Interview with John Stanley, Tom Elliott and Scott Hayward, Money News
9 May 2023
JOHN STANLEY: Jane Hume is the Shadow Minister for Finance and she joins us from our Canberra Studio. Good evening to you.
JANE HUME: Good evening to you.
JOHN STANLEY: I know you'll have a lot to criticise. But I want to ask you a simple question. Is there anything here that you like that you thought, ‘yeah, that's not bad, I'm glad they've done that’?
JANE HUME: Well, I was very pleased to see the instant asset write off for small business has been reinstated. I'm a little concerned about the amount, it's only $20,000. It's the same amount as the instant asset write off was in 2018. So sounds a little bit of a retrograde step. I would have liked to have seen it move with inflation potentially. There's some women's safety measures which I think that we will be supporting. Supporting some additional funding for veterans affairs. And there's also an extension of the pension work bonus scheme which of course, is a policy that we introduced only about five weeks after the last election. So there's a couple of things in there but to be honest, this budget offers very little for most Australians, and I think that's going to be very disappointing.
TOM ELLIOTT: Jane, it's Tom Elliott here. So there was quite a lot of talk towards the end of the budget speech about supporting women, aged care workers, nurses, that sort of thing. And Jim Chalmers wants to point out that his government actually has a majority of women I believe, I'm not sure if it's in just the cabinet or it's the overall number of people in the Labor Party. But do you think that this budget will actually improve things overall for Australian women?
JANE HUME: Well, look, it was a big taxing and big spending budget. I did have a look through the Women's Budget Statement. There was a lot in there about counting and in taking more statistics in. But there seem to have been a lot that had disappeared too. Things like assistance for female entrepreneurs. And of course, we know that women are one of the fastest growing cohorts of starting their own businesses and that seems to have fallen by the wayside. It is a typical big spending, big taxing Labor budget. There's no doubt about it. And if you want to ask what concerns Australians right now, and that's Australian women as well, it's the cost of living crisis that we're facing, and that of course, is being driven by higher and higher inflation. This budget tries to spend its way out of inflation and taxes way out of a cost of living crisis and neither of those are possible. We wanted to see a budget that got inflation under control that reined in spending to combat that cost of living crisis. But instead, I get a sense that this is actually making life harder for the majority of Australians. So many of those measures whether it be your Medicare assistance, or you know, there's all sorts of things. There's just nothing there for middle income earners. In fact, I think we calculate it out just in the budget lockup, and there's a bit of a thumbnail analysis, that the average family with a mortgage of around $750,000 or so will probably be around $25,000 worse off this year than they were before the before Labor were elected.
TOM ELLIOTT: And yet though Jane, this Budget is going apparently to a surplus in the next 12 months. Admittedly, it won't last very long. I mean, we haven't had a surplus since. Probably since Peter Costello handed down his last budget back in the black and white era. So is that something to be pleased about as Australians?
JANE HUME: Well, I think the real test was going to be not just whether you could hand down a surplus this year because, you know, to be honest, I'm just stealing a line from Angus Taylor, but now the drover's dog could have delivered a surplus with the amount of receipts from tax and from commodities and because of that high inflation bracket creep that had really become insidious in revenue collection. The test was really whether that surplus could be sustained in future years. And that's not something that we've seen. In fact, we're going to see a deterioration in the budget bottom line. And that's, I think, very disappointing because that's really the big indication for the RBA. What they've, what essentially Labor have done is raise the white flag on inflation said that that's not our responsibility. We don't need to get fiscal policy aligned with monetary policy. So the RBA has to do all the heavy lifting to get inflation down and that of course, pushes interest rates up.
SCOTT HAYWARD: Senator Hume, Scott Hayward. 3AW Money News. Yes, you're right. The middle and upper class Australians received no formal governance systems from this budget and that doesn't matter because the nation will be happy that the financially vulnerable will be financially supported. But one little piece of data that I just picked up is that I know they're very well off who has $3 million in superannuation, then you just got a little bit worse than tonight because they won't be able to contribute to make concessional contributions at the reduced tax rate of 15%. What are your thoughts on that?
JANE HUME: Well, we always said that we were going to repeal the superannuation tax changes when we come to government, not because of the you know, the amount that they've chosen. That's not important. But that's not the real problem. The real problem here is this as a whole new tax, it's a tax on unrealised capital gains. There is no country in the world that has a tax on unrealized capital gains, and nobody quite knows how this is gonna affect so essentially, if the value of your asset goes up, you're taxed on the growth before you've sold it. Now, that is a real concern. I think for all Australians, more importantly that superannuation tax, while it sounds like it's targeted to older and wealthier Australians, in fact, it's younger Australians that will end up paying more because it isn’t indexed. We think about half of young Australians, even on average ages will fall into that tax trap. So that's a real concern. I think, with superannuation changes.
JOHN STANLEY: And the one thing there, of course, is that they're about 2030 years off, actually being in that situation. You'd like to think you might get elected at some point between now and then to repeal that, as you've said. But just on the middle income earners, because you say that the government spent too much money on the low income earners and people on fixed incomes and people on concession cardholders and the like and that middle income earners at $25,000 a year worse off. Are you then suggesting they should have spent more to provide assistance to those people as well?
JANE HUME: No, I actually think that what we really wanted to see for middle income families for ordinary Australians was budget constraint that would send that message to the RBA that they didn't need to lift rates further. You know, I chair a cost of living committee and one of the things that we heard from that in that cost of living living committee, particularly from not for profit and charity organisations and that they're seeing people come through their doors and asking for their services for the first time that are dual income, this thing people come through their doors that have mortgages and then asking for help to put food on the table and less and when I when I asked one of those organisations, ‘what's the one thing that government could do that would help alleviate the pressure on your services?’ She said, ‘Bring interest rates back down’ to help those people get costs under control, get the cost of living under control, and there just doesn't seem to be anything like that in this budget.
JOHN STANLEY: So what would you have cut? What would you have cut in the Budget?
JANE HUME: Okay, well, I'll give you an example. There are 10,000 new public servants just in the last 12 months alone since Labor came to government, 10,000. Now we're not entirely sure what these public servants do. You know, don't get me wrong. If there's a frontline services fighting cybercrime, or whatever it might be, that's fine. But I don't think that that's the case. I actually think that they're just bolstering the administrative side of the public service. I wouldn't think that that would be wise use of money. We're seeing new agencies built as a net zero emissions agency or authority, the established all those sorts of those sort of, you know, quangos and you know, new authorities that essentially just give rise to a bigger and bigger government. With more and more red tape. That's not an effective use of taxpayer monies.
JOHN STANLEY: That’s why I wanted to ask because we often we see the headline stuff in the budget speech, but there's, there's pages is there's booklets. So of all these smaller funding initiatives that people work through and probably are still working through,
JANE HUME: Absolutely, and more than that, you know, bodies are buried in those booklets. And that's the hard part, of course, is trying to tease out where the real problems lie and where the where the real potential risks are. And looking at one of the things that we saw in this budget was a cut to infrastructure, that at the same time, we're seeing massive increases to net migration. Around one and a half million new migrants in Australia in the five years, including this one, and yet cuts and delays to infrastructure. So it's going to be very hard to maintain if you've got higher inflation, and of course, inflation erodes your purchasing power and it reduces your standard of living your quality of life, plus that increase in migration with without the corresponding infrastructure to support it, if that actually affects your standard of living in the long term. And I think that that's something that's been buried in this budget.
TOM ELLIOTT: Jane, Tom again. There was nothing tonight about the stage three tax cuts which you originally put in place by your government. Do you think though they'll remind now what do you think there might be a nasty in next year's budget and by the way, I'm going to ask Jim Chalmers this as well in about 10 minutes.
JANE HUME: Well, I definitely hope so. And the reason why I hope so is because the revenue increases that we saw tonight, were largely caused by bracket creep. When inflation becomes insidious. That means that people's wages move from one tax bracket to another. The only way to address that is through stage three tax cuts, which are specifically designed to address bracket creep of years gone past. So we would definitely hope that those stage 3 tax cuts are maintained. Quite frankly, I can't understand why in a cost of living crisis, you would want to take more money from people rather than give them more of their own money in their own pockets.
JOHN STANLEY: All right, Jane, just a final one quickly just on the Senate, which is where you are and of course we've got the greens in the Senate now. And they've already they've been implacably opposed to the government's housing program, which you you've also opposed. Where do you think is there going to be? Is there going to be a major roadblock? And could you see a circumstance where potentially the government might be engineering a conflict with the greens that could lead to a double dissolution election?
JANE HUME: Well look potentially that is the case, you're probably asking the wrong person. Our position on the housing future fund is pretty clear. We don't think that this is an effective use of taxpayer money in order to solve the problem for which that they're trying to solve. There are other ways that you can introduce more supply into the housing market. Quite frankly, if you're in government at a federal level and at every single state and territory bar Tasmania, what the fact that you couldn't negotiate better supply of housing, which of course is the real driver to bringing housing prices under control. If you can organise that I think that speaks volumes of the authority that Anthony Albanese has within his own party and with his premiers.
JOHN STANLEY: All right, we'll see how all this pans out. The Senate could be a very interesting place for the rest of this year. Senator Hume, thank you for your time.