Interview with Danica De Giorgio, Hume and McAllister on Sky News
4 November 2022
DANICA DE GIORGIO: Jenny McAllister face off and fire up on the big news and political developments of the week. Jane and Jenny, welcome. Good to see you both. Thank you so much. Normally we do start off with the middle age, but as you can see, we're running a little bit late today. So let's go straight into our first topic. Inflation. So 3.3 million Australian mortgage holders have been stung with another interest rate rise this week. The Reserve Bank has lifted rates for the seventh consecutive month with the cash rate jumping another 0.25% to rise to 2.85 on Tuesday, it's all on the bed to curb rising inflation. RBA governor Phillip Lowe seems confident that we will It will begin degrees decreasing soon, but hasn't ruled out further hikes and pressure on the government offer cost of living relief is ramping up.
DANICA DE GIORGIO: Jenny, as we know cost of living is through the roof. The public wants answers. They want assistance. We know mortgage repayments are going up bills are through the roof. How will the government help people in the short term or is it a matter of well, you just have to bear the brunt of it.
JENNY MCALLISTER: You’re right that Australian households are under quite a bit of pressure. You mentioned just earlier the increases to mortgages there's also causing tree increases to a number of you know the cost just when you do the groceries or fill up your car at the petrol station. We took all the steps that we could in the budget to support that and I guess the approach we took was this. We don't want to make the Reserve Bank's job any harder. And so the relief that we provided in the budget was designed to alleviate cost of living, but also to yield an economic dividend that will help with those long term issues in the economy. So things like reducing the cost of childcare, really important for family budgets, but also an economic dividend getting the equivalent of an additional 37,000 workers into the workforce. These things take pressure off inflation, but also actually help at a household budget level. And we were looking for responsible measures that would help the house, help households but also help the economy.
DANICA DE GIORGIO: Okay, but what in terms of immediate relief, though, why not cash handouts? Why is that not on the table?
JENNY MCALLISTER: I think the treasurer has been very clear that a key imperative is not to make the Reserve Bank's job any harder to allow us to get inflation under control. Pumping large amounts of cash into the economy does produce a risk of increases in inflation. And so we've been really clear about how we ought to target our assistance. It’s things like reducing the cost of medicines, reducing the cost of childcare, and easing some of the constraints in the skills by providing fee free TAFE and other opportunities for training. In the medium term, we are looking to strengthen the economy by dealing with some of the productivity issues that were ignored by the last couple government.
DANICA DE GIORGIO: All right, Jane, what exactly should the government be doing here?
JANE HUME: I think that Australians are rightly frustrated. This budget was such a missed opportunity. It provided no economic plan, and it provided no relief to the cost of living issues that are being faced right now. You know, prior to the election, Anthony Albanese came out and said that people would feel, the you know, the benefit of a Labour government in their hip pockets in their bank accounts. Well, I think that they certainly are right now. And last Tuesday's rate rise is just symptomatic of that Philip Lowe has said that the only way that you can take the pressure off the RBA that you can give them your fiscal policies to do some of the heavy lifting so that the RBA doesn't have to keep with up with those interest rate rises and do all the work itself. There's only three ways you can do it. One is to raise taxes. We think that is the worst idea in a cost of living crisis is to actually take more money out of other people's pockets, the other ways to reduce your spending. And the third way is to grow the economy or reducing your spending and growing the economy are really the only two ways out of here and yet the budget really didn't do anything to help with those two objectives. In fact, Labor went to the election with $18 billion more of spending than the Coalition and in fact, it turned out to be $23 billion more that's certainly not what we’d do. The most important thing I think for businesses, though, is to make sure you get those energy prices under control both households and businesses, whether it be electricity, or whether it be gas and I know we're going to talk about that later. And finally remove the constraints from the economy so that it can grow and flourish and thrive without those artificial supply side constraints and industrial relations reform that would encourage strike action, that is a cost to business that’s burdensome for small businesses is exactly the wrong way to go. So yes, we will do things very differently to help people with the cost of living right now.
DANICA DE GIORGIO: Okay, would you support handouts?
JENNY MCALLISTER: I suppose-
JANE HUME: What was the question?
DANICA DE GIORGIO: Would you support handouts?
JANE HUME: No, we'd simply would simply spend less. And this is what's so frustrating, I think, is that the government have said oh, look, the cost of everything's going up. Isn't that terrible? What are we going to do about it? Oh, well, but they haven't actually provided a plan to deal with that. They haven't realized that the first responsibility of government is to control your expenditure to control those payments, not just simply raise the white flag and say, it's all too hard, we must have to raise taxes in the future to deal with this. But that's not your job. Your job is to control the spinach along the way so that the RBA doesn't have to do all the heavy lifting.
DANICA DE GIORGIO: Okay, so Jenny, how would you control spending?
JENNY MCALLISTER: It's really quite incredible to hear Jane talking about controlling spending. Under their administration, the last Liberal government saw expenditure grow and grow and grow at every budget. This budget, we returned 99 cents in every dollar of additional revenue that was identified to the budget over the first two years of the budget. We actually managed to contain growth in spending-
JANE HUME: Oh Jenny you've got debt and deficit out into the horizon.
JENNY MCALLISTER: I’m intrigued Jane that you choose to raise debt and deficit a trillion dollars. of debt racked up under you guys. And of course, one of the fastest growing elements of expenditure in the budget is servicing the interest on your debt. We have taken the responsibility of putting together a budget. Katy Gallagher and Jim Chalmers-
JANE HUME: Now lets put aside the fact that we had two years of pandemic after a balanced budget, there is no balanced budget on your horizon, not one.
JENNY MCALLISTER: May I finish or are you going to talk over me? Katy Gallagher and Jim Chalmers went through the budget line by line identifying $22 billion of savings and redirections to make room for our priorities. And those priorities were to strengthen the economy, to grow the skill base, to grow the labour force and to ease pressure on house.
DANICA DE GIORGIO: We're running out of time. But Jane, I'll give you the last word on this one. Realistically, though, if the coalition was still in power, what would you be saying to the RBA right now?
JANE HUME: Well, that's exactly what we'd be saying that we'd be spending not just $18 billion less but $23 billion less so that the RBA doesn't have to do the heavy lifting. And we certainly wouldn't be shrouding a whole bunch of cost of living relief measures, things like the paid parental leave. The cost of medicine. These are things that are often the never, never, the never, never that you know, they're two years away for childcare relief. It's one year away from medicine relief. I'm still scratching my head, maybe you can explain to me Jenny, how paid parental leave could possibly be called a cost of living relief measure. It just isn't, it's not-
DANICA DE GIORGIO: I have to wrap it up. I have to wrap it up because I do want to get to our gas chat. So we're going to take a quick break. We'll come back all the excitement continuing the government also seeking solutions to another of his biggest cost of living pains energy crisis. That's next.
DANICA DE GIORGIO: Treasurer Jim Chalmers wants a plan to bring down high gas prices by Christmas, the government is keeping its options open, including considering a mandatory code of conduct and a domestic gas price cap. Though some are backing in calls for a price cap. The former competition watchdog boss argues that even the threat of export limits will see gas companies lower prices for Australian consumers.
DANICA DE GIORGIO: Jennywe'll start with you How can the government force gas producers to charge Australians less?
JENNY MCALLISTER: Look, let's be really clear about the challenge here. We've got global prices for a range of energy sources going through the roof and it's having real consequences for the energy market here in Australia. That of course, flows through to households and applies through to some of the big manufacturers that really rely on gas for their manufacturing activities. It is a very high priority for our government to deal with this and we're willing to explore all the options. You've heard already, of course, that one of those options is thinking about how to strengthen that code of conduct applies to the gassuppliers. But of course, there are other options and I think the Prime Minister has made it really clear he wants to work through those in an orderly way.
DANICA DE GIORGIO: Has the heads of agreement announced by the government recently actually let the gas producers off the hook Jenny?
JENNY MCALLISTER: Look we came to government. And we had a really significant challenge in the electricity system. People were saying that the lights were going to go out. We worked through that with the states and territories. We then dealt with gas supply issues, there was a warning that there was not going to be enough supply in the system. And that's been worked through with the gas industry supplying extra petajoules into the system. The challenge we have to deal with now is price. It's a very high priority for the government and you've seen a number of our ministers talking about some of the options that are on the table. I think what's clear is that we would like to do it in a collaborative way, work with the industry but we do need to see an outcome.
DANICA DE GIORGIO: Jane, how can the government put some downward pressure on energy prices?
JANE HUME: Well, I think the first thing that they could do would be to do as Jenny said, work with the industry, rather than calling the gas producers frauds, rather than saying that guess of increasing gas supply is BS, which is exactly what Chris Bowen has done. I'm so pleased to hear Jenny speaking about this because, you know, let's face it Jen, you're the Assistant Minister for Climate Change and Energy. You know what you're talking about here and yet, every single one of your other colleagues that have nothing to do with the portfolio seems to have something to say. And if you're hearing something different from Ed Husic, Madeleine King, Jim Chalmers, Chris Bowen, and the Prime Minister has just said I'm just going to leave them it to work it out. That's kind of not leadership. That leadership that the country is screaming out for right now, as you said, you know, gas is 40% of the energy supply into our manufacturers unless we get this right. The price the price of everything is going to go up dramatically, dramatically. So it's really important now that those negotiations with the gas producers takes place in an orderly way. Not having every minister having something to say about it. Some of them demonising the gas industry, some of them loving the gas industry, some of them saying price caps that put off the private sector, some of them talking about other mechanisms. Really, that just doesn't say there seems to be a complete disarray on this issue. And yet, the price of failure is so high, somebody's going to do something. Where is Anthony Albanese on this rather than just turning it over to his ministers, surely he should take the lead on these negotiations?
DANICA DE GIORGIO: Jenny is the government on the same page when it comes to this?
JENNY MCALLISTER: Well, it's a little bit reaches in that because the government Jiang was part of spent nine years unable to land an energy policy of any kind 22 energy policies none of them landed. It's one of the reasons that it's so difficult for our energy system to respond appropriately and adequately to some of the international challenges.
JANE HUME: Hang on. Gas prices went down under us, energy prices went down by 8% in the last two years and we had the same problem and we worked through it with the gas producers and we lowered the cost. We did that. Now it's your turn, but you haven't been able to do it. Because you've disrespected the gas producers. You've demonised them so badly. You've called them greedy, and you've called them frauds. And now, Australians are paying the price.
JENNY MCALLISTER: Since coming to government, we have had to sort out a whole range of problems that you left for the Australian people and it's our job to clean it up. So we have worked through the issues with the electricity system. We'll work through issues with gas supply, and now we are working through issues on price. I guess you're right. It is going to require some negotiation and some thinking. But the Prime Minister has been very clear. We want to be collaborative, but we want an outcome. And he's very focused on it. And he's actually tasked the ministers of course, there are a range of portfolios that have an interest in this in our government. We actually want our ministers to work together. It's a little bit different to how you run the show Jane, I know.
JANE HUME: They should give the job to you Jen, you’re the only one who is sensible out of the lot.
DANICA DE GIORGIO: Jane, Jane you mentioned a price caps on power just before. Is that something that the coalition would support price caps?
JANE HUME: No, in fact, certainly not. Because that crowds out the private sector actually. No, they did that. They did that in Argentina about a decade ago. And all we saw is those producers leave the system. Energy prices go through the roof and it was a disaster for their economy. We definitely do not want to see anything that sort of, you know, over intervention over you know, Labor seem to think that you know, regulation is the solution to every single every single problem. The most important thing you can do here is increased supply, increased supply in the Beetaloo Basin, in Scarborough, in Bass Strait, and Narrabri, particularly in New South Wales and Victoria, which is where the manufacturing hubs are and where the gas crisis is really occurring. Because not only are you seeing disunity within the Labor Party at the federal level, but then you're seeing Mark McGowan saying one thing, you're seeing Daniel Andrews say another. I mean, the price is falling apart. We need one voice and we need some leadership.
DANICA DE GIORGIO: Unfortunately, we've run out of time, we'd love to keep going. But Jacob and Jenny McAllister, that's it for our usual Friday show. Thank you so much for joining us. Have a great weekend.