Television Interview, ABC Briefing

SUBJECTS: CPI figures, public service funding, Australian Election Study

PATRICIA KARVELAS [HOST]: Let's bring in my political panel for today. Jane Hume is a Liberal Senator for Victoria. Peter Khalil is the Assistant Defence Minister. Welcome to both of you. Just starting where we on the news today. Inflation – 3.8 per cent. That's not good news. Peter Khalil.

PETER KHALIL [ASSISTANT MINISTER]: Look it's higher than we'd like, but it's lower than we inherited, I think that's an important point to make. We've always known that this job is an ongoing job and people are still feeling the pressure, and that's why a lot of the cost of living measures that we've designed and implemented were put in place to provide that relief to people. We've delivered real wages growth, we've created 1.2 million jobs, reduced unemployment, and there have been three interest rate cuts this year, two after the election. Yeah, but I think, 

KARVELAS: Yeah but we’re not going to get any more though right?

KHALIL: Well, that's up to the RBA. Not you, Jane or myself. They're independent so they'll make those decisions on a whole range of variables. I think the important point is it's gone from 3.6 to 3.8. It is below 4 per cent. You know, when they were in government, it was over 6 per cent and going up. So, I think we've done a pretty good job to bring it down. But we’ve done it in a way that has still provided cost of living relief for Australians.

KARVELAS: Jane? It is higher but you know, the argument about it being lower than it was is also equally true. And the Treasurer's point too that it was flat in October, that's relevant too, isn't it?

JANE HUME [SENATOR FOR VICTORIA]: Well, I think the proof point here is that the cost of living crisis continues on unabated. This is I think damning of Jim Chalmers and his economic  management skills. He said that the inflation genie was tamed, that you know, the dragon was dead. And that's clearly not the case. I mean do you remember the days when Australian families used to not really give two hoots what the inflation figure was, you know, back in the day when it was under 2 per cent ,or just between that 2 to 3 per cent band. Now, everyone is hanging to find out what the inflation data is because they know that the interest rate decisions that the RBA make are entirely dependent on whether the Federal Government has managed to keep inflation under control. Clearly that is not the case. I don't think we can expect to see the RBA make any moves on interest rates anytime soon. And while Peter says well they've cut rates three times, they went up twelve times, Peter, they went up 12 times under you, they're not going to be cut anytime soon. Australians that are struggling to pay their mortgages, struggling to pay their bills are going to be concerned about the issue.

KARVELAS: Though if I can frame a question to you that, you know, it is persistent, it looks like a big issue. It's not deniable by anyone. So, given that it does mean that actually the RBA could even hike rates, I mean that would be diabolical.

KHALIL: Well, I'm not going to speculate about what the RBA is going to do next month or the month after. What is in our control is to press ahead with the responsible fiscal management we’ve been pursuing . I'll put up Jim Chalmers and this government's economic record against theirs any day. It was funny that Jane was talking about how Australians are too concerned about inflation. When you were in government it was above 6 per cent and we’ve brought down debt by $200 billion, it was almost tripled to almost a trillion dollars under the Coalition, and  we've actually provided real relief, cost relieving relief for Australians, but done it in a way that doesn't heat up the economy. It's designed in a particular way through bill relief, for example.

KARVELAS: So, bill relief. Okay, thank you. You've taken me to my point. The energy rebates, do you think they need to be extended now?

KHALIL: Well, these are all things the Treasurer and Treasury will be looking at. How do we provide support? Well, it could be support in different ways to the public. And I think what we've done as a government has been quite clear in providing that relief, prioritising cost of living relief, but doing it in a way that manages inflation as well and bringing inflation down. And frankly from the high of 6 per cent that was there when we came to government. it's a bit rich Jane. All they did was deliver deficits. We delivered two surpluses and a third year deficit which was.. 

KARVELAS: We’ve heard some of these points before so I'm going to move on. Energy rebates, you've been critical about the way the government's managed this. But people deserve to continue to get them, don't they?

HUME: Well, they deserve lower energy prices, don't they?

KARVELAS: But what can't make that happen straight away.

HUME: Well, it's funny that you should say that because that's exactly what Chris Bowen promised. In fact, Anthony Albanese promised it too. He promised $275 off your energy bills. That was before the election. After the election no one uttered the words 275. Not for three years.

KARVELAS: That's right but…

HUME: And now you're recycling taxpayer money, taking their taxes, giving it back to them in the form of rebates and saying to them say thank you for that which is unsustainable. What we need to see is a plan to bring energy prices down. That is not what we're getting from this government. In fact, no one can say when energy prices will come down. I think that's extraordinary.

KARVELAS: What's your view on energy rebates and whether they should extend them?

HUME: I think we should deal with the source. We should deal with the source of the problem.

KARVELAS: So, just extend them?

HUME: What we also know is that increased spending by this government, which has increased dramatically in the last three years, is one of the causes of rising inflation. The RBA have come out and said that. So, if we keep spending more money, more and more money, we're going to keep inflation higher for longer and that's going to increase the cost of living, make the cost of living worse. How about we deal with the problems at their source rather than put band aids on them.

KARVELAS: Which brings me to another economic news sort of in that space, which is cuts to the public service. Now, you're going to say they're not cuts, but I bet if the Liberals were planning a 5 per cent decrease in, you know, the number of staff at the public service, you would be calling them cuts, because they are.

KHALIL: Well, first of all, we have not asked agencies or departments to cut by per cent or anything like that. Let's be really clear about what's going on here. It's about asking the departments and agencies to look at their programs, how they administer them, make sure that they're being effective and efficient with taxpayer dollars. I don't know why the Opposition is arguing against that. It's about discipline, discipline and fiscal management. And as we should, good governance is about, and good government is making sure that we are spending taxpayer dollars wisely.

KARVELAS: When they talked about cutting the public service you…

KHALIL: You keep saying cutting the public service. We're talking about making sure that the way the taxpayer dollars are spent are spent effectively and efficiently. Now, we've done this since we came into government. We've actually found over $100 billion in savings so far. We found in reducing spending on external labour and contractors and all this kind of thing. So, I don't think there's anything wrong with that approach. I think that is the correct approach because taxpayers deserve that their taxpayer dollar is spent wisely and efficiently.

KARVELAS: Jane, you were the Shadow Finance Spokesperson before the election. I know that, you know, lots of things happened during that time, but you had promised some cuts to the public service. Does this, you know, carry on your view that there needs to be cuts to public service?

HUME: I think it's extraordinary that this wasn't clear before the last election. This is an enormous cut. The 5 per cent efficiency dividend is what you're asking for. Your current deficiency dividend is 1%. This is on top of that. It's the equivalent, as we heard today, to cutting around 22,500 public servants. And somehow that escaped you six months ago. I just find that hard to believe. Six months ago, Katy Gallagher and Jim Chalmers and Anthony Albanese said that the public service was right sized, that we didn't need to make any cuts. But now, six months later, whoops, we need to do this in order to balance the budget.

KHALIL: No no, sorry, we found, just for example, $6.4 billion in savings by reducing spending on external contractors and external labour that ballooned under your government. Are you arguing that we shouldn't be looking for efficiencies throughout?

HUME: But you’ve increased the size of the public service, 

KARVELAS: Let me have my turn because I'm in the middle here. You know I like to make myself relevant on this show.

KHALIL: You are very relevant.

KARVELAS: Well I've got to be relevant here. Isn't the point that you weren't upfront with people? 

KHALIL: Well we took that to the last election. We took to the last election the fact that we were going to reduce spending on external contractors and external labour and all those things. That is something that we did as a good government and as we should.

HUME: And the size of public service increased.

KHALIL: And there should be always governments who look at where we need to find efficiencies, I think it's the right thing to do to make sure that we're spending tax effectively and efficiently.

HUME: I reckon the whites of your eyes are showing with MYEFO coming up in a month's time, and you've realised that the books are so bad you're going to need to do something. 

KHALIL: We've reduced a debt that you ballooned out by $200 billion. 

HUME: Actually, the debt's increased. 

KHALIL: Well, we've reduced it by $200 billion ‑‑

KARVELAS: Okay. All right, we're going to move on. There's an Australian Election Study out, and I've got it, you've seen it, probably, Jane Hume. 

HUME: Only in passing. 

KARVELAS: Okay. It shows the Liberals were not regarded as the better economic managers, and you were the Shadow Finance Spokesperson. So that must land uncomfortably with you. 

HUME: Well, I've got to admit, I did ‑ when I saw that I ‑ look, there shouldn't be a surprise. This is a survey that is taken after the election, after people have cast their votes, after they've seen who has won, and moved on. People do tend to reinforce a decision that has already been made. So, while I don't want to disparage the quality of the review ‑‑ 

KARVELAS: No, because it's a very good survey. 

HUME: That's right, and let's face it in the lead‑up to the election some polls said the exact opposite, that the Coalition was the better economic manager, that people trusted the Coalition to grow the economic pie. So, I think this is a kind of revisionist. 

KARVELAS: Okay but there is some evidence, I think more broadly, to say that you did not have a tax cut at the last election, having higher deficits, they were the policies you took, and you talked about what went wrong with the election, it didn't help you, did it; people thought you weren't running an agenda that they wanted to vote for...

HUME: I'd be interested to see what would happen if that same survey was taken today, whether they would agree that the Labor Party is the better economic managers, because as we've seen, inflation has now gone up, interest rates are not coming down again any time soon, the cost of living continues to rise, 40 per cent increases in the cost of energy and no solution to bring energy prices down. I don't necessarily think that that is the hallmark of a good economic manager. 

KARVELAS: I just want to ask you, unless you've got some burning point to make, we do need to move on at some point. 

KHALIL: I would like to respond to that, is that okay? 

KARVELAS: Briefly, briefly. 

KHALIL: The economic management question, I mean, I think all the credibility of the Coalition has been shredded, because when they were in government, all they delivered was deficits, they doubled the debt even before COVID, and they had a share of like the spending of the share of the economy was up to a third. They were not good economic managers, and since we came into government, we have addressed all these issues, as I said earlier, created 1.2 million jobs, reduced unemployment, provided cost‑of‑living relief, reduced debt by $200 billion. So they were in shreds. And then you've got Ted O'Brien, your Shadow Treasurer, and so ‑ this is not all Jane's fault by the way, even though she was shadow finance, whatever ‑ Ted O'Brien's at the National Press Club saying that he's going to keep all these coal‑fired power plants open. You know how much that's going to cost? $17 billion. He's going to put a wrecking ball through the economy and the budget to keep all these coal‑fired power plants open that were slated to close, and there's no economic credibility.

HUME: Hang on. Hang on. You weren't at the Press Club, and he didn't say ‑ and he didn't concede, and he didn't say that, and ‑‑ 

KHALIL: I didn't watch the whole thing. 

HUME: He didn't say that at all, and B, why is it that you guys get Treasury to do so much work on our policies?  How about you guys use your public servants, what's left of them after you've cut them, to do some work on your own policies, to bring energy prices down, do some work on your own policies to reduce taxes, do some work on your own policies ‑‑

KHALIL: Oh, we cut taxes, you didn't. 

HUME: Stop concentrating on us and concentrate on you. 

KARVELAS: Quick question. 

HUME: Two and a half ‑ next election, we will come back to the Australian people with an agenda that demonstrates that we cannot just manage the economy, but we can give them a better standard of living as well. 

KARVELAS: Sounds like an election pitch. 

KHALIL: I’d like to see those policies.

KARVELAS: One minute, just quick on that survey. Peter Dutton, the least popular person to run for Prime Minister for decades and decades, are you surprised? 

HUME: I am surprised. You know how I feel about Peter. He's a lovely man. You guys did a great hatchet job on a good man. I don't know how you sleep with yourselves at night on that one.

KARVELAS: So, you are surprised?  

KHALIL: Wow. 

HUME: I think that's a real shame. 

KARVELAS: You are surprised?  

HUME: I would have loved to properly introduce the real Peter Dutton to the Australian people. We didn't get that chance, and we won't get that chance. But we move on now. Sussan Ley is our leader, and she is very different to Peter, and is very well accepted by the Australian community, and I think that that's a good opportunity for the next election. 

KHALIL: I think, you know, the people I spoke to during the election campaign, when it came to Peter Dutton and the Coalition, their concern was around the policies that he was putting forward as the leader, which was rejecting the tax cuts ‑‑ 

KARVELAS: We know what happened. 

KHALIL: There was no climate change action, no action about housing, no action on housing. 

JANE HUME: But he's a good bloke, isn't he, and you know he is…

KHALIL: And the fact is this, can I just say this? You've got either policies that are like the 17 billion to keep coal‑fired power plants open, or no policies at all, and you're tearing each other to shreds because you can't even land on a policy. So, you need to do that work as the Opposition. 

HUME: But you were mean to him, weren't you? He is a good bloke. 

KARVELAS: I see a lot of meanness across the board, but…

KHALIL: It's not personal, I don't think you can be personal at all. 

KARVELAS: Let's end on a nice note here. Thank you to both of you. 

ENDS