Tuesday, 29 September 2026

Topics: interest rates; inflation.

E&OE……………………..

Carla Bignasca: Well, just about three hours ago, we heard the bad news from RBA Governor Michele Bullock, the cash rate has been lifted to 4.6%. It's bad news for so many of us, so many Aussies who'll have to absorb extra payments on their mortgage, I think for people who rent as well. This government has a spending problem, it's hurting everyday Australians. Joining us now to react is the Shadow Treasurer, Tim Wilson. Tim, good afternoon to you.

Tim Wilson: Good afternoon, Carla.

Carla Bignasca: Tim, if there was no war in the Middle East, would inflation be as bad as it is now?

Tim Wilson: In short, the headline would be lower, but what they call the underlying or the core inflation would basically be roughly the same. This is the problem. That's why on the 3rd of February this year, there was an interest rate hike. That's why we've had three already until today, and now we've had our fourth because we have a domestic inflation problem, which is essentially compounded by international events, but the domestic problem persists, and if Iran ended tomorrow, we would still have an inflation problem.

Carla Bignasca: And Tim, that's the thing. The question is so simplistic, and yet the spin from the government would have you believe that it's all really in part the major fault of this conflict in the Middle East. But the reality is for all of us, we know that we were headed this way, way before conflict started.

Tim Wilson: Yep, and that's why other countries might be moving to increase their interest rates now, but they haven't been doing it in the same way until this point, and so, what we've been set up as a nation is a situation where we are going to go into this worse than other countries. We're the second-highest in the developed world in terms of interest rates, and a lot of households are already looking at it and saying, we don't have any more to cut from our household budgets. And now we're going to face potentially one, maybe two, and possibly three. So, we're talking about another 0.5% after this interest rate rise today on household budgets, and people don't have any more room to give.

Carla Bignasca: Yeah. It is tough. I guess, in your view, where are the areas that we need to cut back? Because yes, there is the conflict in Iran, the impact on petrol prices has been considerable because of the global oil price, but this spending has been underway across both governments, can I say, since COVID times.

Tim Wilson: Well, there's a big difference between the measures that were during the COVID period, which was to support households. But, you know, in saying that, a lot of money was spent and, you know, I think some of it was too much, and of course, we've had the continuation under this government. We now have the government taxing people more than anytime outside of a commodities boom. So, there's big spending going on. Where do we need to cut it back? Clearly, bureaucracy and the size of government is too large. We've already outlined that housing bureaucracies that don't build houses are unnecessary and need to go. We need to look the same at net-zero bureaucracies, which are focused on nothing more than keeping public servants in jobs and pushing down regulation. But we need to make sure that we address the graft and corruption in big government programs. The government has finally acknowledged this in things like the NDIS. All of that is, of course, stimulating demand, and of course, it's feeding inflation too.

Carla Bignasca: Okay. I want to know what your solutions might be in this space. Because at the end of the day, we have to live with the fact that prices are just not going to come down. Inflation, we can get under control, but the solution here for the average household really is to get real wages up, increase productivity. Both the Treasurer and Michele Bullock have said that productivity is the answer. If you had a crack at it today, if we had an election and you were put in the top spot, what would you do?

Tim Wilson: So, starting position is we need to get energy costs down and we announced a series of policies focused on getting more oil and gas out so that we can get cheaper energy into the grid, and also extending out the life for existing energy assets so that we'll get cheaper energy. We then need to stabilise the tax situation and make sure we get more investment. One of the biggest problems out of the last federal budget is people are not confident to invest in the Australian economy right now. These are necessary pillars if we want to then go on to grow the economy faster than public spending and make sure that we get productivity and improvement in living standards. Instead, at the moment, we have public spending outstripping private demand. As a consequence, mortgage rates are going up and people are going to the supermarket more and they're putting more in their trolley and paying more but getting less.

Carla Bignasca: My guest right now is Tim Wilson, Shadow Treasurer. As a small business owner, does it make you disheartened the idea of all this red tape, all this bureaucracy, everything that is happening, this lack of confidence in investing in Australia?

Tim Wilson: Absolutely. I mean, small businesses at the pointy end. Households and small business are at the pointy end of these decisions. This afternoon, we were down with Angus Taylor in my electorate, meeting with the small business owners, and they were telling us how consumers, every time these decisions come through, people spend less, they're less confident about their future, and it ultimately means that it makes it harder for them to keep their doors open, and of course, we're not just seeing in terms of how much people spend, we're seeing it in a huge cost of regulation. I've been in Queensland and rural New South Wales recently, and people tell us about the cost of trickle-down regulation from big companies being pushed onto small businesses, and every time they're filling out paperwork, it's less time they can spend on serving customers and growing their business.

Carla Bignasca: Tim, I want to play you if I can something from the Treasurer addressing this today, aside from blaming the conflict in the Middle East, this question of productivity.

Jim Chalmers: We've got a productivity challenge in our economy. That's the motivations behind the biggest and broadest productivity package in a budget that we've seen for some decades. Now you don't turn around a productivity challenge which has been that entrenched for so long quickly. Not in a couple of months, certainly not in a couple of years either. We've had this challenge for a couple of decades now, it'll take some time to turn around.

Carla Bignasca: What are they doing to turn things around? What would the Coalition do to turn things around and improve productivity?

Tim Wilson: Well, I don't know what the government is doing to improve productivity, because under their time frame, it's gotten worse and now it's technically negative. What we would do, as I said before, is make sure that we get energy prices down. That is one of the most important things we can do, because energy is the economy. We'd make sure, of course, that we cut back on duplicative regulation that is distracting industry. The Australian Institute of Company Directors did a report last year that said there's been a growth of $100 billion of Commonwealth regulation over the past decade. We need to pair that back, because all of that is deadweight cost in the economy and time. But more than anything, we actually just need Australians to want to back themselves, so we have a nation where hard work pays off. That's why we've proposed our Tax Back Guarantee to make sure that if you earn your income, inflation doesn't come and steal it, and of course, people are in a position then to be able to get on and build their own lives and back small business.

Carla Bignasca: Okay. The way I see it right now, we need to make housing affordable, so we need to build houses, we need to increase productivity, we need age care, we need NDIS packages to be created so that we can clear out our hospital beds for the people that need them in an emergency, we need major transport projects underway. But in order to do that, we need to spend money, and isn't that inflationary?

Tim Wilson: Well, it's about how you get hierarchy and priorities right. At the moment, what the government is doing is spending money to cover for the lack of investment in the private economy. What we need to do is get investment in the private economy so that we grow the economy, so that then we have money to spend. Whereas at the current economic model, what we're doing is letting inflation eat away at households and small business, and government is using taxpayers' money to create the veneer of high employment, but in practice, we're just eating away at our foundations.

Carla Bignasca: I very quickly, I just want to take you back to a moment that you brought us earlier this year. Now I'm detecting that you sound a little bit congested. Have you got a cold or something at the moment?

Tim Wilson: I am, I have got a cold.

Carla Bignasca: Well now I feel guilty for putting this on you. But I want to just take a moment to go back to sort of earlier in the year during question time, can we just have a listen please?

Tim Wilson: The Treasurer did start the inflation fire. The inflation's burning, while the Treasurer is squirming, the Treasurer did start the inflation fire. Yes, he put petrol on it, and he cashed organized crime to fuel it.

Carla Bignasca: Shadow Treasurer, I don't want you to do a repeat of the performance because you are a bit congested, but that song is as relevant now as it is then. Have you got something else in the works, perhaps?

Tim Wilson: No, but it shows you that I've been consistent on this message and bang on, and the government has denied it every step of the way. If Australians could pay their mortgage with Jim Chalmers' excuses, they wouldn't be under strain. The Treasurer did start the inflation fire. He does keep stoking it, and that is why Australian households are going backwards and he should hang his head in shame.

Carla Bignasca: I like the performative aspect of, well, as well as, you know, a little bit of light relief.

Tim Wilson: Well, yeah, the problem is at the moment, Australian households, a lot of people will be sitting around their kitchen table tonight trying to figure out what little they can cut out of their budget, and so, it's a challenging day for Australians, but it's important that we keep the focus on how we can fix it and give people hope.

Carla Bignasca: Tim Wilson, I appreciate your time. Thank you so much for joining us on 4BC Drive.

Tim Wilson: Thank you.

[ENDS]