Interview with Tom Connell, NewsDay
3 February 2023
TOM CONNELL: A Select Committee is continuing to dig into the cost of living crisis, with gas prices tipped to rise even further in coming months. The peak body for gas suppliers were in the firing line of this morning's hearings in Brisbane. I spoke to Shadow Finance Minister Jane Hume who was chairing the committee a short time ago. Jane Hume, thanks for your time. Cost of living this is not news that it's a big issue for many Australian households. Has anything surprised you so far in what you've heard?
JANE HUME: Tom, you don't have to go very far to hear from ordinary Australians that the cost of living is the number one issue for them right now. And it doesn't matter whether it's a grocery checkout, or a bowser, when they're paying their electricity bills, or when they're paying their mortgages. Everybody is feeling the pinch. This Cost of Living Committee, which is traveling right around the country, is hearing not just from those consumers that are affected, but also by those agencies, by businesses, by peak bodies and industries that may well have the solutions, immediate relief to the cost of living crisis that Australians are facing today. We have heard from a range of industries and witnesses in the energy sector. In retail, we heard from Woolworths who told us that they're seeing significant changes in consumer behavior, and they've increased their food donations by about 20%. In the energy sector, we heard that the government's price caps won't actually have an effect on energy bills in the short term and may actually have a detrimental effect in the long term. And we heard from the charity sector that around one in three people that are walking into the Salvos right now are doing so because they're actually citing cost of living problems. Foodbank have said that a job is no longer a shield. That they're seeing double income families seeking their services. So today, we're going to be hearing from more people in the energy sector from agriculture, also from local government that may have some solutions and from the departments themselves.
TOM CONNELL: You mentioned there, energy prices. It's true that in the short term they're not going to come down, you know the bills that are coming down right now, but Treasury analysis says next financial year, so beginning from July, they will come down significantly. Are you saying that analysis is wrong and why if so?
JANE HUME: Well, certainly the Australian Energy Regulator said that there has been a 12% increase in people that are under financial hardship or energy hardship that are struggling to pay their energy bills today, today. And the Australian Energy Council said that the methods that the government are using to try and reduce prices simply aren't working and that supply is the answer. And in fact, that the Labor Government has done more to limit supply -
TOM CONNELL: But that's a lobby group-
JANE HUME: that the cancellation of the Beetaloo Basin.
TOM CONNELL: Shouldn’t we be believing Treasury?
JANE HUME: Do you think that- you know, it's Economics 101 that if you increase supply, the price goes down. That's certainly what we were trying to do in government and something that we would like to see from this government. The problem of course, really, Tom, is that energy bills are going up today. People are feeling the pinch today. A parliament was recalled at the end of last year to give emergency relief to people for the cost of living. In fact, what we've seen in the papers today, is that that emergency relief is now going to be part of the May Budget, and probably won't kick in until after that. I feel very sorry for those Australians that are receiving their gas bills and their energy bills, that are showing dramatic percentage increases and wondering how they're going to pay them at the same time they're sending their kids back to school.
TOM CONNELL: So what should have happened? Are you saying the government should have given some form of rebate in the short term? And if so, could that have actually contributed to what we just saw record inflation or the highest inflation in 30 years in the December quarter?
JANE HUME: Well, the Opposition is open minded to any practical implementable solution that the government can offer that isn't going to fuel further and further inflation. Before the election. Labor had all the answers to the cost of living crisis. They were the ones that said this was the number one issue for Australians right now. But in fact, they've broken their promise on $275 relief on energy bills. We haven't heard them say a single word about $275 since the election, even though they said 97 times before then. And now of course, they're scrambling to find some solution but there doesn't seem to be a solution inside. Labor said real wages would go down, Labor said real wages would go up and real wages have gone down. Australians are doing it tough. We need to find something today that will help people today and that's why we're talking directly to industry directly to those people that may well have the solutions because Labor have failed to do so perhaps.
TOM CONNELL: Perhaps they were peddling easier answers before the election. But is it also fair to say right now, their hands are relatively tied. If they have a whole raft of measures to help cost of living in the budget that's going to contribute to inflation and that would just mean more rate rises?
JANE HUME: Well, there are ways to contribute, to reduce the cost of living that may not be inflationary, and that's exactly what we're trying to find out throughout this committee. And there are certainly lots of people with some very good ideas. For instance, Foodbank, who appeared on Wednesday suggested that food donations could potentially be tax deductible and as I said Woolworths have increased their food donations by 20% to help their charity partners. You can see how small solutions like that could actually make a big difference to the services that are being delivered on the ground. We've been asking each of the witnesses at the beginning of each session, whether at the end of the session, they could come up with their one solution, if they could change one thing that would make a difference to cost of living that wouldn't be inflationary, what would be it? Some of them have better ideas than others, but it's certainly a good way to go. It can't do this without- Labor clearly doesn't have any of the answers. No one's saying that all the answers are easy, but they are certainly out there.
TOM CONNELL: All right, well, we'll see more of those ideas, I suppose because it's only early on in this inquiry. What about the big headline grabber 800,000 households are still yet to experience the new norm of interest rates, so they're going to have their rates go up when they come off fixed loans overnight, by 3%? Or even more? Are we at risk of a serious wave of defaults, do you think?
JANE HUME: I would certainly hope not. We also heard from another witness that already the interest rate rises that we've seen that added around $10,000 a year to mortgage bills in the average household now that's a significant cost. Particularly at a time when real wages are going down and a forecast to continue to go down. At one stage of this committee, we would hope that we will speak to the banks and find out how they're going to manage that mortgage cliff, particularly that is estimated to kick in in May, June and July this year. We think that in fact, there was one, Finder it was showed us some evidence that suggested that only 8% of economists believe that 2023 has a positive outlook, every other economist in the country is either neutral or negative. So it's going to be a tough year for Australians. And that's why we need action today.
TOM CONNELL: Just finally, on another topic, the IMF has been looking at the NDIS and in particular the spiraling costs of it and how sustainable it is. It's mentioned perhaps co-payments or more means testing is needed. What are your thoughts on that?
JANE HUME: Well, the Coalition has always believed that the best NDIS is a sustainable NDIS when we're in government, there were options put forward that Labor would not even countenance wouldn't consider they said again, that they would manage the NDIS in a more sustainable way. Well, good luck to them. We would be very open minded to seeing what it is that they propose. The most important thing with the NDIS is that it’s sustainable into the future, it must. To give certainty to those clients that need the NDIS that rely on the NDIS we want to make sure that it's there in perpetuity.
TOM CONNELL: Could that mean co-payments means testing, are they good ideas?
JANE HUME: Well, I think that we as I said, we'd be open minded to whatever it is that the government has to propose but we haven't seen any details yet.
TOM CONNELL: You could make your own proposal.
JANE HUME: But it's up to the government to propose its changes to the NDIS when we were in government, we proposed changes that Labor didn't agree with. Now it's up to them.
TOM CONNELL: Liberal Senator Jane Hume. Thanks for your time today.
JANE HUME: Good to be with you Tom.