Interview with Patricia Karvelas, ABC Afternoon Briefing
10 April 2025
PATRICIA KARVELAS:
Let's bring in the Shadow Finance Minister, Jane Hume. Welcome.
JANE HUME:
Good to be with you PK.
PATRICIA KARVELAS:
Economist Saul Eslake says the idea of these two funds would shuffle money around and would have eliminated Labor's two surpluses if it had been in place. So would those two surpluses have been delivered under your model?
JANE HUME:
Well, let's be very clear about what these funds do and what they are PK. Australia has is a prosperous nation and we've ridden on the sheep's back. We've done very well out of our mining resources. Everything we dig out of the ground for generations. But there is now a generation of Australians that feel like that they've been dudded. They've got the short end of the straw that they've missed out on that prosperity of our nation. And this is about intergenerational equity. So at each budget, when there is forecast particular, you know, iron ore prices or coal prices, it tends to be that there is a gain on those prices. They're very conservative estimates. Now that gain shouldn't be used for recurrent spending. What we want to do is essentially sequester that windfall gain, put it into a future fund for future generations of Australians so that they can benefit from the prosperity of our nation, rather than having it squandered on either recurrent spending, making the structural budget worse, or, more importantly, on sugar hits. Fiscal sugar hits at the whim of an…
PATRICIA KARVELAS:
I get the concept. But economist Saul Eslake says those two surpluses wouldn't have been delivered. Is that right?
JANE HUME:
Well, they're not structural surpluses. They were windfall surpluses. That’s exactly what we’re saying…
PATRICIA KARVELAS (interrupts):
But is he right that they wouldn't have been delivered the way they were?
JANE HUME:
And those two surpluses have been frittered away. They've been frittered away on recurrent expenditure. Now, that's a shame, because we could have used that money for productive investment in the future. So these two funds, the Future Generations Fund and the Regional Australia Future Fund, will invest that money and then that money, the earnings on that money will then serve to pay down debt for the future generations fund, potentially invest in productive infrastructure assets, economic reform. These are the things that will create a prosperous Australia in the future for my kids, your kids and their kids. That's the plan.
PATRICIA KARVELAS:
What's the logic, though, of putting, sorry, I don't mean but putting money aside when you're still running deficits?
JANE HUME:
Well, this money will actually act as an opportunity to pay down debt.
PATRICIA KARVELAS:
Why not just pay it down?
JANE HUME:
Well, you can pay down debt. Well, if you put money into a future fund, it actually earns more money than it costs to repay the debt. Now, that sounds a little bit complicated, but the future fund returns are actually very strong indeed. That gives us an opportunity to not just pay down gross debt, but also to create an asset for the Commonwealth, which then affects your net debt. But most importantly, it gives you an opportunity to use the earnings for productive investment in the future.
PATRICIA KARVELAS:
One of the big concerns is that it could lead to pork barrelling. So what will you do right, to allay that concern, to build this fund in a way where it's robust, it's transparent. It's not just funnelled to projects that might be electorally popular.
JANE HUME:
Okay so there are two funds here. And I think this is really important.
PATRICIA KARVELAS:
No, I mean, the regional one.
JANE HUME:
Yes, okay so let's talk about the Future Generations Fund first, because one of the important features of this fund is that it becomes in itself a fiscal guardrail. It means that you can't use windfall gains for pork barrelling or for fiscal sugar hits or for recurrent expenditure. So it puts a discipline back into the budget that's simply disappeared under three years of Labor. What we want to do with the Regional Australia Future Fund is make sure that the regions who are producing this windfall gain are also adequately supported. Now, this is a capped fund. It only goes up to $20 billion. And the earnings from that fund will then be reinvested in the regions to make sure that we have better equity between our, you know, urban population who benefit from our prosperity, but most importantly, the regions where that prosperity is built.
PATRICIA KARVELAS:
Shouldn't the calls be being made by Infrastructure Australia about what you know, in terms of what should be spent? And of course, the regions should be looked after under that model, shouldn't they?
JANE HUME:
They should, and there is some infrastructure that will come from that. But it's also about, the Regional Australia Future Fund, will be about investing in healthcare, for instance, about making sure that those childcare deserts are dealt with, making sure that there are educational opportunities in the regions as well. That's not…
PATRICIA KARVELAS (interrupts):
Can it be spent on anything?
JANE HUME:
That's not infrastructure. So no, it will have a very specific mandate and that will be outlined in the legislation that enables the fund, as will the Future Generations Fund. It will have enabling legislation that will make sure that the guardrails are there. So it is investing in productive capacity and economic reform opportunities.
PATRICIA KARVELAS:
Will Infrastructure Australia be making the recommendations on how that funds money?
JANE HUME:
Let me be very clear. There will still be infrastructure investments that are done through the regular budget processes, and that would be expected. The regular budget processes will not change. But what's important here is when there is these windfall gains that they're invested for future generation rather than squandered.
PATRICIA KARVELAS:
Okay. Um, but when it's an infrastructure investment, will it go through that process as well?
JANE HUME:
Well it goes through that process now. It depends on what the infrastructure investment is. But infrastructure investments as they're done at the moment, have to go through very rigorous budget processes. They shouldn't be used, this is more about using, uh, windfall gains for recurrent expenditure. So it's about putting a fiscal discipline around the budget, making sure that we're not squandering those gains on either recurrent spending, making the structural budget position worse, but most importantly, making sure that governments spend within their means, they stay within their means, they spend within their envelope, and they don't rely on a wing and a prayer in order to return a budget to balance.
PATRICIA KARVELAS:
I want to move to a couple of other issues, if we can. Let's talk about the trade war. The Prime Minister made the point that you need to sort of be very careful at the moment, because Donald Trump clearly changes his mind. The administration changes its mind. He's right there, isn't he, that there is a lot of volatility in the decision making. This capitulation has just happened, that you need to be pretty steady at this time.
JANE HUME:
There is no doubt that we are in a period of extraordinary global uncertainty, which is why economic resilience is so fundamentally important. And that's one of the drivers of these funds that we've been talking about to build that economic resilience for future generations, rather than simply being at the whim of other countries.
PATRICIA KARVELAS:
But do you think in terms of back to Trump, um, we shouldn't be rushing to Washington and kissing his arse as he used, that's his language, not mine. Um, we should be pretty careful about that given he keeps backing down.
JANE HUME:
We have a very good relationship with the US and most important investment relationship. You know, with our largest, um, investment partner. Uh, and, we also have they're a very important strategic partner as well as a national security partner.
PATRICIA KARVELAS:
But would you be reluctant saying…
JANE HUME:
We have very good relationships with the US already.
PATRICIA KARVELAS:
… let's not do some ass kissing with this guy because…
JANE HUME:
But I don't think that, to use your phrase…
PATRICIA KARVELAS:
It's his phrase!
JANE HUME:
Am I allowed to say this on national television? Ass kissing. I don't necessarily think that would be the way that the relationship is undertaken. You know, we use our relationships across the aisle, both Democrats and Republicans, Liberal and Labor. We should be using all of those relationships right now, throwing the kitchen sink at making sure that Australia's relationship with the US is as strong as it possibly can be.
PATRICIA KARVELAS:
I just want to move to, as I say, there's so many things. We're in an election campaign. Peter Dutton keeps talking about this potential deal if Labor is in a minority situation with the Greens. But I want to put this to you. If that were to happen, and of course, no one's even voted yet. But if that were to happen and they needed to cobble together a government of some sort, couldn't they just do it with the Teals? Why would they need the Greens?
JANE HUME:
Well, we know that the chances of a hung parliament have rapidly, greatly increased. And that's a real concern because it creates uncertainty and instability.
PATRICIA KARVELAS:
But there are more Teals in the lower house.
JANE HUME:
Well, potentially. But why would they not make a deal with the Greens? That way they get control of both houses, the upper house and the lower house.
PATRICIA KARVELAS:
Because they say they don't want to. They’ve said they don’t want to.
JANE HUME:
That means that they get their economic agenda through immediately. So you can see why that would be an enormous temptation for Labor to get into bed with the Greens, because they get control of both houses.
PATRICIA KARVELAS:
But they could also form government with the Teals, right? Just on the number.
JANE HUME:
They absolutely potentially could and it would be interesting to see what the Teals demands would be.
PATRICIA KARVELAS:
It would be and that's a question for the Teals. I just want to take you to a policy that on Monday you dumped and that's working from home. Did that go through the shadow cabinet, all of the processes or was it just your idea?
JANE HUME:
It went through all the appropriate processes, there's no doubt about that. But what I will say is that we did listen on this. Now, I am very committed to ensuring that we have an effective and an efficient public service. And there have been some egregious abuses of the work from home policy that is in place that allows public servants the right to demand to work from home full time. But we listened to the feedback on this policy, and there were elements of the public service where that working from home arrangement, if it wasn't there, would have actually decreased productivity, which is why we made the decision to reverse that policy. Now, that doesn't mean we're not committed to a more effective and efficient public service. It doesn't mean that we're not committed to reducing the size of the public service by 41,000 public servants, and that's the amount that it's grown in three years under labor. That's more than 20% increase. And you'd be hard pressed to find an Australian that feels that they are 20% better served by this bigger public service.
PATRICIA KARVELAS (interrupts):
But on the back down.
JANE HUME:
A bigger public service is not a better public service.
PATRICIA KARVELAS:
Why did you back down?
JANE HUME:
Well, because we listened to the feedback.
PATRICIA KARVELAS:
And what was the feedback?
JANE HUME:
Well, as I said, I heard some feedback about particular elements of the public service that weren't necessarily Canberra based. And it was supposed to be a Canberra based policy that simply wouldn't be able to function as efficiently as they could without those arrangements.
PATRICIA KARVELAS:
Can you give me some examples?
JANE HUME:
Yes I can. So I heard from a woman who was by trade a nurse, but was working for the health department who was on the central coast of New South Wales, and she's been working to ensure that there aren't representations to hospitals. It was a very important project, but she couldn't have done that job unless she was doing it from home. So you can see where that sort of feedback does make a difference.
PATRICIA KARVELAS:
And does that come through? How did that happen? I'm just, I'm genuinely wondering because I heard a backlash straight away as soon as it was announced, right from even your some of your own MPs.
JANE HUME:
And let me, explain that backlash to you, because there was a subterranean campaign that was run by, in fact, wasn't even all that subterranean by the ACTU, by the CPSU, but more importantly, by Labor, who told women in the private sector that somehow we were going to magically be able to change their workplace policies and drag them back to their desks? Well, nothing could have been further from the truth. And that is outrageous and brazen and completely dishonest.
PATRICIA KARVELAS:
It was about the public service. You're right. I looked at your policy and I'm about facts. But what the federal government does and the messages it sends about its views can set a standard, can't they?
JANE HUME:
Well, this is something that Chris Minns did in New South Wales. And no one heard a peep. No one heard a peep. In fact, taking public servants back into the office is now a policy of the New South Wales Government.
PATRICIA KARVELAS:
He said, I heard him asked about this because it is interesting. What is the difference? He said most of the public service in New South Wales are very front line because of the kind of work they do. So they are different, aren't they?
JANE HUME:
Well, we did say that frontline services will be unaffected. We want frontline services to be as strong as possible to deliver the services that Australians expect. That doesn't necessarily mean, though, that we need a bigger, more bloated public service to deliver it. And in fact, the size of the public service has grown so big now it costs the budget an additional $7 billion a year. Now that's an eye watering expense for the taxpayer. I don't think that they feel that they're getting their money's worth from that bloated public service. We want to see a right sized public service and services better delivered to Australia.
PATRICIA KARVELAS:
One of the things I know women, because it's been raised with me…
JANE HUME:
And, you know, it wasn't a gendered policy, don't you? I mean, I think we have had this discussion.
PATRICIA KARVELAS:
We have. I'm not suggesting you woke up one day and thought this would be really good to do to women. But women do get a lot of advantages, don't they, because of the gendered way that families structure their work. That's a whole other conversation, Jane. That's a lot of work for women.
JANE HUME:
That’s a whole other conversation.
PATRICIA KARVELAS:
But women do so much of this work that it does affect them disproportionately, doesn't it?
JANE HUME:
Well, I think that was the way that it was interpreted certainly wasn't the intention of the policy. was to make sure that we have an efficient and effective public service that lives up to the expectation of the taxpayers who pay for it, because, let's face it, every single public servant is paid for their wage is some, is a tax dollar that another worker has foregone.
PATRICIA KARVELAS:
Do you think you can convince women to forget this little moment?
JANE HUME:
Well, I think that there are women out there that are paying very high taxes, more taxes than they've ever paid before, and they too want an effective and an efficient public service, because that's what all Australians deserve.
PATRICIA KARVELAS:
But the Labor Party wants to reduce the tax. They legislated it. You said you'd repeal it.
JANE HUME:
At $0.70 a day in 15 months time. That's hardly a tax reform, is it? We know exactly what that is. That's an election sweetener. It's got nothing to do with the cost of living, because they're saying that that's a permanent feature of our tax system. So if they think that a cost of living relief is a permanent feature of the tax system, they're essentially assuming that a cost of living crisis is a permanent feature of a Labor government. That is more frightening. That's why we've announced a fuel tax excise cut. That fuel tax cut will make sure that we can deliver cost of living relief where it's needed, and it will actually have an effect not just on household budgets, but also on business, whether they're transporting goods to market, whether they're, you know, running generators, whatever it might be, it will be less expensive under a Coalition government, under a Dutton led Coalition government, the cost of living will be addressed directly through that fuel cut.
PATRICIA KARVELAS:
Just to last question on another topic, but Ted O'Brien would not commit to remaining in the Paris Agreement today. It's been reported on. I just want to get clarity from you. Would a Coalition government stay in the Paris Climate Accord?
JANE HUME:
Yes. We are committed to the Paris Agreement, there is no doubt about that. But on Labour's current trajectory, the idea of hitting 43% is an absolute fantasy. And I think that's exactly what it was that Ted was alluding to. And that's a disgrace. That's because Labor's policies simply are not working. They promised $275 off your energy bills. They've failed to deliver it. And now they have no solutions, no solutions to get to either net zero or to reduce energy prices or to shore up the grid. That's why the Coalition government has said that we will inject more gas into the system in the short term, and will deliver in the longer term. When those coal fired power stations retire that dirty coal, we will replace that with zero emissions nuclear energy that will bring down costs, it will shore up the grid, and it's a credible pathway to net zero.
PATRICIA KARVELAS:
Senator, thank you for coming in.
JANE HUME:
Great to be with you, PK.