Tuesday, 3 November 2026

Topics: interest rates; inflation; spending; unemployment.

E&OE……………………..

Patricia Karvelas: Well, to get some reaction now from the Opposition, I want to bring in the Shadow Treasurer, Tim Wilson. Welcome to the program.

Tim Wilson: Thank you for having me, Patricia.

Patricia Karvelas: The Reserve Bank was split, and a significant split is how I see it, three to six. Three people, as the Governor expressed, wanted to wait to see the other rate rises and the impact that would have. Does that give you pause to think this is a risky moment?

Tim Wilson: Well, I think it's a risky moment for Australian households who are already struggling to make decisions about how they're going to pull their belt in and reduce their costs. The clearest indicator out of the decision today was what came from the statement following the announcement of the decision, which is that not only are interest rates going to increase, but they're going to stay at an elevated level all throughout basically next year. So, anybody looking for interest rate relief, until the government gets its spending addiction under control is going to continue to live with higher interest rates and have higher costs as a consequence of this government.

Patricia Karvelas: Okay, but the full impacts of the previous rate rises earlier this year haven't been fully felt yet. So why was a rate rise necessary? Do you back this decision?

Tim Wilson: What the government did was force the hand of the Reserve Bank. The Reserve Bank has, of course, increased interest rates, we've had five now this year, most advanced countries have had one, and it's because we have a persistent problem around government spending, which is putting upward pressure within the economy. Yes, some of those have not been felt through yet, but clearly the Reserve Bank has underestimated how much the government, and they've admitted this, how much it's going to continue to put upward pressure on inflation and interest rates, and that means that they've had to increase rates now five times this year while most developed countries have only had one. The concerning thing is that it's going to continue throughout next year, and of course that means that households that are already doing it tight are going to face increasing pressures, and I know a lot of Australians are sitting around the kitchen table right now making tough choices about whether they can afford to send their kids on school excursions, whether they can afford to pay for a kid's birthday party, and other cuts that they're going to have to make within their own budget while the government won't make theirs.

Patricia Karvelas: Today's updated forecasts from the Reserve Bank show they have revised down the near-term outlook for public demand. Do you acknowledge that public demand is actually trending down?

Tim Wilson: Well, it's with relationship to the problems of private sector growth. What we have is a failure to grow the economy under the Albanese government. Not only have we got a problem around persistent inflation next year, but we also have public sector growth continuing to outstrip private sector growth. According to the RBA statement today, unemployment is going to lift to 5.1% by the end of next year. It was only a few days ago that the International Monetary Fund said that by the end of next year Australia would have unemployment at 4.7%. We're already there, and it's going to continue to rise. Real wages are going to decline. So unfortunately, there's no good economic news out of the decision of the Reserve Bank today around interest rates, but they're also looking to the horizon and saying there isn't the private sector growth, the productivity growth we need to see improvements in living standards.

Patricia Karvelas: If you were in government, what would be an appropriate time frame to get inflation back to the target band?

Tim Wilson: Well, we would hope that with proper fiscal policy, we would see a focus by the Reserve Bank to get it back down within the medium term. We've committed in terms of the fiscal policy and the contribution that we can make, because that is, of course, what is driving public expenditure problems and inflation pressure and interest rate hikes is government spending. We've committed to getting the budget back in the medium term to make sure that we can take that pressure off.

Patricia Karvelas: Do you think that the government's cuts to the NDIS were not deep enough?

Tim Wilson: What we know is that people who are now looking at the commitment the government has made around the National Disability Insurance Scheme are now questioning whether the National Disability Insurance Agency and of course the government is seriously committed to the $50 billion worth of cuts they've already made. I mean, wherever there is waste, fraud, and corruption, I believe we should be targeting it. I don't believe the government has been serious at any step about the waste, fraud, and corruption in the National Disability Insurance Scheme. They were dragged kicking and screaming to do something about it. Even the former minister, Bill Shorten, wanted to do something about it and the Prime Minister overrode him. Now finally Mark Butler is rhetorically saying that he's going to get the NDIS under control, but the auditors are looking at it and saying, we don't believe it stacks up or that it's going to be delivered. Make no mistake, where there is fraud and corruption, we will target it.

Patricia Karvelas: Okay. So, in terms of the broad parameters now, Katy Gallagher there confirming to me they're looking at everything, obviously growth in other areas of public spending, the public service as well. You've already stymied the government when it comes to changing the private health insurance rebate for over 65s. Will you commit now, given we've heard the clear words of the Reserve Bank Governor about this inflation crisis we're in, to support the government as it endeavours to find any savings it can in the budget?

Tim Wilson: Well, Patricia, we wrote to the government at the start of the year and said, let's have a bipartisan approach to reducing government spending. The government rejected that. Every time we've asked them to audit trail government expenditure to see whether it's pursuing or financing organised crime, they've rejected that. Our focus is in outlining our program of savings, and we've outlined them: the bureaucracies that don't build homes or cut emissions, future welfare for future non-citizens, and making sure we cut out the black market in illegal tobacco, as well as ending egregious corporate welfare that isn't growing the Australian economy. Now, of course, every time Labor turns around and says they're going to cut spending, and you asked the question I heard of Katy, "Is this net savings?" and they'll never commit to that, because we know, and history shows, that for every $2 of savings they claim to find, they go on then and spend another $3, and it ends up only stoking inflation further.

Patricia Karvelas: Thank you so much for joining us this afternoon, Tim Wilson. It's obviously a pretty difficult day for people who have mortgages around the country and businesses, but it's been good to hear your view. Thank you.

Tim Wilson: Thank you.

[ENDS]