The Hon Andrew Leigh MP
Assistant Minister for Productivity, Competition, Charities and Treasury
TRANSCRIPT
E&OE TRANSCRIPT
TV INTERVIEW
ABC AFTERNOON BRIEFING, WITH PATRICIA KARVELAS
MONDAY, 2 NOVEMBER 2026
SUBJECTS: Interest rates; Inflation; Middle East; Albanese Government’s responsible economic management; Labor’s productivity reforms; Australian Public Service; Australian house prices; ACTU; Artificial Intelligence; One Nation
PATRICIA KARVELAS: I want to bring in the Assistant Minister for Productivity, Competition and Charities, Andrew Leigh. Andrew Leigh, thanks for joining me.
ANDREW LEIGH: Pleasure, Patricia.
PATRICIA KARVELAS: Why is the Prime Minister calling interest rates a blunt instrument?
ANDREW LEIGH: Well, I think it's the acknowledgement of the simple fact that the Reserve Bank simply has one tool at its disposal, and that tool has disproportionate impacts across the economy. Part of it operates through the exchange rate channel, part of it operates through household mortgages and part of it operates through business borrowing costs.
But it is still the best way that advanced countries have come at getting long-term inflation under control. And that's why an independent central bank is a feature of most advanced countries.
PATRICIA KARVELAS: It is a feature. So when he's speaking like this, is it his way of jawboning the RBA?
ANDREW LEIGH: Not in the least. I think it's an uncontroversial statement with which most economists would agree. But Patricia, what we're seeing around the world is upward pressure on prices as a result of the war in Iran. In Australia, the latest CPI figures showed that automotive fuels have gone up nearly 25 per cent over the last year. And that's why we're seeing inflation increases right across the advanced world; in some cases bigger increases than we've seen here in Australia. Andrew Hastie's a nice bloke, but he's dead wrong when he claims that government spending is the main driver. Government is about $1 in $5 of total demand in the economy, and the Reserve Bank has said that recent budgets haven't materially affected their estimates of the impact on demand.
PATRICIA KARVELAS: Okay, but the Reserve Bank themselves say it's a domestic issue as well. That is something you can have a massive influence on. Should there be net cuts, net savings in MYEFO?
ANDREW LEIGH: Well, we've made significant savings; $177 billion over the course of our time in office, including $38 billion in the most recent budget on the National Disability Insurance Scheme. Obviously, there are significant pressures on the budget as well. We’ve increased bulk billing now, and so the number of fully bulk billing doctors is up from 3 in 10 to 5 in 10. We've put in place many more aged care packages. We've increased support for some of those key defence procurement decisions, including submarines. And at the same time, we've made careful spending decisions and savings that have seen the deficit for last year come in at half what it was forecast to be at the time when we came to office.
PATRICIA KARVELAS: So that's what you've done. And still we have an inflation problem. So, I wonder if Australians hear that and they think, ‘Well, that's in the past’. Do you accept that you need to make further and deeper cuts to have a real impact on the domestic inflation problem in the country?
ANDREW LEGH: Patricia, the principal driver of inflation is what's going on in the Middle East. The impact on the CPI of the changes in transport inflation was almost 1 percentage point…
PATRICIA KARVELAS: But you can't – with respect, I have to interrupt. You cannot control that, but you can control what you do here. And all of the economists and the RBA say what's going on here is an issue. No-one is contesting that. The government has also said spending is something you're looking at. So, do you accept that you need to lower spending across the economy?
ANDREW LEIGH: We’ll always look carefully at spending decisions, including some that we've put forward to the Parliament but which haven't received support, such as ensuring that the private health insurance rebate is means tested and not age tested. The work that the Expenditure Review Committee has been very rigorous, and I know that rigour will continue into the Mid-Year Economic and Fiscal Outlook.
We do though need to think, Patricia, also about the quality of spending. Cutting the health budget isn't going to bring down the global oil price. Australians desire a government which is as careful about spending taxpayer dollars as households and businesses are about their investment decisions. And that's what we're delivering. The evaluation unit we've set up, the Australian Centre for Evaluation, is very much about ensuring we're getting value for money for taxpayer dollars. And the work that we've done through the productivity package is about investing in the long-term sources of productivity. The latest budget estimates that'll boost GDP by around $13 billion, which is more than $1,000 for every Australian household.
PATRICIA KARVELAS: Can we expect more cuts to the public service?
ANDREW LEIGH: We have right-sized the public service and ensured that much of the work that was being done by consultants and contractors at a higher cost was brought in-house. That's important in terms of delivering better services, bringing down wait times for veterans support, for example, or ensuring that Centrelink phone numbers are answered quicker. That work will continue. There will be some parts of the public service where programs are wrapping up and public servants will be moving to different programs…
PATRICIA KARVELAS: But that's moving around what you've already got. Does there need to be a deeper reduction in the core numbers in the public service?
ANDREW LEIGH: Look, I think the public service numbers are approximately right. Public servants as a share of population aren't that different from where they were at the end of the Howard era. It's important that we have the value for money here, and you don't get value for money simply by axing public servants and boosting up consultants and contractors as the Morrison Government did.
PATRICIA KARVELAS: Okay. According to this new data from Cotality, the speed of the decline in home values is tracking at the fastest pace seen over the past 40 years. At what point do you get worried?
ANDREW LEIGH: Well, this is principally going to be driven by interest rates. They're the main driver of what's going on in the house price cycle. The budget decisions that were announced this year play a part, but a fairly modest part, Patricia. This is a normal part of the housing cycle. We see ups and downs regularly, including in 2017 and 2019. So, fluctuations in the housing market are not unusual. Of course, lower prices will always be welcomed by buyers and higher prices will always be welcomed by sellers. And so, there's going to be different dynamics according to where you are in the market.
PATRICIA KARVELAS: Just finally, the ACTU is protesting outside the central bank today. Do you think it's reasonable to protest the central bank doing its job?
ANDREW LEIGH: Well look, I think it's up to people where they protest and I share Andrew Hastie's view that I'd be very reluctant to get in the way of people's freedom of speech. The Reserve Bank will make its decision based on the expert evidence that it sees before it. That's going to be the principal basis on which they make the decision for tomorrow.
PATRICIA KARVELAS: I have to ask you the same question I put to Andrew Hastie, another Andrew, in relation to an AI video made by the Victorian Labor party, which looks pretty real of Jess Wilson, the Victorian Liberal leader and Warren Pickering, the One Nation leader. Is it appropriate to be doing that? Is that kind of the lowering the temperature that you talk about?
ANDREW LEIGH: Look, I think if you're putting up AI videos they ought to be pretty recognisably AI. Whether or not you brand that or simply make it clear is important. What you don't want is anything which is misleading voters and suggesting that it's a real video when it's not. That's something we've seen overseas. I don't think this video crosses that line.
PATRICIA KARVELAS: Don't you really? Because I think it looks pretty misleading. I think if you're an average person, you'd look at that and think it's maybe them?
ANDREW LEIGH: Look, different people will come to different judgments. My basic philosophy is that voters shouldn't be misled. We do see a lot of AI out there at the moment. It’s going to be a feature of what we observe and one of the reasons for our Digital Duty of Care is so that Australians can choose to see a friends-based feed rather than algorithmically-based feed. They can choose to see a little bit less AI-generated content if that's their desire in their feed.
PATRICIA KARVELAS: Andrew Hastie also says Pauline Hanson should declare where she'll run, given she has shown ambitions to be Prime Minister. Do you think she should do that too?
ANDREW LEIGH: We see an awful lot of critique from Pauline Hanson, but very little in terms of actually what she would do. So yes, it'd be useful to know where she'd run but also it'd be useful to know what her policies are. What's a single policy put forward by One Nation that would boost wages and bring down prices? How would One Nation tackle productivity and housing challenges? You know, they are all attack dogs but they fail to put forward the alternative policy proposals that I think Australians demand of someone claiming to be an alternative government.
PATRICIA KARVELAS: Thank you so much for your time.
ANDREW LEIGH: Thanks Patricia.
PATRICIA KARVELAS: That was Assistant Minister for Productivity, Andrew Leigh on tomorrow's expected interest rate rise, government spending, falling house prices and AI.
ENDS