Hume & McAllister, Sky News
10 March 2023
TOM CONNELL: Each week of course the Shadow Finance Minister and Assistant Climate Change and Energy Jenny McAllister has to face off and fire up on the big news and political developments. Jane and Jenny, welcome. First of all, of course, everyone likes this part where I don't talk. You tee off and always stick to that one minute. Jane. What has you fired up this week?
JANE HUME: Tom this week was International Women's Day and quite appropriately, Anthony Albanese learned that election promises are a little bit like babies. They're fun to make, but they're hell to deliver. Do you remember that promise of $275 off your energy bills? Well, Australians are now facing, in some places, bills increasing up to $700 more. Do you remember the promises for cheaper mortgages? This week, we saw a 10th consecutive interest rate rise, nine of which have occurred under this government. Do you remember the promise of no changes to superannuation? Well, that worked well. This week, in fact just in the last two weeks, we've seen that taxes on superannuation earnings are going to double for an increasingly wider net of people over the next 30 years. And no changes to franking credits, that was thrown out the window this week too. Changes to taxation. That was the big promise no changes to taxes. We are not interested in changing taxes. That was the big promise before the election. But why? Why would anybody in Australia believe a Labor government that can break promises so quickly, so easily without so much as an admission or an apology?
TOM CONNELL: I'd like your analogy there. I must say it's not just the delivery to but you know, the months after. Anyway, we won't keep going with the analogy for too long. Jenny, what's got you passionate this week?
JENNY MCALLISTER: Well, the Opposition has completely vacated the field in the context of ideas. We are now seeing an opposition led by the most negative opposition leader since Tony Abbott and that is really saying something he is returning the Coalition to the no-alition. We have a positive plan but the coalition just says no. Yesterday the Coalition in the House voted against the National Reconstruction Fund and in voting against that they voted against improving Australian sovereign manufacturing capability and against jobs and industries in our regions and suburbs. They are planning to vote no for our housing plan which will deliver 30,000 homes for people who need them. including women and children facing domestic violence. They voted no in December to energy price relief for consumers. And incredibly, they are planning to vote no against their own climate and energy policy, which was their policy, the safeguard mechanism up until the last election. They are bereft of ideas. And the challenge is this. No is not a policy. No is not even a talking point, and no will certainly not get Australians beyond the mess that was left to them by the last Liberal government. Anthony Albanese and our team are working hard to deliver the change that Australians voted for.
TOM CONNELL: Of course, we did have that 10th consecutive rate rise and it has certainly kicked off plenty debate around well, not just budget sustainability within households. But what about the federal government as well superannuation reforms are supposed to help address that albeit $2 billion a year initially. Promises of savings elsewhere to we haven't heard what they might be the lead up to the budget the opposition meanwhile, accusing labor of reckless spending, hitting government coffers and people's hit pockets. This is how the week played out.
TOM CONNELL: Very interesting all the talk of you know, budget repair, because it is warranted but how much are we willing to have the discussion. So Jenny $50 billion structural deficit, what's the next conversation later wants to have? Superannuation you put out there. What's the next conversation about how you'll make or fix that very big structural deficit?
JENNY MCALLISTER: But I think the overall approach is to take an honest look at the budget and have an honest conversation with the Australian people about our circumstances. And that, unfortunately, is something that the last government failed to do. Under the Liberals, there are a whole range of ways that the budget didn't honestly reflect our position. There were measures which were terminating, which were the need for those measures was ongoing, but no funding was provided. There were other infrastructure measures where they were under provisioned, the cost of them was not fully met in the budget. These are all problems that we are needing to address, and in doing so, we're going to have to talk honestly about our circumstances. We have an eyewatering debt, a trillion dollars of liberal debt, the cost of servicing that debt is going up as interest rates rise. Government is going to have to have some conversations with Australian people about how we tackle that, not just in this year, but over the coming years.
TOM CONNELL: Maybe that conversation, the next iteration will be in the budget. So Jane, when the Coalition says look, we want to stop more taxes of any form. If you're going to fix the budget. There's one other thing to do look at spending. You’re Shadow Finance. Are you willing to say we've got a spending problem and seriously address that even if it's not always popular?
JANE HUME: I think we already have said that Tom. We went to the election last year with $8 billion less in spending than Labor were committed to. By the time they got to the October budget they spent an additional $23 billion dollars. They keep talking about accommodating new priorities, but their priorities are increased spending. And all they want to do is tax people in order to pay for those new priorities. And I think that's rather disingenuous. I think I can't remember whether it was Ronald Reagan or Margaret Thatcher, one of those two greats that said, actually, I think it was Winston Churchill that said, taxing people out of a crisis or taxing an economy out of a crisis is like standing in a bucket trying to pull yourself up by the handle. It's never going to work. The most important thing that a Labor government could do is concentrate on its spending side, not these $45 billion off balance sheet spending that's going to that's going to actually add to debt that Jenny was talking about there.
TOM CONNELL: Let’s talk about the Coalition's last budget. On the Coalition's last budget you said, Oh, we started it then you have $14 billion of extra spending. It wasn't that you weren't saving money in that budget. You just weren't spending as much as Labor pledged to. Is your role, have you been told to get out and seriously look at spending and, and genuine large savings rather than, ‘Oh, we won't spend as much as the other side’, which was the Coalition's line last time.
JANE HUME: I think you can look at our track record on this Tom. We have always been a government that wants to see a budget balanced, which we've made sure that was specifically mentioned in the Budget papers in every budget that were delivered, in fact in the last year's October budget, the objective of budget balance was completely removed from the Budget papers completely removed, not just in the forward estimates, but in the medium and long term to that's unheard of. In fact, the budget was brought back into balance in late 2019. That MYEFO in 2019 was a balanced budget, then COVID hit, things changed. But most importantly, the job now of any government is to bring the budget back under control to rein in your spending. And that means that the RBA doesn't have to do all the heavy lifting on inflation management and interest rate control.
TOM CONNELL: Jenny, I'll give you a response of sorts to that. If you feel as though you know the discussion within labor as you're talking about how ambitious you might be able to be on budget repair by the next election. Could we have a forecast budget back into the balance?
JENNY MCALLISTER: I think Katy Gallagher and Jim Chalmers have been really upfront about the challenges facing the budget, and obviously they'll update those figures when the budget comes out in May. But Jane's recollection of history is quite inaccurate. I mean, let's compare the actual record on responsible the budget approaches. The last budget had $30 billion of new measures are no offsetting arrangements to pay for those new measures as 10 billion and very significant savings, more than $20 billion of savings redirected or repurposed or returned to the budget. Their last budget who that upgrades to revenue pay for some of the new expenditure. Our last budget took 99% of the revenue upgrades and returned them over the first two years to the budget. We understand that the budget repair task is serious. And I think Jim Chalmers has made it really clear that our priorities will be returning revenue upgrades where we can to the budget for budget repair, exercising spending restraint and constraint and providing a very targeted high quality spending where we can making sure that any new expenditure is high quality and support some of that objectives around helping families and improving the performance of the Australian economy.
TOM CONNELL: All right, we're gonna take a quick break when we come back all over the future of coal and gas in Australia's energy market as a safeguard mechanism debate rolls on.
TOM CONNELL: Welcome back, you’re watching Hume and McAllister. Let’s just recap another big issue of the week. The Government accepting the Greens amendment to rule out the $15 billion National Reconstruction Fund underwriting any gas and coal projects. Something it says wouldn’t have happened anyway. It won’t budge however, that’s Labor, on demand from the greens to ban new fossil fuel projects as part of ongoing safeguards mechanism negotiations.
TOM CONNELL: So Labor’s been at pains Jenny to say, this is fine for the NRF but it’s not our overall view. Can you just enlighten us on Labor’s broader view on new coal and gas projects so, as long as they stack up in terms of not affecting local environment, do their emissions matter? Is that assessed at all? Does Labor have any view on new coal and gas mines or is it just purely, if they stack up, don’t affect local flora and fauna, they’re fine?
JENNY MCALLISTER: Our big story, as you've heard in some of the grants that you've played just now, is stabilising energy markets by providing clear signals to investors about our expectations for emissions reduction. The problem with the last government of course is that they failed to do that over 10 years. Mostly through in fighting in their own ranks, they couldn't agree on their own policy. And it left investors and power station operators, project proponents without any clear sense about what the shape of the regulatory should be. In terms of coal and gas, we have a target to get our energy grid to 82% by 2030. Well that’s our expectation. The consequence of that, of course, is that there will still be at 2030, some power stations powered by fossil fuels we expect and our long standing position is that projects need to stack up environmentally and we are going to treat those projects just like we treat other projects.
TOM CONNELL: What about the Coalition side? Jane, you are involved in the review of course and you've pledged to do quite differently from the last election view, not just what you had to say about the climate, but even your target as well as something you'll need to change to win enough voters back for the next election.?
JANE HUME: We always committed to a 2030 zero emissions target, sorry a 2050 zero emissions target. But the most important thing was that we were never prepared to sacrifice Australian businesses and Australian households and their cost of living to meet that target. We wanted to make sure that there was a smooth and seamless transition to net zero by 2050. And that was why we're not just, we didn't just target admissions, but we also and successfully so I might add, but we also made sure that energy prices didn't increase. Now we're seeing the exact opposite. And in fact, what we're hearing is that the safeguard mechanism is in fact going to push costs out for both consumers and for businesses. The energy sector are telling us that particularly in the short term, it's actually going to increase power prices for businesses and for consumers. So at what cost? Do you want those urgent emissions reductions if you can get a smooth transition, which I don't know how you're going to get if your National Reconstruction Fund doesn't allow for coal or gas investment, because without that long term supply, there is no way we are going to be able to maintain low energy which is one of the core equities in Australia.
TOM CONNELL: So hang on, you oppose the NRF fullstop. You’re saying there's no way we can do the transition without money from the NRF but you didn't want the NRF to exist at all. So how do you weight that up?
JANE HUME: The National Reconstruction Fund is a poorly considered project because it is an off balance sheet funds that will immediately increase debt that will immediately increase interest rate repayments. The IMF have said that this kind of structured program is actually detrimental to installation. That's why we don't support and not only that, but it provides equity and revenue for the Commonwealth. We don't even know what the appropriate rate of return is. That's taxpayer money that's been invested without knowing what it is they get back for this. Now we think that’s highly irresponsible for one of these off balance sheet funds.
TOM CONNELL: Okay, well, the point being there if you oppose it full stop, but it has to be used to transition I'm just not sure how they marry up look. We were a bit truncated today with what happened with the NRL so I just want to get to our final topic. It was International Women's Day this week, of course, and there's a lot of highlights on you know, gaps that remain out there a lot of concerning ones I thought as well might be reflecting worth reflecting on what has changed in particular since you know you were growing up and isn't sold what people put up with and changed in a positive way. You know what used to happen back in the day to young women or any women that just wouldn't happen anymore, Jane?
JANE HUME: Numerous things can I say when I wrote my first job and I won't say where it was but it wasn't a rather big organisation. After I interviewed the bloke that interviewed me said, ‘Well, you're the first person that's come in here that isn't a you know, a kid with pimples. It's nice to get a woman in a skirt that can actually do spreadsheets’. I thought that that's an interesting, but my think my big sexist moment was when I was putting together a strategic plan for that same organization. And one of the senior fellows handed me his contribution on a QANTAS Club napkin I thought that's respectful.
TOM CONNELL: I love that we get an insight on your various jobs. I'd love to see the full CV one day Jane because we've delved through so much. Jenny, what about you?
JENNY MCALLISTER: Certainly, I think lots of things have changed in really positive ways. The one thing I really noticed is that I was once often the only woman in the room. I've worked in a lot of reasonably male dominated environments and I was often the only woman there and now I am just so regularly surrounded by other women. And one of the really nice things about International Women's Day is Labor, of course, is celebrating this moment where the majority of our caucus is women. Very nice for me to be with all of those colleagues on International Women's Day and just reflect how much politics has changed in that period.
TOM CONNELL: Yeah and of course, I know there are lots of measures that need to be improved on. I was looking at the status report this week. So I'm not trying to say mission accomplished just anticipating the feedback, some of the feedback I get is very-
JANE HUME: Long way to go.
JENNY MCALLISTER: There is a long way to go but it’s important to reflect on what we've achieved.
TOM CONNELL: Exactly, exactly. All right, Jenny Jane, thank you. We will talk again next week.