Tuesday, 29 September 2026

Topics: inflation; interest rates; spending; Victorian politics.

E&OE……………………..

James Glenday: Now borrowers are bracing for another interest rate rise today with the RBA expected to lift the cash rate to its highest level in almost fifteen years. Financial markets and economists expect the board to deliver a quarter of a percentage hike in an effort to address stubbornly high inflation.

Emma Rebellato: Now this would be the fourth interest rate hike this year with no guarantee households will be spared another one before Christmas. The Shadow Treasurer, Tim Wilson, joins us in the studio. Tim good to see you.

Tim Wilson: Good to see you too.

Emma Rebellato: If you were in government, what would you do to bring down inflation?

Tim Wilson: The key thing we need to do to address the problem of inflation is to get government spending down. The problem we've got at the moment is the government keeps stoking inflation by spending at a state and a federal level, and as a consequence, it's forcing the hand of the Reserve Bank which is leading them to these increases in interest rates. It's why we're up to the fourth, potentially, this year, and it may not be the last.

James Glenday: You've been describing the government's policies at a federal level as an addiction to spending. What specifically would you be cutting back that would make a difference in the next six to twelve months?

Tim Wilson: Well, the most important thing is to get a lot of the large government programs that are open honey pots for people to raid like the National Disability Insurance Scheme, home-aged care packages and other schemes, like we've got phantom children enrolled in child care. Those schemes need to be controlled. We need to make sure we're getting value for buck for the Australian taxpayer. But more importantly, we've got to stop the fraud and corruption that's existing in these schemes which both obviously leads to honest taxpayer's money being taken out of these schemes for dishonest means, but is also stoking inflation.

Emma Rebellato: Okay, well the NDIS, the government's made moves on the NDIS to get all these people who are rorting the system, you know providers out of the system.

Tim Wilson: I think it's a very optimistic interpretation. We've passed some legislation, a lot of it sits within the minister's discretion. It's yet to see whether they actually crack down on the fraud and corruption. But frankly, we've got to make sure this scheme is sustainable. It now consumes more than our national defence. That is not a sustainable way for our nation going forward.

Emma Rebellato: Okay, so aged care though, you mentioned aged care. Where, how much money do you think you can save? How many people are doing the wrong thing here?

Tim Wilson: I said home aged care packages and what we're seeing is a replication of the fraud and corruption in the NDIS going over to home aged care packages and seeing similar behaviour here. We need to make sure that the focus is getting value for taxpayers' money. Because it's not just that honest taxpayers' money is going to dishonest means, it's also, of course, stoking inflation. You know, this government has continually engaged in denial about the problems of their spending and how it is putting upward pressure on interest rates. The Reserve Bank has consistently said that this is a problem, now we need action from the government.

James Glenday: The Treasurer, Jim Chalmers, will join us next hour. He has repeatedly said, and I think the finance minister said on our show yesterday, a lot of these factors are outside their control. The war in the Middle East, Japan's raise rates, we're seeing the US raise rates too. How much of it is international do you think? How much of this international effect is really flowing through at the moment?

Tim Wilson: I know this is the strategy the Treasurer likes to get himself off the hook, but this will be the fourth potential rise this year. That is not the same as at other advanced economies. What we're facing is a persistent underlying inflation problem which is the one that the Reserve Bank uses to judge whether they should increase interest rates. There is obviously behaviour going on around the world, that doesn't explain the previous three. And the first one this year was off the back of data last year, was at the start of February. The first bomb on Tehran didn't drop until the end of February.

James Glenday: We're looking at two to three hikes, I think it's actually two and a half percent hikes have been priced in by analysts. That would take a variable mortgage to around 7 percent, or so. Is that going to flow through to about 5 percent unemployment in Australia? Is that where you think we need to head? Are we heading towards a recession?

Tim Wilson: Well, I don't want unemployment, but if we don't change the economic approach the government is going to head towards, one of two things is going to happen. They're going to break small businesses and households, or we need to pare back government expenditure in the public sector. So, there's a choice that's now faced by the government. The problem with the government at the moment is their answer is to break small business and households, and the problem is many people when they go down that path don't recover.

James Glenday: So, you think we're going to head to above 5 percent unemployment? Is that what is needed to kill inflation?

Tim Wilson: I don't believe that that's the sole solution. I think you can find a way through this, but it requires changing the economic approach the government has at the moment, which is to stoke spending, public spending. It forces the hand of the Reserve Bank, and the trade-off is that it eventually breaks households and small business as a way of slowing the economy rather than looking at how the government pulls its belt in, because it's irresponsible for the government to turn around to the Australian people and say ‘you should pull your belt in’, when they're not prepared to do the same.

Emma Rebellato: The IMF has said that governments need to rein in spending, not just federal though, state governments. So, the federal can only really control what it can control if the state governments are spending more too. So how much responsibility can the federal government have?

Tim Wilson: I'm not absolving the state governments, I agree that one of the big challenges is state governments spending too much money too. This is where prudent, responsible fiscal management needs to come in, and we've seen in the state of Victoria, which we're presently in, where government has continued to spend endlessly, particularly on large projects where we're getting very poor value for money, or some of that money is even ending up in the hands of organised crime, like the Big Build projects in Victoria under Ben Carroll. This needs to end. It's a reflection of the broader economic model that is failing Australians and is putting upward pressure on interest rates.

James Glenday: I just want to ask about an issue that you've spoken about a lot in the past and that is Australia's top tax rate. It's 45 percent plus Medicare surcharge, so 47 percent on income over 190 grand a year. What do you think the rate should be? You've expressed a view in the past.

Tim Wilson: I have expressed a view in the past, but the challenge is always to adjust the economy over time and create incentives at the heart of the economy. What we've got at the moment is the government increasing tax rates on things like capital gains…

James Glenday: To your specific policy, I know you've got the index policy, what does Tim Wilson think? What do you think the rate should be? Is anything above 40 percent too high?

Tim Wilson: Today I'm here to speak about the...

James Glenday: You've expressed a view.

Tim Wilson: I have, I have, but I know that we'll get distracted by this. We believe very strongly that income taxes are too high. What we want is an incentive at the heart of the economy, so people work and enjoy, and ensure that hard work pays off. Our tax-back guarantee is very clearly focused on making sure that the Treasurer can't keep taking more of people's hard-earned income through inflation. We need to adjust thresholds so that we give more people their money back that they've worked hard for, and that's the base of the policy we're taking to the next election.

James Glenday: Does nothing though for that top tax rate. I mean it's just targeted to inflation.

Tim Wilson: That's actually not true. If you went back to 2008 and index the top income tax threshold, Australian households in the top tax bracket would receive somewhere around an extra $80,000 not taxed at the top marginal tax rate. People would get about a $40,000 tax cut. That's a substantial tax cut which reflects the fact that we want hard work to pay off.

James Glenday: So just to take back to my question. Substantially lower, under a liberal government you'd be looking at a substantially lower top tax rate.

Tim Wilson: What we're looking at is how do we lower taxes sustainably to grow the economy and incentivize the right type of behaviour. The Treasurer goes out there and wants to increase taxes on small business, on those who are going to back themselves, the self-starters of this nation. We don't think that's the way forward, and now we're seeing the consequences of the economic model they've adopted, which is that spending outstrips the productive part of the economy. That leads to inflation, that leads to higher interest rates and breaks small businesses and households.

James Glenday: We've got to let you go, but before I do, the Victorian Premier yesterday said that the Liberal Party and One Nation were enjoying wharfie-time, which I think was a reference to Fremantle's disastrous grand final. And he's effectively saying that these two parties are celebrating already. Do you think that the Liberal Party is too confident heading into Victoria as well?

Tim Wilson: Not at all. But I do think that Victorians are waiting for their government and looking forward to removing them on election night because Victoria is governed by an organised crime cartel. It's just registered as a political party and currently sitting in Spring Street.

James Glenday: We'll take that as a comment. Obviously, the Labor Party will strongly disagree with that reference. Tim Wilson, thank you for coming in.

Tim Wilson: Thank you, but they should stop handing money to organised crime.

Emma Rebellato: Thank you.

[ENDS]