SKY NEWS NEWSDAY WITH TOM CONNELL
WEDNESDAY, 29 MARCH 2023
SUBJECTS: INTEREST RATES, INFLATION, HOUSING AUSTRALIA FUTURE FUND, DGR STATUS FOR ORGANISATIONS CAMPAIGNING ON THE REFERENDUM FOR AN INDIGENOUS VOICE TO PARLIAMENT REFERENDUM
TOM CONNELL (HOST): We have had retail spending figures out this week that show Australians are spending only the same amount they were spending in September last year. In other words, spending’s been flatlining since then. So, have Australians heeded the warnings or perhaps unable to spend anymore? Is this the end of rate rises? Joining me live now, Andrew Leigh, Competition, Charity and Treasury Assistant Minister. Thanks for your time.
ANDREW LEIGH: Always a pleasure, Tom.
CONNELL: We’ll know the figures soon enough. I kind of just want to fast‑forward 12 minutes and have it, but retail spending we know; does it feel like the rates have basically done their work? Do you think Australians can look forward to no more rate rises maybe even from here on in?
LEIGH: We certainly hope that the worst of inflation is behind us, Tom. But it does speak to the independence of the Australian Bureau of Statistics that I’m their responsible Minister but I get no heads‑up on the figure.
CONNELL: Nothing at all?
LEIGH: So, I will see the monthly inflation number come out at the same time as everybody else does, which is as it should be. It’s the ABS’ independent role. We’re doing what we can as a Government to ensure that we are working in tandem with the Reserve Bank, providing responsible cost‑of‑living relief through cheaper child care, cheaper medicines, dealing with those supply chain challenges, particularly in the education sector, with investments in fee-free TAFE, and then restraint in the budget that Jim and Katy are putting together right now.
But I know many households are doing it tough, feeling the squeeze. That’s hitting small businesses as well. The challenge is if we don’t get inflation under control, we know, historically, it has big costs for the economy.
CONNELL: And as painful as even a recession might be, embedded inflation is kind of like a recession that goes on and on. But what about dealing with it? Because you alluded to what the Government said, “Well, we won’t increase pressure around spending. We won’t make it worse.” Is it too blunt, the only tool we really have, the RBA increasing rates, and particularly on low-and-middle income workers that they really do it tough and they have to basically fix the inflation problem? Higher-income earners seem to do okay.
LEIGH: Yes, by definition, if you change interest rates, you’re only affecting people who borrowed money. People who saved money actually benefit. People who borrowed money are the ones that feel the cost. That’s disproportionate across the economy and we’re aware of that as a Government as we put together things like the energy bill relief package, which will be one of the key aspects of the budget that Jim Chalmers hands down in May.
CONNELL: Are you comfortable with the RBA as just the inflationary father with, would you like to sort of think big and study the world and different proposals and so on? Is there something else that we can do that doesn’t mean the RBA isn’t always the one targeting the same type of people?
LEIGH: Well, they have got their macro-prudential tools that they’ve deployed over the last decade. They are able to limit the growth of the investor lending book, for example. That was one tool that they used. But nothing is as powerful as the interest rate for what they’re doing.
CONNELL: So, it’s just the reality. It’s blunt, but that’s the thing that works.
LEIGH: It works, and works with greater speed than measures that you might put in place in a fiscal side of the economy. From the fiscal side, we’re really thinking about the long-term challenges. The safeguards changes this week are really important in terms of setting ourselves up for that cleantech investment wave, which will then put downward pressure on energy prices.
CONNELL: Albeit, we’re talking years away, aren’t we?
LEIGH: These are investments that do pay off over years, but for Australians who have got solar PV on their roof, they can attest to what it does when you have access to renewables.
CONNELL: You mentioned housing. So, it looks like it won’t get support from the ACT Senator Pocock. He says it would deliver up to 540 homes in Canberra, the place he represents, but more than 2,000 are said to be lost as the National Rental Affordability Scheme winds up. So, in a net sense, the housing problem is going to get worse. Is that a fair point from him?
LEIGH: If you look carefully at what David Pocock is saying, he’s not allowing the perfect to be the enemy of the good. Certainly, he has been arguing for a larger package, but he hasn’t said that he would vote against the $10 billion Housing Australia Fund. That Housing Australia Fund has specifics set aside for housing for veterans, for older women facing homelessness, for families fleeing domestic and family violence. I honestly don’t know how the Greens manage to sleep at night saying that they are going to vote against housing for these vulnerable groups. I understand they would like to do more, but you don’t get to that goal by saying, “No, we’re not going to do anything.”
CONNELL: But what Senator Pocock is actually saying is they’re not doing more. The net effect is less with the ending of the National Rental Affordability Scheme.
LEIGH: Well, the National Rental Affordability Scheme was started under the Rudd-Gillard Governments. We’re also investing through the national housing agreements across the States. We’re putting money directly into homelessness services. There’s a whole range of these housing programs that Minister Julie Collins is working on at the same time.
CONNELL: Is he right the net impact is actually going to get worse?
LEIGH: Well, the end of the National Rental Affordability Scheme has been coming for a long time. The point is now: does the Senate want to support the Housing Australia Future Fund? That Housing Australia Future Fund, $10 billion set aside, operating off-budget in the interest of getting more social and affordable housing out there. And Minister Collins has lived this, as has the Prime Minister. They both spent parts of their childhood in social housing. They know what they’re talking about and they want to deliver for communities right across the country, including here in the ACT.
CONNELL: There was a bit of debate over the machinery bill for the Voice, the Indigenous Voice to Parliament. DGR status, so, you know, charitable status effectively for donations to the no campaign, was a deal done on that? Will that no campaign now have that status?
LEIGH: There’s not a single entity that’s running the no campaign. As I understand it, there will be multiple entities coming forward, and certainly we will consider all of those applications as we do for any DGR specific listing application. These don’t go –
CONNELL: Is the default position, though, that they would be eligible? They’ve got to tick whatever box, but that cause, supporting the no case, would be eligible for DGR status?
LEIGH: I don’t think anyone is saying, Tom, that if you and I decided to set up a charity tomorrow and campaign for the no case, that charity will then automatically be written into Australian tax law as getting deductible gift recipient status. We will assess each proposal as it comes to us, but we need to do so from a position of fiscal responsibility. We understand we were left with a trillion dollars of Liberal debt and –
CONNELL: But hang on –
LEIGH: – and that allowing deductible gift recipient status has a budgetary cost. So –
CONNELL: It’s going to be a drop in the ocean compared to Australia’s debt.
LEIGH: Well, we will assess these as they come forward. We understand the importance of being able to have a conversation on this. This is a big national conversation for the country.
CONNELL: But the deal done – I’m trying to understand the deal done. So, that DGR status for a no campaign will be able to qualify. I understand it’s not automatic, but that cause, if you like, can qualify?
LEIGH: We will certainly assess those applications on their merits as they come through. There is a timeline on these things. We’ll do our best to work through them as expeditiously as possible, but in good faith; we can’t just be ticking an organisation that comes through without having done the necessary paperwork.
CONNELL: Right. But there will be organisations, you’d imagine, that will do the right paperwork and will get that status that are campaigning for no?
LEIGH: That might well be the case. You look at Australians for Indigenous Constitutional Recognition, a yes case organisation. They began the process of looking for deductible gift recipient status in 2021 and then were finally granted it just in last October’s Budget. So, it has been a long run-up for other organisations. I bet there’s organisations watching this show now that have put in for specific listing and been knocked back and they wouldn’t us to be short-circuiting the process.
CONNELL: Right. Andrew Leigh, we’ll have to leave it there. Thank you.