The cost of living is going up for mortgage rates, grocery prices, and energy bills, and more Australians are finding themselves under financial pressure. The months ahead are unlikely to offer reprieve and we know that rates are going up. This is the new environment. Joining me live is now the Shadow Finance Minister Jane Hume, Jane, thanks so much for your time. Congratulations on your new role. You're now in opposition though, do you have some sympathy for the government trying to grapple with this economy?
I have extraordinary sympathy for Australians, and particularly those mortgage holders that have seen an average mortgage go up by about $200 a month, because of yesterday's rate rise. The largest rate rise that we've seen in 22 years. That's of course, on top of a rate rise that we saw throughout the campaign, that added about $100 a month to the average mortgage. So around $300 now more each month, the average Australian family will have to pay on their mortgages. That's going to pinch and that's on top of the cost of living pressures that people are facing. Now the government is in an invidious position. We don't ever say that Labor has caused the interest rate rises that we're seeing are the inflationary pressures. They are, of course, global pressures, global pressures on both inflation and on energy prices. While they may not be responsible for the price rises, they are certainly responsible for their response to those price rises. Now, one of the things they have done, Laura, is they announced during the election campaign, around $45 billion worth of off-budget spending in quite vague promises.
There are only really two levers that you can pull in order to respond to inflation. One is the monetary response, and that's the RBA's responsibility. That's what they have done. The other is the fiscal response, and that's where the government now needs to step up. This is not the time for an additional $45 billion in gratuitous spending in vague spending promises, if they want to maintain inflation, they need to rein in their fiscal spending.
But what's gratuitous spending, though? I mean, are you talking about the childcare policy? Isn't that a productivity measure?
Well, that's not what I'm talking about. I'm actually talking about $45 billion, in addition to the 21 or so billion dollars that they announced on spending and things like child care and, other things that they want to bake in. That's their decision. But there was also another $45 billion on things that we really can't even describe. I think there was some spending on wires and transmission poles. Even the Grattan Institute has come out and said that is unnecessary spending, and in fact, will make power prices cost more rather than less. So I think Labor probably need to go back to their spending commitments that they made during the election and say, Is this really going to add fuel to the fire of those inflationary pressures that Australians are already feeling? Can they wait as far as an October budget to respond?
Jane, can you understand that some people might be choking on the WeetBix right now because you were in power for a decade. I think it's fair that I point out that we've just come off the back of a term of parliament where you were the biggest spending government in history. You've left quite a legacy.
Well, I understand why you would say that, Laura, but the most important thing for a government to do is to respond to the circumstances of the day. This is a government now that is facing two significant crises, one inflationary pressure, and one in fuel prices. And they're already beginning to go to water. The previous coalition government faced drought, fire, floods, a global pandemic, a global recession, a war in Europe, and then geo instability in our own region. And it responded appropriately to do that. That's why at the end of our term of government, we had the lowest unemployment rate that we'd seen in nearly 50 years, including the lowest female unemployment rate in 50 years. We also had fewer people on welfare and more people in work, which means that the government revenues had improved. That's why we could actually improve the budget bottom line by $100 billion in one budget alone, the biggest budget turnaround that we've seen in more than 70 years. That was our acknowledgement, that fiscal responsibility needed to step up in a post-pandemic world. It's now the opportunity for the new government to do the same and demonstrate that they have the fiscal credentials that they promised during the election campaign.
Less than a month into this new government, the energy crisis is cropped up. You wouldn't blame the Albanese government for that, I assume. But what do you suggest they should do about the unions have suggested some kind of export tax a new tax would that work?
Well, I think the first thing that they need to do is better engage with the gas companies. In 2017 when the coalition government saw a spike in gas prices, the first thing they did was put in the trigger mechanism that allowed them to engage with gas companies to say, well your job is to keep prices low and ensure that there is enough supply for the domestic market. That's exactly what they did. At that time, Chris Bowen called that mechanism, well I can't say it on television because it's a swear word, but he said it was BS and a fraud on the Australian people. Well, now that's the mechanism that is exactly what Chris Bowen needs to use. Let's face it, he is the Minister responsible for this. Has he picked up the phone and spoken to Meg O'Neill at Woodside? Has he picked up the phone and spoken to Frank Calabria at Origin? You know, these are the people that he needs to speak to, in order to make sure that that supply is there, and that prices can be maintained. If you've been disparaging towards the gas industry for the nine years that you have been an opposition, well then it's very hard to build those relationships to make sure that supply is there once you're in government, so there's a bit of building that needs to be done.
We'll see where that ends up. Thanks for keeping this a family show Jane Hume. Appreciate that. Check-in with you soon.