E&OE TRANSCRIPT
Topics: Cost of living relief, inflation, Reserve Bank, small business
NATALIE BARR, HOST: The latest inflation figures will be released in just a few hours but it will take much more than a slight fall to fix the cost of living. Meanwhile, Treasurer Jim Chalmers will today reveal the nation's first surplus in 15 years and it will be significantly higher than forecast in the May Budget. However, economists warn of a rapid economic slowdown that could trigger our second recession in three years. Joining me now, Social Services Minister Amanda Rishworth and shadow finance minister Jane Hume. Good morning to both of you. Amanda, consumer spending is slowing – we know that's the whole aim of this. But how do we know when the RBA has gone too hard on interest rates?
AMANDA RISHWORTH, MINISTER FOR SOCIAL SERVICES: The RBA is independent and they need to obviously work carefully through the economic data. What the Government can do is make sure that our Budget works for people and that's exactly what we've done through our cost of living measures, through our cheaper childcare, our improvements to Paid Parental Leave whether it's our cheaper medicines or Medicare. Our job is to support people with cost of living as well as investing in productivity into the future. So, our Budget is focussing on people to make sure that the worst of the cost of living is helped but of course that we’re not adding to that inflation problem.
NATALIE BARR: Also Jane, last month almost 900 businesses reported insolvency or restructuring. That's the largest in seven years. Are they kind of collateral damage?
JANE HUME, SHADOW MINISTER FOR FINANCE: Well, there's not just a cost of living crisis Nat, but there's a cost of doing business crisis as well. I know that when I speak to businesses they talk to me about their energy prices, energy bills, their rents are going up and also the cost of supplies is going up too. That's been passed onto the consumers in the form of higher prices. If the Government was really doing its job it wouldn't just be focussed on delivering little bits of cost of living relief to certain cohorts here and there but it would be controlling its spending, bringing down the aggregate demand in the economy. That sends a signal to the RBA that it doesn't need to keep pushing up interest rates to bring inflation down because bringing inflation down is the only way that you can give consistent cost of living relief to all Australians in a sustainable way. That's what we're looking for from the Government right now but it doesn't seem like they have a plan to do that. My concern, and I know the concern of many economists, is that potentially we're seeing the economy shuddering to a halt right now and moving towards potentially a recession that we don't have to have. If the Government did a little bit more of the heavy lifting, we could avoid that recession. We could avoid that recession and reduce interest rates at the same time by making sure that we haven't got one foot on the brake and one foot on the accelerator.
AMANDA RISHWORTH: Jane, that's just not true. That's just not true. We are absolutely being responsible in our budgeting. A number of our measures, including our energy relief puts downward pressure on inflation… [interrupts].
NATALIE BARR: Let's just let Amanda make her point there.
AMANDA RISHWORTH: What I was saying was it is about banking more revenue to make sure that we're not adding to inflation. That's exactly what our Government has done over two budgets, including the surplus that you mentioned, Nat. So, Jane, we are taking the responsible action. Helping with cost of living at the same point is not adding to inflation.
NATALIE BARR: But Amanda, I guess people are going to see this surplus. They know that the economy is in trouble – 900 businesses going under. This is people's lives here, and they're going to think, why can't the Government help me?
AMANDA RISHWORTH: We're doing what we can to help. And we've announced a range of measures in the Budget, including measures for small business. So we are doing what we can, including as recently announced $2 billion into housing because we know that that is incredibly important. But we are taking that responsible pathway not to add to inflation. And we are doing the two things at the same time to make sure that we're not adding to inflation pressures in the economy. We've outlined a range of measures, including for small business, so we are there helping them when we can.
NATALIE BARR: Well, you know, people at home are just shaking their heads and thinking, I'm hearing inflation, I'm hearing cost of living crisis, and I can't pay my bills. So, it's a big mess. Thank you both very much for giving your point of view, we’ll see you next week.