PETER STEFANOVIC:
Well, the Reserve Bank fears unemployment will rise next year as Australians feel the full effect of rate rises. The predicted uptick in unemployment is a key reason cited in the RBA minutes for keeping the cash rate at 4.35 per cent this month. The jobless rate rose to an 18‑month high of 3.9 per cent last month, and the Reserve Bank expects that figure to rise to 4.25 per cent next year. Joining us live now, the Assistant Treasurer, Stephen Jones.
Stephen, good to see you, as always. So, the RBA says it may have to raise rates again. Do you really think that's necessary when the US is talking about cuts and not just a few, more than half a dozen over the next two years?
STEPHEN JONES:
Look, I take some heart, Pete, from the read‑through of the Reserve Bank minutes where they say the rate rises that we've already put in place, that the Independent Reserve bank has already put in place, together with what's going on in Australia and around the world, slowing consumption and putting downward pressure on inflation. So, action in the field already starting to work. So, I take some heart from that. Of course, from our point of view, ensuring that we maintain budget discipline, which has been the hallmark of this government. Ensuring that we could get spending back under control, that we're banking new revenue that's coming through, and that we're not going on a spending spree like the previous government. In fact, the budget repair has been our number one economic responsibility over the last 18 months.
STEFANOVIC:
Yeah, but when the RBA talks about further tightening restrictions may be needed. I mean, I know it's independent and you'll say that, but do you have concerns that potentially another rate rise could cook the economy next year?
JONES:
Look, I have concerns that Australians are doing it tough. Whether it's small businesses or households around the country, we know they're doing it tough. They're struggling to make ends meet. And we want to ensure that from our part we do what we can to support them. We want to see ourselves through the problem. I take heart from the fact that inflation is coming down. It's coming down here in Australia and around the world. We'd like it to come down faster, but we are heading in the right direction. We've got to maintain our budget discipline and where we can find areas that we can support households, we will. Where we can find areas where we can maintain and improve our supply chains and to ensure that we are setting ourselves up for the recovery, we will do that. But budget discipline, absolutely. Our number one priority to ensure that we don't make a tough situation worse for the economy and for households.
STEFANOVIC:
The RBA — just to wrap up here, Stephen, the RBA does say that it fears unemployment will rise, but isn't that just what happens when rates rise?
JONES:
Look, I think the employment story is one of the phenomenal achievements of the last 18 months. Over half a million jobs created in our first 18 months in government. Historically low unemployment rates. We want to keep them there and we'll be doing everything we can to ensure that we can maintain that great employment story where the overwhelming majority of Australians who want a job have got one and wages are moving again. So, with budget discipline and growing jobs, they're our objectives as we set ourselves up for recovery over the next twelve months.
STEFANOVIC:
Okay, Stephen Jones, thanks for all your appearances this year. Have a great Christmas and new year.
JONES:
All the best to you and your team and your family. Have a good one, mate.