Wednesday, 30 September 2026

Topics: inflation; interest rates; spending.

E&OE……………………..

Peter Stefanovic: Joining us live is the Shadow Treasurer Tim Wilson this morning. So, Tim, thanks for your time. So, what do you believe are the domestic capacity pressures that the governor referred to?

Tim Wilson: Well, it's quite clear, it is government spending that is stoking private demand. The problem we've got with the Albanese economic model is it picked up the model here from Victoria. They've stifled, investment by raising taxes on the productive part of the economy. The only way they can cover for that is to spend to keep up job numbers, and as a consequence, you're getting a spike in private demand. Until you get a better sense of balance, you get investment back, private investment back into growing the economy, making our nation more productive, and having economic growth outstrip inflation, Australians will continue to go backwards. That's why we have spending at a 40-year high outside of the pandemic. That's why real wages are being eclipsed by inflation. That's why when Australians are going to their mortgages, they're paying more at the supermarket, they're putting less in the trolley and paying more.

Peter Stefanovic: Well, further to that, and you saw this week that the budget being $6 billion better off is largely thanks to the tax take from superannuation. So again, they're relying on Australian workers.

Tim Wilson: Exactly, they've said that they're not relying on workers, but they're explicitly relying on workers and investors, the people who want to build and grow the future of the economy. This is the problem with our taxaholic Treasurer and his economic model. The economic model is designed to take from the future to cover for his political and economic blunders today, and as a consequence, we have upward pressure on inflation that flows through into interest rates and prices at the supermarket. It's only going to change if we see a change in government.

Peter Stefanovic: So, we need the government to invest. So, what needs to be taken out?

Tim Wilson: What we need is the private sector to invest and to have confidence. Every time the government turns around and adds new taxes, as they did in their federal budget as of May, as Victoria has done in this state, is it slows down investment in building the future of the economy. It slows down investment in our productive capacity, that means sustainable jobs and economic opportunity and enlarging the size of the economic pie. That's what we need to see change. Instead, the Albanese government is going in the complete reverse direction. They're undermining private investment, undermining private growth, and you can see this very clearly from numbers. If the government had pulled its belt in as much as they're asking households, the budget would be $22 billion in surplus, and we wouldn't have as strong an inflation pressure. Instead, they keep spending with gay abandon and of course, Australian households are paying the price.

Peter Stefanovic: Warren Hogan was on the program last hour, and he said the only way to get to some form of surplus is to take out the recurrent spending that is baked in. So, would you consider reducing the public service as a form of baked-in recurrent spending?

Tim Wilson: We've already made a series of commitments of measures we would take. Housing bureaucracy that doesn't build a single home, net zero bureaucracy which doesn't cut emissions. We have so much waste in the government system. We've talked consistently about the fraud and corruption in the National Disability Insurance Scheme amongst others. There is so much waste we can cut out. But more importantly, we need to change the ec…

Peter Stefanovic: Sure, but does that apply to the public service? Which we've spoken about before, it’s per capita is the highest in the world.

Tim Wilson: As I've said before, we have bureaucracies there and clearly some of those bureaucracies involve roles which aren't helping to grow the economy. So, it's very clear to us that...

Peter Stefanovic: Which ones?

Tim Wilson: Well, I said before there's a housing bureaucracy which isn't focused on building new homes, net zero bureaucracy which isn't seeking to reduce emissions. We need to make sure that we have a change in the economic model which focuses on private growth and private jobs creation. That's the foundations in which we see economic growth lift standards of living and wages but also make sure that we tame inflation.

Peter Stefanovic: Philip Lowe has said in an interview overnight that a spending cap as a share of GDP needs to be restored. Do you agree?

Tim Wilson: Well, we're looking through all of these measures right now that we'll take to the next election, but I absolutely want to see spending restraint.

Peter Stefanovic: Are you in support of something like that?

Tim Wilson: Well, the challenge will be the short and medium-term objectives we need to achieve to make sure that we get the budget back to a sustainable position. We already announced our commitment to a charter of budget honesty which will be introduced under a Taylor government, and part of that is about containing government spending to make sure that we don't see growth in public spending that outstrips the private economy that's what we're seeing right now…

Peter Stefanovic: Where would the cap be?

Tim Wilson: …where we're at 26.9% of budget spending, 24.1% of tax revenue, which means we continue to have a problem. And of course, we'll outline the details of the charter of budget honesty as we move forward and we'll also do it staged to make sure that we achieve the outcome to get the budget back to a long-term sustainable position, whereas at the moment the belt is out and Australians are paying the price.

Peter Stefanovic: Sure, but where would you like to see the spending cap restored to?

Tim Wilson: Well, there's lots of things I'd like to see, but one of the challenges we face is we do not know what is in the next two federal budgets. We need the next two federal budgets to guide where it currently is…

Peter Stefanovic: Right, but below what it is right now?

Tim Wilson: …and where we'll go to in the next election and then the measures we need to take. Well, there's always going to be an appetite to decrease it. Daniel Mulino, the Assistant Treasurer today was on television saying that he wanted to make massive cuts to public spending, and we look forward to him delivering on that. Every time the government says they're going to do that, they find ways to increase spending on the other side. So, we'll do this in a sustainable and measured way. The next election is going to be a referendum on economic management and particularly the way forward. One of the biggest challenges we face is what is it we are going to inherit from this Albanese government in their economic model that continues to stoke inflation, tax inflation, spend inflation in a vicious cycle that is making Australians poorer.

Peter Stefanovic: Alright I’m out of time, but Tim Wilson, thanks for your time.

[ENDS]