Wednesday, 30 September 2026

Topics: inflation; interest rates; tobacco excise; Fuel Price Shield.

E&OE……………………..

Warwick Long: Tim Wilson is the Shadow Treasurer, and can join you now. Also, the Liberal Member for Goldstein. Welcome to the program.

Tim Wilson: Thank you very much, and I've had no experience with bedbugs either, so.

Warwick Long: That makes two of us, right? Take us into these inflation numbers today. The Treasurer says it's exclusively to do with rising fuel prices. Is that how you read the numbers?

Tim Wilson: Well, you need to separate out the different parts of inflation. There's headline inflation, which has gone up and there's no dispute that the headline inflation problem is driven principally by international factors as well as, as he outlined, what's happened with the energy rebates. But there's underlying inflation, and underlying inflation, or core inflation, is essentially the core inflation at the heart of the economy, which is a reflection of the persistent problem, and that's been at 3.6% now for many, many months and it hasn't moved around. That's the one the RBA looks at to say where should we set interest rates? And until they get that number below three, they're basically going to keep interest rates up and that's going to be hard on Australian households, and that’s the problem

Warwick Long: Before I talk about what you're going to do, with that information at hand, a lot of people are saying now this locks in yet another interest rate rise before the end of the year. Is that how you see it?

Tim Wilson: That is possible. That is absolutely possible. Until you get the core inflation, which is driven by domestic pressure, government spending, you're not going to see relief. So, using Iran, no one's disputing that it has an influence on the bigger picture on headline inflation. But using it as an excuse for interest rates is deceiving the Australian community from where the real problem is, which is in the domestic economy. That's why we've had three interest rate rises this year, sorry, four now, four as of yesterday, and why there may be a possible another one before year's end.

Warwick Long: And when you add those four interest rate rises together on an average mortgage, I was talking about these figures yesterday and got a bit confused, but you're looking at $5,000 out of people's mortgages, right?

Tim Wilson: That's serious money.

Warwick Long: It is big money. It is big money. And there is more being added on if there are more rate rises. And you're still continuing, apart from the Iran war, you're continuing to blame government spending for this?

Tim Wilson: Well, core inflation is primarily driven by domestic pressure. The headline inflation, which is what Jim Chalmers likes to talk about in the context of Iran, that's a different conversation, but the core inflation is where the Reserve Bank draws its decision about whether to increase interest rates from. That is driven by domestic pressure and particularly government spending. We have too much money going after too few goods, the government keeps borrowing from the future and spending today, and that is why interest rates are at risk of going up again.

Warwick Long: So, if that's your analysis of the economy, how are you going to cut spending if you won?

Tim Wilson: Well, that's not my analysis of the economy. There's a lot more to the economy than that. But the key thing we've said is, we’ll cut the housing bureaucracy that doesn't go on and build any houses, we'll cut the net zero bureaucracy that doesn't cut emissions, we're going to focus on making sure that welfare is targeted towards citizens because you've got to take out cash from the economy and make sure that it's sustainable so that there isn't more spending than there is economic growth. When you have that, there's too much money chasing too few goods, it creates inflation pressure and of course it ultimately leads to interest rate rises, which isn't just mortgages, but it's also people going and paying more at the supermarket and getting less.

Warwick Long: You also want to cut the fuel excise because fuel prices are too high. Isn't that going to put extra money into the economy and increase inflation?

Tim Wilson: No, because we've already provided an offset on that by cutting the tobacco excise. We actually increase government revenue which can be used as an offset because we're very cognizant, very mindful…

Warwick Long: You're relying on people buying more legal cigarettes by cutting the excise to increase revenue there, aren't you? Is that the maths?

Tim Wilson: Well, that's part of it. But the challenge we've got at the moment is that money is still going into the economy, but they're not paying tax, it's just going to organised crime. When we get them to pay in tax, we can at least offset it so that we're not increasing the money supply.

Warwick Long: And so how does the tobacco excise affect the fuel excise in terms of money coming into government coffers?

Tim Wilson: Because we get $2 billion more annually, the Parliamentary Budget Office estimated $2 billion more annually will go into the government coffers as a consequence of cutting the tobacco excise, and we can use that to offset a temporary fuel excise cut in response to the conflict in Iran. If you don't have inflation offsets, you're only going to keep stoking inflation.

Warwick Long: At the same time, there is a lot of arguments going on around migration and the effects of migration on the economy. All sides of politics, including yours, want to cut migration. That could make the economic situation worse and further put pressure on interest rates, couldn't it?

Tim Wilson: Well, I wouldn't look at it straight that way. Migration has a very complicated relationship on the economy, but we absolutely need people to fulfill jobs and roles within the economy for things like making sure, I was in Dubbo recently, and they need people to work in aged care and they need people to pick fruit and to be part of harvests. You go to any part of the country and you'll see similar circumstances. So, the absence of people to work can have an inflationary impact as much as there's a contribution towards the overall economy. The key thing: are we getting the people where we need to get them to support the growth in the economy because one of the reasons we have inflation, apart from government spending, is there isn't the growth in the productive part of the economy that is outstripping the inflationary pressure and government spending, and so that's why we continue to have upward pressure on inflation and interest rates.

Warwick Long: Productivity is the problem. Shadow Treasurer Tim Wilson is with you. Tim Wilson, usually at a time like this when interest rates are going up and inflation is high, oppositions do well, but you read polls, I'd imagine. Every poll I've seen has been looking worse and worse for your side of politics. What's going on?

Tim Wilson: Well, they're pretty bad for the government, and clearly people are jumping off…

Warwick Long: They're not good for you either.

Tim Wilson: No, hang on, let me finish my answer. They're jumping off the government and what people are looking for at the moment is hope, because people are drowning, you know, the Treasurer is drowning under his own inflation. He's basically waved the white flag today on inflation in his press conference. They're looking for hope and we need to be the agents for hope to make sure that Australians have confidence that we can get through this working together to a brighter economic future…

Warwick Long: So, does the electorate see more hope in Pauline Hanson at the moment than they do the Liberal Party?

Tim Wilson: No, what they see is them raising concerns, issues and drawing attention to themselves, and that definitely attracts people's attention. We have to earn people's trust that there's a way forward, that we can do this together, and that we can build a better future if we unite as a country with a clear plan that builds a more economically prosperous country where young Australians can look to the horizon for hope and that we can make sure the next generation of Australians can get well-paid jobs so they can go on and do things like buy a home and retire with security.

Warwick Long: I know you've got to go, but your leader Angus Taylor was in Warragul today. Are we going to see him more in the lead-up to the Victorian election in Victoria?

Tim Wilson: I don't control his diary, but I assume he will be. He was in Warragul, he was in my electorate yesterday, and he's always welcome in the great State of Victoria.

Warwick Long: Tim Wilson, thanks very much for your time.

Tim Wilson: Thanks for having me.

[ENDS]