The Hon Andrew Leigh MP
Assistant Minister for Productivity, Competition, Charities and Treasury
E&OE TRANSCRIPT
RADIO INTERVIEW
2CC RADIO CANBERRA, LIVE WITH LEON DELANEY
WEDNESDAY, 4 NOVEMBER 2026
SUBJECTS: Inflation; Middle East; Albanese Government’s responsible economic management; Interest rates; Commonwealth funding arrangements for the ACT
LEON DELANEY: Now the Assistant Minister for Productivity, Competition, Charities and Treasury, and of course our very own local member here in the federal seat of Fenner, Dr Andrew Leigh. Good afternoon.
ANDREW LEIGH: Good afternoon Leon, great to be with you.
LEON DELANEY: When is your government going to admit to mismanaging the economy?
ANDREW LEIGH: Well Leon, we know that the primary driver of inflation is global oil prices, that's why we're seeing inflation going up around the world. This isn't unique to Australia. We're seeing inflation kick up in other advanced economies, in some cases by more than it has increased in Australia.
We're obviously doing our part. The federal government accounts for about $1 in $5 of demand, and we've made $180 billion worth of savings since we came to office, and we'll continue to make responsible savings in order to do our part in pushing inflation down.
LEON DELANEY: Okay, now that's almost word for word what you told me last time when we were talking about the latest inflation figures, but the fact is…
ANDREW LEIGH: I'm glad the facts haven’t changed.
LEON DELANEY: Well, the thing is the decision made by the Reserve Bank yesterday tends to suggest otherwise. Now, if the Reserve Bank has been warning the government for the best part of this year now that it needs to control its spending better, and I know the Reserve Bank is not in a position to direct the government on policy, but it's been dropping enormous hints and we've seen the figures that indicate that present federal government spending is at the highest level it's been as a percentage of GDP since the days of John Howard, when the government was rolling in unexpected revenue.
Here we have a situation where it's a clear indication that government spending is part of the inflation problem and it's not me saying that – it's the Reserve Bank saying that – it's a cavalcade of economists saying that, and yet you and your federal government colleagues refuse to accept that?
ANDREW LEIGH: Well Leon, let's go to what the Reserve Bank said yesterday. They said that public demand was weaker than expected over the first half of the year. Over the last financial year public demand growth halved, private demand growth almost tripled. And it is very clear that there are many other factors going on in the economy apart from what the federal government is doing.
Of course we're doing our part, that is about bringing down unnecessary spending. We came to office with sports rorts, car park rorts and all the rest, and we've made significant savings there. It's also about the quality of spend, better evaluating government programs through our Australian Centre for Evaluation, spending on things that matter to Canberrans such as boosting bulk-billing rates, and ensuring that we're not spending in areas that aren't necessary.
LEON DELANEY: Okay. You mentioned sports rorts. Of course the government has its own rorts issue at the moment, doesn't it? With those grants that were invitation only, including the $6 million for the golf club in the Prime Minister's electorate?
ANDREW LEIGH: It's just the way election commitments always operate, Leon. Election commitments by both sides of Parliament are made in this way. There's nothing exceptional about that. What we saw under the Coalition was a program which was purporting to be a merit-based program but was anything but, and that's why Bridget McKenzie had to step down as the responsible Minister.
LEON DELANEY: Alright. Back to the interest rate decision, and yes the Reserve Bank Governor did identify a number of factors, including international conditions – the Middle East conflict remains unresolved, she said, and also of course the impact of other international factors. These are issues that obviously the Australian Government can't influence, but then how can the Reserve Bank influence them? How does changing interest rates impact on US Government policy and the conflict in the Middle East? It can't, can it?
ANDREW LEIGH: Well it doesn't, they're responding to the circumstances that we've been dealt. Their mandate is a dual one. It's about maintaining full employment and price stability. They're looking to do that, and you would have seen the split decision yesterday reflecting differences even among our best economists as to how best to manage this. We don't comment adversely on statements made by the Reserve Bank. They have a difficult job to do in an environment in which back in August they were forecasting a global oil price around $81 a barrel, and now in recent weeks we've seen the global oil price going over $110.
It is a significant challenge and that's why inflation is rising around the world. The sooner we can bring this conflict in the Middle East to an end, the better. I do hope that cooler heads prevail and that that conflict is brought under control. That's the biggest thing that anyone can do in order to bring price stability back to the Australian economy.
LEON DELANEY: Which brings us back to the blunt instrument argument, of course. If the decision to change interest rates can't address those issues; the Middle East conflict and any other external factors – if changing interest rates can't rein in those factors that are influencing and putting pressure on inflation, then surely the obligation then falls back on to the federal government, which does have the option of changing fiscal policy and spending less?
ANDREW LEIGH: Well look, what we're doing is investing in productivity reforms, which is something that the Reserve Bank has flagged up. We had a huge productivity package in the last budget, estimated to increase long-run annual GDP by about $13 billion. Getting rid of non-compete clauses from next year, revitalising national competition policy, all of that is about increasing the speed limit to the economy and taking off some of those supply side pressures that the Reserve Bank has flagged up.
LEON DELANEY: Yeah, but again I come back to this concept, it's well accepted that the Reserve Bank only has the tool of interest rate decisions at its disposal. It's the only thing it can do. Surely there's more scope for the federal government to take stronger action across a range of different fronts that the Reserve Bank can't address?
ANDREW LEIGH: Yeah I mean, look, it's easy to call for spending cuts in the abstract. The harder question is to find them, and that's why Katy Gallagher and the team around the Expenditure Review Committee table have done so much work in delivering that $180 billion we've saved, including $38 billion in the National Disability Insurance Scheme just in the last budget.
That is important work in constraining the impact of the federal government on demand. We also have measures such as taking away the age testing of the private health insurance rebate that are being opposed by the Liberals and Greens. Measures like that would make a difference in terms of curtailing inflation, as well as of course making the system fairer.
LEON DELANEY: Yeah, well it wouldn't make the system fairer, that's why there's so much resistance to the move. It's changing the goal posts after people have retired and that's just not fair to those older Australians, especially people who depend on an age pension and yet still manage to scrimp and save and make sacrifices because they believe maintaining their private health insurance is important, and your government has just snatched that away from them, or tried to?
ANDREW LEIGH: Well Leon, did you know when John Howard put this in place he had to change the Age Discrimination Act because otherwise that change would have breached it? Ours is a measure which just says that the 66 year-old Australian faces the same income test for private health insurance as a 64 year-old. It still means that somebody who is in that retired cohort will get around 25 per cent rebate on their private health insurance, depending on their income. It makes the system fair for people of all ages.
We don't have different tax scales for people according to age, and so too the tax rebate for private health insurance shouldn't differ by age. We're investing massively in aged care packages, and this provides us the fiscal scope to spend more on aged care than they have before, which is a big demand from older Australians.
LEON DELANEY: I would argue though that much of this debate around intergenerational equity has been misguided because it is based on the false assumption that it's some sort of intergenerational war between the older generations and the younger generations. It fails to recognise the truth of life, that if we're lucky, we will pass through every stage of life and it's only fair and reasonable that if you're lucky enough to live to an advanced age, all of those years of being a contributor to the economy and paying your taxes and working hard should amount to something. And if there's a reward towards the end of your life I don't see that as unfair, unjust or inequitable. I see that as reward for years of being a contributing member of society, don't you?
ANDREW LEIGH: Well that's why we've increased spending on aged care packages. It's why we're spending so much on the pension. It's why we're strongly committed to ensuring that we have better quality of aged care, getting nurses back into aged care homes. Our government has worked very hard to ensure better circumstances for older Australians. At the same time we're looking at measures that are fair right across the economy. And if you ask young Australians now what the biggest issue is for them, they say it's housing affordability.
LEON DELANEY: Yeah and there's no doubt about that, but there are other issues involved with housing affordability, but changing the private health insurance won't fix that?
ANDREW LEIGH: No, that's about funding the aged care packages. Housing affordability was a centrepiece of the last budget too and that is an intergenerational equity issue. It's one that came last year at the Economic Reform Roundtable and the reforms we made to capital gains, negative gearing and trusts are reforms that have been called for up to 50 years in some cases going back to the Asprey Review. The reform is backed by E61, Grattan Institute and Tax and Transfer Policy Institute at ANU, which sees the system made fairer in order that young Australians can get a crack at home ownership.
LEON DELANEY: Okay, we've got an email in from a listener, Mark, who says, ‘What about cutting out Centrelink benefits to people who are not permanent residents and also NDIS entitlements?’ What exactly are the entitlements for people who are in Australia but not permanent residents?
ANDREW LEIGH: Look, they're more limited than they are for other Australians. Very happy to come back to you with the details of who gets what there, but in many cases we're talking about people who have been in Australia for a very long time, people who are paying taxes, people who are contributing here, and so those arrangements are about people who are being ongoing citizens in the economy.
Typically these aren't available to somebody who is, for example, a temporary migrant. You're talking about permanent migrants here and the benefits that they get. Overwhelmingly of course, migrants are net fiscal contributors to the budget.
LEON DELANEY: Yeah, in other words productive members of the community. I'm going to run out of time, but I really want to address one other important thing. Your colleague, the federal Member for Bean, David Smith, is out of the electorate today and not available but he's thrown a hand grenade in the form of his submission to a legislative assembly inquiry, which has suggested that if Commonwealth funding for the ACT had kept pace with increasing costs over the decades since self government, the ACT would be entitled to somewhere between $1.3 billion and $1.8 billion a year extra from the federal government – more than enough to cover the ACT's ongoing budget deficit.
Now, I'm pretty sure your federal colleagues, including the Finance Minister, might not enjoy those remarks terribly much, but what's your response?
ANDREW LEIGH: Well look Leon, there is no stronger advocate for Canberra than Dave Smith, he's a terrific Member for Bean and somebody who will always put the interests of Canberrans first. I'm pretty passionate about Canberra getting our fair share. In the last Liberal budget before we won office Canberra got about a fifth of our fair share of infrastructure spending. Now with Katy Gallagher as Finance Minister, we're getting our fair share, big investments in light rail, in the scoping work for the new pool and the new Convention Centre.
So look, I'll look carefully at what Dave Smith has said there, respecting the independent process of the Commonwealth Grants Commission and recognising, you know, our conversation began with you saying that the federal government should be spending less, so it's hardly a time when we ought to go out there splashing cash around.
LEON DELANEY: It should be spending less overall but more in the ACT, Andrew, that's the proviso?
ANDREW LEIGH: This is often the argument one hears, Leon, you should spend less on everyone else and spend more on me!
LEON DELANEY: Yes!
ANDREW LEIGH: I will continue to be a strong advocate for the ACT and for the fiscal discipline that the Commonwealth Government's showing in order to put downward pressure on inflation.
LEON DELANEY: You mentioned infrastructure there and that's also intriguing, because there was a Senate Committee which was looking at infrastructure and the ACT Government made a submission to that Committee requesting or arguing in favour of greater Commonwealth contributions to infrastructure. The inquiry apparently, what from what I read on region media, in the report that it's delivered has rejected that suggestion?
ANDREW LEIGH: There are plenty of cranes in the sky around Canberra right now Leon, and a lot of those are Commonwealth funded. We've just had the work wrap up on the War Memorial, we've got the National Security Precinct, we've got the work going on the light rail, we've got the work on the Canberra Theatre and then we've got the work on the pool and the Convention Centre.
So infrastructure is running a pace, and of course right now we've got a big data centre boom which is putting demand there, and the biggest Commonwealth housing building project that we've had in a very long time. There's more houses being built right now in Australia than ever before, about a quarter of a million homes under construction. That's how we are seeing an infrastructure boom under an infrastructure Prime Minister, and the ACT is certainly getting our fair share of that.
LEON DELANEY: And that's even before we start work on a new sports stadium at Commonwealth Park, isn't it?
ANDREW LEIGH: Well, that's certainly a case that's being made by many. I think one of the challenges is just making those finances stack up. The last time that the ACT Government did costings around this, I think it was in the order of $3 billion. So that's about…
LEON DELANEY: Hogwash!
ANDREW LEIGH: $15,000 for every Canberra household, and that's of course a pressure that would be placed on budgets if that was to be raised.
LEON DELANEY: Yeah, that calculation's just hogwash. That was done in order to convince people it was too expensive. But anyway, we'll see how the current proposals unfold.
ANDREW LEIGH: There are very few very few big infrastructure projects that have come under budget over recent years Leon.
LEON DELANEY: This is true.
ANDREW LEIGH: So you know, I think when someone does an infrastructure project costing, history would tell you you're wise not to think that you're going to get it for a fraction…
LEON DELANEY: I know, but $3 billion in Canberra and $600 million in New Zealand and about $700 million in Tasmania, it doesn't add up, does it?
ANDREW LEIGH: This has been the best estimate that we have on paper. You know, I'm open to being persuaded that there is a bargain option out there that can be built, but right now I'll trust the estimates that have been done by the ACT Government.
LEON DELANEY: Thanks very much for chatting today.
ANDREW LEIGH: Thanks as always, Leon.
LEON DELANEY: Thank you. Dr Andrew Leigh, the federal Assistant Minister for Productivity, Competition, Charities and Treasury, also our very own local Member for the federal seat of Fenner.
ENDS