Tuesday, 29 September 2026

Topics: inflation; interest rates.

E&OE……………………..

Kathryn Robinson: I'd like to say good morning and welcome Tim Wilson, who is the Shadow Treasurer, to the program. Very good morning to you, Tim.

Tim Wilson: Good morning, Kathryn.

Kathryn Robinson: Look, if we can just start on inflation and inflation expectations when it comes to rates. We know that this is a problem. We know that rates are widely tipped to increase today. Do you support a 25% interest rate hike?

Tim Wilson: Well, Australian households are doing it tough, and the problem is the Reserve Bank's hand is being forced by the government because it won't kick its inflation addiction. We know that Australia's underlying inflation rate, the one that the Reserve Bank uses, has been persistent and high throughout the year. It was persistent and high before Iran, so this is because of domestic problems, not because of international factors. And it's not just that the Reserve Bank's hand is going to be forced today, it's quite possible that it may yet again by year's end and some people are forecasting next year. The only answer is the government has to pull in its belt rather than just turning around to Australians and telling them they need to pull in their belt.

Kathryn Robinson: Look, when it comes to inflation though, we know that the Treasurer is saying it's being largely driven by issues in the Middle East. I mean, that is a component. You can't deny that, right?

Tim Wilson: I'm not denying it at all, but if that were the case, we wouldn't have had three interest rate rises already this year. We wouldn't have had an interest rate rise before a single bomb was dropped in Tehran, and there's a reason the rest of the world is now increasing interest rates off the back of international events. They didn't do that for the most of the third quarter of this year. We've had the biggest decline in living standards in the advanced world. This government's economic plan is driving inflation, it is making it harder for Australians to get ahead, it's increasing interest rates, and it's also increasing the price at the supermarket, and Australians are getting less in their trolley.

Kathryn Robinson: As we heard yesterday though, the government has said its spending growth has slowed by 2.2%. That's moving in the right direction, isn't it?

Tim Wilson: Well, I'll wait and see that actually delivered. The government has consistently said that they're trying to pull their belt in. They're not actually doing it in reality. We know from data yesterday that it's on the verge of being the highest taxing government in Australian history. There's only one that's previously been higher and that was because they were in a commodities boom.

Kathryn Robinson: That was the Howard government.

Tim Wilson: Yeah, but that isn't the situation we're in now. We’re in a situation where the government's only answer is to increase taxes on small business, on households, and it's making it harder for them to stay afloat and keep their doors open.

Kathryn Robinson: So then if that's the case, what would a Liberal or a Liberal Coalition government be cutting back on right now if you think the government has a spending problem?

Tim Wilson: Well, we've already said we'll cut back on big bureaucracies around housing that aren't building new housings, net zero bureaucracy which isn't actually lowering emissions. We’re focused on removing the waste and mismanagement in government spending and bringing back integrity into schemes like the National Disability Insurance Scheme so that we have a more robust framework going forward, we get value for taxpayers' money and more importantly, public money from honest taxpayers doesn't end up in the hands of dishonest actors like organised crime, as we've seen through Big Build projects in Victoria financed by the federal government.

Kathryn Robinson: On the NDIS, we know that legislation, I think, was passed in August to lower spending growth from 10 to 2% over four years saving around $38 billion over four years. So, you can't argue that, I guess, the government is not looking at changing its spending habits?

Tim Wilson: Well, let’s wait and see them deliver it. Even within what they pass through law, there is still too much tolerance for fraud and corruption in the National Disability Insurance Scheme and this is dishonest actors taking advantage of some of the most vulnerable Australians and in addition to that, it's also inflationary. So, the government has been dragged there kicking and screaming to do anything on the NDIS. They opposed every measure we took when we were last in government. The Prime Minister over-ruled Bill Shorten when he was minister, and now that it's become so clear to the Australian public that this program has become a honey pot for fraud and corruption, they're slowly starting to act.

Kathryn Robinson: It's 14 minutes to 9:00 here on 702 ABC Mornings. Kathryn Robinson with you, speaking with Shadow Treasurer Tim Wilson here ahead of a widely anticipated move by the Reserve Bank today to increase rates by 25 basis points. Are you preparing for something like this in your own home, or perhaps you're a business operator that is making changes ahead of what is anticipated to be a rate hike today? 1300 222 702 is the number to call, or the text line 0467 922 702. Tim, staying on spending, we know that the states have a responsibility here. The Feds can't control what they do?

Tim Wilson: The federal government can't control what they do, but it can stop supporting state government programs where we know honest taxpayers' money is ending up in the hand of dishonest actors. You know, in April of this year, I wrote to the Prime Minister and said, of the money you've given to the Big Build projects in Victoria that have then ended up in the hands of organised crime, do an audit and get that money back. The Prime Minister has refused to do so. Instead of cutting back on spending that is stoking inflation and fuelling organised crime, they've actually taken a disinterest and they've compounded the problem. And because of that, interest rates will go up, and Australians will pay more at the supermarket and get less in their trolley.

Kathryn Robinson: I want to ask you about what seems to be a divergence between the Reserve Bank and the government when it comes to unemployment and inflation. The Reserve Bank says unemployment will have to reach 5% for inflation to come back down. Treasurer Jim Chalmers has spoken to Radio National Breakfast this morning, seems to disagree.

Jim Chalmers: Well, we’re not for higher unemployment. I think that's pretty clear and what we've seen in recent years is that it's possible to have low and steady unemployment at the same time as we see inflation moderate to more normal levels. I don't want to see Australian workers, whether it's thinking through the lens of unemployment or whether it's thinking through the lens of wages, I don't want to see Australian workers carry the can for decisions which are being taken on the other side of the world to prolong a war which has been absolutely disastrous from a cost of living point of view and from an economic point of view.

Kathryn Robinson: Tim, when it comes to full employment and unemployment, do we need to see 5% to tame inflation?

Tim Wilson: Well, if the government keeps persisting with its economic model, that's where we'll end up. The problem we have now is the government's approach to economic management is to stoke inflation, force the hand of the Reserve Bank to increase interest rates and break households and small businesses. The Treasurer is completely addicted to inflation to underpin his economic approach. Until there is a change of government, we won't see a change of this model. In fact, the Treasurer is doubling down, and that's why Australians will be experiencing higher interest rates and when they go to the supermarket, they'll pay more and get less in their trolley.

Kathryn Robinson: Tell me, we are speaking to Saul Eslake coming up on the program a little later, and he is amongst some economists that are looking at other levers that could be employed. We know that changes to monetary policy, it's a fairly blunt instrument. One of those is temporary tax increases. Is that something that the Liberal Party would support?

Tim Wilson: Absolutely not, and we already have tax increases passed in the last budget, and we're already talking about inflation having a very negative impact on households and small businesses. These tax increases are going to target and hit households and small businesses. The government can't keep turning around to Australians and asking them to pull their belt in when they're not prepared to do it themselves. We need prudent fiscal management, we need to make sure spending is targeted and getting to people based on need. We can't continue to have this active stoking of inflation.

Kathryn Robinson: If I can put this text to you, Tim, ‘Tim Wilson has got it wrong. The government should be taxing very high wealth and spending that money on paying for essential services for people. That would ease the pressure on working families and low-income people.’

Tim Wilson: Well, politely, that is incorrect. The problem is aggregate demand. Aggregate demand is what happens when the government keeps pump-priming people's spending capacity as it has been doing through its active inflation agenda, and the government did increase significant taxes in its last budget. Inflation has persisted despite that, because the problem starts in Canberra. Our problem isn't because the people are living too well, our problem is because the government is living too well.

Kathryn Robinson: All right, really good of you to join me, Tim. I just got to ask before I let you go, will you be tightening the belt at home?

Tim Wilson: Absolutely. I'm exposed to it just as much as everybody else, and this is the challenge, you know, households are doing it tough and it doesn't matter what income bracket you're on now, you're in the sights of Jim Chalmers' active inflation agenda.

Kathryn Robinson: Shadow Treasurer Tim Wilson, thank you very much for joining me this morning.

Tim Wilson: Thank you.

[ENDS]