Radio Interview, 6PR Perth

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The Hon Richard Marles MP

Deputy Prime Minister

Minister for Defence

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02 6277 7800

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15 May 2024

SUBJECTS: Federal Budget; Housing; AUKUS. 

OLIVER PETERSON, HOST: Lots of chat, lots of talk of the federal Budget which was handed down almost 24 hours ago now by the Treasurer, Jim Chalmers at Parliament House in Canberra. Joining me from there right now live on 6PR today is the Deputy Prime Minister, Richard Marles. Good afternoon.

RICHARD MARLES, DEPUTY PRIME MINISTER: Good afternoon, Ollie. How are you?

PETERSON: I'm well, thank you, Deputy Prime Minister. I'll let Taylor in Coogee ask the first question and she says she's struggling to work out how this Budget is going to bring down inflation. Can you please, Deputy Prime Minister, let us know how?

MARLES: Well, the simple answer to that is that we are managing the budget prudently in a way which puts downward pressure on inflation, so we're not spending in the levels that we've seen in the past under the former government. And the best example of that is that we are seeing now two budget surpluses at a federal level in a row. Now, last year was the first budget surplus in 15 years. This is the first time we've had two in a row in almost two decades. Making sure that we are careful about the way we're spending in the federal Budget is the single most important step we can take to put downward pressure on inflation. And it's right to say that putting downward pressure on inflation is the biggest thing we can do in terms of tackling the cost of living pressures that people face. So, that's the answer to that question.

PETERSON: Sure, for now, but being careful looking forward because expenses exceed revenue every year and we've got ten years of deficits on the horizon.

MARLES: Yeah, but if you compare our spending over the coming years compared to what was intended to have been spent by the former government, so when budgeting happens at a federal level, you have a profile going forward. We've taken what we inherited from the Liberals and in each and every year we are spending less. That's the important point to make. And the surpluses are bigger, the deficits are smaller. And that doesn't happen by chance, that happens by really thorough work. And we've been able to deliver two surpluses. But even going forward where there is projected to be deficits, they're much smaller deficits than what was planned under the former government, and that's what we need to be doing to put a downward pressure on inflation, and that's what we are doing.

PETERSON: And that forecast from your colleague, the Treasurer, is 2 to 3 per cent by the end of the year. Puts it at odds, though, with the Reserve Bank and Governor Michele Bullock saying 3.8 per cent by the end of 2024. Who's going to win?

MARLES: Well, I mean, obviously we're going to find out that answer to that question come the end of the year, but I think the important point to observe now is that in respect of both forecasts, inflation is seen to be moderating. I mean, both the Reserve Bank and Treasury are predicting that inflation is going to moderate. Treasury is saying it will come down to that two to three per cent ban. Obviously, we'll have the answer to that come the end of the year. But I think Ollie, doing this- managing the Budget in a prudent way, is what we are seeking to be as a government. But what its meaning is that we're paying down debt faster. Debt peaks at a lower level. We're saving something like $80 billion worth of interest payments on that debt over the course of the next ten years. That's a huge benefit to the federal Budget. That is what needs to be happening, and we're doing that with front and centre in mind, the spending that we are undertaking going towards easing the cost of living, pressures that people are facing.

PETERSON: Do you think if you are able to meet that inflation target by the end of the year, the early Christmas present might be going to an election?

MARLES: Look, I'm not about to speculate on that. I mean, our intention is to serve the term. That's what the Prime Minister has said, and so we're focused on doing that. Cost of living is the issue that Australians are facing now. That's the case across the country, including in WA, and that's been what has informed us the most in terms of how we put this Budget together. We want to make sure that we are prudent in our spending, so we put downward pressure on inflation. The spending that we do, we want to have it focused on easing the cost of living pressure. That's why everyone, every income taxpayer in the country is getting a tax cut. That's why every household is getting a $300 energy bill rebate. You know, those are measures which are at the heart of this Budget, which are about tackling the question of the pressures on cost of living.

PETERSON: Was it Mark McGowan that inspired the energy rebates? Because he did it a couple of years ago, he had sort of McGowan economics. Now it spread to Roger Cook and now he's obviously the Premier of Western Australia. Now it's becoming Chalmers-economics, Richard Marles.

MARLES: Well, look, I don't know about the energy rebate specifically, but Mark has certainly been an inspiration for all of us, you know, in terms of those of us in Labor, in government across the country. We've looked at what he's done in WA. I was actually with Mark last night, he was over for the federal Budget and he's a good friend. And I think what Mark has managed to make clear is that Labor governments have to put sound and prudent economic management at the heart of our proposition to the people. Those who feel the economy going south the most, in fact are people who have the least. It's the most Labor thing we can do to manage the economy. Well, that's the lesson that Mark, I think, has taught all of us and we definitely have taken inspiration from that and that's what we've brought to bear in the way in which we've managed the federal Budget.

PETERSON: And do you think that point that you just made there, Deputy Prime Minister, I think is really interesting because there's always a perception that Coalition governments are better economic managers than the Labor Party. You'd reckon that tag is unfair?

MARLES: I definitely think it's unfair. I mean, if you look through the history of our country, the great economic reforms have happened under Labor governments. You see that federally under the Hawke and Keating government and it was the Rudd government which got us through the global financial crisis without going into recession. And we were one of two countries at that time that didn't go into recession. So, I definitely think that tag is unfair. But I also think, to put it more on the positive, we do well electorally and we do well in our engagement with the public when it is very clear that we've got sound economic management front and centre in mind. I think Mark McGowan was an exemplar in that, I mean, he did such a great job as the Premier of Western Australia. The way in which he's managed the Western Australian Budget has really been an inspiration to all of us and we've looked at. Have no shame in saying we look at Mark's success and have sought to emulate that federally. And we've definitely taken on a lot of his practices on board and you can see that in the way in which we're managing this Budget. And the fact that we had a decade of Liberal governments federally, they did not. During nine years in office, they produced not one surplus, even though they promised to produce a surplus each and every year. They were zero from nine. And we've been in power for two years and we've had two surpluses and we've done something the Liberals never did.

PETERSON: Two things I want to focus on with you, Deputy PM, before you go. First is around housing and migration, because I see in the Treasury papers, and we know that 528,000 people migrated to Australia last financial year. This year, the projection is 395,000. The one after that's 185,000. Are you pulling enough levers? Are you throwing enough at fixing the housing crisis? So, there's going to be a slowing down of the migration intake. Will that help? Because we've got a property expert live after five Damien Collins is well known to everybody here in WA. He reckons house prices in WA are going up 40 per cent over the next five years. And quite simply, as you know, right around this country and here in Perth, we are in the midst of a rental squeeze. You find that there are hundreds of people, applications going in for every property that comes up on the market at the moment. Have you pulled enough levers to address the housing crisis? Will it get better over the next twelve months?

MARLES: Look, we believe we have. I mean, we have looked at migration numbers and they are coming down, which is the first point I make. But in relation to housing specifically, this Budget contains billions of dollars of investment in new housing. And it is, and that's right across the country, including in Western Australia. And we simply have to get more housing stock in place. That is ultimately the answer to this issue. And we do see it around the country. There is an enormous need to have more housing there, which is why it is a big focus of this Budget. But we think that we are pulling the levers in a way which will see that housing stock increase and obviously that happens in a context where we are managing the migration rates so that they're not at the level that they have been.

PETERSON: And just finally, AUKUS, I know it's your responsibility as well as Defence Minister, Richard Marles, you've got a fair amount of money being contributed over the next 12 months to start those construction of those submarines and some of that work obviously going on here in Perth.

MARLES: Yeah, well, I mean, Perth is really at the heart of what's happening with AUKUS. So, the way I think about it is that really we're building two capabilities. One is the capability to build a submarine which will happen in Adelaide. But the capability to operate submarines is a capability that we are building out of Perth, out of HMAS Stirling at Rockingham. I think Henderson will play a part in this as well. And really, that's what happens first. I mean, we are seeing an increased number of visits from American nuclear-powered submarines to Australia, that's principally to HMAS Stirling in Perth. And we will see a number of those later in the year where there will be a significant amount of work done on that submarine and that is what we are kind of doing. As each submarine comes, we do more and more work on it, become more familiar with it. This is leading over the next few years to the establishment of the Submarine Rotational Force West, which will operate out of HMAS Stirling. And at that point, we will see American Virginia class submarines, a British Astute class submarine operating on a rotational basis out of Perth. And ultimately, in turn, that leads to the early 2030s, when we'll have our first Australian flagged Virginia submarine. But when you look at that pathway, so much of that is happening in Perth and it's going to be. I mean, it's very exciting for the nation. It's very exciting, I think, for those military personnel who are serving in Perth. But the point I'd also want to make is that with that comes a whole lot of work in respect of sustainment of those submarines. And when you add that to what we have announced in relation to the Surface Fleet Plan, which we'll see for the first time, continuous naval shipbuilding happening at Henderson in Perth, suddenly Perth becomes a really critical part of the nation's defence industrial base, and that represents thousands of jobs going forward and a really exciting economic opportunity for the state.

PETERSON: Richard Marles, thanks for your time.

MARLES: Thanks, Ollie.


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