Tuesday, 29 September 2026

Topics: interest rates; inflation; government spending; productivity; One Nation polling; Victorian politics.

E&OE……………………..

Mark Doran: So that is the words of the RBA Governor, Michelle Bullock, who fronted the media. It wasn't long ago they didn't give us any information about it. They just put interest rates up or held them firm or occasionally put them down. I think Michelle Bullock spoke for about an hour today. Tim Wilson is with us right now, the Shadow Treasurer. Good afternoon, Tim. I won't keep you for an hour, but I'm very keen to talk to you about your thoughts on this. The RBA basically placing inflation over jobs.

Tim Wilson: Well, thanks, Mark. The RBA has got a mandate to make sure that it gets inflation under control because if it doesn't, prices continue to rise and people not just pay more in their mortgages, but they also go to the supermarket and they pay more and get less. And this is the problem of what happens when the government continues to spend faster than the growth in the economy. And that's why Australians are doing it so tough right now.

Mark Doran: So the RBA is independent of the government. I know there are politics at play, and I'm not going to cut you off. I'm certainly going to let you take your free kick. But can I ask you your opinion, the Coalition's opinion, of how the Reserve Bank of Australia, the independent Reserve Bank of Australia, is handling its role in managing our monetary policy?

Tim Wilson: Well, the Reserve Bank's hand has been forced at the end of the day by government policy. They look at the broader economic circumstances. They see what's happening with inflation, but they don't control one of the key drivers in inflation, which is domestic demand, which is being fuelled by government spending. And so I think they're being forced into increasing interest rates. That's why it's so important to get to the central problem, which is government policy that is basically playing a game of interest rate chicken with the Reserve Bank. And on this occasion, they've blinked. And even worse than that, because the government won't contain its spending, they've already flagged there may be even further interest rate rises to come.

Mark Doran: You heard from Michelle Bullock, or our listeners did. You've heard from her all day and may well have spoken to the Reserve Bank and members, I'm not sure how that works. But they referenced global… Michelle referenced global headwinds being partially to blame. Do you agree with that?

Tim Wilson: Well, they're part of the conversation, but normally they sort of strip out the international temporary factors like Iran. There's obviously a big conversation about global demand for capital. So what is within our control as a nation? And the key thing that's under our control is what the government is spending money on and how much they're spending. And they're spending more than the economy is growing. Inflation is too much money chasing too few goods and services in the economy. And because it continues to overspend and go into deficits, it means that it pushes up inflation and eventually flows through to interest rates.

Mark Doran: Productivity was also referenced, and the Governor took some time in talking about that. Is it a basic supply and demand? That seems to be the answer to all economic problems, but a basic supply and demand equation here? We're not producing enough, but we're using plenty?

Tim Wilson: Essentially, yes, but the problem is that productivity under this government has gone backwards and is now in negative territory. What we have is essentially Australia is not producing as much as we're consuming, so that will have an inflationary effect. What we need is a government to do things like grow the economy, make sure we attract investment, back Australians to get ahead, particularly small businesses. And instead, in the last federal budget, they did the complete reverse. They smashed them with higher taxes. They've corroded confidence and a pathway for future investment. And that means that inflation is being stoked. And so it means that people are paying higher prices on their mortgage. And when they go to the supermarket, they're paying more and getting less of their trolley.

Mark Doran: And that's the equation, I think, or the part of this equation that's interesting to the listening audience, many of whom will, to be fair, listening to this and appreciating it, but struggling to follow it and understand it. It is pretty complex. It's easy to understand if you've got a mortgage, which 33 percent of the population do. Higher interest rates, higher cash rate means you're paying more, as I said off the top, $91 more now per month to service a $600,000 loan or a mortgage. This year that's $364 extra you need today than you did at the start of the year. But what about those, and there is 33 percent of the population, or roughly, that rent, that don't have the mortgage, where do they feel the pain?

Tim Wilson: Well, they feel it at the supermarket because inflation will continue to push up prices in every part of expenditure across the economy. But the principal place is in places like the supermarket where they'll go and they'll buy a trolley or a basket of goods and they'll get less for them than they used to get. But of course, we should not ignore the impact it's going to have on mortgage holders. A new mortgage holder will be paying about $31,000 more as a consequence of the 16 interest rate hikes under this government, and that is a serious impost on household budgets.

Mark Doran: Okay, so now comes the free kick. You are the Member for Goldstein in Victoria, so you understand my football analogy. I feel now, Tim Wilson, Shadow Treasurer, like I'm an umpire who's paid a free kick to you in the back pocket, and I've just given you two 50-metre penalties and put the man on the mark right in the goal square. You cannot miss. Here's the political free kick. Jim Chalmers, the Treasurer, said today in response to this interest rate of 4.6 percent, the highest that we've had in this country in 15 years. He said, quote, ‘Australians are paying a very hefty price for that war in the Middle East. And today, that price became a bit steeper with the decision from the independent Reserve Bank. So we do take responsibility for our part of the fight against inflation. That's why we will continue to manage the budget in a responsible way, roll out cost of living help in a responsible way and deal with the longer-term challenges as well.’ That's what Jim Chalmers says. You are his shadow. What do you say?

Tim Wilson: Well, the reality is it's all just bunkum. If Australians could pay their mortgages with Jim Chalmers' excuses, they wouldn't have problems at the moment. The real problem is the government, constantly faced with economic headwinds, is spending more. They're spending more, faster growing than the economy overall. That's why we have an inflation problem. No one's pretending there aren't international factors, but the problem is coming from domestic demand. The RBA Governor outlined that in a press conference today. And until the Treasurer kicks his inflation addiction and his spending habit, we will not see inflation down. We will not see a reduction in interest rates. And people will pay more in their mortgages and they'll pay more at the supermarket and get less for it.

Mark Doran: Okay. All right. We thank you very much for that, Tim. As I let you go, can I just take you back to yesterday, while I've got you, the latest Newspoll? One Nation, 30 percent of the primary vote nationally, leading the ALP, 29 percent, and your Coalition back on 19. No longer a protest party, now a potential party of power. I'm not sure whether the Treasury spokesperson will be able to eloquently describe what's happened today like you have done, but Barnaby will be asked. They're very much in the picture now. You no doubt did, I watched, and many of our listeners would have watched, on Four Corners last night a program called Beyond the Orange Wave that went behind One Nation. And there was a line in that that I reckon summed it up. The support for One Nation that that Newspoll shows against you and against the ALP is representing those who are angry with the establishment. So away from the interest rate decision today, where are we at on a political standpoint?

Tim Wilson: Well, I don't think you can disconnect it because inflation changes societies. What we're seeing is, because of the Albanese active inflation agenda, we are seeing a corrosion of the middle class where people are working harder and they're actually going backwards. People build resentment and are angry and they want a change of government. The big challenge for all those voters out there when they're going to the ballot box is, do they think, and this is what public opinion polling shows, in a contest between One Nation and Labor, Labor wins. In a contest between the Coalition and Labor, the Coalition wins. I want to make sure that Anthony Albanese and his government is defeated, and that's why people need to vote Liberal or National.

Mark Doran: Okay, and just last one as I let you go, just on that. In Victoria, your home state, where a long-serving Labor government is definitely on the nose, do you have genuine fears, or maybe you could answer it this way if you were to be honest, does your polling suggest that One Nation may end up with a balance of power in Victoria, a position of power that Pauline Hanson has never seen before?

Tim Wilson: I don't think we should jump to those conclusions. Firstly, we shouldn't be so arrogant as to prejudge voters. And in fact, the consistent message is, in Victoria, people like Jess Wilson, the Liberal leader. They have confidence in her and her plan, and people desperately want a fresh start for the state. And they know that if they vote One Nation, it's too big a risk and it might keep Labor in power, so they're clearly going to vote strongly for the Coalition to take office.

Mark Doran: All right, I said I wouldn't hold you up for too long. I have, I apologise, but I thank you very much for your time.

Tim Wilson: Happy to chat. Thanks, mate.

[ENDS]