What we learned: Wednesday: 26 October
With that, we will bid adieu to the blog for the evening. If you’re in Sydney, it’s great drying weather – pop your sheets on!
Here were the main developments of the day, largely related to budget reacts.
US ambassador to Australia, Caroline Kennedy, has been doing the rounds at Parliament House today, with quite a lineup to meet and greet. Even former prime minister Scott Morrison made the trip from the backbench.
In his address to the National Press Club, the treasurer, Jim Chalmers, rubbished a claim by the Nationals that Labor left the regions behind in the budget, pointing to around 700 investments in regional communities.
Peter Dutton has questioned the prime minister how a $2,000 hit to family budgets made Australians better off, as he had promised Labor would secure prior to the election. Also in question time, Chalmers suggested Angus Taylor’s fingerprints were “all over energy policy chaos” following budget findings that prices would increase by 20% this year and 30% next year.
A string of bodies have come out in praise of the budget, but GetUp wasn’t one of them. It accused Labor of “folding to the gas industry with a huge new fossil fuel subsidy” following a a $1.9bn funding announcement for the Middle Arm project in the Northern Territory.
Medibank has released a new statement to the ASX, saying the data of all of its customers was accessed in the recent cyber-attack. This includes Medibank, ahm and international student customers.
And Australia’s inflation rate has hit 7.3%, the highest since 1990.
Man shot by police during arrest in Sydney’s east
A man has been shot by police while they were attempting to arrest him in Sydney’s eastern suburbs this afternoon, police said in a statement.
Just before 4.30pm, officers from Eastern Beaches Police Area Command were called to Matraville, following reports a man armed with a knife was allegedly assaulting two women.
Following inquiries, the officers attempted to arrest the 26-year-old man inside a nearby car park, when he allegedly produced a knife and confronted them, before police discharged their taser and firearm.
The man was treated at the scene for a gunshot wound to his thigh before he was taken to hospital in a stable condition.
A critical incident team has commenced an investigation.
Residents on ‘wet’ side of divided town of Echuca accuse council of ignoring their needs
The northern Victorian town of Echuca has been divided for more than a week now by a levee, which has protected one side of the town.
Residents on the flooded side released a statement on Wednesday saying they have been ignored by the local council, accusing the shire of washing its hands of responsibility for the mud wall.
Campaspe Shire Council also released a statement, saying it was “not consulted” about the placement of the levee. But Victorian Emergency Management said it was a joint decision between them, the local Catchment Management Authority and the Campaspe Shire Council. The mayor has been contacted for comment.
Around 60 homes on “the wet side” of the levee are believed to be impacted by flood waters and residents say they have been ignored.
In a statement, they said the local council had not communicated or met with any of the residents whose homes are now flooded.
Council has also not stated when the levee will be removed.
As a result, residents (both young and old, healthy and ill) on the wrong side of the levee will be unable to receive assistance from fire, ambulance and police services for the foreseeable future or even basic services such as bin collection.
Emergency management commissioner Andrew Crisp said it had been a difficult decision to make.
The nature of emergency management means that sometimes difficult and challenging decisions need to be made.
The temporary levee at Echuca mitigates the flood risk for as much of the community as possible.
We appreciate the challenges faced by residents beyond the temporary levee area and continue to do everything we can to support all communities impacted by this significant flood event.
Kon Karapanagiotidis says budget continues ‘status quo of unfairness’ for refugees
The Asylum Seeker Resource Centre chief executive, Kon Karapanagiotidis, has been in Parliament House today following the release of the budget.
As reported by AAP, Australia will spend an extra $150m on offshore processing this financial year in a budget that’s been widely criticised by refugee advocates.
The treasurer, Jim Chalmers’ first budget saw offshore processing funding jump to $632.5m, a move that’s been labelled “deeply disappointing”.
Karapanagiotidis said the government should stop pumping money into the “moral and financial blackhole of immigration detention and holding refugees offshore”.
More than half a billion is being spent to harm people who turned to us for help, safety and protection. It’s time to right the wrongs of the past decade, not continue the status quo of unfairness by denying refugees and people seeking asylum access to mainstream social support and a safety net.
The budget contained no word on Labor’s pledge to expand its humanitarian intake to 27,000 places a year across four years in another move that disappointed advocates.
It had $20m for the adult migrant english program and $42.2m over two years to increase visa processing. About $18m over four years will fund additional three-year visas to Ukrainians and extend Medicare coverage to them for 12 months.
Experts welcome budget funding for LGBTQI+ health services
The Australian Federation of AIDS Organisations (AFAO) has welcomed budget funding into expanding LGBTQIA+ health services and accelerating the end of HIV transmission in Australia.
The budget includes $220,000 to AFAO to explore the barriers facing LGBTIQA+ communities when accessing healthcare, and options to provide better access to appropriate healthcare.
The AFAO’s chief executive, Darryl O’Donnell, said more than four in five young LGBTQIA+ people report high levels of psychological distress, while one in 10 have attempted suicide in the past year.
We have made important strides in supporting the health of LGBTIQ people, but there is nonetheless a continuing crisis. LGBTIQ-led health organisations can do so much more if they are properly resourced with secure funding.
The government has signalled through this budget it is serious about progress on HIV. We’ve worked closely with the minister while in opposition and now in government to share the evidence on what Australia can achieve on HIV. With the right effort, Australia can achieve something that would have seemed astounding as recently as a decade ago, virtual elimination of HIV transmission.
PM meets US senators in Canberra
The prime minister, Anthony Albanese, has met with a bipartisan delegation of US senators.
Readers will recall that the US ambassador to Australia, Caroline Kennedy, visited Parliament House today. This appears to have been linked to the visit of members of the US Senate Select Committee on Intelligence.
Albanese’s tweet mentions that he also met with Kennedy (unfortunately she is not in the photo and so it is more of a “manel”):
Littleproud says Labor budget is ‘devastating’ for farmers
Over in the Nationals camp, David Littleproud has bitten back at Labor’s budget, arguing it has “ripped the heart” out of the agriculture industry.
He said the scrapping of the $6.5bn Hells Gate Dam and funding reductions for the Dungowan Dam, Emu Swamp Dam, Hughenden Irrigtation Scheme and Wyangala Dam were “devastating” for the future of the farming industry.
Allegra Spender says budget does well on childcare and parental leave
The Independent MP for Wentworth, Allegra Spender, told ABC’s Afternoon Briefing Labor’s budget had “on some areas … done really well”, with room for improvement.
She said the pros were childcare, paid parental leave, climate action, aged care investment and investment in housing. The cons were the lack of structural reform and dealing with electricity prices.
The community I represent will be really proud of the work on childcare, on paid parental leave which is something we’ve been pushing hard [for], on climate action and aged care investment … and the I think the area that the government hadn’t brought to the election but was really strong was housing. I have a lot of young people who want to get into the housing market and a lot of families who want their kids to be able to do that. The two big things the budget was missing is one is real facing structural reform and the second piece is dealing with electricity prices driven by the fossil fuel price increases from the war in Ukraine.
Spender said Labor had realised Australia has a severe supply problem with housing and we need to build more than the promised 1m homes (though she didn’t seem too keen on those additional dwellings being for social housing).
They’ve recognised they need to work with the states. A lot of people say this is only about social housing or things like that. This is about everyday people, two people, both working, who can’t get onto the housing ladder. This is about the affordability of housing.
Energy ministers to gather in Melbourne on Friday
With the federal budget and now the consumer price index (CPI) having a big impact on power prices, it’s interesting timing that the federal, state and territory energy ministers will gather in Melbourne from Thursday, with the main meeting on Friday.
The gathering might help sort out a few things, such as just how much prices are supposed to rise for electricity (and gas) from now, and where.
The treasurer, Jim Chalmers, told the National Press Club today that the 20% rise is already in the bills, as far as electricity price rises are concerned, before another 30% rise kicks in during 2023-24. We’re still picking up signals that the 50% was briefed to Treasury as rises yet to come. Let’s hope the ministerial meeting helps to clear that up.
Maybe they will even magically work out ways to help moderate the increases. Failing that, come up with measures that might soften the blow. Here’s hoping.
North Melbourne decides Alastair Clarkson will start as coach in November
Alastair Clarkson will commence his coaching role with the North Melbourne football club after stepping aside for a formal review into conduct at Hawthorn during his tenure, outlets are reporting.
Eddie Synot welcomes funding promise for Indigenous voice
Indigenous law academic and Uluru dialogue member Eddie Synot appeared on ABC’s Afternoon Briefing earlier discussing the $75m promised in the federal budget for a referendum on an Indigenous voice to parliament and $5m for a truth-telling commission.
He said the funding was an important step to ensuring the government was committed to the referendum.
I think it does show that the government is moving towards this in the next financial year … hopefully they’ve won’t waste any time in moving on with their promise and commitment to the Uluru statement from the heart.
Truth telling and treaty is a complicated, very important process that will take a lot of time. And truth telling in particular is not just about having a grand scheme where people are able to tell the truth and it gets put away into a book somewhere or a museum as it has done before … the truth telling is something that’s very connected to voice and treaty itself. It’s about the community being in control of their own truth. Being able to manage that into the future.
US ambassador meets Peter Dutton
The US ambassador to Australia, Caroline Kennedy, has met with the opposition leader, Peter Dutton, and taken some suitably awkward pics together.
Head of Acoss says more needed in budget for people under ‘chronic financial stress’
The Australian Council of Social Services (Acoss) has also reacted to Labor’s budget.
The body says it builds good foundations and delivers on important election commitments, but more support is needed for people facing “multiple and unrelenting crises”.
It welcomes the $560m investment in community services, as well as investment in aged care, paid parental leave, funding for preventing domestic violence and child care.
It says the new cross-government housing accord to build 40,000 homes – half social, half affordable, over five years is a “serious start” but a lot more needs to be done to ensure everyone has a home.
The chief executive of Acoss, Dr Cassandra Goldie, said:
We remain deeply concerned for people who have the least and are in chronic financial distress – people who are unemployed, single parents, people with disabilities, students and people on temporary visas. There isn’t enough in this budget to help them right now.
People on the lowest incomes are facing multiple and unrelenting crises right now – extreme weather events, rising rents, food and fuel costs, and the prospect of more losing their jobs means that government must deliver on lifting incomes and social and affordable housing.
Instead of spending money on stage-three tax cuts, we could lift incomes, including jobseeker and disaster recovery payments, fund social housing, and adequately fund community services so they can help people when they need it most.
Greens want electricity price caps paid for by coal and gas companies
Speaking of energy prices, the Greens camp have been calling for the federal government to look at capping electricity prices – with any cost covered by big coal and gas corps.
The Greens leader, Adam Bandt, said price caps were being considered internationally, including in parts of the EU, in the wake of energy price spikes hitting global economies.
People are hurting, the electricity market has failed and it’s coal and gas driving the crisis. The government needs to look at capping electricity prices.
If that needs to be funded, then the coal and gas giants driving this crisis should take a haircut on their profits. As well as capping power bills, the government needs to help homes and businesses get off gas.
The gas corporations are making giant windfall profits, yet the budget shows the existing failed gas tax, the PRRT, is going to collect almost half a billion dollars less than forecast. A windfall profits tax would help people and businesses with their energy bills by funding subsidies to get off gas with renewables and electrification.
Assistant treasurer questioned on inflation
Jones is asked about stagnated wage growth, yet to outpace inflation (also known as the so-called “inflation dragon”) which hit 7.3% today. It’s the highest rate since 1990.
Is Labor’s assurance wages would pick up a broken promise?
Jones rejects this, and points to one of the party’s first acts - to work with the Fair Work Commission to increase the minimum wage. He says aged care workers will be “next cab off the rank”.
A $40 increase for workers on the lowest paid award based wages in the country. We’re committed to that and more needs to happen. We have aged care next cab off the rank and we will be introducing into parliament over the next fortnight laws to get bargaining working again. We know that these are some of the levers we need to put in place.
Quite clearly inflation is going to go up and stay up but it will [come] down again. That’s what happens to prices. Wages however, they go up and they stay up … we acknowledge there’s going to be some pain in households for the intermediate period. We know we’re going to get to the other side of it. Our job is to not make a bad situation worse by fuelling the inflation dragon.
Government spruiking its energy policy
Assistant treasurer Stephen Jones is appearing on ABC’s Afternoon Briefing to discuss the cost of living crisis and anticipated spiking energy bills.
Labor pledged prior to the election they would cut energy builds for households. Is this a broken promise?
Jones says the party released a policy in early 2021 about how it would end the energy and climate wars and they remained committed to that policy.
Or policy certainty for the next few decades had included a focus on renewables and hydrogen and modelling … it will have the impact of driving down energy prices. We have the best mob in the outfit independent of government … to model the impact of our energy policies.
He says the war in Ukraine also wasn’t factored in to the government’s modelling.
We weren’t seeing galloping inflation in the US and Europe. We weren’t seeing OPEC change its policy around oil production. In short, the landscape was very, very different. We’re still committed to our policies and we’re also committed to doing what we can to bring energy prices down from where they otherwise will be. We don’t have all the levers. Sometimes the state and territory governments have some of those levers but we’re putting in a plan to try and minimise the cost.
Thinktank says government housing plan an ‘important shift’
The Australian Housing and Urban Research Institute says the “devil will be in the detail” of Labor’s announcement of one million homes to be built by 2029.
Of the million, “at least” 20,000 will be social and affordable housing, on top of an existing commitment for 30,000 affordable homes through the Housing Australia Future Fund.
The body says it “marked a significant and important shift toward delivering much-needed relief in Australia’s urgent housing crisis”.
In recent years it has become clear that no single sector can supply Australia’s needed social and affordable housing. The government’s plan to create a national Housing Accord, bringing together all levels of government with investors and the construction industry, to deliver this ambitious target is essential. The government will be facing an open and receptive audience.
Getting these investments right will be critical. There are real risks to navigate, and many policy, regulatory and program design decisions to work through to ensure we have the right types of housing being built in the right places to make the difference our country so desperately needs.
Many thanks to Amy Remeikis for gracing us with those thousands of words. I’ll be with you for the rest of this fine Wednesday. Let’s keep the good times rolling!
I am going to hand you over to Caitlin Cassidy for the rest of the afternoon – thank you so much for joining me through these thousands of words – many of them saying the same thing, in different ways.
I’ll be back very early tomorrow morning – in the meantime, take care of you.
Meanwhile, as Paul Karp reports, the electoral reform debate continues:
And also random balls it seems.
Love a notes app tweet:
We look forward to Sussan Ley’s Midnights (Sussan’s version)
There was quite the line-up to greet US ambassador Caroline Kennedy
But as Daniel Hurst points out there was some serious business too:
A bipartisan delegation of senators from the US is currently in Australia for talks with intelligence agencies and other government officials.
Here is a little more from Mike Bowers’ very busy day.
Scott Morrison managed to pop up from the backbench:
Angus Taylor was given an open book exam:
The Nine Network’s Charles Croucher got a parliamentary shout out (and probably a few lines for his news package tonight)
And the government enjoyed its day:
The US Ambassador Caroline Kennedy was in the chamber while all of that went down, as Mike Bowers shows.
Alexander Abramov suing foreign minister Penny Wong in federal court
A Russian billionaire businessman has the power to influence his government even without direct political ties, the foreign affairs minister’s lawyer has suggested in court, AAP reports.
Alexander Abramov, who became head of Russia’s largest steel producer Evraz, is suing Penny Wong in the federal court after the Coalition government in April sanctioned 67 Russian elites and oligarchs over Moscow’s invasion of Ukraine.
The sanctions imposed by former foreign minister, Marise Payne, on Abramov were later revoked but then reimposed by Wong in September.
Abramov’s lawyer has rejected the Australian government’s assertion that the steel magnate is economically or strategically significant to Russia, pointing to his self-proclaimed lack of political connections and resignation as chair of Evraz.
Barrister Perry Herzfeld SC, representing Wong, argued in court on Wednesday that the sanctions were not limited to those who had a direct influence on foreign governments.
Even if Abramov’s assertions about his lack of government influence were correct, influence could come about indirectly - in his case, through Evraz, Herzfeld said.
The decision to sanction him focused on his influence on Evraz rather than Moscow, he said.
“The mere fact of the condemnation ... might cause foreign governments to be influenced,” Herzfeld told the court.
People of significance don’t lose their ability to influence others just because they resign from a particular role, he suggested.
The government rejected Abramov’s assertion it made mistakes when it sanctioned him by not taking into account his resignation from the role of Evraz chair in March and by wrongly referring to him as the company’s co-founder.
The hearing continues.
And then after one last dixer which ended with this from the prime minister:
The test tomorrow night - is twofold. What is their alternative? The second part of that test is - if they think it’s a good idea, why didn’t they do it during their almost decade in office? Why didn’t they do it in almost their decade in office? That’s the big test for the opposition leader tomorrow night. An appropriate title for someone who opposes everything.
(Tomorrow night is when Peter Dutton will give the opposition’s budget reply speech)
Question time finally ends.
Melissa Price: My question is to the Prime Minister. For nearly six months the Prime Minister refused to repeat his promise of a 275 reduction in household power bills. Now that the government’s own budget papers forecast an ever 50% increase in power prices isn’t it time the Prime Minister came clean with the Australian people. Will the Prime Minister concede he has broken his $275 promise?
I’m asked about commitments given during election campaigns on electricity prices. And I do know about election commitments given on electricity prices.
Because the former government that we know - that we know, before the 2019 election, said that a re-elected Morrison government...a 25% reduction in the average wholesale electricity price. The electricity price then was $84.25.
In May 2022 it was $286.18, an increase of $201.93. So, instead of a 25% decrease there was a 240% increase. And that doesn’t take into account either the further increase that was baked in where they hid - where they changed the law, changed the law in order...[to delay the release of the increase]
At that election there were a range of commitments that they gave, none of which they The election commitment that we gave was to move to 82% renewables, was to invest in our rewiring the nation plan.
…We have established a rewiring the nation plan.
Our rewiring the nation plant was a part of my first budget reply. It was provided for in last night’s budget, and even before our first budget we were delivering. With deals signed by Tasmania and Victoria with the Commonwealth. In some cases, in the case of the Marnus link, a tri-agreement agreement between a Victorian Labor government, a Tasmanian Liberal government and the Commonwealth.
And then he’s out of time (I cut out all the interjections because no one has time for that at this point in the week)
Dixer for Tony Burke on industrial relations
Tony Burke during a dixer on IR answers why the government is prepared to have the fight on multi-employer bargaining:
There were three different streams of bargaining dedicated to moulding employing bargaining. But they haven’t worked. For example, some of the barriers it turned out on the way decisions when, early childhood workers would deny a pay rise on the basis that they couldn’t compare their work to the work of engineers.
Low-paid workers weren’t able to enter the low-paid stream, and think of who these workers were - nurses, aged care workers and security guards, not able to enter the low-paid stream. Now, those opposite, you want to question whether or not multi-employer bargaining and opening it will make a difference to getting wages moving, look no further than the quote from, and I hate that it’s the same person again, the Shadow Treasurer.
Because the Shadow Treasurer was asked by Laura Jayes about his attitude to why they’re opposed to multiple employer bargaining and he answered this. “It pushes up wages.” “It pushes up wages.” He went on with more. “This is a bad place to go.”
And by the end he was saying, “This is exactly what they shouldn’t be doing.”
Well, in terms of it having an impact on wages he will. It will, but if you’re a government that wants to get wages moving then these are the sorts of decisions you make and take and we’ll be introducing into the Parliament tomorrow.
Coalition continues with questions on power policy
David Littleproud asked Anthony Albanese if the rewiring the nation plan will add to people’s power bills.
I’ll be seeing the New South Wales premier later this week and I’ll convey these Coalition views about these renewables and about fixing transmission because we are working with state and territory governments to fix the mess that was created by those opposite with all of the years of inaction and here is one, here is what, here is one the fellow colleague of those opposite have to say about this.
About transmission, which is what you’re asking about.
‘This will renew our economy as a renewable economy, it will put downward pressure on electricity prices, electricity prices will be lowered with with without it. It will help save money on people’s power bill, it is a great day, historic day.’
That is what the minister for renewables, Guy Barnett, that well-known radical socialist who served in the Senate as a Liberal party senator for year after year after year has gone into the Tasmanian parliament, is a minister and was standing next to myself, the minister for climate and energy and the Tasmanian premier had to say about that.
The Tasmanian premier himself had to say this: ‘Renewable energy is absolutely 100% in Tasmania’s DNA, reliable, affordable and clean energy, that will unlock billions of dollars of investment over the course of the next decade.’
[I] spoke about a renewable future, with the New South Wales Premier, ‘the issue here the New South Wales, Victoria, Queensland and South Australia are dealing with now has been the ideological war when it comes to climate change in energy policy in this country that has led to a lack of private sector investment’.
That’s what Dominic Perrottet, the New South Wales premier had to say, but it’s not just Coalition members, it is a range of that so I hope you give me another one, Gary Sharpe who the government, the Coalition government appointed as energy to look after the regulator, just have a think about the way electricity gets dispatched.
The Leader of the Opposition says, “Malcolm did”.
I got news for you, sunshine, he was a Liberal prime minister and you were in his cabinet. You are in his cabinet, if you had any guts, you would have resigned.
Anthony Albanese just said he would be meeting with the NSW premier a little later this week, so seems like they will have plenty to talk about
Dominic Perrottet says NSW being shortchanged by federal Labor government
The leaders of New South Wales have accused the federal government of shortchanging the state in the budget.
Speaking in flood-affected Moama, the premier, Dominic Perrottet, said the federal Labor party was playing favourites with state Labor governments and failing to provide cost of living relief measures.
Labor cannot be trusted with supporting household budgets with the cost of living.
Once again, we just keep being penalised because of our state’s infrastructure success. That approach needs to change. I’m getting sick of lazy Labor states around the country being rewarded for poor financial management.
Deputy premier, Paul Toole, said the government had “shortchanged” NSW.
We’ve been the economic driver here for this economy for a long period of time and now we’re going back to the bad old days where federal Labor did not invest in regional NSW.
We’ve worked too hard over the past 10 years with the investments that we’ve seen into our communities and just by the stroke of a pen overnight, it’s now been taken away. We’re not going to stand back for it.
The independent member for North Sydney, Kylea Tink, has another of the crossbench questions:
In the science budget, the government outlined the pressures Australians are under following the multiple crisis, Covid, natural disasters as well as because of living pressures to come. Indeed, in the past year alone, many Australians have accessed Medicare funded psychology sessions. Can the minister please explain to us and to those in the community who need mental health support, why the budget did not include an extension of the Medicare sessions which will now expire at the end of December?
I thank you, Mr Speaker and the member for North Sydney for her question and for her deep understanding and engagement in health policy and a time of this parliament.
As to the member pointed out, for some time, there has been an additional 10 sessions available under the better access program under Medicare as part of the Covid response. And that has been taken up quite substantially across the country.
We included $2.6bn in last night budget for Covid measures that will take up to the 31 December by and large and that includes the extension of the Covid national partnership agreement, that the parameters are concluded with premiers and chief ministers in his first national cabinet meeting in a range of other measures going to the needs to replenish the national medical stockpile but a range of measures beyond the 31 December are still being considered by the government and arrangements for better access and 2023 are one of those measures about watch will have more to say in the coming weeks.
The government is considering that in a number of other Covid measures that currently expire on the 31 December, many of them were intended to expire on the 30 June or 30 September under arrangements put in place by the former government but I’m very alive to the views of the APS, the psychological society has to say about this, about patients, about the current better access arrangements which we are looking deeply in terms of what will be in place for 2023.
More broadly in relation to the question, can I say that there is as I’m sure the member is aware, under way an evaluation that will committed by the former government as was appropriate in the last evaluation better access program hadn’t taken place for more than 10 years, the final report on better access is not due until probably December, maybe a bit after that and will have a look at longer terms arrangements in the relation to better access in light of that very deep evaluation which I know has had very strong support in the sector.
But can I assure the member that in relation to the 10 additional session that will put in place as part of the Covid response, we’re looking at that closely along with a range other Covid measures that currently expire on the 31 December, respiratory clinics and others are in the category and will have more to say about that in coming weeks and I welcome further discussion with the member about her perspective on this.
There is some more back and forth about energy prices, which includes some very clever lines, but you have to wonder about the wisdom of cracking political attack jokes when people are genuinely and sincerely concerned about paying their bills after already struggling to pay bills before these forecast increases.
Ted O’Brien is angry
Ted O’Brien gets another question and the Liberal member for Fairfax is still trying on his “very angry and serious and angry” question asking persona, and well, it needs a bit of work.
(It does make me think about the former member for Stirling, Vince Connolly, who never quite worked out how to ask a question without seeming like a cut-price AI that had learnt human tics from a MySpace code).
My question goes to the Treasurer. And it follows his response to the former question, where he explained his proclivity for mishearing question requests. My question is has the Treasurer and has the prime minister also misheard questions to which they responded with a promise of a reduction of household power bills by $275, where they made that commitment no less than 97 times?
Mr Speaker, I know that we’re supposed to take these characters seriously, but some days when they ask us about energy prices it’s just too difficult. Now, Mr Speaker, I do confess that when you have ears as big as mine and you say that you misheard something, I know that people might doubt that, but it’s the truth, and I rang Charles immediately after and I explained to him what happened. Now, that I have fessed up, to mishearing a question at the National Press Club, it’s time for you to fess up in your role in energy policy chaos.
It’s on relevance. Pensioners and families heard this [government] say on 97 occasions...
Thanks, Mr Speaker. Two points. First of all, the question in which it was asked almost anything could be in order in the way that question was asked. And, secondly, I refer to your earlier rulings where points of order have been taken by the leader of the opposition where it was clearly intended to participate in debate rather than to take a point of order and just refer to that earlier ruling.
Milton Dick appears to have had it. That’s three cranky Queenslanders in the house today:
I thank the leader of the house. And I want to make it clear, points of order on relevance must be stated. It is not an opportunity to ask a question again, to ask additional information, to give statements. Both the manager, the deputy and the leader have extra responsibilities in that area. If this continues, the points of order will not be heard. I want to be very clear to the house. I’ll give the call to the treasurer.
Thank you, Mr Speaker. There are two facts - or three facts about what’s going on in energy markets.
First of all, renewable energy is cheaper energy remains the case.
Second of all, there’s a war in Europe which is causing havoc in energy markets and pushing up electricity prices and, thirdly, the energy policy chaos brought to us by the dregs of the former government over there have made things harder rather than easier for us to deal with it.
Angus Taylor's 'fingerprints all over energy policy chaos': Jim Chalmers
Angus Taylor to Jim Chalmers:
A short time ago, the treasurer was asked whether Australians can expect to $275 off their power bills, he said: “Yes, it’s in the budget.” Page 57 of the budget says prices will increase by 20% this year and 30% next year. What page refers to a reduction of $275?
Thank you very much, I’m pleased to get this question from the shadow treasurer for two reasons.
First of all, it’s because it does give me the opportunity to explain to the house and explained to the relevant journalist who asked me the question, at the National press conference.
And I say about that ... I was temporarily blinded by the vast influence of Charles Croucher who has inherited this remarkable position of power from Laurie Oakes and Chris Uhlmann and I say, as I said to Charles who I rang straight after the press club, I rang Charles and I rang Laura Tingle and I said I thought you were asking me a different question, I misheard it and I answered a different question and so I say again to Charles, who is in the gallery through you, Mr Speaker, I misheard his question and I am generally grateful for once to the member for Hume for the opportunity to talk about this.
The other reason Mr Speaker, the other reason, Mr Speaker that I am genuinely delighted to get this question from the member form Hume on energy prices is because...
(the member for Petrie tries to raise a point of order which is not a point of order)
Thank you very much, may I reassure the member for Petrie that my answer is not going to be about the shadow treasurer’s history of doctoring documents, my answer is going to be about energy prices, he asked the about energy prices.
I pay tribute to the opposition tactics committee who decided on today of all days that the matter of public importance today will be the shadow treasurer talking about energy prices.
When I got given this one, I couldn’t believe my eyes, Mr Speaker, the guy has got his fingerprints all over this energy policy chaos that we’ve inherited, the guy who is more responsible than anyone else in this building for their smack that we had this was a decade which has given us energy policy pay us has the nerve to ask us a question about energy prices.
This is the guy that gave us the wasted decade of missed opportunities with electricity market chaos and now that we’ve got this war in Ukraine, our energy markets are more vulnerable than they should be because of the rank and competence of the shadow treasurer.
We’ve spoken in this place before, Mr Speaker. About this sense of humour that they’ve got and given the shadow treasurer questions on energy prices before when everybody jabbed at the same time to ask a question and you didn’t give a call to the Shadow Treasurer, the biggest sigh of relief coming from over there.
Over there because he is - he has got his fingerprints all over this energy policy crisis, he hid an increase from the Australian people during the election and they won’t forget it.
Linda Burney addresses students in the gallery
There are a group of First Nations’ students in the gallery and Linda Burney directs an answer to them (the question was on how the budget helps women)
I really hope you’re enjoying your stay and enjoying Question Time. The Albanese Labor government believes in women and the budget last night absolutely proved the issues that we have all the respect we have for equity, for diversity and for fairness. There will be cheaper childcare in fact, there will be $4.7bn of cheaper child care that will make childcare more affordable for 97% of Australian families.
We’ve expanded the paid parental leave scheme to 26 weeks and it also applies to single-parent families.
And that is an ordinary contribution to the life of families in this country and in particular to the participation of women in the workforce. And will provide greater flexibility for families to ensure the rental paid leave system works in ways that is best for them.
It’s not up to government to decide that, it’s up to families to work out the ways that it is best for them.
We are going to invest $1.7bn in women’s safety initiatives including $170m for 500 frontline community workers experiencing domestic violence.
These are all policies in our first budgets, policies that are good for women, good for families and good for our economy. Australia should not rank 43rd in the World Economic Forum, global gender index, index out of 146 countries, that is shameful and we need to move that.
We have a gender pay gap of 14% in this country and we know absolutely that gender equality is a key factor behind the issue of gender-based violence. The tragic stories that we also on Four Corners earlier in the week absolutely underscores this terrible inequity.
That is why we will develop a standalone First Nations national plan to gender-based violence for Indigenous women and they will be led by the work of minister Rishworth in terms of her responsibility. I am proud, absolutely proud to be part of this government.
Peter Dutton associates the opposition with Burney’s comments.
Zali Steggall has one of the crossbench questions:
Will you commit to an urgent review of the petroleum resource tax to close new loopholes and prevent multinational tax avoidance and deliver to the Australian people a fair share of the revenue from extracted Australian national resources? This could then find the rapid electric for households needed to reduce emissions and deliver up to $5,000 in much-needed cost of living relief per year per household.
Thank you, Mr Speaker and I think the member for Warringah for her question. I do understand and appreciate and I respect that the member for Warringah has had a view about the PRRT and about the taxation of resources particularly when we are seeing this quite extraordinary for gas in our economy.
Our focus, when it comes to the gas market, is building on the good work of Minister King who has guaranteed more supply into the market and to work with other colleagues, Mr Hughes, and others to turn our attention to the code of conduct and to see it as something meaningful we can do on the prize side of the equation as well.
I understand that there are a number of people in the community, a lot of people who are respect who have called for us to dial up somehow the PRT.
My predecessor, the former member for Kooyong, Josh Frydenberg, and I’ve been kind to him about this because I think it was a right step, began some work in the Commonwealth Treasury about the taxation of gas in the PRT. And what the Treasury did, they began their work, there was the initial report, Josh Frydenberg to some initial steps but the work was paused while the Department for that focused on the COVID response.
The workers in the process of restarting, we have said that it’s not something that we are focused on, our focus is on the regular Tory side and the code of conduct and other issues but obviously, if and when the Treasury completes that work, I’ll take their advice seriously.
Sussan Ley to Anthony Albanese:
Before the election the prime minister promised that if he was elected power prices would drop by $275. Last night the prime minister’s budget said power prices would rise by more than 50%. Given the prime minister often references his bachelor of economics degree, can he advise the House how it is possible to have prices rise by more than 50% but fall by $275 at the same time?
(This answer is interrupted about a million times)
Well... The cheapest form of new energy in this country is renewables. That is something that is recognised by the Business Council of Australia, something that’s recognised by the Australian Industry Group, something that’s recognised by the Australian Chamber of Commerce and Industry. It’s recognised by the National Farmers’ Federation, but apparently is beyond the capacity of those opposite to recognise. For a decade ...
that we had 22 different energy policies announced and none of them landed. Even when they went through the Liberal party room, not once but …
twice ... they still didn’t lead. In fact, they so detested the idea of landing an energy policy when one looked like being landed they instead locked on a prime minister instead. Not once but twice.
Not twice but -- once but twice, twice, and they ended up with the member for Cook. They ended up with the member for Cook. Turned out one of the hidden figures in the last budget was the member for Cook.
(Point of order that is not a point of order)
(interruptions of the interjections)
(Milton Dick cracks it)
Thanks, Mr Speaker. 22 policies announced, none of them landed. And an energy grid...for the last century.
The member for Fairfax...
The shadow minister interjects. That energy prices went down under the former government. Oh really?
Absolutely extraordinary. Indeed, so bad was it going that the shadow treasurer changed the law so that the price increase that was built in and should have been declared in March wasn’t declared until after the election. That’s how bad it was going.
That’s how bad it was going. But during their time in office, we saw four gigawatts of capacity leave the grid and one gig go in. Now, the old supply-demand that you do sort of talk about a bit in economics degree, supply and demand.
If you go four gigs out and one gig in, do you have more energy or less energy?
The prime minister’s time expires.
Inflation spike prompts ANZ to lift its estimate for how high the RBA will go
As noted in the earlier posts, the 7.3% headline CPI figure for the September quarter was not what the market (and shoppers) wanted to see.
We expected analysts to lift their expectations of how high the RBA would need to go to slay the “inflation dragon” (as Treasurer Jim Chalmers dubbed it).
Well, the ANZ is among the first to move, lifting their expectations of the “peak“ cash rate by 25 basis points to 3.85%.
After the RBA’s 4 October meeting, the cash rate rose to 2.6%. ANZ says there’s now a chance that the central bank will go back to lifting the rate by 50bp (as it did in the June-September monthly board meetings. More likely, though, the increase will be in further 25bp instalments for now.
Underlying and non-tradables inflation gained momentum in Q3,” ANZ said. “These broad-based, domestically driven inflationary pressures are persistent and harder for the RBA to rein in, particularly given that the overall economy is in good health with solid household spending, strong business conditions and a substantial volume of unfilled labour demand.”
Among the upside risks are all those floods (with more to come) pushing up prices further.
The budget cited the market economist consensus (at the time) of a peak RBA cash rate of 3.35%. Perhaps that’s one number already out of date.
Jim Chalmers gets the first dixer
Given the six hours in budget lock up, the budget speech, the morning media and then the press club, I think we can leave it.
Question time begins
It is straight into the questions today
On 30 April this year the prime minister said Australians would be “better off under a Labor government.” The budget confirms that a typical family will be $2,000 worse off by Christmas with inflation, the tax burden, power prices and unemployment all forecast to go up under your budget. Can the prime minister explain how a $2,000 hit to family budgets makes Australians better off?
Well, of course, I reject the premise of the question (my eye just twitched)
The leader of the opposition has simply made up figures. But what he said...
On 5 April the leader of the opposition said also the head winds, I mean inflation is very high in the United States and we have to be again real about what’s happening economically over to coming years.
On 3 May he went only to say, “Nobody wants to see things go up but it’s a reality of a world where there’s inflation. I think Australians understand that. There’s a lot of pressure that puts pressure on interest rates at the moment.”
The shadow treasurer said, “We’re making - we’re facing circumstances in what’s happening in the Ukraine and Russia that were not expected and very hard to predict. These are driven by extenuating circumstances.”
They had a lot to say about the difficulties that Australia’s facing due to the global impact which is a global inflationary pressure that is seeing central banks around the world with the fastest and most consistent tightening of monetary policy that we have seen in many decades.
What last night’s responsible budget, handed down by the treasurer did, was to have fiscal policy work in partnership with monetary policy rather than against it. Because we make no apologies for the fact that we have brought in responsible measures, including responsible measures on cost of living, cheaper childcare, and those opposite respect quite sure whether they’re against that or for that.
Cheaper medicine, that they never did either, cheaper medicine.
Expanding paid parental leave to six months, making more affordable housing, working with the private sector, working with state and territory governments to deliver more affordable housing. And, importantly, getting wages moving again.
People might remember during the election campaign me standing up, day after day, with a $1 coin, a $1 coin.
Which is what we said the minimum wage should be increased by. Those opposite opposed it, opposed it, said it was reckless, said it was loose, remember that? It was loose economic policy to argue that people on the minimum wage, the heroes of the pandemic, should get a pay increase of just $1 an hour.
The Australian people … judged you in May for the hypocrites and the hopeless economic managers you are, and you’ve learnt nothing in the days, weeks and months since.
There were a lot of interjections from the opposition.
Antipoverty Centre condemns federal budget
The Antipoverty Centre weren’t expecting a lot before the budget, but spokesperson and DSP recipient Kristin O’Connell said the budget hasn’t given social security recipients any hope in the face of the rising cost of living:
Anthony Albanese has given us no help and no hope. This budget is a death trap.
The forecast is higher electricity bills, low wage growth and more unemployment. It means more people feeling suicide and self-harm are their only option.
Poor people are not the cause of inflation but we are the ones being punished for it.
This budget is nothing but an exercise in blatant social murder. The ghouls running this country have chosen to get their precious budget savings at the cost of lives they deem disposable.
People on the lowest incomes cannot take any more. We cannot sustain the brutal welfare policies inflicted on us.
We’re not coping with the price increases we’ve already seen, let alone more. Electricity and gas going up means more people having their power cut off, more people in debt they can’t repay and more people homeless.
We don’t need more demeaning food banks, voucher programs, services, mental health awareness. We need money. We need it urgently. Politicians know this.
Every poverty-related death is a political choice.
Angus Taylor on the budget:
The remarkable thing about this government is when they were in opposition, they talked relentlessly about taking accountability. Relentlessly.
So when they are in government need to take responsibility. During the pandemic we were thrown curve balls every day. It was fair enough that they said take responsibility for those circumstances. We did but like today, you don’t get to choose your circumstances in government.
You do choose your response.
And the real point I’m making here is there is no clear, critical, compressive plan that is a response to those circumstances. I have laid out some things are could do on energy so that I think would make a real difference.
But it’s up to them to put that point forward. What was disappointing for all Australians in this budget in terms of the outcomes is that that are comprehensive plan wasn’t there, it’s a missed opportunity, there is a question in my mind given the budget is normally in May, if you just gotta give a lot of forecasts, why are you doing it in the first place?
Budget predicts rising electricity prices
Budgets usually try to bury the bad news and puff the good stuff, so it was a bit curious to see yesterday’s 2022-23 (2.0) version tell us electricity prices were going to soar.
Specifically, Budget Paper 1 said:
Treasury has assumed retail electricity prices will increase by an average of 20% nationally in late 2022, contributing to higher forecast CPI in 2022–23. Given forward wholesale contract prices for electricity remain elevated, retail electricity prices are expected to rise by a further 30% in 2023–24.”
Cue headlines that screamed electricity prices were going to rise 56% (that’s taking the compounding effect). But where did that number come from, was it national, and was it realistic?
The Australian Energy Regulator said it wasn’t them (or if it was, they wouldn’t say), and the Australian Energy Market Operator (which is releasing September quarter figures overnight) said they look at wholesale and not retail.
Treasurer Jim Chalmers shed a bit more light on the scary numbers. For one thing, it’s national (which means some regions may see bigger rises).
But, and this was something the budget might have worded differently, most of that 20% is actually already showing up - so forget those 56% headlines (we hope).
The first of those electricity price forecasts [are] already flowing through,” Chalmers told the National Press Club, saying they were “starting to show up” .
You know, the 20% this year is not from now. It’s over the course of this financial year,” he said. “Then we’ve got 30% next year.”
A collective sigh of sorts... (and cue some online article tweaks, maybe).
And that is where the press club address ends
We are now on the downhill slide to question time, where the opposition will pretend the economy was hunky dory before the election.
It wasn’t and there is more Labor could do in this budget, but the opposition attacks so far have been a little all over the place.
Will all the new training and education be worthwhile?
Q: There are 20,000 new university places in the budget and 180,000 new free TAFE places. There is an established counter-cyclical trend in that the more buoyant the jobs market, the less likely people are to go to university or to TAFE. So I’m just wondering if there’s going to be an oversupply of education and training places and where these people are going to come from especially to fill places for childcare which you’re going to need by next July?
I wouldn’t have thought there would be an oversupply of training. One of the big conclusions from the Jobs and Skills Summit we had here is that we haven’t trained enough people for some of these opportunities. The opportunities are obvious - they’re overwhelmingly into the future, they’re in areas like the care economy, as you rightly identify in your question, we need to train more people.
But what we have also tried to do and I think Clare O’Neil’s work in her migration review working with Andrew Giles and others is important here too - sometimes we think in this place that if you got labour and skills shortages you got to choose between training or migration or childcare and participation or some other thing.
The reality is the situation for employers trying to find workers is so substantially challenging that we have to find a way to act on all of those fronts simultaneously.
One of the reasons I’m so proud of our early childhood education programs, one of the biggest investments in the budget, is because it’s cost of living relief, but also because you know too often in this conversation about how we feel skill shortages we ignore new parents and particularly new mums. So paid parental leave and early childhood education are important.
Clare O’Neil’s work on migration is incredibly important and we took some steps in the budget including trying to clear up that visa backlog but we need to train more people and we need to make sure the people we train are relevant to the opportunities that the economy is creating.
Does the budget really ‘leave no one behind’?
Q: A keen mantra of the election was - “nobody held back and no one left behind”. Can you say to the Australian people given the massive cost-of-living pressures they’re facing which you have admitted can’t all be addressed, that this budget does just that?
Yeah, absolutely. Because the most damaging thing for people on low and fixed incomes, their worst thing that could happen to people who are at risk of being left behind in this country is if we let inflation get out of control. You know, inflation inflicts a hammer blow on Australians, but particularly vulnerable Australians.
And why everything I ran through in my speech is so critically important to this, is because we can provide cost of living relief - we got the indexation, we got the minimum wage increase, all of these things are important, but the most important thing is we don’t add to this inflation problem because inflation punishes the most vulnerable, the most - and it helps but you don’t need to be a Labor person to recognise that.
I recognise that. So we’re not going to leave people behind to fend for themselves against this inflation threat which stalks our economy. It is public enemy number one, it is our highest priority, it’s going to get worse before it gets better but it will get better.
When it comes to not holding people back, we got this incredibly aspirational agenda around skills and training and in so many different ways because while we deal with these near-term inflationary pressures, we can’t forget the reason why we’re here in the first place - which is to create more opportunities for more people and more parts of Australia and the budget does that too.
Chalmers labels Nationals' claims Labor leaving regions behind ‘complete rubbish’
Q: The Nationals have accused this budget of leaving regional Australia behind. Are they right? And the bulk of your budget commitments for regional Australia focus on infrastructure programs and roads and renewable projects but how are you delivering better services for regional areas? I’m thinking specifically about access to doctors, healthcare and childcare programs as well?
Yeah, I’m glad you asked, because this line that the Nationals are running is complete rubbish.
You know, there is a huge amount of investment in regional communities and a massive amount.
700 and something different investments in the regions including across some of the areas that you identify, but projects as well.
And all we have done in the budget is we have introduced a level of rigour and robustness to spending in regional communities.
You know, as a Queenslander who knocks around regional Queensland a lot with my colleagues from the Senate and with others, I know how important regional infrastructure is and regional services are.
You know, it’s ingrained on my brain. That’s why, you know, this line that’s been run that somehow, you know, we have gone after the regions in this budget is rubbish.
There’s a lot of investment in the regions, projects and services, both sides of that equation, but what we have tried to do is we tried to work out, you know, where Barnaby Joyce has been travelling around writing comments on the back of coasters or issuing press releases, we have tried to say, “OK, is there a business case for this? Is there a level of rigour?”, and where there isn’t, you know, we might have delayed some spending. And I think that’s the right and responsible way to go about it.
The other thing I’d say about it is this: And it’s not just in this area but really right across the board, you know, we are engaged with local governments and with state governments about how the Federal Government plays an active role in delivering projects and services in regional communities.
And October - the October budget that we released yesterday had some necessary tidying up of some of those programs, long overdue, but it doesn’t mean that there won’t be new investments in regions in subsequent budgets as well and that’s important too.
Q: The Housing Accord sets up the architecture to ease housing shortage in the long-term, but do you think people need some housing relief with the stress they’re feeling right now?
As you know from yesterday and from other times that I have raised this, I think the housing accord is really important because we’ve got incredibly low vacancy rates, high rents and people can’t live near where the jobs and opportunities are being created.
That’s what’s motivated Julie [Collins] and I as we finalised this policy work being investors, builders and state and territory governments and local governments.
You’re right that it takes a little while before it comes in - 2024 - but that’s deliberate, too, because we have got labour shortages in the industry, we have got inflation when it comes to building materials, and there’s an existing pipeline of work and one of the benefits of working so closely with the building and construction sector is because you understand the shape of that pipeline and so we want to start in 2024 when that pipeline is expected to trail away a little bit.
Now, you question about what do we do in the interim? I think one of the most important things in the budget, not that I’m taking, you know, credit for it as a new decision in the budget, but there’s a $33bn increase in the budget when it comes to payments and pensions as a consequence largely of indexation.
And so payments like when it comes to rental assistance and other kinds of payments, people on fixed incomes, they get indexed and when inflation is high, the indexation is relatively high. I know people would like more than that, I understand that genuinely, but that’s an important part of the way that the budget works and that’s how the budget is working right now, it’s kicking in extra for people who are some of these payments.
When it comes to working people, you know, one of the reasons why I’m so proud Tony [Burke’s] and I first order of business for the Albanese cabinet was our support for a decent minimum wage rise.
That was the first thing Anthony’s cabinet decided and I took that through with Tony, first order of business, and that’s important too because we want wages to keep up to the extent that they can and for people who are on low and fixed incomes, those two things working together, indexation and a minimum wage increase, we hope, makes it a little bit easier, not enough, but a little bit easier.
Q: About 40 minutes ago you said you were going to have a serious go as being as up-front as you can be with Australians. Given that and give therein’s probably a one word answer to this question - should Australians still expect that $275 off their power bills, particularly off pre-election prices
Yep, it’s in the budget.
He’s four words over that one word answer, but there you go.
How about broadening the base of the GST?
Q: Would you contemplate, for example, broadening the base and lifting the rate of the GST perhaps in exchange for the states doing more on the NDIS to ease the federal pressures?
No, that’s not our inclination, and from time to time that gets put to us and we listen to that respectfully, occasionally that view puts by one or another state, depending on who the premier at the time is.
And over the 20 or so years I have been knocking around this building, from time to time people make that proposal, we listen respectfully, but it’s not a path we intend to go down.
As you know, and as you allude to in your question, if you increase the GST, every cent would go to the states and I know that’s what you’re getting at with the kind of a trade-off with disabilities, but quite often not in your question, but quite often more broadly when people put this to us, you know, they have got so many different destinations for an increase in GST that it gets spent four or so times over. Budget repair, more money for the states, and other destinations for it. So we’re worried about the distributional impacts of increasing the GST, that’s why we haven’t been in the cart. But, again, you know, there are advocates for that, we listen to them, but it’s not our intention.
Q: Could I clarify, Treasurer - you’re not inclined to increase the rate of the GST, but what about broadening the base?
No, same answer.
Warnings over electricity prices
Q: It’s been put to me that the Australian energy retailer has warned governments in the default market of next year prices could rise as much as 50%. So what I’m talking about is the 70% to 80% rise if you include the 20% that your budget may have underestimated next year’s rise by 20%. Given that, wouldn’t that have more of an effect on inflation than, say, a rebate to offset that given all the price points, power bills go through, and isn’t it too late for a cap because of the contracts that have already been signed around electricity?
First of all, I haven’t seen that AER number but I think it is worth remembering that the numbers that Treasury put in yesterday’s budget around anticipated increases in prices for electricity were a national average.
And so it is conceivable that in some parts of the market it’s less than that, some parts of the market it’s more than that, but I’m not familiar with that particular number. I don’t think I have been briefed on that number.
But the numbers as they are in the budget are confronting enough and your point about whether the horse has bolted, a bit like the answer to an earlier question is that some of these price rises are already flowing and, you know, we have made no secret of that.
Part of that was the consequence of what was hidden during the election campaign.
So we’ll do what we can for all of the reasons I have described in all of the other questions about this. If’s more that can be done, more will be done. We don’t want to limit our options.
We want to do the right thing, the right and responsible and sensible thing in the context of price rises in electricity which, you know, are confronting to say the least.
Chalmers asked about petroleum resource rent tax
Q: The PRRT – petroleum resource rent tax designed in the 80s has proven itself to be wholly inadequate to capture some of the wealth from this great nation. In your budget, despite the ginormous prices for oil and gas, it’s going to be – going down, only about $2bn. Now, that well-known socialist Rishi Sunak earlier this year increased the windfall super – whatever, windfall tax for oil and gas in Britain from 40% to 65 or thereabouts. Is it about time for you to have a proper look at how much tax companies like Chevron is paying for effectively renting a resource that is owned by Australians?
First of all, the tax taken the PRRT goes up in the short-term, and I do genuinely understand that a lot of people would like to see it go up more, but in the budget numbers last night there was an increase in PRRT in the near-term, but you’re right, that it trails away after that because of the assumptions that we make about prices.
But it has tracked up over the course of recent history when gas prices have been high and the other thing to remember is that the broader company tax rate – tax take is substantially higher too, and some of the companies that we’re talking about are part of that as well.
You mentioned now Prime Minister Sunak and it’s an opportunity to congratulate him, of course, but also to say that I had a conversation with him when he was the chancellor at the very beginning of our government, I had a conversation with Rishi Sunak, then chancellor, about some of these issues including tax, a brief conversation about it. Different countries make different decisions about how they go about this.
Now, in our country, in our case, my predecessor, I think, you know, in a welcome way, he did the right thing here, Josh Frydenberg, he began an inquiry into the taxation of gas, PRRT, and that work there was some fruits of that work and then it was paused by Treasury when they were dealing with the most intense part of Covid and they have or are or about to or have restarted some of that work and I’ll obviously listen to the advice that I get from Treasury as they conclude that work.
But it’s not currently something that we’re focused on. Our intention and our priority and our focus is on building on the work that Madeleine [King] has done on supply to think about price and to think about the code of conduct in the gas market.
Treasurer addresses rise in electricity prices
Q: The budget papers show a 20% increase in electricity prices this financial year and a 20% increase in gas prices this financial year. Obviously there is a consequence in later years but just focused on the immediate, is it now too late to stop that happening? Or do you actually have levers that can change those outcomes this financial year, 20% on each of those factors?
I think one of the things that’s been lost in this conversation about the first of those electricity price forecasts is that that is already flowing through and I know that you don’t want a heap of, kind of, partisan reflections here, but what we’re seeing now in that 20% is part of what Angus Taylor hid from the Australian people during the election campaign, some of you will recall he made a quite an unusual intervention to prevent the publication of the change to the default market offer.
And so this 20% that we’re in right now, which is starting to show up in bills and starting to show up in figures, is actually part of that, you know, when the DMO went up, that flowed through to retail prices and so that is already flowing and that doesn’t make it any easier for people to deal with, I’m not pretending that, but it is an important qualification.
You know, the 20% this year is not from now, it’s over the course of this financial year and it’s already begun. And then we got 30% next year and in gas it goes 20 and then 20. What we tried to say about any steps that we could take in this area is we have taken a bunch of steps, you know, in terms of funding the regulators to do their work, I really pay tribute to the ACCC by the way who do incredible work under Gina’s leadership in this regard and we want to involve them more in the solution than we have even in the past.
Q: In terms of the options available to the federal government, we already have a – as you mentioned with the DMO (default market price) – effectively a price cap mechanism. What are the problems with how that is currently working? And if, if that is put in place to ensure that energy retailers don’t go to the wall, what more can the federal government do or is it really going to be up to the states to pursue reform in this area?
I’m going to try to make sure that you haven’t wasted your question by saying exactly what I said a moment ago, but, I mean, it is in the same areas, you know.
A lot of the regulatory powers are held by the states, that’s just a fact.
A lot of the good work that’s happened so far has been because Chris Bowen has taken a collaborative approach to working with his state counterparts and some of the other important areas. And that will be the approach that we take going forward as well.
I’m not prepared to kind of elaborate on some of the mechanisms that are currently in place or the steps that we might contemplate beyond that except to say, you know, I was asked yesterday in the budget lock-up and through the course of the evening and through the course of the morning and I suspect probably the prime minister and the finance minister and others were as well, what additional steps could be taken.
And I think, I believe, that more effective than sending people cheques to deal with it in the near-term, that a better avenue for us to explore is on the regulatory side and beyond that I don’t want to limit our options.
Q: Are you up to putting price caps on energy?
A bit like the answer to the question before – I don’t want to nominate a preferred path. It would require a lot of consultation with colleagues and with other levels of government and so that’s the reason why I’m not prepared to be more specific.
Chalmers quizzed on tax reform
Q: You talk about sensible tax reform and you have also spoken about having a conversation with the Australian people about some of these decisions that need to be made. So will you be coming to the Australian people in the coming months before the next budget trying to develop a tax reform package that you can present to Australians at the next budget? Are you open to everything? Will it revisit some of your previous proposals perhaps around capital gains tax, all of those things?
Well, first of all, I mean, we take seriously the positions that we took to the election around capital gains and some of those other proposals. But I think I have made it pretty clear that last night was the beginning, I hope, of a conversation about the budget position and all of the ways we can improve it.
And I hope and expect that that will continue in the lead-up not just to the May 2023 budget but the May 2024 budget as well. I think the days of pretending that we don’t have structural pressures on the budget are over.
As I said before, you know, part of recognising this moment that people are appreciating our willingness to talk up to people, not down to people, part of that is about being upfront, about the sorts of things that the nation needs to contemplate.
The nation does need to contemplate how we trim spending, how we show budget restraint, and whether we have got the best tax system that we can – that we can have, fit for purpose for the challenges that we confront.
Q: Dr Chalmers, I think you said you’re not keen on an inquiry to look at the tax system maybe because you have been through such an inquiry, but nevertheless, Michael Keating, a former distinguished public servant and one-time head of finance has suggested that there should be an inquiry firstly into what revenue we need and, secondly, when we establish that into the ways that such revenue could be raised. It does seem a very logical way to go about things. What do you think of that sort of proposal?
I got a lot of time for Mike. I spent some time with him. We correspond from time to time. He’s one of those people who have been around this town for a long time that I consult regularly, whether it’s Mike Keating, Martin Parkinson, Ken Henry from time to time. And I think I made it pretty clear and I have been pretty blunt about it, but I think we do need to consider the tax system when we think about long-term sustainable budget repair.
As I said in response to Laura’s first question – you know, I think we’d be unnecessarily narrowing the conversation if we said, “We got this massive structural problem in the budget, it comes from intensifying spending pressures, it comes from the rapidly-increasing cost of servicing the trillion dollars of debt that we inherited”, I think it would be unwise to limit our options to just one area of budget repair.
And what Katy and I were able to show yesterday I think, with the help of the ERC and the cabinet colleagues more broadly, is that you can combine all of these things, spending restraint, trimming spending, sensible tax reform and also making sure any new investments that you’re making deliver some economic bang for buck.
So I don’t want to limit the conversation. You’re right to assume partly for historical reasons that I don’t immediately rush for another tax review, other colleagues might have a view about that as well, but I think we broadly know what the challenges are, certainly in the budget position, we broadly know what the levers are, and last night we began to utilise those levers, but there’ll be more to come.
Q: Would a price trigger be one of those sensible solutions to the problem? Has the inflation figure today made redundant the main assumptions in the budget on prices? And if the 50% increase in electricity does eventuate and the 40% increase in gas, would you consider some form of energy rebate or energy supplement in your next budget particularly for low-income people, pensioners and welfare recipients.
So in terms of our forecasts for inflation, we don’t expect that to change markedly. What we saw today with inflation was broadly in line with what the Treasury was expecting.
The market was expecting about 7, it came in at 7.3, so the higher end of market expectations but not dramatically so. The upside risk to inflation and to that peak and some of the things that the Reserve Bank and others will be contemplating will be whether or not the natural disasters play a bigger role in that peak, the timing of that peak towards end of the year.
So you know clearly in volatile times, forecasting is a difficult business to be involved in but what we saw today doesn’t substantially change our expectations, but the combination of electricity and natural disasters has capacity to be a little worse than what we anticipated last night.
In terms of the challenge in energy, part of it is gas, part of it is as it feeds into energy more broadly, and we have said on the gas front that we need to build on the good work that Madeleine King did in terms more supply in the market and need to consider things like code of conduct, like price in the gas market, high gas prices are smashing our local industry and making it – making life much harder as Dan Walton and others have identified today.
We got more work to do there. We said that’s the case again working collaboratively with my colleagues. In terms of the type of mechanism, triggers, caps, other kinds of regulation, I’m not prepared to pre-empt any of that or narrow down the conversation today. It doesn’t involve multiple levels of government, does involve multiple ministers, and so I’d rather leave our options pretty open and the same goes for in some future budget, if there is a genuine case to provide support to people differently than what we did last night with our $7.5bn cost of living relief package, if there’s a compelling case to do that at some future point, obviously we’ll consider it.
Chalmers grilled on power prices
Q: 56% rise in power prices is going to force many Australians to avoid turning on their heater this coming winter. In extreme cases this can lead to loss of life if someone has a chronic illness and avoid doing something like this. There’s also already warnings that small businesses and manufacturers may go under as a result of these price increases. So if the $275 that Labor promised at the election isn’t coming, what can the government do right now to ensure that people can turn the lights on and businesses won’t go under?
That modelling that you refer to was done in 2021 and it referred to an outcome in 2025 and in the interim, we got a war in Europe, which is creating absolute havoc in energy markets around the world and pushing up electricity prices here at home. It remains the case that renewable energy is cheaper energy.
We see what’s happening in global energy markets is a reason to do more, to get more renewables into the system, our opponents see it as an excuse to do less. That’s our starting point.
What we saw in the inflation number today was, unfortunately, the front-end of some of these pressures on electricity prices that you’re right to refer to. A bigger and bigger part of our inflation challenge will be a combination of higher electricity prices and the impacts of natural disasters on grocery prices as well.
And that number that we got today, 7.3%, a substantial part of that is electricity and we understand that.
And we know that that makes life harder for Australians who are already under the pump for lots of reasons.
We still expect our inflation – inflation to peak around the same level towards the end of the year but petrol has come off a bit quicker and electricity prices and groceries are going to be a bigger and bigger part of that.
In terms of what we do about it – obviously we have – there’s already been a number of steps taken, I pay tribute to Chris Bowen in this regard – bringing energy ministers together because so much of what needs to be done here happens at the state level.
He’s brought energy ministers together, he’s made some progress in the budget, we did more for our regulators in important ways, but as I flagged yesterday and as I’m happy to repeat today, I do think there’s more work to be done on the regulatory side and I have been deliberate in not pre-empting the specifics of that because it involves a heap of colleagues and governments at multiple levels but if there is something that we can sensibly do on energy beyond the substantial steps that we have already taken, if we can do that to help take some of the sting out of these price rises, then obviously we’ll consider it.
Chalmers says he worked closely with the business community
It is the question time for the treasurer.
Q: About six months ago we were standing here and your predecessor was up on the podium talking about their own plan for the recovery and a very heavy emphasis or large part of that plan involved the private sector. They talked about a business-led recovery, time for the government to pull back and let business, you know, generate the growth, the job creation. It was a kind of language that was notably absent from your budget last night and tomorrow you’re about to unveil an industrial relations bill, which got a few people in this room nervous. What, if any, is Labor’s planned role for the business sector, for the private sector, in, you know, confronting the challenges ahead?
Absolutely crucial. And I know that my predecessor talked about that a lot but what we did in the budget yesterday is we put our money where our mouth is when it comes to working with the business community. You think about the housing accord that Julie Collins and I worked on and released yesterday with a bit of help from the Herald, and what that was all about was recognising when you got big challenges in the economy, government typically can’t solve them on their own.
Often the market can’t solve it on its own so you work out what are your big advantages and our advantages in this country and business community wanting to do the right thing, big superannuation, trillions of dollars of superannuation funds, and in this case, building and construction sector led by the peak industry groups who want to do the right thing as well.
So I see business as absolutely central, absolutely crucial, to everything that we’re trying to achieve. The last time we were hearing these numbers we brought together business people and unions from all around Australia and the Jobs and Skills Summit that Anthony and I hosted here in this room, and I think that was a demonstration as was the budget, as was the relationship that I have with people like Jennifer Westacott and others who I respect greatly, immensely, and spend a lot of time with and have a lot of time for. Business will be crucial to our prospects going forward and I think what we have done in the budget around the housing accord and in other areas shows that we don’t just say that, we mean that.
Chalmers says government driven to transform ‘moment of adversity into an age of long-term prosperity for our people’
The treasurer finishes with:
Now, since taking on this job, I tried to have a serious go at being as upfront as I can be in what’s happening in the economy and what it means for the budget. Sometimes I don’t get it bang-on, it can be inelegant, ineloquent, but I always try to preference the blunt over the polished and I want to take people into our confidence about what we’re seeing, what we’re doing and why we’re doing it.
As I said last night, and as I have said before, this is just the beginning of the conversation I want us to have about the longer-term position of the budget, about the things we got going for us and the things we need to confront.
About our priorities as a country and the choices we need to make to honour and pay for them.
Now, this springs from an optimistic, realistic mindset, not a pessimistic one, because for all that’s confronting and challenging about this period, we aren’t daunted, and we aren’t distracted. We are driven.
Driven by our determination to transform this moment of adversity into an age of long-term prosperity for our people. We are energised by this opportunity. We are determined to do something with it in the time that we have got.
To steer our country through these choppy waters and towards a better future - a future worthy of the Australian people that we are so privileged to serve.
Treasurer defends no ‘cash splash’ in budget
An indiscriminate splash of cash would have made our inflation challenge more profound and more prolonged and ultimately more painful for people who would have felt it through higher prices and higher interest rates as well. I think most people get that.
Now my sense in recent months is that there is a pretty solid understanding in our communities of how all this works – the balancing act, the tight rope we’re trying to walk here.
At a time of rapidly rising interest rates, we weren’t prepared to do something that might have made a nice splash on budget day, but would ultimately be counter-productive to tackling the inflation challenge.
So that meant any cost of living measure couldn’t be inflationary, it had to deliver at least another purpose, pull at least another lever in the economy whether on the supply side or through productivity or through participation, it had to deliver some kind of economic dividend and you see that in the plan that we set out last night.
‘Inflation is the dragon we need to slay’: treasurer
There’s never any shortage of worthy and well-meaning offers or ideas on where we might spend more money.
And that temptation becomes a lot stronger when you see people hurting. As a Labor government, as Labor people, we feel that, we care about that, it keeps us awake.
We see what rising prices means for families taking more from hip pockets and pushing people closer to the edge. And whether it’s food, whether it’s electricity, whether it’s rent, inflation is public enemy number one.
Inflation is the dragon we need to slay.
And in the weeks leading up to yesterday, cost of living relief was the subject of most of the questions I got from yourselves and from your colleagues and that’s not surprising.
Because it’s the source of most concern in our communities right now which is why it was the centrepiece in lots of ways of our budget last night. But there’s a right way to spend and there’s a wrong way to spend. And perhaps surprising to some was our determination to deliver cost of living relief only where it met very specific and very strict criteria.
Relief that was targeted in the right way, timed in the right way, and which delivered the right kind of result.
And we did it in this way not to appear tough, not just to win kudos with the markets or the commentariat but because we knew that doing any different would be doing damage to the people that we are here to serve.
Jim Chalmers begins post-budget address to National Press Club
Inflation is back at a level we haven’t seen since I was in primary school.
We were reminded of that an hour or so ago with new CPI numbers showing we hit 7.3% through the year to the September quarter.
And we expect inflation to peak later this year and stay higher for longer mainly due to energy prices and natural disasters before they start to moderate.
Now, the rising cost of energy comes courtesy of the war in Europe but a decade of energy policy chaos hasn’t helped either.
And that’s why energy prices are a bigger reason why inflation is higher than we’d like for longer than we’d like.
Now it’s already well understood that Australia enjoyed nearly three decades of uninterrupted economic growth until that ended in 2020, but it should also be understood that low and stable inflation was a cornerstone of that remarkable run.
And now we are in genuinely different and genuinely difficult times.
Queensland to amend law after UN restricted from accessing state’s mental health wards
The Queensland premier has announced the state government will amend its legislation after the United Nations condemned the state for refusing access to its mental health wards.
The UN suspended its tour of Australian detention facilities after the New South Wales government refused inspectors entry into any facilities and Queensland blocked access to its mental health wards.
During question time on Wednesday, Greens MP Michael Berkman asked premier Annastacia Palaszczuk what she would do to repair Queensland’s reputation on human rights.
Palaszczuk said she had been advised that UN officials had faced “some barriers” that “restricted access” in the state’s mental health wards.
She said a bill would be progressed to amend that restriction by the end of the year. This would allow the state to fulfil its obligations under the optional protocol to the convention against torture and other cruel, inhuman or degrading treatment or punishment (Opcat).
States have known for five years that the inspections would occur and some had changed laws to provide for access.
Delegation head, Aisha Shujune Muhammad, condemned Queensland and NSW for blocking access during the officials’ first Australian visit.
“It is deeply regrettable that the limited understanding of the SPT’s mandate and the lack of cooperation stemming from internal disagreements, especially with respect to the states of Queensland and New South Wales, has compelled us to take this drastic measure.”
$5.5m allocated in budget to investigate Optus data breach
The Office of the Australian Information Commissioner was given $5.5m to investigate the Optus data breach, and the company’s information handling processes in the budget last night, but it’s too soon to say how exactly the money will be spent.
The OAIC announced the investigation earlier this month in coordination with a separate investigation by the Australian Communications and Media Authority.
The investigation will focus on whether the Optus companies took reasonable steps to protect the personal information they held from misuse, interference, loss, unauthorised access, modification or disclosure, and whether the information collected and retained was necessary to carry out their business.
The OAIC indicated it was too soon to say where the funding would go, but it is understood the funding would be focused on the investigation itself, not any potential legal action arising out of the investigation.
Jim Chalmers giving post-budget speech in Canberra
It is a full house for Jim Chalmers’ first post-budget National Press Club address.
It is being held in the parliament Great Hall, so it is a very, very full house.
GetUp accuses Labor of ‘folding to the gas industry with a huge new fossil fuel subsidy’
GetUp is unhappy with what it says is a new fossil fuel project subsidy in the budget.
There is a $1.9bn funding announcement for the Middle Arm project in the Northern Territory “citing it as a ‘Sustainable Development Precinct’, ‘including common use marine infrastructure and regional logistics hubs’.”
“What is not being told in this story is that the Middle Arm development is a Coalition-era plan to turn fracked gas from the Beetaloo into plastic, pesticides, and gas for export. Labor must confirm not one cent of this public money will be spent on enabling new gas and fracking projects.”
Larissa Baldwin from GetUp said:
Our politicians are failing to tell us that the Middle Arm petrochemical plant is a Morrison government-era plan to turn fracked gas from the Beetaloo into plastic, pesticides, and gas for export.
Firstly we were told $1.5bn would be spent on this project by Catherine King’s office and now the federal budget outlines $1.9bn, with Labor claiming this is a ‘sustainable development’.
This giant gas processing hub on Darwin Harbour would be a disaster for Traditional Owners, water and our climate.
Public funding for this fossil fuel project flies in the face of a decade of staunch Traditional Owner opposition to fracking on their Country and Labor’s mandate for climate action from voters last election – contradicting Labor’s good work on renewables.
We can’t let Labor get away with defying Traditional Owners and folding to the gas industry with a huge new fossil fuel subsidy – greenwashed as ‘sustainable development’.
Angus Taylor says Coalition didn’t know energy prices would rise before election
Angus Taylor is having a big day:
Q: Mr. Taylor, the government has accused you of hiding energy price hikes before the election, saying that prices hikes were backed in. Did you know that energy prices would hike before the election?
No, I didn’t and can I say that the government had saw the Ukraine war happen before the election, and they kept their commitment, they made their commitments to a $275 reduction back in November, but the broader point I make about this, is this is a government that has an excuse for everything, and a plan for nothing and to have in the budget, a recognition now that electricity prices are going to go up by 50% over the next two years. 20% this year alone is incredibly disappointing.
Is the government running away from ironclad commitments it made during the campaign. Commitments that Australians rely on, commitments that I know swing votes, and understandably so. We understand that as an opposition, having lost the election these were real commitments, and no asterisks, no footnotes, Australians should be able to expect better.
According the ABS, the biggest contributors to the higher CPI in the September quarter were the cost of building new dwellings (not buying them), up 3.7%, furniture, up 6.6%, and gas up 10.9% for the three months alone.
One of those things, you have to imagine, the federal government might be able to do something about.
We know Australia isn’t short of gas since we export the great bulk of production. But because of the wisdom of both major parties, east coast gas users now pay global prices for the fossil fuel (while Western Australia has wisely capped its increases by reserving 15% of output for domestic use.)
With the high gas price propelling power prices higher (as it is frequently the swing fuel in wholesale electricity market setting) in eastern states, pressure will likely be added to treasurer Jim Chalmers and others in the Albanese government to do something about it.
Indeed, as Chalmers told reporters yesterday during the lock-up:
“I’m not going to pretend that we’re not worried about these electricity prices,” he said, blaming the war in Ukraine for “playing havoc” with energy markets and a decade of energy policy indecision, our colleague Tory Shepherd reported.
“I think any responsible government facing these kinds of price hikes … needs to consider a broader suite of regulatory interventions than they might have considered in years gone by,” he said. “We have more work to do … more will be done and we’ll have more to say about that in due course.”
The ABS said electricity prices rose 3.2% for the quarter, with WA’s $400 power credit and smaller offerings in Queensland and the ACT helping to blunt the increase.
Excluding the effect of these schemes, electricity would have risen 15.6% in the quarter,” the ABS said.
Apart from anything else, these ABS numbers help to clarify why the federal budget was forecasting a 20% further increase in electricity prices this year and another 30% on top of that next year.
But given the range of increases in the market, you have to assume Treasury is looking at even higher price rises in some states. (Hello, NSW.)
Federal budget a ‘big win’ for grassroots campaign on treaty, Greens’ Lidia Thorpe says
The Greens senator Lidia Thorpe has responded to some of the funding in the budget – here is some of her tweets
Palaszczuk says she will continue to push for 50-50 funding for Queensland's public hospitals
The Queensland premier has welcomed the federal budget while flagging she will “always” advocate for more funding for the state.
Premier Annastacia Palaszczuk said the budget included an extra $1bn in health funding for Queensland than the state received under the Morrison government.
But Palaszczuk said there was “more work to do” at the national cabinet and that she’d continue to push for 50-50 funding between the federal and state governments for public hospitals.
The premier said the prime minister had been “very positive” in discussions she has had with him about building new pumped hydro energy storage dams.
She said the government is continuing to work on a funding partnership to connect Townsville to the North West Minerals Province and to progress the Hughenden irrigation scheme.
All of these projects will mean more investment in Queensland’s regions and good jobs.”
Nick Evershed has put together a chart showing inflation since 1990 (or from when Taylor Swift was one, if that is how you measure time) so you can see the jump:
Australia’s inflation rate hits 7.3%
Lots of bad numbers in those higher-than-expected CPI figures. For one, the quarter-on-quarter rise of 1.8% compared with market forecasts of about 1.6%.
The trimmed mean figure coming in at an annual pace of 6.1% is also a worry since that’s pretty much the “underlying” inflation figure the RBA wants back into the 2-3% target range. That’s quite an acceleration from 4.9% in the June quarter.
Cue: an increased chance of higher interest rates.
That’s bad enough. But the non-discretionary annual inflation increased to 8.4% in the September quarter, up from 7.6% in the June quarter, the ABS said, dubbing that “a new high”.
Prices of discretionary stuff that you don’t need to buy only rose by 5.5%.
For what it’s worth, the budget had pencilled in a peak CPI headline rate for 7.75% that would hit by the end of this year. More than a few number crunchers are going to be wondering if we won’t hit that and then some. If we do, the non-discretionary inflation might be nudging 10%.
Your wages have absolutely not kept pace with inflation
Daniel Andrews vows to fight for ongoing 50-50 split of hospital funding with commonwealth
The Victorian premier, Daniel Andrews, has vowed to continue fighting for an ongoing 50-50 split of hospital funding with the commonwealth after the federal budget confirmed the temporary pandemic arrangement would end in December.
Earlier this year, Andrews alongside other state and territory premiers had pushed for the current agreement to be extended beyond winter.
Speaking to reporters on Wednesday morning, Andrews said he believed other state and territory leaders would join him in fighting for an equal partnership on hospital funding:
Our position, I’ll only speak for Victoria, but I think I would be joined by other colleagues, is again putting patients before politics, 50-50 is a proper partnership .... that remains my view.
The federal Australian Medical Association has previously called for the Covid funding to be extended to 2025, and for the federal government to commit to a long-term 50-50 split in health funding. Under the current long-term agreement, the federal government contributes 45% of hospital funding, but also places a cap when growth rises above 6.5%
Andrews also stressed the need to reform Australia’s Medicare system:
If you can’t find a free bulk-billing doctor, then the only other free option for you is to go to the hospital emergency department ... it’s not just hospital funding, although our position is unchanged, it’s also a primary care system that’s better connected to hospitals and is also there to keep you out of hospital.
Non-discretionary annual inflation increased to 8.4% in September quarter
This is what people are feeling though – the non-discretionary inflation.
These are the things you CAN’T cut completely. Because they are necessary for life.
The ABS says:
Non-discretionary annual inflation increased to 8.4% in the September quarter, up from 7.6% in the June quarter. This continues to be well above discretionary annual inflation of 5.5%.
Non-discretionary inflation includes goods and services that households are less likely to reduce their consumption of, such as food, automotive fuel, housing, utilities and health costs, which have all risen in prices over the past 12 months.
You will probably hear a bit about the “underlying inflation” today and that is because that is the figure the RBA focusses on.
When the RBA talks about its 2-3% inflation target band, it is talking about underlying inflation.
Keep in mind I only have a high school economics education, but underlying inflation is when the most volatile items in the CPI basket are excluded from the measure and it is meant to just measure the “real” inflation.
In ABS terms, it is the “trimmed mean”.
That went up by 1.8% in the September quarter and is up 6.1%
That is going to worry the RBA. A lot.
What does the ABS say?
The consumer price index (CPI) rose 1.8% this quarter.
Over the 12 months to the September 2022 quarter, the CPI rose 7.3%.
The most significant price rises were new dwelling purchases by owner-occupiers (+3.7%), gas and other household fuels (+10.9%) and furniture (+6.6%).
Inflation hit 32-year high in September quarter
Australia’s annual inflation accelerated in the September quarter, heaping pressure on household and business budgets, ensuring more interest rate rises to come.
The consumer price index rose to 7.3% in the July-September period compared to a year earlier, the Australian Bureau of Statistics said. Economists had predicted CPI would quicken to reach 7% for the quarter from the 6.1% pace reported for the previous three months.
That pace is the highest since 1990.
The ABS will release the September inflation data in just a few minutes.
ABS data always looks backwards, so the figure it puts on inflation is what you have already felt.
Government ‘considering options’ on energy costs, Chalmers says
So what will the government do about the energy market, given the coming increases?
Jim Chalmers was asked that this morning on ABC radio Melbourne:
Virginia Trioli: Well, so you’ve signalled more government intervention in the energy sector. How exactly? What are the mechanisms that you could use, that you plan to use, or are we talking here about legislative changes that you’re actively considering?
I think the best way to understand it, Virginia, is we’re considering a broader range of options than might have been considered in the past.
Trioli: Give me some examples of that, treasurer.
I don’t want to – the reason I don’t want to do that, Virginia, I don’t want to pre-empt the work that needs to happen, including by my other colleagues in the cabinet and including potentially by state governments. I don’t want to limit our options but really why I raised it yesterday is people are asking me, is the best way to deal with that to send cheques in the mail? I’m not convinced that it is because of our inflation challenge and our budget challenges. I think a smarter thing to consider is whether we can do something in the energy market itself.
Trioli: A cap of some kind? A price cap?
Well, I’m not going to pre-empt it. I really don’t want to limit the conversation or narrow the conversation and I’m conscious that other colleagues are involved and other levels of government are involved and so, I’d rather flag to your listeners, Virginia, we know it’s an issue. We know people are already under the pump. Obviously, these projected price increases will be difficult for people to accommodate. Any responsible government at any level seeing these kinds of forecast increases would be considering their options, and we are.
Liberal MP Stuart Robert decries ‘budget of disappointment’
If Stuart Robert could describe the budget as a colour, I think he would choose “sad-beige”.
It’s a budget of disappointment, sadly. Before the election, the prime minister said no one left behind. Now we hear 150,000 more Australians will be unemployed. $275, in terms of a reduction for the electricity price has been junked. We now hear our prices are going up a staggering 57%. Inflation is up longer and higher. I think it’s a budget of disappointment.
‘We’ve got to be really careful’: Chalmers on balancing inflation and relief
Jim Chalmers is trying to walk the line between acknowledging that people are doing it really tough and about to do it tougher, while also acknowledging there is little in this budget to help them.
He told Network 10:
When you do recognise, as I do, that the most vulnerable Australians are most at risk when inflation is high – first of all, don’t make it worse. But also, in the budget that I handed down last night, there was something like $33bn in extra money for pensions and payments. And that’s because when inflation is high, we try and make sure that pensions and payments keep up with that, with the indexation. So that’s part of the story.
And when it comes to low paid workers … the first thing that we decided as a new Labor government … was a minimum wage increase for people on the lowest pay to make sure that they get a decent pay rise to keep up with these costs of living too.
And I know that people would like us to do more. I do genuinely understand that. But we’ve got to be really careful with the budget in these pretty uncertain times. We’ve got to build a buffer. We’ve got to not make inflation worse. And one of the things I’m proud about in the budget last night is we did provide cost-of-living relief, we did invest in strengthening the economy, but we did it in the most responsible way we could think of.
But that is cold comfort if you are wondering how you will pay for basics, or one piece of bad luck away from losing your home.
Medibank CEO says number of customers affected by ‘terrible crime’ to rise
Further to the update from Medibank that all the private health insurer’s customers have had their data accessed, CEO David Koczkar said:
Our investigation has now established that this criminal has accessed all our private health insurance customers personal data and significant amounts of their health claims data.
The investigation into this cybercrime event is continuing, with particular focus on what data was removed by the criminal.
As we’ve continued to say we believe that the scale of stolen customer data will be greater and we expect that the number of affected customers could grow substantially.
I apologise unreservedly to our customers. This is a terrible crime – this is a crime designed to cause maximum harm to the most vulnerable members of our community.
For the record: Penny Wong has called on Iran to stop oppressing women
Liberal senator Claire Chandler’s said in the Senate that she had not heard the government condemn what is occurring in Iran, but there is this statement from 27 September from Penny Wong:
The Australian Government condemns the deadly and disproportionate use of force against protesters in Iran, following the tragic death of 22-year-old woman Mahsa Amini.
We have raised concerns into the circumstances surrounding her death in custody with the Iranian Embassy in Canberra.
Australia supports calls led by the Acting UN High Commissioner for Human Rights for a prompt, impartial investigation into Ms Amini’s death by an independent body, which ensures her family has access to truth and justice, with those responsible held to account.
We are alarmed by reports that dozens of people have been killed and many more injured, including teenagers, during heavy-handed measures Iranian authorities have implemented to crack-down on ongoing protests.
Australia supports the right of the Iranian people to protest peacefully and calls on the Iranian authorities to exercise restraint in response to ongoing demonstrations.
Reports of internet restrictions are also deeply troubling and suggest an effort to stifle freedom of expression.
Australia regularly raises Iran’s significant discrimination against women and human rights violations with officials in both Tehran and Canberra, as well as in multilateral fora.
Australia stands with Iranian women and girls in their struggle for equality and empowerment, and we call on Iran to cease its oppression of women.
Australia is committed to promoting gender equality and women’s human rights, empowerment and ending violence against women and girls worldwide.
ABC loses Doctor Who
This means Doctor Who, which has been broadcast on the ABC for 50 years, will no longer be available free to air.
Greens call for Labor to broaden the parameters of what’s possible
Max Chandler-Mather continues:
The cost of living is going to go up and real wages are going to stagnate, but at the same time we’re going to continue to see record corporate profits. Not only that – those same people making those record profits are going to get an extra $9,000 a year.
I once again return to that question asked time and again: why on earth do people in here wonder why people don’t like politicians? Time and again we are told that the parameters for what’s possible in politics are narrow.
We could, for instance, step up and build hundreds of thousands of good-quality public homes over the next few years. We could scrap the stage three tax cuts and bring dental and mental health into Medicare.
We could bring forward the paid parental leave scheme right now so hundreds of thousands of extra parents could benefit.
We could make child care universal and free right now if we scrapped the stage three tax cuts.
Australians voted for change but got ‘more of the same’ in budget, Greens say
And here is where the Greens are going with the budget response today – this is from Max Chandler-Mather’s attempt last night to amend a supply bill.
People in Australia voted for change in the election in May, but so much of this budget is more of the same.
We’ve been told that energy prices are going to go up by over 50 per cent over the next two years, while at the same time gas corporations are counting record profits.
We’ve been told that revenue into the government coffers from gas is going to decrease by hundreds of millions of dollars in the same year and in the same period as one of the biggest gas booms in our history.
We’re told that rents are going to skyrocket, but there is no action on capping or freezing rents.
We’re told that the shortage of public housing is going to increase over this period, and yet the only investment the government is making in public and community housing is for 20,000 homes over the next five years, which doesn’t even match the annual increase.
We’re told that unemployment is going to be up, yet the perversity of it is that we all sat here, hearing the Treasurer talk about a sensible budget with tough choices, but everyone in this place is going to get an extra $9,000 a year once the stage 3 tax cuts come into effect.
What are the tough choices that we’re all making here? What are the tough choices that the billionaires and millionaires are making, who are going to get the $9,000 extra a year out of the stage 3 tax cuts? We’ve been told that life in Australia is going to get tougher over the next few years.
Medibank hacker accessed all customers' data, company says
Medibank has released a new statement to the ASX, saying the data of all of its customers was accessed in the recent cyber-attack. This includes Medibank, ahm and internatonal student customers.
Yesterday, Medibank provided a further update regarding the cybercrime event and announced a comprehensive customer support package for Medibank, ahm and international student customers affected by this cybercrime.
The investigation into the cybercrime event is continuing, with particular focus on identifying which systems and networks were accessed and what data was removed by the criminal.
Since yesterday’s announcement, our investigation has now established that the criminal had access to:
- All ahm customers’ personal data and significant amounts of health claims data.
- All international student customers’ personal data and significant amounts of health claims data.
- All Medibank customers’ personal data and significant amounts of health claims data.
As previously advised, we have evidence that the criminal has removed some of our customers’ personal and health claims data and it is now likely that the criminal has stolen further personal and health claims data.
As a result, we expect that the number of affected customers could grow substantially. Our priority is to continue working to understand the specific data that has been taken for each of our customers so that we can contact them directly to let them know.
Medibank has announced a support package for affected customers which includes:
- A hardship package to provide financial support for customers who are in a uniquely vulnerable position as a result of this crime, who will be supported on an individual basis
- Access to Medibank’s mental health and wellbeing support line for all customers, including ahm customers
- Access to specialist identity protection advice and resources from IDCARE Free identity monitoring services for customers who have had their primary ID compromised
- Reimbursement of fees for re-issue of identity documents that have been fully compromised in this crime
Also happening today:
Here is where Peter Dutton will be going with his budget reply
I don’t think there was any election promise about a 56% increase in electricity prices and, tellingly, the 5reasurer never mentioned it in his speech last night.
There was no mention about a 40% increase in gas prices in the treasurer’s speech last night. I think a lot of Australians thought they heard the prime minister say before the election that he had a plan to deal with the cost of living pressures.
Everybody knew about the Ukraine war. The $275 promise was made knowing all of the settings – the Ukraine war had already started.
… So I think there is a lot of doubt and a rising level of anger within the Australian public because they know that Labor just doesn’t have the ability to manage the budget and they’ve demonstrated that in their document last night.
That was from his interview with the ABC this morning.
What he neglects to mention, though, is that his shadow treasurer, Angus Taylor, the former energy minister, delayed a key electricity pricing update until after the election, leaving voters in the dark over changes to their bills.
‘Deserved the chop’: environmentalists welcome defunding of Queensland dams
Environmental groups have welcomed the defunding of Queensland dam projects that were branded as probably “the biggest pork barrel in history”.
The former deputy prime minister, Barnaby Joyce, had championed the proposals to build a series of speculative dams, particularly the Urannah and Hells Gates dams in north Queensland.
More than $6bn in funding was awarded to Queensland water projects that had not completed detailed business cases. The former government also sought no input from the panel it established to scrutinise such projects, the National Water Grid Advisory Body.
The new Labor government’s decision to remove funding from the federal budget does not necessarily kill the projects, but they now seem increasingly unlikely to be built.
The Queensland Conservation Council director Dave Copeman welcomed the decision to reverse the former government’s funding commitments.
“These dams threaten the health of the Great Barrier Reef, as they would result in more sediment and nutrients flowing into reef catchments,” he said.
“They threaten more than 30 endangered species, and are dependent on business cases that don’t stack up economically or environmentally.
“Billions for reef killing dams whose business case was washing coal is a dead end investment that deserved the chop.”
Greens attempt to amend a supply bill, sparking a stoush
Over in the lower house, Labor and the Greens got into a small political stoush yesterday over Greens MP Max Chandler-Mather trying to amend a supply bill.
Supply bills are all about the money for the business of government. It’s the nuts and bolts to keep money flowing (this time including for public servants) and it’s the reason why minority governments make deals with the crossbench to guarantee supply. If a government doesn’t get supply, it pretty much has to go to an election, simple as that –because the money has to keep flowing.
For that reason, supply bills are usually left alone.
Last night, after Stephen Jones introduced a supply bill, Chandler-Mather moved this motion:
That all words after “that” be omitted with a view to substituting the following words: “whilst not declining to give the bill a second reading, the House:
(1) notes the government’s first budget gives a $9,000 per year tax cut to billionaires and locks in the $254 billion stage three tax cuts for the wealthy;
and (2) calls on the government to repeal the stage three tax cuts and provide cost of living relief that will make people’s lives better, including by putting dental and mental healthcare into Medicare, building more affordable housing, and making childcare free”.
You’ll note he made it clear that he was not declining to give the bill a second reading. That’s important because it shows he wasn’t aiming to block supply.
Tony Burke, though, was not having any of it:
In terms of stunts there are plenty of bills where you can move a second reading amendment, but to pick supply? To actually pick people’s wages, people who work for the commonwealth, is something that—I thought the sorts of arguments as to whether supply would be jeopardised in Australia were dispensed quite some decades ago. If it were to come back, it had not occurred to me that it might be members of the Greens political party who would raise it.
Be in no doubt, it’s not like I am providing something that isn’t readily available. It’s there in practice. On the one occasion a second reading amendment had been agreed to it was because the people on this side of the table— neither of whom are in the parliament anymore—weren’t paying attention. And for the bill it was on there was no consequence in the timing. There was no urgency.
The Speaker ruled that the amendment had been validly passed and proceedings on the bill should have ceased at that point. But you really want to put that forward? Really? Of all the different things that we can put in jeopardy and be willing to play some game of chicken with each other don’t choose the wages of the people who run the public service, don’t choose the wages of the people who deliver the payment system, don’t choose the wages of the people who run this building and who we all ask to help us every single day we’re here.
The opposition stood with the government in voting down the motion.
The issue the party of the Greens has raised—and we’ll take it, I think, as read that it’s a rookie error and move on—is one of enormous consequence. I’d seek the maturity of the House, probably on behalf of the Leader of the House and myself, for us just to move on and get this important part of the bills done with tonight.
And on that rare note of agreement between the opposition and the government, the House moved on.
One Nation senator retracts ‘the brown stuff’ in Senate
And One Nation senator Malcolm Roberts was made to retract unparliamentary language:
Roberts: “The harm from our Covid response was foreseeable and preventable. If only the Senate, the ultimate house of review, had had the courage to stand up and call bullshit. The Senate did not.”
Acting deputy president: “Order! Senator Roberts, that language isn’t parliamentary. I ask that you withdraw or find another word.”
Roberts: “I retract that—the brown stuff.”
Liberal senator says Australia must take a stance on Iran’s treatment of women
Tasmanian Liberal senator Claire Chandler meanwhile focussed on what is happening in Iran:
The government of Iran — the dictatorship of Iran — is killing Iranian women and girls. Day after day, week after week, women and girls in Iran are being shot, beaten to death or kidnapped and never seen again.
They are being attacked by the regime’s forces in their schools, their homes and in the streets for doing nothing more than refusing to cover their hair as the dictatorship demands or for protesting against the killing of women and girls the day before or the day before that. If ever there were a case for democratic nations to stand up for the human rights of women and girls, this is it. Australia could start by leading the way on having the Iranian regime removed from the UN Commission on the Status of Women.
It has now been six weeks since I first suggested that Australia must take a stance on this. By leading the charge on correcting this absurd and disgusting validation of the Iranian regime, we could have sent a message that, as far away from Iran as we are, we will not stand by and do nothing as women and girls are killed.
But six weeks later, there’s been not a single word from the prime minister or the foreign minister on Iran’s position as an UN-endorsed expert on women’s rights. Many of our closest allies have already used sanctions against the Iranian regime to send a message.
The US, the UK and Canada have all applied various forms of sanctions against Iranian leadership and the leaders of the so-called morality police responsible for much of the violence. But what actions has Australia taken and what sanctions has Australia applied in response to the murder of women and girls? None. Our government has not just done less than our allies and partners; it has done nothing.
Gerard Rennick criticises US approach to Ukraine: 'Time to use diplomacy, not weapons'
I’ve just had a read of the Hansard overnight and it seems that some senators took the opportunity of the budget focus to throw up some curve ball issues.
Queensland LNP senator Gerard Rennick had some things to say about Russia’s invasion of Ukraine, which did not seem to follow the line Australia has taken – he’s using Joe Rogan and Tucker Carlson as his guides, it seems:
America’s greatest strengths are its people and its political process. Two of its biggest political commentators, Joe Rogan and Tucker Carlson, are both anti war in Ukraine. What does that tell you about the will of the American people? They do not want to get entrapped in a war that has nothing to do with them.
The American system of government was formed by patriots, people who opposed foreign oppression and the unelected ruling class and instead sought to protect the liberties of the individual. There is no greater manifestation of the enlightenment period than the American revolution. Unfortunately, despite the warnings of Eisenhower and the efforts of Kennedy, the elites have infiltrated the centre of power in the US, Washington, DC, and turned it into a swamp that desperately needs to be drained.
The founding fathers must be turning in their graves.
The only way out of this bloodshed is for the eastern provinces of Ukraine to be given the choice of self determination.
In 2010, the International Court of Justice concluded that the declaration of independence of Kosovo, adopted on 17 February 2008, did not violate international law. This decision was backed by western countries. The provinces in eastern Ukraine should be given the same rights, subject to a vote. Australia backed East Timor’s right to self-determination in 1999. We should not forget Northern Ireland’s wish to remain part of the United Kingdom.
Provided that voting is conducted fairly, then surely a democratic outcome in Ukraine is better than continuing the bloodshed, is it not? The only people who are suffering here are the Ukrainians. The escalation needs to end. It is time to use diplomacy, not weapons.
In the words of Ronald Reagan when he started a detente with the Soviet Union in 1984: ‘We seek genuine cooperation. We seek progress for peace. Cooperation begins with communication.’
‘We can’t turn it around in one month’: Albanese under fire over power prices
We posted a little earlier about what Anthony Albanese said about energy bills in response to questioning from ABC radio RN host Patricia Karvelas.
Here is more of that exchange:
Karvelas: Prime minister, the budget paints a grim picture of electricity prices. Bills will go up by 20% this year and then 30% next year, it’s staggering. For someone with a $500 energy bill, they’ll be paying around $780. This is a huge increase that’s going to hit people, families, pensioners. Is your election promise of cheaper energy bills dead?
Our election promise was consistent with the modelling that we took to the election, which was about the fact that the cheapest form of new energy is clean energy. What we’ve seen from the former government and what we have inherited was four gigawatts out of the system and only one gigawatt into the system. That’s the practical example of why there simply wasn’t enough investment.
Now, you’ve already seen, as a result of our policy, which is essentially implementing the integrated systems plan of rewiring the nation, you’ve already seen agreements reached last week with Victoria and Tasmania, including the Marinus Link, which is a major proposal that could never get done by the former government. That will make a difference. That will make an enormous difference.
Karvelas: There’s no doubt that those investments are really key in transforming the market. But they don’t help families in the short-term, do they? And you did promise to cut power bills, that promise is dead now, isn’t it?
Cheaper power bills will come as a result of investment in cheaper energy. That’s just a fact.
Karvelas: But not next year.
That will take time, of course. We can’t turn it around in one month. And remember that the former government actually changed the rules. They introduced a new system to avoid telling the Australian people that the power price increases that were baked in, that were due to occur, to keep from the Australian people that significant increase that occurred in the middle of this year.
Lenore Taylor and Katharine Murphy spent part of last night discussing the budget with Laura Murphy-Oates – you can hear that conversation here
Greens MP says Labor’s housing plan a 'con job' that will make crisis worse
Max Chandler-Mather has responded to Anthony Albanese’s comment that the “Greens are always negative”.
The Greens MP for Griffith says:
Of course we’re negative about a plan that will see the housing crisis get worse. We’re willing and ready to offer Labor our plans to build 1m public and affordable homes, freeze rents and scrap negative gearing.
Over the last five years the private sector built just under 1m homes, so Labor announcing that under their plans the private sector will build 1m homes over five years from 2024 is a complete joke. These homes would have been built anyway.
The ‘housing accord’ looks like a complete con job. Planning deregulation and handouts to the private sector to build housing won’t fix the housing crisis, any more than any housing tax breaks or planning deregulation has in the past.
In reality, the only extra thing Labor has announced is $350m for 10,000 so-called affordable homes over five years, all the rest is smoke and mirrors.
Meanwhile Labor’s already announced the Housing Australia Future Fund will only fund the construction of 20,000 public and community homes over five years, which will literally see the shortage of public housing grow to 590,000 homes as the build won’t even keep up with increasing demand.
Also worth remembering – there is another budget coming in May
Treasury estimates that inflation will begin coming back down from mid next year. But treasury is not a fortune teller – it is making educated predictions based on information as it knows it now and can’t predict exactly what else might happen (intensifying war, supply chain shocks, etc).
It’s going to be a rough year.
Albanese ‘determined to govern in the national interest’ amid power price concerns
Why is there no help for power bills in the budget?
Anthony Albanese told Network 10:
It would have been counterproductive. It would have given a sweetener there. But we’re determined to govern in the national interest. That’s why we targeted our cost of living relief in areas that wouldn’t feed into inflation. Cheaper childcare, cheaper medicine, more paid parental leave, more affordable housing, our plan to get wages moving, as well as structural investments in the National Broadband Network, in infrastructure investment in rail and road projects – so that we’re boosting the economy in a way that builds that capacity as well as building capacity in our people through $1bn additional into fee-free Tafe.
That is an example of how we are creating opportunity, making sure our economic settings are right whilst making sure we are keeping an eye on inflation. Because that’s what really hurts people. You can’t have increases in real wages if inflation is continuing to increase.
Jim Chalmers will also give an address at the National Press Club today.
From past years, the success or failure of a budget tends to rest on how long people talk about it. People spoke about the 2014 budget for weeks. But the more boring the budget, the less its discourse shelf life.
Over on Sky News, the questions were all about the next budget:
Host: Joining us live now in Canberra is the prime minister, Anthony Albanese. Prime minister, good morning to you. So, a safe budget to pay for your election commitments. Are tax increases and spending cuts next?
Hang on, Pete. We’ve just had the budget last night. You’re now talking about future budgets. Let’s talk about what we did last night. What we did last night was to fulfil our election commitments, provide cost-of-living relief with cheaper childcare, cheaper medicines, more paid parental leave, more support for affordable housing. And we want to get wages moving again. We did all that without putting pressure on inflation by targeting our investments in things like infrastructure, improving the National Broadband Network, making sure that there’s that growth in the economy without putting pressure on inflation. That was our focus last night. And we managed to achieve it.
Host: You’ve still got a mountain of debt to pay down, it’s only going north, prime minister. So are tax increases and spending cuts going to come next?
Look, we inherited a trillion dollars of debt, Peter, as you know. We inherited a trillion dollars of debt with not much to show for it. What we did last night was to make $22bn of savings. We took the revenue gains that have come through, 99% of those revenue increases from the higher costs of fuel and energy, we put them straight to the budget bottom line, 99% of them. So it was a responsible budget that saw a significant drop in the deficit to $37bn from what was anticipated. That is a responsible thing to do. Because we want to make sure that we fight inflation because that is necessary if we’re going to get real wages moving in the way that we want them to.
The post-budget interview game is very strong today
There are so many interviews to be done that Anthony Albanese and Jim Chalmers just walk from camera to camera, microphone to microphone and host to host and answer different versions of the same questions.
Peter Dutton and the opposition are doing their best to get their lines in where they can too.
All of this before a day of parliament where the same things will be discussed.
Inflation figures to be released this morning
If the flood of numbers in last night’s budget weren’t enough, we get September quarter consumer price index numbers from the ABS at 11.30am today (AEDT).
The spectre of inflation dominated Labor’s first budget since 2013 with very little extra spending to assist cost of living because that would only stoke price pressures. The independent Reserve Bank would then have to hike interest rates higher for longer, nullifying any benefits.
The market consensus is for the headline CPI to come in at 7%, quickening from the annual pace of 6.1% in the June quarter (the predicted quarter-on-quarter increase is about 1.6%)
Underlying inflation will be what the RBA is most interested in, while the rest of us will be watching what will be happening to non-discretionary items (essentials).
Economists such as CBA’s Gareth Aird, who correctly picked the RBA’s latest 25 basis point rise in the cash rate, reckon the central bank was assured the budget wouldn’t be expansionary. Not extending the fuel excise “holiday” was a clue.
The budget assumes the RBA’s cash rate will peak at 3.35% but investors are still betting on a much higher “terminal rate”.
Households arguably hold up half the sky for the budget predictions (and China the other half) so it would be better for the economy if the budget and not investors were right on interest rates. We explore these dynamics more in this piece:
Dutton says people on fixed incomes 'copping it' in Labor's 'grim budget'
The Liberal leader, Peter Dutton, is out attacking the government’s pre-election modelling that said the average electricity bill would fall by $275 with increased renewable investment.
Dutton told ABC News Breakfast:
The government said only six months ago that families would see a $275 reduction – now they are told [it is] a 56% increase. People on fixed incomes, pensioners, they are really really copping it in this budget and it is a grim budget.
And I worry for those families who are already struggling with an increased mortgage payment, in increased prices of the browser, and now they’ve been told by the government the complete opposite of what they were told before the election so you can understand the anger out there.
Dutton claims the market is “factoring in” increased costs from investment in renewables and batteries. The Ukraine war had already broken out when Labor used the $275 figure, so they can’t blame skyrocketing gas prices, according to Dutton.
Dutton also attacked Labor for blowouts in the NDIS, arguing that the Coalition hadn’t been able to make changes to the scheme because they wouldn’t get through the Senate.
Meanwhile, Bill Shorten “has been running around telling people they could have more rather than less” under the disability insurance scheme, Dutton said.
And just like that…
Albanese says election promise of cheaper energy was ‘consistent with the modelling’ at the time
Here is where we get a bit closer to the nitty gritty.
Anthony Albanese is on ABC radio RN Breakfast and he is asked about lower energy prices.
The game has changed since then. Labor’s promise was by 2025, but this is the closest the PM has come to admitting it may not be possible to meet that election commitment.
Albanese says cash handouts would ‘feed straight into inflation’
The prime minister, Anthony Albanese, told ABC News Breakfast the government had opted not to give cash handouts that would “feed straight into inflation” and therefore “not help people with cost of living”.
So what we had to do was target investment into ways that didn’t add to inflation. So cheaper childcare, more paid parental leave, more affordable housing. Increase in wages that you will see over the medium term kicking in ... As well as providing immediate relief through measures like cheaper medicines.
Asked if Australia could avoid following the rest of the world into recession, Albanese replied:
I think that is right. The budget papers show that’s the case because we have been responsible. In areas like the increased upgrades in revenue - 99% of those over the next two years were banked to pay off debt, put downward pressure on inflation.
That is a bold prediction. With a huge structural deficit even while Australia is at near full employment, there’s not a lot of room in the budget for pumping up demand if the economy does tank.
Asked about the Greens’ criticism that the private sector built 1m homes in the last five years anyway, Albanese rejected criticism of the housing accord as smoke and mirrors.
Gee they’re negative, they always are. They never have any solutions. We have a real solution worked out with super funds, state governments.
Albanese on taxes: ‘We have no plans beyond what we announced last night’
On Channel Nine’s Today, Anthony Albanese was asked about Labor’s plan for the economy, allowing him to rattle off the highlights reel from the budget:
National reconstruction fund, to help create new industries
A billion dollar plan for skills and training
Cheaper childcare policy to lift women’s workforce participation
Paid parental leave to help working families
Albanese was then challenged on whether the government will increase taxes. He said:
We have no plans beyond what we announced last night ... We’ve fulfilled the commitments we’ve given. If it was in our agenda you would’ve seen it last night.
It’s a bit silly to ask about future budgets the day after we hand out a budget. All our plans are in the budget last night.
Albanese said the tax agenda in the budget is cracking down on multinational tax avoidance, which are the “ones we went to the election on” as the government was “fulfilling promises we put to the Australian people, that they voted for in May”.
Albanese and Chalmers spruik budget and blame Coalition for energy price woes
The prime minister, Anthony Albanese, and treasurer, Jim Chalmers, are out selling the budget with the three Rs featuring heavily (responsible, responsible, responsible).
Chalmers told ABC News Breakfast the budget provided “targeted cost-of-living relief that doesn’t put upward pressure on inflation”. Pressed on why the government didn’t do more for households, Chalmers said there was $7.5bn for measures including cheaper childcare and medicines. The treasurer said the government couldn’t offer “excessive” cost-of-living relief, which would make inflation worse.
On Sky News, Albanese said the budget was responsible because it applied 99% of the projected improvement since the March budget towards the bottom line, resulting in a “significant drop in the deficit”.
Albanese was pressed on electricity prices, and continued to warn the government would consider further regulatory reform.
Albanese blamed the Coalition, arguing “if we’d had a decade of investment we’d be less reliant on global prices” and noting prices were scheduled to increase by 20% before the election, but voters weren’t told.
Albanese said the budget contained the biggest spending in renewables since the Chifley government’s spending on the Snowy Hydro scheme.
We need to increase (gas) supply further. We would be prepared to look at measures beyond what governments have normally considered because of the extraordinary circumstances.
Chalmers told Channel 7’s Sunrise that Australians understand the war in Ukraine is pushing prices up, and renewables will help bring them down.
Good morning – it's budget Boxing Day
It’s budget Boxing Day and this is where stuff gets real.
A budget lives or dies in the first 48 hours – the reactions, how the government defends it and how the opposition attempts to frame it all matter.
But what matters the most is what you think, Australia. And how you react.
This budget puts budget repair front and centre. Which means that, yes, it’s a bread and butter budget. There is no, as someone said last night, meat and potatoes. There is barely a spread of jam.
The cost-of-living relief comes in the form of the measures announced before the budget. Childcare. Paid parental leave. Infrastructure projects such as the “aspirational target” of 1m social and affordable homes (with the states and the private sector helping).
But looking through the budget, inflation looms large. So Jim Chalmers has worked to put a lot of money back into the budget. Almost all of the extra $150bn found in revenue went back on the budget’s bottom line.
Which means there is not a lot of individual cost-of-living relief.
Chalmers calls it “restraint”. He has a very keen and worried eye on inflation. And doesn’t want to act in opposition to the Reserve Bank, especially after what happened in the UK.
So it’s bread and butter all round. Which will be cold comfort for anyone already struggling to make ends meet.
The opposition has seized on the lack of relief for energy prices and that looks like where Peter Dutton will be focusing most of his own energy today.
The Coalition spent question time yesterday trying to pin the increases on Labor and that looks set to continue today. It’s an ambitious task given the Coalition was in power for almost a decade up until May and also knew energy prices were going to increase, and deferred that information until after the election.
But no one cares about that when they are opening crippling energy bills. And if the opposition can attach that angst to the government then they’ve managed someway to flip the narrative.
It’s going to get messy.
You’ve got Katharine Murphy, Mike Bowers, Sarah Martin, Paul Karp, Daniel Hurst and Josh Butler sorting through that mess for you, and Amy Remeikis on the blog for most of the day.
There’s not enough coffee in the world today.
But let’s get into it.