Interview with Leon Delaney, 2CC
26 October 2022
LEON DELANEY: Shadow Finance Minister Jane Hume has I believe, suggested that families are likely to be $2,000 a year worse off by Christmas, Jane Hume. Thanks for joining us. Is that what you said?
JANE HUME: That is exactly what I've said. Leon, it's actually quite sad. You know, the budget last night was a test it was a test for this new Labor Government, whether it could build on the strong position that it inherited from the Coalition, a strong economic position as well as a strong fiscal position, and also whether it could address the cost of living that's bearing down on so many Australians right now, but it further tests because there really isn't anything in this budget that will assist your family budget. There's no credible plan to deal with the source of inflation rather than just the symptoms and to help families deal with the immediate cost of living pressures right now. In fact, you know, the cost of living is forecast to go up. electricity and gas bills are going up by 50% and 40%. Over the next two years. The tax receipts are going up, you're paying more tax, and government spending is going up, but employment will go down, and real wages are also forecast to go down for the entire term of this government. So it is a traditional Labor budget. You know, you could dress it up as anything you like, but it's a high-taxing, high-spending budget. And it really isn't helping ordinary Australians to get ahead right now.
LEON DELANEY: Okay, so there's a few things there. But how do you arrive at your figure of $2,000 a year?
JANE HUME: Well, in fact, that's a typical Australian family with an average mortgage. That's just calculating the effects of inflation of interest rates and rising energy prices that are actually forecast in that budget. Between when this government came to power and Christmas this year. Our estimation, and it's a very conservative estimate, is that an average Australian family will be at least $2,000 worse off.
LEON DELANEY: Okay, now, you've asserted that this budget does nothing to address the causes of inflation, let alone the symptoms of it. But wasn't the previous government, the government of which you were a part of, also guilty of treating the symptoms without addressing the cause by simply handing out more money to people in the May budget? Oh, sorry, the March budget in terms of providing a reduction in fuel excise, for example?
JANE HUME: Well, actually, the reduction to fuel excise is a deflationary measure because, of course, that feeds into supply chains which bring down prices. What we would like to see in this budget is tackling those source issues, again, not the symptoms of cost of living pressures. So things like ensuring affordable electricity by making sure that there's a reliable baseload supply of energy, we certainly want to transition to net zero. We've said that we've made that a commitment, but we also want to do it in a way that works effectively and stops those price shocks that we're now seeing in power prices. We want to make sure that we're tackling supply constraints. You'll probably recall that just in June this year, one month after the election, Peter Dutton announced a pension work bonus scheme that would allow older Australians to return to the workforce for a couple of extra days or a couple of extra hours here and there to supplement their cost of living stresses, but also to help those labour shortages that we were having, and we would certainly want to see a reduction in red tape on small businesses. Nothing in this budget for small businesses other than an industrial relations nightmare, excessive union power and industry-wide wage claims. So both things are actually adding to the pressures on businesses on households. They're not removing the cost of living pressures.
LEON DELANEY: Let's not conflate the industrial relations bill, which we haven't seen yet, with the budget, which doesn't necessarily specifically reflect on those industrial relations changes which are yet to come. I'm sure there'll be ample opportunity to debate those at any time. In the next couple of months anyway, but the budget itself, obviously, the big headlines that came out of it today were the more than 50% increase in electricity prices over the next two years despite the election promise to reduce electricity promises. It's almost a gimme, isn't it, that you're going to attack the government over that clearly broken election promise. But what about the other big headlines? Things like this housing accord to deliver 1 million new affordable homes in good locations in a five-year period? Do you think that's achievable?
JANE HUME: Well, even Labor has said that target is only aspirational, and we know that when Labor Prime Ministers make these rather lofty goals, they rarely manage to achieve them. We want to see more Australians into their own home when we believe in the importance of home ownership not just for the sake of shelter or family security, but also because of economic security. It's actually one of the greatest indicators of economic security and retirement, owning your own home. I haven't seen the details of this program yet. My concern, though, is it does sound like you're simply swapping landlords you know, at the moment, you land what you pay to rent to your landlord, and it sounds like you simply pay rent to a super fund. I'm not entirely sure how this will work if super funds aren't investing in social housing now. That means that, probably financially, it doesn't stack up. So if the government forces super funds to invest in social housing, well, who pays the price but someone's gonna pay, is it gonna be the taxpayer or is it going to be you because your retirement savings aren't invested in optimal investments? So let's see the details of this plan. We know we want to see more social housing, but the most important thing with social housing, of course, is that the states and particularly local governments get on with those approvals and open up supply and open up more land for building the idea.
LEON DELANEY: Yes. Now this chord, of course, depends upon the participation and cooperation of the states and territories. And as you may know, here in the ACT, we have an ACT government that seems to be somewhat reluctant actually to release enough land for housing developments. That's going to be an obstacle, isn't it? If you can't get the state and territory governments to fully play the game?
JANE HUME: Well, it will be the biggest obstacle, quite frankly, to making sure that this policy is accessible. I think if I were in the ACT, I would be a little concerned about this because one of the other numbers that we saw in the budget was an additional 8000 public servants, most of whom will be based in the ACT. Now I have great respect for public service and work with them very well. But we're we going to put them all? Because there's already significant housing pressure in the ACT, and if this is the estimate of the growth in your hometown, Well, I think that that's something that a lot of people should be asking the question.
LEON DELANEY: While most of them are the consultants and contractors that are going to be eased out so that it'll be the same people, just under a different pay structure.
JANE HUME: Well, I'm not entirely sure that is the case. It certainly does sound like it costs more.
LEON DELANEY: Okay. The other big ticket item here is, of course, the expenditure on easing the cost of childcare. That comes alongside the policy on expanding paid parental leave. Now, these have been described as economic measures to boost productivity, not welfare measures. Do you support that position?
JANE HUME: Well, I would be very interested in the modelling of the productivity there. I do believe in supporting families in childcare and pay parental living, and we want to make sure that families work hard that, you know, that aspirational that they didn't ever help him with our tax and transfer system. I would say, though, that certainly, in the childcare system is far more a participation measure than a productivity measure, but that aside, it's a very expensive measure. It's $4.7 billion on top of their already $11 billion yearly that goes into childcare subsidies. And affordability is important with childcare. Don't get me wrong, it is really important but equally as important is accessibility, and the real problem at the moment is accessing childcare that's in a convenient location, particularly in our regional and rural areas. I was talking to one of my colleagues Anne Webster, who's the member for Mallee just yesterday, and she was saying that nine towns in her electorate have no childcare facilities whatsoever. Some of the programs that have been cut by the Labor Government as part of their in inverted commas, waste and rorts audits, actually delivering opportunities for local councils to develop childcare centres themselves. In those towns that couldn't find funding for a childcare centre any other way. So I think that's gonna be really disappointing, particularly for Australians in regional areas that they can't access. The childcare subsidy is great. But if you can't access the childcare, you can't use a subsidy.
LEON DELANEY: Yeah, I was speaking with Samantha Paige from early childhood Australia just a short time ago. She said the big challenge that the sector is facing is the workforce shortage.
JANE HUME: Exactly right. I've heard that it's somewhere around 7000 people or 7000 vacancies in the childcare sector alone, and again, this is very, very expensive, and a commitment of $4.7 billion has no workforce planning attached to it either. So again, I'm not entirely sure that they're not going to make the problem worse, with an enormous price tag to go with it.
LEON DELANEY: One thing that hasn't been spoken about much is the question of hospital funding. Now there wasn't anything in particular in the budget to change the status quo. Is one thing significant change looming, though? During the course of the pandemic, there was an agreement to boost Commonwealth funding to help the states and territories get through the additional costs of treating COVID patients in hospitals now that additional funding is due to expire at the end of December. Just a couple of months away now. There's no move to continue it, although states and territories are screaming out, please, please don't let it end. Now. Is it the time to end that additional funding? Or is it time for the Commonwealth Government to reconsider its position and boost funding for Health and Hospitals? We're all the states and territories are currently experiencing a significant challenge.
JANE HUME: Well, we would always want to see hospitals funded appropriately. But that said, COVID measures should come to an end, they were emergency measures. They were undertaken at an enormous cost. To the deficit to the budget, they need to unwind as the COVID emergency diminishes. That said, we want to make sure that our hospitals are appropriately funded. Both states and territory governments need to step up to the plate and make sure that they're using their budgets as efficiently as possible. I know, in my own home state of Victoria, that the hospital system has crumbled. Yet the money that's really being directed to Victoria in this budget is $2.2 billion for a suburban rail loop that we don't need, don't want, and doesn't stack up, according to the Auditor General. So I know that my liberal colleagues in Victoria have said that they would like to see that money redirected into the health system rather than be used on a piece of infrastructure that nobody needs. It is essentially a marquee piece of budgets, a sorry state of election pork barreling in the state election that's occurring in just five weeks.
LEON DELANEY: The old pork barreling. There's been a number of politicians in recent years that have actually been honest and said, Well, look, it's a fact of political life, and you're never gonna get rid of it. Seems they were right.
JANE HUME: Well, I think politicians have a duty in auditing that to fight for their electorate, to fight for their communities and to make sure that they will serve well by their governments. But sometimes, there is something that is far more brazen than that, and quite frankly, $2.2 billion. You can't miss it. It stands out. I mean, that's 25 times the commitment to infrastructure than the ACT, for instance, is getting from the Labor government. So it does make a big difference.
LEON DELANEY: What do you think is the biggest missed opportunity in the budget?
JANE HUME: The biggest opportunity would have been to tackle inflation to really get in there and control your spending. Instead, what the Labor Government has done is remove its guard rails. It's removed the tax debt to GDP ratio, it's removed its revenue to GDP ratio, it's removed the payments to GDP ratio, which, once you remove the guardrails, well then essentially all bets are off and then when spending goes up. What you do is you shrug your shoulders you say, oh, well, can't be helped. It's just circumstances we're going to have to raise taxes. That's the last thing you would want to do in a cost-of-living crisis is to raise taxes. So I'm very pleased to say that the Stage 3 tax cuts are they're embedded in the budget. In the budget as they have been since 2019. It's not as if they were a surprise. When this Labor Government came to power. They knew that they were already there. It's not as if that they worked within those parameters. We would want to see them continue to work within the parameters of those guardrails that have been a cornerstone of the tradition of Liberal Coalition governments in the past, which was the reason why we were able to bring the budget back into balance in 2019.
LEON DELANEY: Senator, thanks very much for chatting today.
JANE HUME: Great to be with you.
LEON DELANEY: Thank you Senator Jane Hume, Shadow Finance Minister.