Interview with Laura Jayes, AM Agenda on SkyNews
15 February 2023
LAURA JAYES: Let’s go to the Shadow Finance Minister Jane Hume who joins us from Canberra. What are you expecting to hear from the Governor? What do you need to hear?
JANE HUME: Laura, Philip Lowe appearing today is an extraordinary opportunity to essentially pick the brain of an economist that sees data no one else can see. We really want to understand what the drivers are to this inflationary environment, where he potentially sees inflation going in the medium term and the long term, whether it’s peaked or whether there is still more pain to come. You know the economist Chris Richardson said the other day that the RBA has essentially been sending up a distress signal to the government saying that doing all the heavy lifting on tackling inflation can't just be left to the RBA, it also is a responsibility for the government. You know, and they really have left that job of tackling inflation, tackling the rising cost of living, only to one arm. There are two levers that you can pull. There’s the monetary lever and there's the fiscal lever. And we want to hear from Philip Lowe as to what it is that he needs from his government to help him do the best job he can to tackle the rising inflation crisis that's facing Australians right now. And the rising cost of living that’s going with it.
LAURA JAYES: Yeah, he has signaled that he wants the Government to do more. There’s a second budget coming up from Jim Chalmers, not far away. What do you want to see in that?
JANE HUME: Well, we would hope that it doesn't reflect the first budget, which is one of the things that we're prosecuting in estimates right now. I can certainly say that the additional $23 billion in spending that we saw from the Labor Government wouldn't be helping with the inflation, and increasing cost of living.
LAURA JAYES: What would you cut from that first budget?
JANE HUME: Well, we wouldn't have done that extra $23 billion in additional spending. We wouldn't have done $43 billion in off balance sheet spending, which the IMF has said is inflationary. Immediately adds to debt. Immediately increases the deficit because of the interest repayments and has inflationary pressures. We certainly wouldn't have seen interventions into the energy market that would not just affect the prices now but potentially threaten supply in the long term. And most importantly, we would have had an economic plan that would have seen a credible pathway back to surplus and assistance for Australians that are facing cost of living crisis right now. It doesn't matter whether they're feeling at the petrol bowser, or the grocery checkout, or when they're paying their mortgage rates, or when they're paying their rent. And Australians are doing it tough, and they’re looking to their government for help. They’re crying out for assistance. And instead, the priorities of this Government mean that the inflation crisis, that the cost of living crisis is simply getting worse.
LAURA JAYES: So you think this upcoming budget shouldn't have a single dollar of new spending? Because it would be inflationary.
JANE HUME: They've already signaled, in fact, I think I just heard Steven Kennedy say it just before that there is going to be increased debts, increased deficits over the medium term. Now increased deficits, that's the signal to the Reserve Bank. That's the signal to the reserve. Bank that unfortunately, the job of dealing with inflation is yours. It's not the government's. They’ve essentially abdicated the space. They’ve absolved themselves of all responsibility here. Now, that's not suitable, that's not appropriate economic management. When we were in government, we made sure that fiscal policy and monetary policy moved in the same direction that they were aligned, and we keep hearing that from members of the government. But don't look at what they say, look at what they do, because this is quite the opposite message coming from Steven Kennedy today, to the one that we are hearing coming out of the mouth of Jim Chalmers.
LAURA JAYES: I mean, how are they not aligned? I mean, we don't have a Liz Truss situation here. You'd agree?
JANE HUME: A Liz Truss situation, what do you mean?
LAURA JAYES: Well, Liz Truss, when she became Prime Minister was working completely at odds with the central bank in the UK and that's why she didn’t last so long.
JANE HUME: I think that's exactly what we've got going on here. When you have a government that continues to spend, that continues to have no credible pathway back to surplus, in fact, they didn't even have in their last budget an objective of a balanced budget. That's the first time since the 1990s. That anyone could remember a budget that didn't really have an objective of returning to balance or that means that you're turning over all the hard work or heavy lifting to do to tackle inflation, and then you can point the finger to Philip Lowe and blame him, which is exactly what so many members of the government have done in an entirely inappropriate way interfering in RBIs decision making processes. So we don't think that they've tackled this problem at all. They said they came to government saying that they had an economic plan, and yet they failed to demonstrate that they have one that's going to assist ordinary Australians with the problems that they're facing right now. And return that budget back on a credible path to surplus and to make sure that we return the economy to an even keel and reduce the cost of living pressures on ordinary Australians.
LAURA JAYES: When you say there's been intervention or interference with the RBA. What are you talking about? You're talking about the comments of Stephen Jones.
JANE HUME: Not just Stephen Jones, but certainly Stephen Jones. I think that they were incredibly out of line. You've got the RBA Governor coming out and saying one thing and Stephen Jones coming out and saying another and yet at the same time saying oh, well, it's an entirely independent organisation. Now, that is not the case. If it's an entirely independent organisation, you leave those decisions to them. But there's no way that this government can get away with not assisting by making sure that fiscal policy and monetary policy are aligned. I know you had Stephen Jones on this morning-
LAURA JAYES: Yeah, Pete had him on, that’s right. He said, he repeated that and said essentially, he is on the side of mortgage holders doing it really tough and the side of small businesses doing it tough and he doesn’t want to see interest rates rise on them because they're already struggling to pay the bills. What's controversial about that?
JANE HUME: I heard that this morning and I gotta say I nearly spit out my coffee. Because Stephen Jones said it yesterday and then said the exact opposite to what he'd said yesterday. Stephen Jones is the opening pinata of this government. If I were Jim Chalmers I’d be be scratching my head wondering on Earth, who made the appointment to the Assistant Treasurer because every time he takes a step, he steps in something. This is disastrous for the government. So I would suggest that maybe Stephen Jones is a little bit more tempered in his responses. Just concentrates on the job that he's supposed to be doing and lets Jim Chalmers perhaps deal with the RBA.
LAURA JAYES: Alright, let me ask you one more thing because we've seen the CBA today, the Commonwealth Bank, post a record six month profit. This is off the back of high interest rates imposed on those very families. How should we read that? An almost $6 billion profit when people are struggling to pay their business.
JANE HUME: Well, banks aren’t charities, they’re not not-for-profits and certainly that profit will feed into the dividends and the share prices that ordinary Australians hold. I'd imagine that anybody that has a superannuation fund should be pleased to hear that Australian companies like the CBA and other Australian companies are doing well.
LAURA JAYES: Jane Hume, great to talk to you as always. Nice jacket too, see you soon.