LAURA JAYES: The RBA Governor Philip Lowe, as we just heard there from Ed, is before Senate Estimates here in Canberra this morning, he has been questioned for about an hour and half now, and earlier this morning was the Shadow Finance Minister Jane Hume doing the questioning. She joins us here now in the studio. Jane, good to see you. First of all, we heard from the Treasury Secretary yesterday with a pretty grim forecast for where we're headed, we've heard from the boss of Wesfarmers, that, you know, things aren't going to be bright for quite some time. And now we've heard from Philip Lowe, that inflation is not going to get back to 3% until 2025.
JANE HUME: That's right, he said that he won't be able to bring inflation back into that target range until the middle of 2025, which I think would be really disappointing news. For a lot of Australians that are feeling the pinch right now, that doesn't matter whether it's at the grocery checkout, or whether they're paying the mortgage paying rent. Now, everybody's feeling that cost of living pressure that's coming from that high and persistent level of inflation, which has had a seven in front of it for the last three quarters in a row. Obviously, the RBA is singularly focused on getting that inflation down. But we heard from Philip Lowe today that he's trying to take the economy on a slower glide path back to lower inflation.
LAURA JAYES: To protect jobs.
JANE HUME: Absolutely. He said that, in fact that this was the legacy of the previous government, and the decisions that were made the fiscal decisions that were made by the previous government, and the monetary decisions that were made by the RBA at that time to to ensure that there was full employment essentially, by the time the Coalition left office, and that's remained, which is very good news that he said that it's never been easier. It's been about 50 years since it's been this easy for Australians to get work. Yeah, which is really good news, we wouldn't want to upset that in an effort to bring down inflation too quickly. But that's really the reason why you need to make sure that your fiscal policy and your monetary policy are moving in the same direction at the same time.
LAURA JAYES: He did give credit to this government and the budget, right?
JANE HUME: He said that the interventions in the energy market would bring down, according to his forecasts, inflation by half a percent, permanently, and quarter of a percent temporarily. And then it would push inflation back up again, when that temporary measure is taken off, all other things being equal. But of course, if you've got inflation at 7%, well, that's really only bringing it back down to six and six and a quarter. That's probably cold comfort to most Australians now that are feeling the pinch. And of course, he also said that it's people on lower incomes that are disproportionately affected by inflation, they feel they know the cost of those rising prices, more acutely than do those on higher inflation. So it has got a regressive effects like a regressive tax short was the phrase he used.
LAURA JAYES: Then, given those comments, does that give vindication to the government's budget who did help the most vulnerable in terms of direct payments?
JANE HUME: Well, I think he actually said that the overall budget was neutral. It was a neutral strategy on inflation, whereas monetary policy is clearly contractionary. It's not adding to inflation. But it's certainly not doing anything to pull those fiscal levers to make the RBA's job easier. And of course, if the RBA's job isn't easier, well, then they have to keep using the one tool that they've got, which is interest rates to keep pushing those up to drag inflation back down to that 2 to 3% band. And of course, that's going to take longer, inflation will stay around for longer interest rates will stay higher for longer. I think that that's going to be very disappointing news for a lot of Australia.
LAURA JAYES: Well, we're gonna get the inflation figures out a little out a little later today. Angus Taylor was in the house yesterday talking inflation. Let's have a look.
ANGUS TAYLOR: In the last month alone, the price of Vegemite has increased by 8%. Peanut Butter by 9%. Yogurt has increased by 12%.
ANTHONY ALBANESE: The CPI jumped 2.1% in the March 2022 quarter on his watch the largest quarterly rise this century Germany when he was 13. UK 18.1. United States 9.9 Every single one of those countries has higher remember, food inflation,
ANGUS TAYLOR: Vegemite up 8% Not in a year, in a month, their babies figure in a month.
LAURA JAYES: Now, by now, Jane Hume our viewers know that Angus Taylor was really misquoting inflation numbers; he was talking about monthly inflation instead of annualised inflation. What's notable in that though, is it doesn't seem like Anthony Albanese picked him up on it straight away.
JANE HUME: I think we need to be a little bit forgiving here.
LAURA JAYES: I thought you might say that.
JANE HUME: Let's face it, politicians particularly those in, in economic portfolios carry a lot of statistics around in their head and it's very easy to muddle them up. So I don't think we could read too much into it.
LAURA JAYES: It was prepared, though, wasn’t it?
JANE HUME: I don't think we can read too much into that. But what I think we can say is that Australians are doing it tough. They are feeling those rising pressures, a rising cost of living a grocery checkouts when they're buying fuel when they're paying their energy bills, when they pay mortgages, when they're paying rent, there is no doubt that this is the cost of living is the number one issue right now, cost of living has been driven by inflation. And in those higher interest rates that are going up and up and up to try and manage inflation, or simply making it worse. There's a lot of pain out there. Now we're hearing stories about financial hardship. And Philip Lowe was talking about those today, just the number of people that are in negative cash flow out there is increasing. So of course, we need to make sure that while the RBA is doing its job doing a lot of the heavy lifting on getting those inflows that inflation down, we want to make sure that the government's doing the same
LAURA JAYES: Good pivot. Now, I'm gonna ask you about this leak. Andrew Clenell had this morning. Someone from Shadow Cabinet is expressing frustration more than one person about Angus Taylor, basically reprimanding his colleagues for not finding budget savings in their own portfolios. And then he went into the House and made a mistake. I'm not drawing that line they have, is there frustration within Shadow Cabinet at the moment?
JANE HUME: Well, I would never speak about what goes on in Shadow Cabinet. But do you really think it's a surprise that a coalition opposition would say we want to make sure that spending is under control, we want to make sure that the policies that we take the next election are more fiscally responsible than the lot that are in government now. And I think that that's, that should be no surprise.
LAURA JAYES: Are Shadow Ministers finding savings like Angus Taylor has demanded?
JANE HUME: And it has been the same way for years in the past. In fact, it's been a basic budgetary rule that the Coalition has said itself, that you don't bring in a new policy idea until you have an offset until you know what it is that you're going to give up in order to make a new spend. And that's just fiscally responsible. I don't think that would be a surprise to anybody.
LAURA JAYES: Okay. Well, we look forward to question time today. Rolls around pretty quickly, so there's always time for redemption. Thank you. Good to see you.