SUBJECTS: Interest rates; franking credits; Malcolm Turnbull at the Robodebt Royal Commission
PETER STEFANOVIC, HOST: Let's return to Canberra now. Joining us is the NDIS and Government Services Minister Bill Shorten. Bill, good to see you. A 10th rate rise highly likely today. Your thoughts on that this morning?
BILL SHORTEN, MINISTER FOR THE NDIS AND GOVERNMENT SERVICES: I think it's going to be incredibly tough for families with mortgages. You know, quite frankly, I don't know how a lot of them are doing it at the moment, because each rate rise goes up, it's real money out the door every month or every fortnight, depending on your mortgage repayment cycle. And with ten rises, you know, the average mortgage is, what, up $16,000 a year? There haven't been wage rises to match it. So, you put that 15 or $16,000 and that's only an average, I should say so there's people well above it, plus all the, in my opinion, profit seeking behaviour by some of the big corporations, plus inflation. People are doing it really hard at the moment.
STEFANOVIC: Do you accept that rate rises are better than the alternative though, which is runaway inflation?
SHORTEN: Oh, we don't want runaway inflation. I mean, this is just monetary policy decided by the Reserve Bank. It is independent, but personally the wisdom of trying to hit inflation and get that inflation genie back in the bottle is crucial. There will no doubt come a point, though, where the pain - is the cure worse than the problem? Now, runaway inflation has to be hit, has to be hit on the head. That inflation genie needs to be put back in the bottle. Of course, what makes this particular economic turmoil tough is that a lot of the causes for inflation are supply side. What that means is they're a bit out of the control of the mortgage holders. You know, with the war in Ukraine, we've had China's COVID shutdowns causing supply chain blockages. We've had our own failure in the past to prepare for, you know, energy and skilled workforce. So that's driving inflation on the supply side. A mortgage holder can't really control that. So, it is difficult and, you know, I just want this cycle of pain to come to an end as soon as possible because at a certain point it's, you know, almost counterproductive. But that shouldn't for one second be taken as me saying anything other than we've got to put the inflation genie back in the bottle.
STEFANOVIC: Do you accept that the levers that your government has put in place so far are not working, given that eight of the nine rises so far have happened while you were in power?
SHORTEN: Oh, I think, Peter, you're more sophisticated than that. You know that sort of analysis, the reality is that inflation is a lagging indicator. So, the impetus for inflation was built up when Putin started his illegal criminal war in Ukraine in February 2022. We've seen the whole impact of COVID, and we've seen how it's shut down supply chains, it's reduced the ability to get parts. I actually think there are green shoots of recovery in terms of the external supply side costs.
STEFANOVIC: Well, that was my next question. What levers are working?
SHORTEN: Well, I guess - I don't guess, I believe that Labor's strategy is doing what we can in terms of fiscal policy. We're supporting. we're putting in place to support relief for childcare. Thank goodness we put in some of our measures on gas and coal at the end of last year, which is putting, restraining the rate of growth of energy prices. There are modest wage increases, not inflationary wage increases, as the critics and the Liberals predicted but, you know, at least people's wages in some cases are moving about 3%, so it means that the 7% inflation is not, you know, is not seven, it's more like four. But they're all levers that government has. The reality is, though, that a lot of the problems that we're dealing with, the story for this was written when previous governments, you know, during COVID, had to, chose to, get rid of all our visa workers. The previous story was written in terms of not having a proper energy market on the East Coast. You know, these are things that take a while to unravel.
STEFANOVIC: Today, your government is going to introduce changes to franking credits. The Prime Minister said before the election there would be no changes to franking credits. Is that another broken promise, Bill?
SHORTEN: No, this is not going to affect everyday retirees at all. It's a technical measure which goes towards integrity. It's about making sure that companies can't buy back shares lower than market prices.
STEFANOVIC: Given your proposal on franking credits was unsuccessful, do you really think it's a good idea to go back to that well?
SHORTEN: I think this is a completely different proposition. It really is a completely different proposition. This is about, it was in the October budget, it's a tax simplification measure. It's about making sure that companies - it's closing a loophole where large companies are able to buy back shares at below share market price.
STEFANOVIC: It's still a raid on retirees, though, is it not?
STEFANOVIC: But you're raising, what, $600 million? It's mostly coming from -
SHORTEN: It is a tax integrity measure. It's over four years, that number, Pete. And I think when you look at what the tax expenditure statement said for franking credits in financial year 2019/20, it was $17 billion. So no, just that’s - what's that old saying? That dog won't hunt.
STEFANOVIC: Right. Okay. But have you said to the Prime Minister, hey, doesn't matter to what extent we've been here before. It was unsuccessful in the past. Maybe franking credits is a poisonous term for us.
SHORTEN: Well, maybe the term has been politicised, but the measure is just a tax simplification measure. There's no there's no comparison to what we proposed. And after 2019 said we weren't going to propose.
STEFANOVIC: All right. Just a final one here on Robodebt just before we’re out of time, Malcolm Turnbull, he's told an inquiry yesterday that he did not consider the legality of Robodebt. What's your thoughts on that?
SHORTEN: Well, there was a lot of noise coming about Robodebt. A lot of noise. A lot of pain. A lot of unfairness. It does make me wonder when I've watched a cavalcade of Coalition Ministers present at the Royal Commission, into the Coalition's handling of Robodebt, what would it have taken to make the governments of Mr Abbott, Mr Turnbull and Mr Morrison sit up and pay attention? How is it they couldn't have heard the cries for help of hundreds of thousands of people who were the most vulnerable? Anyway, that's his evidence. He didn't hear it. But I think one of the lessons there is that if you have a lot of people knocking on the door, complaining about something day in, day out, week in, week out, month in, month out, year in, year out, then maybe you need to change your hearing aids.
STEFANOVIC: Bill Shorten, we'll leave it there. Thank you for your time, though. We'll talk to you soon.