Interview with Greg Jennett, ABC Afternoon Briefing
3 May 2023
GREG JENNETT: Well, separate to interest rate hikes, the Senate has been going about its own work on cost of living pressures. It's now reported or in fact delivered multiple reports might be more accurate because senators split along party lines when it comes to some of the causes of cost of living pressures. But for a liberal perspective, at least. Shadow finance minister Jane Hume joins us here in the studio. Welcome back, Senator. Before we get to some of the findings of this Senate inquiry, why don't we pick up on the criticism coming from a Premier of the Reserve Bank, Governor Philip Lowe. Does he deserve this public treatment?
JANE HUME: I think Philip Lowe is demonstrating extraordinary patience with Dan Andrews, a premier who has overseen rises of over 42 different taxes in his state who has driven the state into debt and into deficit, multiple deficits. I think it's galling that he's pointing the finger. I think it's probably a distraction at the cause of the cost of living crisis being interest rate rises when the RBA has one job to do and that is to get inflation under control. Perhaps Dan Andrews should be doing his bit for getting inflation under control. More importantly, you're right, the RBA is independent. Jim Chalmers has shown great restraint by making sure that is clear from the Federal Government. I don't like the idea of Labor premiers being used as proxies in this debate to question the independence or the decision making skills of the RBA.
GREG JENNETT: You say a proxy. Do you suspect that Dan Andrews has been put up to this in some way by the feds? And more precisely, is there a sort of a cowering effect that comes with public criticism of this officeholder?
JANE HUME: I would very much hope that Anthony Albanese and Jim Chalmers would speak to Daniel Andrews and remind him of the independence of the Reserve Bank of Australia and perhaps tell him to stick to his knitting, look after his own state rather than coming cap in hand to the Federal Government and asking for a bailout because of his economic mismanagement.
GREG JENNETT: All right, Jane Hume Why don't we move back to areas that you've been working on, and that is the findings of this Senate Select Committee into Cost of Living on the politics. First of all, I observed that there was a splintering among senators on the committee. Does that undermine the value of the entire inquiry, which is long and resource intensive, really?
JANE HUME: No, I don't think it does. And the reason is this was a committee that was put together by the Coalition and the Greens in conjunction with the Greens, but it involves all members of the Senate. Anyone can be involved. There are Labor members as well and all have worked very well in questioning witnesses and that includes charities, it includes peak bodies, it includes businesses and business groups as well as individuals on what's driving the cost of living crisis, what's potentially making cost of living challenges turn into a crisis and making the situation worse. This report has only come out with evidence, with funding. It's an evidence base. It's a fact base. It doesn't make recommendations. They will come later in the year. I would expect that there will be a difference of opinion because each party comes at this from their own particular perspective. But it's really hard to dispute the facts. And that's what we heard at these committee hearings.
GREG JENNETT: Yeah, as you say, no recommendations. There are, however, 11 findings. And on the eve virtually of the federal budget finding number two, the most effective way to reduce inflation, which is what everyone's struggling with at the moment, is to have monetary policy and fiscal policy working in the same direction. They basically are, aren't they?
JANE HUME: Well, in fact, we've heard evidence to suggest that they are not doing that. And we heard it at Budget Estimates just last year. You know, Philip Lowe told us that he's increased these increasing interest rates, that's a restrictive monetary policy. Yet Steven Kennedy, Dr Steven Kennedy, the Treasury secretary, told us that the budget was inflation neutral. What we want to see now is a budget that's actually going to is going to halt inflation and reverse inflation, make sure that we don't have an RBA with its foot on the brake and a budget with its foot on the accelerator because that just makes the RBA's job all that more harder and it means that interest rates keep having to rise and Australians pay the price for those higher interest rates.
GREG JENNETT: All right, well, leaving aside off budget funds, which I know your side of politics often talks about, the National Reconstruction Fund isn't even administering money yet. And the Housing Australia Future Fund hasn't actually been created yet. What would you be cutting?
JANE HUME: Well, I don't think we can leave those funds aside because, let's face it, the IMF themselves came out and said the problem with these off budget funds is they can have an inflationary effect. But let's face it, the government has been making decisions that potentially could be making inflation worse in industrial relations. Decisions can push up the costs of labour, of wages, which then gets flows onto higher prices. Energy decisions interfering in the market mechanisms can potentially deter investment. So that will affect the supply side, if you will, had the chance.
GREG JENNETT: I think we may test this in two years time. You'd cut some of those.
JANE HUME: I think we made it very clear that the decisions that this government is making on energy in particular, which is one of the great drivers of the cost of living crisis, could potentially be making the situation worse.
GREG JENNETT: All right. I assume you're talking about price capping and other things, but since you mention energy, Jane Hume does invite an observation from you on Beetaloo Basin, the Northern Territory Government moving a step closer to making this happen. More supply of energy will reduce the cost of energy, says your inquiry. But does that include Beetaloo Basin? Do you support its full development from here?
JANE HUME: Absolutely. We should be encouraging investment, particularly in new gas reserves, tapping new gas reserves, not just in the Beetaloo Basin. Let's look at places like Narrabri, Scarborough and Bass Strait. You know, we have rich, supplies of gas in Australia. This is something that is going to be a fundamental part of our energy transition to net zero by 2050. All sides of government seem to agree on that We want to make sure that the best and sustainable way to keep prices low in the meantime is to open up new supply.
GREG JENNETT: But on scale, it's a bit of a game changer, isn't it? Beetaloo Basin, if fully developed to its known reserves. And there are even more that I think are not fully established yet. It is on scale far bigger than any of the others you mentioned?
JANE HUME: Well, we'd hope so but diversification of supply is just as important as scale of supply. We would hope to see more and more gas fields opened up not just for exporting, but certainly for domestic supply, and that will sustainably bring prices down.
GREG JENNETT: All right. Well, we'll be talking about this, I'm sure, beyond budget week. Jane Hume, thanks so much for joining us today on those findings in the Cost of living report.