Radio interview - 11 May, 6PR Mornings with Gary Adshead
The Hon Matt Keogh MP
Minister for Veterans' Affairs
Minister for Defence Personnel
E&OE TRANSCRIPT
6PR PERTH
MORNINGS WITH GARY ADSHEAD
THURSDAY 11 MAY 2023
HOST, GARY ADSHEAD: Behind Party Lines, Andrew Hastie and Matt Keogh are on the lines. Andrew Hastie, you are there?
ANDREW HASTIE: I am, Gary. Good to be with you.
GARY ADSHEAD: And you. And Matt Keogh, thanks very much for your time, fellas.
MINISTER KEOGH: Great to be with you, Gary. Hi, Andrew.
GARY ADSHEAD: Okay. The debate is going on. I suppose first up, Matt Keogh, can I ask you: are you comfortable that this budget will not impact inflation and therefore people’s interest rates?
MINISTER KEOGH: Absolutely. In fact, this is a Budget that will be deflationary. We anticipate it has a deflationary effect of 0.75 per cent. And so that’s really important because what we have done here is a responsible Budget. It is a practical Budget. It certainly addresses cost of living pressures, but it does it in a way that doesn’t add to inflation. And that’s important for exactly the reason you mentioned – we don’t want to put extra pressure on –
GARY ADSHEAD: Are you certain about that? Are you so certain about that you’re prepared to back yourself that inflation will stay where it is or go lower and interest rates won’t be put up by the Reserve Bank in a couple of weeks?
MINISTER KEOGH: Well, there’s many things that impact inflation, Gary. What we’re saying is our Budget doesn’t impact – does not increase inflation.
GARY ADSHEAD: Okay. What do you think about that, Andrew?
ANDREW HASTIE: Look, I think that’s wrong. I think this Budget is a big-spending, it’s a big‑taxing typical Labor Budget. And the big challenge for all of us right now is inflation – that great silent tax which is hurting a lot of families at the moment. A family with kids now is around $25,000 worse off, and I think it’s beyond heroic, it’s almost a bit of a fantasy, for the Treasurer to say in his speech – and looking at page 3 of his speech right here – “Labor expects inflation to fall from 6 per cent this year to 3.25 per cent next year.” I don’t know how that’s going to happen, because this is a big-spending Budget. It’s a stimulus. It’s actually going to push prices up. There’s more money going into the economy. And I see this hurting families, not helping them.
GARY ADSHEAD: Why was this – Matt Keogh, in your words – why was this a Budget that tended to leave behind middle Australia, as it’s now being described? Why was it? Because there’s certainly nothing in it for millions.
MINISTER KEOGH: Well, that’s just not true, Gary.
GARY ADSHEAD: Well, go on. Name something.
MINISTER KEOGH: That’s not true.
GARY ADSHEAD: Give me one.
MINISTER KEOGH: Well, there’s the tripling of the bulk-billing incentive which makes it cheaper to see your doctor. Making it cheaper for medicines because you don’t have to buy them as frequently. We’ve got the changes for Rent Assistance which will obviously help across the board for people as well. But in addition to that there’s the childcare subsidies which will increase from 1 July this year. There’s a range of things that will help people across the board as well as those measures that will assist people at the lower end as well.
So, it’s really important to appreciate what we’ve done here across the board, but we’ve done it in a responsible way. We are delivering a small surplus, and we are reducing the level of deficits in the future years considerably, which means our debt repayments are lower. It means our overall debt will be lower. That’s important in terms of – you know, Andrew talks about inflation, but they’re the key measures that impact on inflation…
GARY ADSHEAD: A trillion dollars, though.
MINISTER KEOGH: And reducing electricity bills. We’re reducing electricity bills. We were going to hit a trillion dollars under the previous Government, but we’re going to be able to come out of that quicker under the way that we are managing the Budget. And, of course, you’ve got the reduction in electricity bills which will apply to half a million households in Western Australia. That’s not to be sneezed at, and I’m sure people will be very happy to be receiving that reduction on their power bills.
GARY ADSHEAD: Okay. Andrew, in terms of surplus, you know, you guys weren’t able to. I know that there was a suggestion that this was surplus a drover’s dog could have pulled off, but why couldn’t you guys get us into a surplus earlier?
ANDREW HASTIE: It’s a good question, but it’s kind of beside the point. What we’re dealing with right now is inflation. And what this means for Australians, this budget, there’ll be less disposable income for families, which means less money to spend on things like holidays, entertainment, school fees –
MINISTER KEOGH: Well, is it inflationary or not inflationary?
GARY ADSHEAD: Yeah, I was going to say –
MINISTER KEOGH: So, you’re arguing both sides now?
ANDREW HASTIE: No, no.
GARY ADSHEAD: Because of interest rates?
ANDREW HASTIE: Yeah, because of interest rates, of course. As inflation increases, the Reserve Bank will hand down interest rate rises to try and curb inflation. It’s a silent tax. It’s going to eat away at people’s savings and their purchasing power. So the way you do that – well, the way the Reserve Bank does it is increase interest rates. And what I’m saying is that families will have less disposable income, we’ll see less investment in the private sector, overall national income will decrease, and we’ll see unemployment rise. I mean, this is just basic economics here. And so, to pretend that somehow this Budget is not inflationary is quite ridiculous, frankly.
GARY ADSHEAD: Just one that’s sort of resonating a bit here on 6PR – probably because a lot of truckies listen in – is this Road User Tax. Why did it have to go up at all? Because I know that I’ve heard Jim Chalmers say that there was a choice between a 10 per cent increase and a 6 per cent one. But why does it have to go up at all given that cost of living pressures and now this will be passed on through freight, Matt Keogh?
MINISTER KEOGH: Are you talking about the tax, the fuel charges?
GARY ADSHEAD: Yeah, yeah, the return of that. Yeah.
MINISTER KEOGH: Well, there’s always been – we’ve always had taxation in our fuel, and, of course, there was a brief pause under the previous Government of that being indexed, which they legislated to have that come back last year, and that’s what happened. And so that’s continued to be indexed as it always has since John Howard introduced it.
GARY ADSHEAD: So, you couldn’t actually draw a line under it and take it out? I mean, you can put things in through legislation. Can’t you take things out? Given that the truckies are saying, “Well, that’s going to get passed on to consumers,” so, you know, all the things you’re doing in terms of welfare payments and whatever, it will all just be undone.
MINISTER KEOGH: Well, it won’t be undone. Yes, those are costs that are passed through, like many different costs. And that’s why we’ve targeted the benefits that we’ve included in this Budget to those people who are being hit hardest by cost-of-living increases. But we still need to be having generated that revenue for our roads. And, of course – who are the main users of those roads are those truckies. And I know talking to people like Senator Glenn Sterle, who was a truckie and does lots of work with road safety with them as well as our Minister for Transport Catherine King and our Assistant Minister for Road Safety Carol Brown, working on these issues about making sure we’re improving the quality of those roads. And that is funded directly by the taxation in our fuel.
So that’s a really important measure to make sure that we are improving the quality of those roads. And, of course, the better quality those roads are the more efficient our transport systems are, which is a de-inflationary measure.
GARY ADSHEAD: Andrew? Are you hearing anything in your neck of the woods about that one?
ANDREW HASTIE: Look, we’re still taking stock of everything. And Peter Dutton will reply tonight, of course – 5.30pm WA time, if you’re watching on ABC or Sky or whoever else is broadcasting.
But the thing I want to focus on really is the doctor and housing shortages in WA. Now, Matt and Labor will say that, you know, the $3 billion worth of bulk billing - $3 billion worth of bulk billing will help the doctors – help people get more access to their GPs. But what we have in the shortage, there’s not enough GPs. That’s part of the problem. And then with the housing shortages, sure –
MINISTER KEOGH: That is absolutely true.
ANDREW HASTIE: They’ve handed out some – well, Mark McGowan really.
MINISTER KEOGH: Doctor shortages, what did the last Federal Government do over the decade to fix that?
ANDREW HASTIE: Can I finish, Gary?
GARY ADSHEAD: Yes.
ANDREW HASTIE: Can you adjudicate?
GARY ADSHEAD: I can adjudicate.
ANDREW HASTIE: Thank you.
GARY ADSHEAD: Because you’re facing each other today, are you? You’re not actually in the same room, just to be clear.
ANDREW HASTIE: No.
MINISTER KEOGH: We’re missing our normal repartee.
GARY ADSHEAD: Okay. We understand.
ANDREW HASTIE: Gary, housing shortages, right, in WA. So, the Rent Assistance they’re handing out, that doesn’t increase the overall supply of houses. And if I may, I just want to read out this text I received from a Peel Region real estate agent. He said, “On the ground, Andrew, it’s a crisis. Affordable housing for lower income tenants is impossible to find. First home buyers are being priced out of their relative market by east coast investors and are subsequently losing hard-earned savings through increase in rental prices if they’re unable to stay with family while they save. I just sold one – this is on Tuesday last week – with 12 offers, mostly from first home buyers, who had been trying for months to buy, and it sold to a lovely yet well-positioned middle-aged couple for 50 grand above asking.”
And my point is, there’s a plan to bring in 1.5 million new migrants over the next five years. There’s no plan to grow our economy, and there’s no plan to deal with the shortages, whether it be housing, doctor also –
GARY ADSHEAD: Well, there’s a $10 billion plan, isn’t there, Matt Keogh?
MINISTER KEOGH: Well, that’s exactly right. We have the $10 billion plan for additional housing which is being held up by the Liberals in the Senate right now. But in addition to that, in this Budget was a critical measure for – to incentivise investors to build homes and apartments for rent so that we get more housing stock coming in from the private sector as well by giving them – halving the tax rate that applies to managed investment schemes for housing. So that is a really important measure to encourage the private sector into the market as well as the $10 billion Housing Australia Future Fund that the government is creating to create more social and affordable housing.
So, there are two, multiple, streams here that we are trying to bring forward, one of which, as you pointed out, the $10 billion Housing Australia Future Fund, is being blocked in the Senate by the Liberal Party right now. And that’s not just about general affordable and social housing; that’s housing to benefit women and children that are fleeing domestic violence, it’s housing to benefit veterans that are in need of homelessness support. So, these are people in need, and that’s being blocked by the Liberal Party right now.
ANDREW HASTIE: But, Gary, if you’re one of these first home buyers who are offering above the $430,000 stamp duty free threshold, just to have a chance, if you’re one of those people, this budget doesn’t help you get into the housing market.
GARY ADSHEAD: No, that’s right.
ANDREW HASTIE: And so, what we really need to do is think about how we increase supply. This resides with the state government, of course, and Mark McGowan is sitting on his hands here. We’re about to have this massive surge of migration, and Australia has been built on migration, but there’s no plan, and that’s the issue.
GARY ADSHEAD: And on that –
MINISTER KEOGH: I think also we need to be clear on the migration figures. We’re now in a catch-up period of having our borders closed for the last two-and-a-bit years. And the migration figures, which are higher now, still have not made up for the shortfall of migration over those years. And that’s at a time when we know – and you look around I’m sure everyone is aware – people are crying out to get workers. We need people to come in and fill those positions as well. Obviously, that puts pressure on housing, and that’s why we’re creating the mechanisms to build more of it.
GARY ADSHEAD: I just – obviously on – obviously that median house price, that $430,000, is so out of date now. It’s way over $500,000, so that stamp duty should be changed a fair bit.
Just quickly – I know I can hear bells – just quickly in relation to the tax cuts that will come into effect next year for those people who are on higher incomes particularly - $9,000 if you’re on $200,000 or more, you’ll save $900,000 compared to the $2.85 you’ve given to those people who are seeking a job extra a day. Is that going to be embarrassing when it happens, Matt?
MINISTER KEOGH: Well, those tax cuts that come in from 1 July apply for middle-income earners all the way up the chain. And we’re keeping those as they are proposed. And that will benefit those tax earners as well as people at the bottom end that have been benefitting from a range of other benefits, including the increases in payments that we’ve announced in this budget.
GARY ADSHEAD: All right. And I don’t think that Andrew Hastie is going to counter the argument that those tax cuts should be kept in place.
So, I’ll leave it there gentlemen. I do appreciate it. Sorry about the technical problem earlier on.
ANDREW HASTIE: No worries.
MINISTER KEOGH: No worries, Gary. It was great to chat.
GARY ADSHEAD: I’ll let you get back to your day jobs.
END
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Authorised by The Hon Matt Keogh MP.
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