Interview with Matt Doran, Afternoon Briefing
9 May 2023
MATT DORAN: After nine years occupying the ministerial wing here on Capital Hill for her view on tonight's budget, I swung past Shadow Finance Minister Jane Hume's office earlier today. Senator, welcome back to Afternoon Briefing. It looks as though the government is about to deliver a surplus, the first in 15 years. Is there a sense of envy on your part that they're doing what it looks like the coalition couldn't do in nine years of office?
JANE HUME: Well, I think that Angus Taylor probably said it best when he said that a drover's dog could have delivered a surplus for this budget. Let's face it, we've had soaring commodity prices. We've got increasing inflation. That's creating bracket creep. So the take from income tax has been so much higher than anticipated. And largely that's because of the very low unemployment that was the legacy of the last coalition government that this government's been able to take advantage of. So we would expect to see a surplus from that soaring windfall revenue. What we're afraid of now is that the expenditure side of the budget isn't under control What we want to see the real test for Jim Chalmers is not delivering a one off surplus but a sustained surplus into the future because that is the only way that you can grow the economy and also rein in inflation, which is the great thief in the night right now, eroding people's savings, eroding their purchasing power and reducing their standard of living. That needs to be the number one priority of this government, bringing inflation back under control.
MATT DORAN: The Treasurer made quite a virtue of the fact that in the last budget the Government banked a lot of the improvement in the budget position rather than spending. Are you suggesting that this time around it's going to be a different kettle of fish?
JANE HUME: We're already hearing from the Government that they’re intending to bank a far lower proportion of the revenue of that windfall revenue than they did at the October budget. That's a real shame. More importantly, we're actually seeing that expenditure, that structural spend increase and of course we're seeing tax increase as well. You can't tax your way out of a cost of living crisis. You can't spend your way to reduced inflation. This is actually going to have a negative effect on the economy. And more importantly, as that cost of living rises and inflation rises, well, all Australians are going to pay the price. The only way you can improve the standard of living for all Australians, the only way you can reduce the cost of living for all Australians is to get inflation under control. That's not what we're seeing from this Budget.
MATT DORAN: Isn't some of the spending I guess, forced because the Coalition in your counterpart, Katy Gallagher's words, left funding holes in some major projects or major programmes that needed ongoing funding beyond the end of this financial year. She's constantly pointing to things like the Office of the E-safety Commissioner, the myGov service that they're having to funnel billions of dollars into. Isn't that part of the driver of some of that spending?
JANE HUME: Well, a limited funding over the medium term is a common budget tool. And in fact, I'm sure we'll see many of the programmes that are being proposed by this government with the same budget envelope. And the reason for that is you want to be able to review programmes, make sure that they're effective and either increase or decrease their funding appropriately to either change or sustain those programmes. So that's a partisan nonsense line. Most importantly, we actually delivered a balanced budget back in 2019 at MYEFO, not just a balanced budget, but a balanced budget that then forecast sustained forecast surpluses into the future. Now, of course, COVID hit and those things changed. But the reason why we could respond to COVID so well and so effectively was because we had that balanced budget. We got there and it took a long time to get there, but we got there reducing taxes and making genuine savings in a low inflation environment. Now, the fact that this government hasn't even acknowledged that they can do the same or that they want to do the same, that's a concern.
MATT DORAN: A bit premature though, when you did outline that budget position, you know, the printing of the back in black mugs and all that sort of thing, that you were sort of jumping the gun a bit, weren't you?
JANE HUME: Well, it was there. I mean, it was there for all to see in the MYEFO papers of 2019. And thank heavens it was because otherwise we wouldn't have been able to tackle COVID the way we did come out the other side with that growing economy very, very low unemployment. And that's really what's set this government up for the future. Now, the problem is they're not capitalising on that. Instead, they're going back to that natural instinct that Labor has to tax and to spend. That's not going to help Australians with the cost of living, not in a sustainable way. It's simply going to push inflation up further And that means the RBA has to do all the heavy lifting using interest rates as the only tool to fight inflation. They must get inflation down. Inflation is the thief in the night. It erodes your purchasing power. It eats at your savings and it reduces your standard of living. So unless you're tackling that, they're simply not doing right by all Australians.
MATT DORAN: You pointed there to cost of living and the pressure that so many Australian households are under. Do you concede that there does need to be an element of spending in the budget to deliver some relief to Australian households?
JANE HUME: Well certainly we want to see vulnerable Australians looked after because quite frankly at the moment so many families are doing it tough, they're making difficult decisions with their household budgets. I think that Jim Chalmers should be expected to do the same with the federal budget. The problem is if you tackle inflation, if you tackle those cost of living problems by targeting specific areas, well essentially all Australians will pay the price because if you can't get inflation down, that costs all Australians. That should be not just the number one priority of this budget, but it should be a specific policy objective and that's not something we're seeing.
MATT DORAN: So on specific policy objectives, what do you think needs to be in the budget when it comes to tackling cost of living? What specific measures would you be looking for?
JANE HUME: Well, we'd want to see genuine saves, not simply offsets. And in fact, one of the things that concerns me greatly about the rhetoric that's coming out of the Labor government right now is they're saying that they have banked savings, that they have savings here and savings there. Scratch the surface. They're not savings, they're simply offsets They're reprioritisation of existing envelopes of money. The best example, is just yesterday they came out and said that they'd found $17.8 billion of savings and then quickly admitted that 7.8 billion of that was simply the Defence spending review or the Defence Strategic Review taking money off one set of submarines and putting it towards another. That's not a saving. Don't call that a saving. That's an offset. What we want to see is genuine savings to the budget because that's the only way to sustainably bring the budget back into surplus and grow the economy, reduce your taxes, reduce your spending. That's how you make structural changes and create a structural surplus going forward. There is no desire, no appetite in this government to do that.
MATT DORAN: Back to my specific question. What specific cost of living relief do you want to see in this budget?
JANE HUME: Well, I can tell you what we wouldn't do. For instance, No. Well, I mean, look, the government has all the resources of all the departments behind it, giving it advice as to what policies it could introduce that would reduce inflation. Now, we don't have that as an opposition, but I can tell you what we wouldn't do. We wouldn't, for instance, increase the number of public servants by 8000 just in the last 12 months alone. That's not a responsible fiscal measure. So there are things that we look through in this budget. We'll make sure that we forensically go through each measure that they're proposing, particularly during the estimates process. And we will be asking the question not just is this not an inflationary measure, but will it reduce inflation? Because if you're not reducing inflation then you're not tackling the genuine cost of living crisis. You're not doing right by all Australians, because the only way you can reduce the cost of living for all Australians is to tackle inflation head on.
MATT DORAN: We'll prosecute some of those issues with you in the coming weeks and months. Jane Hume, thank you for joining us.
JANE HUME: Thanks, Matt.