PETER STEFANOVIC:
Let's go to Sydney now. And joining us is the Assistant Treasurer, Stephen Jones. Stephen, good to see you. Before we get on to economics, I do want to ask you about this letter that the family of Yang Hengjun have written to the Prime Minister pleading for him or the Prime Minister to help bring Yang Hengjun home.
STEPHEN JONES:
Well, I don't want to speculate on the likelihood or otherwise what I can say is that the Prime Minister, the Foreign Minister and senior government officials have been raising this matter with the Chinese Government. We'll continue to conduct our diplomacy in quiet, not through the use of megaphones. But I can confirm that this matter has been and will continue to be raised, including during the visit, the upcoming visit.
STEFANOVIC:
Does Cheng Lei's release help his cause or help him?
JONES:
Look, I think it indicates that there's a willingness on both sides, from the Australian Government's point of view, to want to assiduously work through the issues of difference, whether there are issues of trade or other issues, and ensure that we can normalise our relationships. And there's green shoots there. I don't want to put it any higher than that. Obviously difficult relationship intentions. And when we came into government, things weren't right. They weren't good. And we've put a lot of effort and big credit to Penny Wong and to the Prime Minister, who've put a lot of effort into normalising this relationship. A long way to go, but great strides have been made.
STEFANOVIC:
Okay, onto the economy. Inflation not yet completely under control, rates likely to increase again next week after a few pauses. So, does this mean after all this time, your policies still aren't working?
JONES:
Look, the Australian Bureau of Statistics and others, including the Reserve Bank, have confirmed that policies that we have put in place are putting downward pressure on inflation. Whether it's our medicines policy, whether it's our childcare policy or indeed the policy that kicks off today as around 7 million Australians who are pensioners, who are concession cardholders or children and going to a GP, we have tripled the bulk bill incentives.
And that'll be a big cost of living price saving for families who need to go to their local GP and get medical assistance, and we know that medical care is often a big lumpy bill in a family budget. But it is true, Pete, as you've pointed out, that we're not immune from what's going on around the world. And when the oil cartels reduce supply to push up prices, that has an impact here in Australia. And the price of oil, the price of petrol is flowing through to everything. And we're not immune from that.
STEFANOVIC:
You and I, we've spoken about this so many times, and I remember you saying that you had hoped that the cash rate would peak at 3.35. Another rate rise next week takes it a full percentage above that. So, I mean, have you misread the economic challenges.
JONES:
Look, myself, the Treasurer, every member of the government doesn't want the cash rate to be a percentage point higher than it absolutely needs to be to deal with the inflation challenge. The inflation challenge is real. We've got to do our bit to keep a lid on inflation and that includes the fiscal discipline that we have shown and will continue to show. But we're not immune from what's coming at us from around the world. Whether it's the war in Ukraine, the uncertainty in the Middle East or the behaviour of the oil cartels in cutting supply to push up prices. They have a real and material impact on our economy. And that's what we're feeling.
STEFANOVIC:
So...
JONES:
That's what we're feeling at the moment. We just see through it. We're confident that we'll see through it.
STEFANOVIC:
So, just to clarify on that point that you made there, Stephen, when you said you don't want it to be a percentage higher than where it needs to be, is that to suggest, correct me if I'm wrong here, that you think it needs to be at 3.35?
JONES:
No, what I'm saying, Pete, is the Independent Reserve Bank will independently assess the inflationary and other pressures within the economy. Of course, the Australian Government is concerned about the impact that interest rate rises and that inflationary pressures are having on households right around the country. We know that has an impact on their ability to make ends meet, which is why we've been doing our bit, from fiscal policy point of view, to bring put downward pressure across the economy as a whole and to provide some targeted relief in the area of medicines, childcare health care policy.
These are the areas where we can have a real and material impact and we're doing it. But what we can't do is fan the flames of inflation by loose fiscal policy. And that's why our part of the equation is so important. The Independent Reserve Bank will determine what it needs to do in relation to the cash rate to ensure that monetary policy is working in hand with fiscal policy.
STEFANOVIC:
Stephen, thanks for your time.