Interview with Patricia Karvelas, ABC RN Breakfast
25 October 2023
PATRICIA KARVELAS: After several rate holds, Reserve Bank governor Michele Bullock has warned there could be more rises to come in her first formal speech in the top job. Inflation figures for the September quarter will be revealed later this morning. But with a global spike in fuel prices, the pain is already being felt. Jane Hume is the Shadow Finance Minister. She's my guest this morning. Jane Hume welcome.
JANE HUME: Good morning, Patricia.
PATRICIA KARVELAS: We're going to get to the economy in a moment, of course. But first on the Middle East, you just heard Richard Marles there. He doesn't expect any advance warning of the ground invasion of Gaza. Is the Federal Government doing enough to help those 79 Australians stranded there?
JANE HUME: Well, we certainly support the announcement this morning. That was why Peter Dutton called for the Prime Minister to convene a National Security Committee meeting earlier in the piece. Now while that didn't happen, it's really good to see that it's happening now that those troops are being deployed. It's important that Australia not only show support for Israel but also support our own citizens in the region and ensure that any Australians that are within that conflict zone can exit the conflict zone safely and quickly with the support of the Australian military.
PATRICIA KARVELAS: The Government's not outlining exactly how many troops. Are you satisfied by that?
JANE HUME: Well, I think we'll probably hear more about that later. And look, and that's not surprising. There are security issues and I think that we have to respect those.
PATRICIA KARVELAS: How worried are you that another major war will have a huge impact on inflation again?
JANE HUME: Well, of course, we're worried about inflation more broadly. There's a lot of pressures on inflation. We know that, for instance, fuel prices are much higher now because of the conflict that we're seeing in the Middle East, and we'll probably see some of that play out today. But Australians don't need to wait to know that inflation is too high. They don't need to wait until the announcement of what the inflation figures are today. They feel it every time they go to the supermarket and buy groceries or when they're paying their energy bills or when they're filling up at the bowser. The cost of living crisis is absolutely crippling Australians and our concern is that Labor simply isn't taking inflation seriously enough. Inflation is the ultimate thief in the night. It erodes your purchasing power, it eats away at your savings, it lowers your standard of living and it lowers your quality of life and while we know that there are international pressures that are pushing inflation up higher, we also know that there are domestic things that can be done and that the Government isn't doing its fair share of the heavy lifting. It's turning over all responsibility to reduce aggregate demand to the Reserve Bank and that's why Michelle Bullock is making these statements about pushing interest rates higher, that low tolerance for sticky inflation and that is of great concern.
PATRICIA KARVELAS: She doesn't actually, if we're going to her words. She also talks about the war in the Middle East we're seeing unfold and the international pressures as well, doesn't she?
JANE HUME: She absolutely does and that's why I mentioned them. They are important. We are seeing fuel prices increase. We are seeing supply chain issues, but there are also domestic issues as well. If the government were genuinely serious about reducing aggregate demand, it wouldn't be spending an additional $188 billion as part of its budget measures, just since the last election alone. It wouldn't be taxing truckies or farmers, which of course immediately get passed on as increased costs at the checkout. And it wouldn't be discouraging new investment in the energy market because the only way that you are going to decrease electricity prices, gas prices in the medium and long term is by increasing supply. But all of the interventions that this government is implementing in the energy market is actually deterring that new supply. So the government can be doing more. It shouldn't leave all of the heavy lifting to the RBA.
PATRICIA KARVELAS: So do you accept, though, that the conflict in the Middle East could force inflation to stay higher for longer?
JANE HUME: We would hope that would not be the case. Obviously, we would like to see a de-escalation of tensions in the Middle East but of course, fuel prices could potentially be much higher because of this conflict. But I don't want to speculate as to how long that might last.
PATRICIA KARVELAS: Well, hopefully not long. That's obviously the great hope. Earlier this week, the government released the final report from the Women's Economic Equality Taskforce. It calls for parental leave to be extended to 52 weeks and paid as a replacement wage. Would you support that?
JANE HUME: Well, look, 52 weeks is obviously a big jump from the 26 weeks that's now available. It was the previous government that said that it wanted to take paid parental leave to 26 weeks and a full replacement wage is extraordinarily expensive. It's currently at minimum wage and it's around by the end of the forward estimates, it's around $4 billion a year. That was a figure that was cited by the Finance Secretary just yesterday. So, you know, while this sounds like a terrific recommendation, it comes at an enormous cost, both to the taxpayer but also to employers that would have to pick up the tab as well.
PATRICIA KARVELAS: So you don't support it?
JANE HUME: Well, I think that we'd like to see it costed out so we can see whether it's a reasonable proposal or not. I mean, it would be a lovely thing to have. But at what price? A what price to the taxpayer? At what price to the economy? At what price to those business owners?
PATRICIA KARVELAS: So is that something, I'm just trying to get your position on this, do you think it should be explored by the government?
JANE HUME: Well, I think that the government is probably exploring it, otherwise it wouldn't have released a report that recommended it. There were a number of recommendations in that report, some of which were, you know, easily implementable, some of which were a little bit more ambiguous things like, build supply of good, secure jobs for women. Well, that's a terrific idea. But the government doesn't create jobs. The private sector creates jobs. It also had things like advance women owned businesses. That's, again, a terrific initiative. But in fact, we saw cuts by this government to the entrepreneurial support for women's businesses at the last budget. You know, at the moment, only about a quarter of all new businesses, business start ups are run by female founders. We'd like to see that increase. That was a real priority of the last government.
PATRICIA KARVELAS: The report also calls for the activity test, which makes parents work additional hours to secure additional childcare support to be scrapped and this is a recommendation which is quite key and has been pushed for some time. Do you think that should now be looked at?
JANE HUME: I know that there is a push to allow for more children to access early learning and I don't have a problem with that. But I do think that considering the childcare subsidy is again, taxpayer funded. I think taxpayers have a right to expect that those that are taking advantage of that subsidy are doing so because they're working or they're studying or they're volunteering. They're not just doing it because they want a bit of time off from the kids and look, I think that's fair and reasonable, particularly at a time when the subsidy is now available to families that are earning up to half a million dollars. I mean, that's a very substantial family income to be able to access a taxpayer funded subsidy.
PATRICIA KARVELAS: A Deloitte report has shown that the economy misses out on $128 billion every year by failing to support the full representation of women in the workforce. That number is pretty staggering. It's hard to ignore, isn't it?
JANE HUME: It is an enormous number, and I have to admit that was at the front of the Women's Economic Taskforce report. I did want to go back and see where that number came from and yes, you're right, it was from a Deloitte report. Again, I think I'd like to dig in a little bit deeper just to find out exactly what that $128 billion.
PATRICIA KARVELAS (INTERRUPTS): I’m hearing in your voice that you're a little bit sceptical of it, am I right?
JANE HUME: Well, it's an enormous amount of money and it's not just over ten years. That's every single year that Deloitte are saying if we remove the barriers to women's full participation in the economy, that would add value to the economy. Well, I want to know what that means by saying add value to the economy, but I'm not sceptical of the number. But I think that of course we should be removing as many barriers to women's full participation in the economy as possible. That is the road to equality. The question, of course, is how we get there and at what cost.
PATRICIA KARVELAS: Just finally this morning, the government announced an additional $2 billion for critical mineral mining, that doubles the investment. Do you welcome that?
JANE HUME: Look, absolutely. It's another $2 billion that wasn't budgeted for. So I suppose we'll ask some questions about that today at Senate Estimates. It adds to the critical minerals facility, which was a loan facility set up by the previous government. We believe very much in supporting Australia's critical mineral industry. I would say, though, that there isn't a shortage of investors out there in critical minerals and I don't think there's a lack of finance either. Where there is a real problem in the critical minerals supply chain is in those approvals. So we would actually like to see a reduction in red tape for critical minerals projects and we'd also like to see an expansion of the list of critical minerals, the updated critical minerals list to include things like copper and nickel and bauxite and potash and phosphate. So there's other things other than just, you know, lithium and cobalt and the regular things that are on that list. So that's really what we would like to see. A reduction in red tape and an expansion of the list rather than just throwing more money at subsidies.
PATRICIA KARVELAS: Thank you so much for joining us this morning.