LISA MILLER: Jane Hume is the Minister for Superannuation, Financial Services and the Digital Economy, and she joins me now in the studio. Good morning to you.
JANE HUME: Good morning, Lisa.
MILLER: This argument that this is the triple whammy, it's the big increases in prices, it's the higher home repayments, it's the bigger gap with real wages - all of that is fact, isn't it, and it's happened under your government?
HUME: Well, it's also happened under the government of the US, under Joe Biden, under Boris Johnson in the UK and under Jacinda Ardern in New Zealand. This a global phenomenon, higher inflation rates, which will be fed into normalising our interest rates again. So, we knew that this was going to happen at some stage. The good news is it's actually lower than those comparative countries. It's been caused by the unrest, obviously, in Europe and also the lingering supply chain issues after Covid. You know, freight costs, for instance, container costs are about four times higher now than they were pre-pandemic, and that's feeding into prices locally. But that's one of the reasons why in this Budget this year, we have delivered some targeted and responsible, proportionate cost-of-living measures. Things like $250 payments to pensioners and to concession cardholders that will come out just this week. Tax offsets for low- and middle-income earners, and, of course, the cut to fuel excise, which will feed through and actually have deflationary effects.
MILLER: Do you think that argument is gonna work, telling people, "hey, it could be worse, have a look at what's going on overseas"? I mean, really, they've got bills they're paying right now, Jane Hume.
HUME: We know people are feeling the pinch in their pockets right now and that's why this government has been listening and has been delivering those cost-of-living measures as part of this Budget. The sustainable cost-of-living measures that can only be delivered because of the improvement in the budget circumstances, $103 billion turnaround. That's the biggest turnaround in a budget in 70 years, and that's the reason why we can deliver $8 billion worth of help with cost of living.
MILLER: So, next week, everyone is pretty much - pretty much everyone is tipping there is going to be a rate rise. The last time that happened in an election campaign was 2007. We've talked about it a bit, John Howard and his government got booted. How do you think voters are going to react this time, when they discover next Tuesday their home loans are gonna go up?
HUME: Well, the decision for interest rates to rise is one for the RBA. The RBA is always entirely independent of government. That's really, really important. But they have said that they will take into account, when they make that decision whether to raise interest rates, are wage rises, and they'll also consider which ones of those cost-of-living pressures are temporary and which ones are...
MILLER: But they said that when the markets were suggesting it was gonna be four-point-something, not 5.1.
HUME: We know there is a compelling case for interest rates to rise because let's face it, the RBA’s objective is to keep inflation within a band, and inflation is now outside of that band. But that said, they'll make a decision based on the circumstances of the time and particularly which ones of those inflationary pressures are transient and which ones are structural and permanent. We know that, for instance, you know, largely it was driven by fuel costs and by construction costs So, the RBA will do the analysis to which ones of those are permanent and structural rises, as opposed to transient ones.
MILLER: This argument that the Prime Minister puts forward that it's only your government that can keep the pressure down on these factors, it's sort of being killed by what we're seeing actually happening with the economy, isn't it?
HUME: Well, you have to understand the economy and you have to be able to understand the effects of interest rates, and particularly know the cash rate, before you can have a plan to keep the economy strong and to keep rates as low as possible. Even in times of great global uncertainty, even in times of global pressures on costs of living.
MILLER: We've talked about wages before, the gap between the cost of living and wages continues to grow. This has occurred over years under a Coalition government?
HUME: Well, and again, sluggish wages are again a global phenomenon. But the best way to make wages rise is to have full employment, an increase in employment. That's why we've kept unemployment so low, under four per cent now, and why we've committed to an additional 1.3 million jobs over the next five years. 450,000 of those within the regions. The best way to make wages rise is to make sure that here there is full employment and that here there is pressure then on employers to attract and retain staff.
MILLER: Where do you think interest rates are gonna be by the end of the year?
HUME: Oh, I wouldn't claim to be... I haven't got a crystal ball and I don't want to make predictions on behalf of the RBA. We live in very uncertain times. That's why it's so important to stick with the plan we've been delivering for Australians for now over the most difficult period of time, the last 2.5 years, throughout a global pandemic, a global recession, changes in our geopolitical landscape, bushfires and floods, and yet we've come out he the other side in a stronger position than we were in before.
MILLER: Yeah, but this is Labor's argument - is it stronger when you've got big increases in prices, higher home loan payments and a bigger gap with wages? That's what voters are facing right now -- right now.
HUME: The question May 21, who do you trust to lead the economy? If people are feeling it in their hip pockets, that's the question they'll be asking themselves. I think they're going to stick with the Morrison government, who has delivered throughout this very difficult period of time.
MILLER: So how much trouble is the split within the Coalition over net-zero and climate change causing inner-city Liberal seats that are being challenged and targeted so heavily by these independents?
HUME: Well, there isn't a split. The commitment to net-zero by 2050 was a commitment that was taken to the party room, a proposal taken to the party room. It was agreed by the party room. It's been agreed on the international stage. So, that is our position and it will remain our position, and we have a plan to get there through our long-term, low-emissions technology road map that's already delivering. We've reduced emissions already by 20 per cent since 2005. In fact, we invested more in renewables just last year, or clean energy technologies last year alone than through the entire time of the last Labor government.
MILLER: Does it help that argument that Matt Canavan is saying net-zero is dead?
HUME: Matt Canavan has always had a position.
MILLER: He's part of your government.
HUME: We know he's always had a position, but in this case he's wrong. We are sticking to the plan to reach net-zero by 2050.
MILLER: Alright, Jane Hume, thanks for your time this morning.