Right, but not cash handouts - there won’t be cash handouts.
JONES:
Yeah look, of course, we would have looked at all of these things, Pete, but the problem is once you start writing – there’s two problems with writing cheques. We’ve already got a trillion dollars’ worth of debt and a Budget deficit. This will significantly add to that, but as the Treasurer will outline in his speech in Melbourne today, the impact of handing out – or the benefit of handing out cheques for cost‑of‑living relief will be very short‑lived because the minute they hit people’s bank accounts, inflation will go up again and the independent Reserve Bank will be jacking interest rates again. So, it’s one of those solutions that just won’t work.
STEFANOVIC:
Right. In part of the Prime Minister’s speech today he’s going to talk about reform. He wants to, quote, “Reform our way through these economic conditions.” What does reform look like?
JONES:
We’re not going to throw our hands up and say the job of economic reform is done in the Treasury portfolio. In fact, right across the economy, ministers have been charged with bringing forward reform agendas, agendas that are going to make it easier for Australian households to manage cost-of-living pressures, measures that are going to lead to wage increases, whether that’s through the industrial relations reforms that we currently have before the parliament. Reforms are going to enhance productivity and productive investments. We’ve already brought forward our child care propositions. In addition to all those things, looking at what we can do in the area of consumer‑friendly policies, policies that are going to help consumers at the - when they’re doing their shopping, and help businesses to invest and ensure that we’ve got – as we come out of this problem that we’re facing in Australia and right around the world, we come out stronger. Sorts of measures that we’ve already started work on include the $14 billion National Reconstruction Fund. That is a capacity‑building mechanism. We want to ensure that businesses are ready to take advantage of this and all the other policy stuff that we started the work on in the Budget.
STEFANOVIC:
Right. But will there have to be higher taxation and spending cuts?
JONES:
We’ve made it quite clear that we’ve got a revenue problem and between now and May next year an honest conversation with the Australian people: if you want the NDIS, if you want Medicare to keep pace with changes in the cost of medicine and medical technology, if you want aged care to be the sort of thing that we’d all be proud of putting our loved ones in an aged care system, if we want to ensure our defence forces – it’s not just submarines. It’s ensuring our defence forces have the capacity and the equipment that’s going to be necessary in an uncertain world. But we’ve already got a Budget deficit and we’ve already got a trillion dollars of debt. It’s very, very difficult to find a way to do it within the existing cost envelope. So, that’s just an honest conversation you’ve got to have with the Australian people.
STEFANOVIC:
Yeah, well I mean, yeah so, that basically means you’re going to have to increase taxes.
JONES:
We will have to look at all options, but we’re not going to hide from the fact that we’ve got a big problem in the Budget. We inherited it. We didn’t create it. We inherited it, and we think it’s our responsibility to start bringing down that deficit down over time because you know, in the days of low interest rates, you could write cheques for billions of dollars and feel like it didn’t have an impact on the bottom line. We now know that that is wrong and the debt that we’ve inherited is the fastest growing expense on the government’s books, and by the end of next year it’s going to be costing us more than we spend on aged care. That’s not sustainable.
STEFANOVIC:
Stephen Jones, we’re out of time. We’ll talk to you again soon. Thank you.
JONES:
Good to be with you, Pete.