Afternoon Briefing Wednesday 15 May 2024 - Transcript


SUBJECTS: Budget 2024; Tax Cuts for Every Australian Taxpayer; Energy Bill Relief for Every Household; A Future Made in Australia

GREG JENNETT (HOST): Well, time for some government perspective now on all things Budget. Andrew Leigh is the Assistant Minister for Treasury matters, so closely linked to the processes and the planning that got us here. And Andrew's back with us in the studio. Welcome once again.


JENNETT: Energy bill relief. Is the Government claiming in giving $300 to every household that you are at least in part, making good on the $275 reduction promise?

LEIGH: That hasn't been at the forefront of our thinking. Really, this is about providing energy bill relief at a time when households are under pressure. We've done it this way because it's the most efficient and straightforward way of providing that energy bill relief and because it reduces inflation. So, that's making the Reserve Bank's job easier. It's really important that fiscal and monetary policy work closely together. We've done that in past Budgets. We've done that again in this Budget.

JENNETT: Means testing across a range of government programs is a very Labor thing to do, and it's conspicuously absent here, the Treasurer says, for efficiency reasons and delivery reasons. Should it or could it have been given more serious consideration, though, notwithstanding the mechanical problems in filtering out the wealthy on their energy bills, might it have been fairer to give more to those who need it most?

LEIGH: It's a simple, practical issue. Your energy retailer knows whether a customer is a concession card holder or not, and so they can target based on that straightforward metric. But once you want to provide energy bill relief to middle-class Australians, there's not that granular detail available to the energy companies. So, the choice that you're facing is, do you want to provide it only to concession cardholders or do you want to provide it to everyone? We made the choice to provide that relief to everyone.

JENNETT: That explanation makes sense. Does the same logic apply to multiple property holdings, though? Would it not be possible for some government agency, even if it was a land titles office in a state government, to have recognised and filtered out multiple payments to one individual who might own four, five or six properties? That's going to be allowed, right?

LEIGH: My concern, Greg, is that these things often sound simpler in the description than they are in the execution. What you'll often find with energy retailers is that they have a database which is set up in order to do their business. It's not set up from the standpoint of government providing relief. You don't want to put in place a system which means that we have to delay that energy bill relief. We want to get it out the door quickly.

JENNETT: All right. With the first payment coming at the end of the first quarter, is that correct? Yes. All right. Now, what happens if inflation is not where you say it will be at the halfway mark of the next financial year? That'd be Christmas, New Year - you've effectively promised that it will be. Is this a political rod for the government's own back? If that benchmark is not met, that is three or higher, two-point something inflation.

LEIGH: When we came to office, inflation had a six in front of it. Now it's got a three in front of it. To be back in the target band, it needs to have a two in front of it. So, we're seeing inflation steadily come down partly as a result of the policies we've put in place; the increased Commonwealth Rent Assistance, the childcare assistance and the energy bill rebates in the last Budget, which the Liberals and Nationals voted against, and also the energy bill relief in this Budget. We've got those forecasts in place, as you would have seen, and we're confident that we're reducing inflation through the policies we've got in place. Australians will see that cost-of-living support coming from a government which has their backs.

JENNETT: There will be waypoints and markers on the journey towards inflation reduction between now and Christmas. If the evidence was mounting that we were not going to get back in that target band, you have another official Budget update called MYEFO in December. Would you be prepared to change course to use that to pull money back out of the economy if this one, if this Budget had overcooked it?

LEIGH: As an economist, I'm often concerned about people who simply look at the total quantum of spending and don't look at exactly how that's allocated. So, if you provide targeted relief, as we've done through the energy bill relief and through the Commonwealth Rent Assistance, you are able to reduce the headline inflation rate and that, again, takes pressure off. So, you want to look precisely at the way in which it's being delivered. In other words, you want to do a bit of microeconomic analysis, not simply just look at the macroeconomic aggregates. This Budget's been put together very carefully with cost of living at the heart of it. And we haven't mentioned the fact that every Australian taxpayer gets a tax cut from the 1 July.

JENNETT: Well, exactly. We'll come back to that maybe around the 1 July because it is locked in. Now, Future Made in Australia. What is the counterargument to the one put by the Coalition today that really big investors in the clean energy space, Twiggy Forrest is one that's been named, aren't deserving or shouldn't qualify for production subsidies?

LEIGH: We're putting in place a massive industrial transformation, Greg, moving the grid from one-third renewables to four-fifths renewables over the course of less than a decade. That's possibly the biggest industrial transformation the nation's ever gone through. To get that right, we need to get more investment in renewables. Some of that investment will come from overseas, some of it will come domestically. A range of the superannuation funds have stepped up, but we do need to create a more straightforward process for overseas investors and the Treasurer has announced that through a clear single pathway. We also need to ensure that we're creating the right incentives for local investors as well.

JENNETT: Do you have benchmarks for success here? How will you know that it has worked, say, at the five-year mark?

LEIGH: We'd certainly be looking at the increase in the renewable share in the grid. That's a big marker of Australia moving down that pathway of being a renewable energy superpower. We've got the big increases in offshore wind, the Climate Change Minister has announced those offshore wind zones and we're seeing a whole lot of solar farms put in place. We're seeing improvements in the grid and battery storage alongside it. It's an exciting transformation. It shows that you don't have to choose between economic growth and doing the right thing for the planet.

JENNETT: It's just been a bit sluggish out of the blocks. But I guess you're saying the approval mechanisms contained in this might speed that up. Andrew Leigh, we'll keep track on that in the months ahead. And thank you, as always.

LEIGH: Pleasure, Greg. Thank you.

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Cnr Gungahlin Pl and Efkarpidis Street, Gungahlin ACT 2912 | 02 6247 4396 | [email protected] | Authorised by A. Leigh MP, Australian Labor Party (ACT Branch), Canberra.