Andrew Leigh

E&OE TRANSCRIPT
RADIO INTERVIEW
ABC CANBERRA DRIVE WITH ROSS SOLLY
WEDNESDAY 15 MAY 2024

SUBJECTS: Budget 2024; Tax Cuts for Every Australian Taxpayer; Energy Bill Relief for Every Household; Funding for ACT Infrastructure; Canberra to Sydney Rail Link

ROSS SOLLY (HOST): Here's a statistic for you, Andrew Leigh. I know you like your statistics.

ASSISTANT MINISTER ANDREW LEIGH: Absolutely.

SOLLY: Should everyone get the $300 energy bill rebate on our ABC Canberra Drive poll at the moment, you'd be happy to know 55 per cent of ABC Canberra Drive listeners say yes, 45 per cent say no, Andrew Leigh.

LEIGH: The simple answer to the 45 per cent is that energy companies don't know your income, they don't know your wealth. What they know is whether you're a concession card holder.

If you're a government and you're rolling out energy bill relief, you can either do it to everyone or you can do it just to concession card holders. You can't do any more fine-grained targeting than that. Our view was that middle-income Australians were doing it tough, and we wanted to extend energy bill relief to them. So, the most straightforward way of doing that was to provide it to everyone.

SOLLY: I understand the simplicity of it and I also said a bit earlier on that maybe, you know, why should the people who pay most of the tax be denied a $300 rebate? But would you also concede, Andrew Leigh, that it does stick in the craw a little bit, that Andrew Forrest is getting a $300 rebate and the person battling to put food on the table is also getting a $300 rebate?

LEIGH: We're about helping everyone and every Australian taxpayer is going to get a tax cut on the 1^st of July. Every Canberran will benefit from the historic investment, the Australian Institute of Sport - there's a range of things in the Budget that are flowing out to all Australians. We make no apology for that. We want to make sure that everyone has a fair go in life. And the energy bill relief is just one of the things that we're doing within this Budget that will build a stronger economy and a fairer society.

SOLLY: I've seen a whole heap of economists coming out today, Andrew Leigh, giving their thoughts on what effect this Budget and some of the measures in the Budget might have on inflation. Quite a lot, saying that they think it will actually drive up inflation.

You've been around economies for a long, long time. You've been crunching numbers for a long, long time. Explain to me why giving people a little bit of relief financially and giving them perhaps a little bit more spending money, why that would not drive up inflation?

LEIGH: Because it's coming off the bill, Ross. We're doing this through the energy bill providers, and so they --

SOLLY: I know, but they still might have put that 300 aside for the bill. They now don't need to spend it on the bill because it's come off the bill, so they can go out and spend it on something else.

LEIGH: We know that Australians are under the pump and so we're providing that relief to them. But in terms of inflation directly, the Treasury estimates that our measures will take three-quarters of a percentage point off inflation this year and another half a percentage point next year. That's in line with what we did in our last Budget, where the energy bill relief, the child care relief and the Commonwealth Rent Assistance, all work together to reduce inflation. We're working hand in glove with the Reserve Bank. They've got their job to do on monetary policy. We've got ours to do on fiscal policy. A key focus for our government is making sure that we made their job easier.

SOLLY: I noticed that Standard & Poor's, the international rating agency today, Andrew Leigh, is saying that there is no chance now of an interest rate cut this year. Do you share their pessimism?

LEIGH: That'll be a matter for the Reserve Bank. Certainly there are plenty of commentators around. Before Ross, you were talking about the bevvy of economists who offered their views on the Budget. That's not something that they need me to weigh in on. The Reserve Bank will make its decision independently.

SOLLY: But ultimately, as a government, you would like this to work towards some interest rate cuts sooner rather than later, wouldn't you? I mean, this is - I know that, you know, helping out the poor and making sure everybody has cost of living relief is important, but part of that cost of living relief would be an interest rate cut. Now, you would be hoping, I'm sure, that this Budget might work towards that cut.

LEIGH: Well, absolutely and we had inflation with a six in front of it when we came to office. It's now got a three in front of it. When it's got a two in front of it, it'll be within the Reserve Bank's target band. So, we have done a lot of work to bring down inflation, that work will continue, the cost-of-living focus of this Budget really is one of the hallmarks of it.

We understand that the inflation challenge is an important one for the Australian economy. At the same time, though, Ross, we haven't forgotten the importance of investing in the future. The productivity-boosting reforms we're doing in education and infrastructure. The big competition reforms, which help to boost living standards and create a more dynamic economy. So, it's a Budget focused on inflation but with an eye to the future.

SOLLY: Do you think that the mechanisms are there now in this Budget that should lead, or could lead by the end of this year to an interest rate cut?

LEIGH: We've certainly looked to provide that space to the Reserve Bank through the measures we've taken, we've talked a lot about the energy bill relief and the other important measure here is the increase in Commonwealth Rent Assistance. We raised it 15 per cent last year, another 10 per cent this year. So, that's a 25 per cent increase in Commonwealth Rent Assistance and that again takes pressure off rents, another important part of inflation.

SOLLY: Andrew Leigh, obviously there is a long wishlist here from the ACT Government. It's an election year, I'm sure they would have liked some money for a convention centre, etcetera. But I've also heard David Pocock saying, well, the ACT Government does not ask for enough. They haven't been putting in the paperwork asking for money.

What's your experience there, Andrew Leigh? Is the ACT Government a bit tardy with putting in requests for funding or federal assistance?

LEIGH: Not at all, Ross. We're doing a power of work in the ACT. The investments in light rail, the investments in the Australian Institute of Sport--

SOLLY: I know you are, but is the ACT Government forthcoming enough? Because David Pocock says he keeps asking at committees, has the ACT Government put in a request, and he keeps being told no.

LEIGH: No, they're absolutely putting forward those Budget requests. You've got the work that's being done around the National Security Precinct as well. You can't build everything in one go, Ross, at some stage, you're just going to run out of workers. We have a full construction pipeline here in the ACT as a result of having a Federal Government which is strongly committed to making sure Canberra gets its fair share.

SOLLY: Quick question from Martin from Chifley. Is there any money in the Budget for the upgrade of the Canberra to Sydney rail link?

LEIGH: I'd love to see that. It's principally an issue for the NSW Government, but it'd be fantastic if they would improve that connectivity. I reckon if you got it down from four hours down to more like two and a half hours, you'd find many more Canberrans taking the train. A beautiful trip, just a smidgen too long.

SOLLY: It is a smidgen too long. It's very scenic, though.

Andrew Leigh, we need to leave it there. Thanks for your time.

LEIGH: Real pleasure, Ross. Thanks for having me on.