Tuesday, 29 September 2026

Topics: interest rates; inflation.

E&OE……………………..

Paul Murray: Tim Wilson is the Shadow Treasurer. He's been listening to all of that, but I want to talk to him a little more broadly than the challenge I've just put before Australian politicians. He's of course the Shadow Treasurer. Tim, again, what I think is really frustrating, and I'm trying to keep a quiet rage is, people are really, really pissed off tonight. My WhatsApp, in my little world, right, people who are not political, the WhatsApp chats that are about footy tipping competitions are blowing up deluxe tonight. So, to see a government with a Treasurer who didn't even have the balls to turn up anywhere near an office, so he wouldn't have to answer a question from anyone who really knew what they were asking, kind of sells you the whole thing about how they're just managing the media, not the economy.

Tim Wilson: You're 100% right, Paul, and I did listen to your introductory piece, and I couldn't agree with you more. The challenge Australians are facing right now is that they're sitting around the kitchen tables of the nation and they're asking themselves, ‘I don't have anything left to cut, what is the government expecting me to cut?’ We know that government spending is currently at a 40-year high outside of a crisis or pandemic. If the Treasurer had, and the Prime Minister had, pulled their belt in as much as they expect Australian households, the budget would be $22 billion in surplus. Instead, what is happening is the government just keeps spending with gay abandon, it's stoking inflation, it's putting upward pressure on interest rates, which means someone who's got a new mortgage today will be paying $31,000 more in debt servicing this year. And of course, they go to the supermarket, not only are they being asked to not put things in the trolley, but when they get to the checkout, they're putting things into the trolley and they're getting less and paying more.

Paul Murray: So again, I understand that we are part of a greater world, we don't live in a world of 30 years ago, let alone 50 years ago where Australia's capacity to be this island that could at times live amongst itself. I get all of that. But what are things government can do?

Tim Wilson: Well, the key thing that government can do is it can control its own spending. Because when you've got a 40-year high outside of a pandemic, and you showed your graph there before and it was a perfect demonstration of it, is the government is actually the key contributor, because the first interest rate hike this year happened on the 3rd of February. It was off the back of last year’s data, and it was, you know, a full month before the first bomb had dropped on Iran. We've had three this year until today, and of course, most other advanced developed economies have not seen an increase in interest rates. So, we're starting from a weak and a poor position because of domestic pressure. No one's ignoring the fact they're international factors, but it's compounding the problem that Australians are experiencing, and what we've had is a government whose only answer to every problem is to stoke inflation further and make it worse in the hope they can get through a news cycle. What we need is governments to pull their belt in, firstly before they ask Australians to do so. But then we actually ultimately need economic reform that's going to drive investment to get energy prices down, but to get investment back into the Australian economy, to free up the labour market, but exactly as you said, to give Australians hope that tomorrow can be better than it is today if we work together as a team and as a country.

Paul Murray: Now also, we're in a scenario where that sense of hope is really important, right? That sense of a government actually listening here. Politically, we know what this mob's going to do, which is that again, it's all about thinking, okay, the pain happens now and that eventually, if they get one little drop somewhere in 28, and everyone's distracted by whatever Trump is doing in the final year of his presidency, then that will be enough to be able to get things back on their side. But I wanted to ask you something here, which is inevitably, when one of our guests comes up later, they're going to say it's all the Reserve Bank's fault or it's all private companies' fault, because the Reserve Bank waited too long and private companies are making too much money. Do you agree with either of those propositions, which I know you are pre-answering here, but we're probably going to be debating in the next 10 minutes or so?

Tim Wilson: Well, frankly, both of them are fanciful. The Reserve Bank has been forced into this position by the spending addiction of the government. The Reserve Bank doesn't sit there and go, we'd like to tweak with the interest rates based on preference. They make decisions based on the underlying data of the entire economy. They look at where inflation is going, and as we know, underlying inflation, which is what they've benchmarked it off, has been persistent at 3.6%. We've had movements because of Iran, no one's arguing that, but the underlying problem has remained the same, and if Iran disappeared tomorrow, it would still be there. That's why we know it's domestic and it's very clearly caused by that, and the Reserve Bank Governor basically said that very clearly today. The idea that it's driven by company profits is frankly a fanciful proposition. What we have is a problem where we're not getting enough small businesses building the future of this country. It's the failure to grow the economy and back productivity, and particularly growing the economy for people who want to invest in their future. In fact, the last federal budget has really smashed confidence in small businesses, which if it's done anything, has helped aid big business to concentrate their economic power, but it's not actually the driver of the problem of inflation at all.

Paul Murray: All right, thank you very much, Tim. Again, it is just the white-hot rage, that's the only way I can be right now. I know you're not out yourself the same. All right, all the best mate. Thank you. Tim Wilson of course, the shadow treasurer there joining us from Melbourne.

[ENDS]