Tuesday, 3 November 2026

Topics: interest rates; inflation; spending.

E&OE……………………..

Paul Murray: Tim Wilson is the Shadow Treasurer. He's in the man cave right now. Thanks for making the trip, mate. Appreciate it.

Tim Wilson: Pleasure. Thank you, Paul.

Paul Murray: Like anyone trying to pay off a house tonight, it's a bad night. But it was last month. It has been now 17 times. It's tens of thousands of dollars that people have had to find on top of what they were paying before this mob came into office, promising, among other things, cheaper mortgage repayments. Yet, the responsibility dance, well, they get this close to saying, "Oh, it's all Trump's fault," please.

Tim Wilson: Well, people are now paying $31,000 more since the election of the Albanese government. And this dance that's going on at the moment, I just watched your package of Jim Chalmers trying to say why it's not his responsibility and it's Iran, it's Trump, it's whatever. Anything under the sun. At some point they almost blamed The King. The problem they've got is that the underlying inflation rate, the one that the Reserve Bank uses as its benchmark, lifted above their target in July last year, 16 months ago. So that happened well before any bomb landed on Tehran, and that's why we've had five interest rate hikes this year instead of most developed countries having one this year. It goes directly back to government spending, and until they understand that they're the core of the problem, we're all going to keep paying. Today the Reserve Bank said not just are they lifting rates, but they're basically going to keep them there pretty much to the end of next year.

Paul Murray: Well, and it feels now that we're getting into some sort of economic whirlpool where, because it's so hard to pay off a mortgage, someone might have to sell their house, but there's not the buyers there because of the rates that exist. The whole political bet about this was that younger people would be happy that they'd have an entry in, and fine, fair enough, nobody's against that. But again, the vast majority of people, basically, home value today, if you bought one in the past five years, there's a chance you're going to lose money. And people, when things are like this, they get divorced, they lose their jobs. That's where I talk about that whirlpool effect, and that's what's beginning to look a little frightening, isn't it?

Tim Wilson: 100%, because it's not the people who choose to sell, it's the people who are forced to sell. And they don't have choices. We did analysis of the data earlier this week. Basically, we're now at the same point or above, actually, the point of what it was like to have 17% interest rates in the 1990s off current interest rates because of the volume of debt people have, just to buy an average home. It now consumes 52% of an average worker's wage just to keep a roof above their head. And this is the problem. We've seen this in Victoria when the tax changes were introduced, higher land taxes. There are parts of Melbourne that are now taking 40% baths in terms of the price, the value if they're forced to sell. And that means that people end up selling for less than the debt they owe.

Paul Murray: But also, just in case people think, "Well, of course these two blokes are going to wildly agree with each other," can I show you the Reserve Bank Governor today who, again, in her press conference, not very subtle here about saying, look, you're going to hear from the Treasurer later in the day saying it's nothing to do with us. Pay very close attention. She is saying, "It ain't all Iran."

Michele Bullock: Part of the reason for inflation staying higher for longer is global oil prices. However, I want to be very clear that we are not tightening monetary policy because of the direct impact of oil prices on inflation. I know there is confusion in the community, so I want to be very clear: monetary policy cannot impact global oil prices. Rather, the tightening in monetary policy is to address domestic capacity pressures. These were evident before the rise in oil prices, which is why the board started to increase the cash rate in February this year prior to the start of the conflict in the Middle East.

Paul Murray: Now, while of course being a bureaucrat, being impartial, she's got to keep that tone, but if you're actually reading the text, that is a big whack to the government.

Tim Wilson: It's a massive whack because she was essentially undercutting the Treasurer before he made his argument. What she's been saying, coded up until this point, but today it was explicit, is government spending is the cause of the problem of inflation. And it's not just her anymore. The OECD is saying it, the International Monetary Fund is saying it, and frankly Jim Chalmers is acknowledging it himself. He likes to talk about how they've saved two bucks over here, he ignores the fact that he's spending three bucks over here. But by making that argument, they're accepting that they're the cause of the problem, but they don't want to acknowledge it fully, they're trying to shift responsibility.

Paul Murray: Now, last one here. You're always going to get asked about polls, and normally they aren't great, but a poll has just come out here, YouGov, they were bang on with the 2025 election. They're saying right now, economic circumstances, all the rest of it, Angus Taylor's the preferred Prime Minister, and the Liberal vote is up in lots of areas. It's one poll, it's not a trend, but your reaction?

Tim Wilson: Well, obviously we're always enthusiastic to see improvements in polls, but really where we're going to be 18 months out from an election, we have to be laying the groundwork for a case for change. I think the case about why we need to remove the current government is very clear. Australians desperately need hope and change, but we've still got work to do to make sure that we are that solution for them. But releasing costings of reducing expenditure, policies that will give people hope about how they can go on and own their own home, and of course pay lower interest rates is an important part of that too.

Paul Murray: Well said. All the best to you. Good luck. Thank you very much. Tim Wilson there, the Shadow Treasurer.

[ENDS]