SHARN COOMBES, LIBERAL CANDIDATE FOR DUNKLEY: Good morning, everyone. And good morning and welcome to the Prime Minister who is here at Palamara Village Fruits today. This business is a local icon here in Mount Eliza. Steve and his family have been operating for 30 years and we are very fortunate to have this great business here in our local community. Welcome, Prime Minister. It’s great to have you here this morning.
PRIME MINISTER: Well, thank you, Sharn. Thank you as the Liberal candidate here in Dunkley for the great job you’re doing and your local plan here. Over the last two years, Australians have faced some of the most difficult challenges in our economy since the Second World War and indeed the Great Depression. And over these years, what we have done as a government working together with small businesses right across the country, Australians right across the country is provide a shield, a shield to the economic impacts we’ve seen from the pandemic and the many things that have followed from that pandemic. And that now even extends into war in Europe and the disruption of supply chains all around the world. And these pressures are putting significant pressure on interest rates, on inflation, on the cost of living. We know that and we know what’s causing that and Australians know what’s causing that. And whether it’s the business here that was able to be got through the pandemic with JobKeeper and the cash flow support and the instant asset write off, which enabled them to keep their more than 40 employees, the income support that was provided to people in the community so they can come in and get access to fruit and vegetables over the course of the pandemic. It was the shield that we put up during the pandemic of good economic management, of well-designed policies that ensured that Australia has come through this pandemic stronger than most of the advanced economies in the world, in particular economies like the United Kingdom and Germany and France and and so many others, Canada. It’s why today, while cost of living pressures are very real and families are feeling them, it’s far worse overseas. Now, what does that mean? Those consequences overseas could have been felt right here, but it’s because of the shield of strong economic management, of a government that knows how to manage money and has been able to maintain our AAA credit rating during an economic crisis 30 times worse than the Global Financial Crisis of over ten years ago that means as more Australians are in jobs, unemployment is down to 4 per cent and falling, and our economy has got an economic plan behind it, which sets up opportunities for the future.
So as we’re dealing with these economic pressures and we’re weighing up the choice Australians are at this election. The question is, is are you going to let that shield, that has supported the Australian economy, protected your incomes, protected your jobs, ensured that you’ve been able to keep your homes and be able to go through this election and beyond with confidence. That is a shield which is protecting Australians even today. And the choice is to keep that shield or to let that shield drop. And if that shield drops, then what we’ve seen overseas can very much be visited upon the Australian economy and jobs and livelihoods here.
JOURNALIST: As you fight to save many inner city seats against teal candidates, which you’re not visiting, is it embarrassing for your Government or damaging for your Government, the fact that a tech billionaire has shown more leadership on emissions reduction than you are?
PRIME MINISTER: I don’t agree with that at all. I mean, our Government, net zero by 2050 with a clear plan investing $22 billion to realise the technologies that are actually going to deal with climate change, and to ensure at the same time we keep affordable, reliable energy in Australia, which has enabled us to get electricity prices down. In fact, they’ve fallen over 10 per cent since I became Prime Minister. I mean, those electricity prices is what they pay here to keep the fridges on and to keep people employed. So what we’re doing is we’ve got the balance right when it comes to ensuring we’ve got real net zero by 2050 targets, but a practical funded plan focussing on technology, not taxing people and shutting down energy production, which will only cost people more than.
JOURNALIST: PM, pensioners and welfare recipients have just had $250 in their bank account.
PRIME MINISTER: Yeah.
JOURNALIST: One lettuce alone would be 2 per cent of that pay cheque. When that $250 inevitably runs out, what shield is available to those people then, when inflation is expected to continue and rates are due to rise?
PRIME MINISTER: Well, as you know Clare, just this week, we’ve made major announcements which have dealt with the cost of pharmaceuticals for pensioners. We’ve changed the access to the Commonwealth Seniors Health Card. We’ve changed the arrangements for the safety net for pharmaceuticals, particularly impacting on pensioners. A strong economy with Australians in work is always going to mean we’re more able to continue to provide support, whether it’s to pensioners or others across the economy. If you don’t have a strong economy and you don’t manage money well and I’ll take, for example, during the pandemic, we had to lean in more than obviously governments have had to in the past. That saved the Australian economy. But we knew when to start and we knew when to stop. If Labor had their way, they would have spent an extra $81 billion during the pandemic on top of what had to be spent to save the economy. Now, that would have only put greater pressure on interest rates, greater pressure on inflation. And that’s why this matters.
I mean, the situation that Australia faces is a situation faced all around the world and I think Australians understand that. How do I know that? Because as they face the future, they have decided to move from variable interest rates to fixed interest rates, 20 per cent to 40 per cent. They’ve also, during the pandemic, made the wise decisions to pay as much down on their mortgages as they could. And what has happened there is we’ve seen a doubling in the length of time pre-pandemic to now about how much further Australians have been able to get ahead of their mortgages. What does that mean? Australians have been supported during the pandemic so they can insulate themselves and prepare for the many challenges that are still ahead of us. So that’s why they have a very important choice to make at this election. Do they go with an economic plan that has worked and is continuing to work, which provides for the strength of our economy in the future? Or a Labor Party that we know can’t manage money, that doesn’t have the experience to deal with these significant challenges and would lead to a weaker economy.
JOURNALIST: Prime Minister, on the RBA, everyone knows the Reserve Bank is independent, but you’ve made a virtue of interest rates being lower under a Coalition Government. So why shouldn’t you equally be held responsible if interest rates go up?
PRIME MINISTER: Well, I do know that interest rates have fallen to 0.1 per cent. I do know –
JOURNALIST: But that wasn’t you. It was the pandemic and the RBA.
PRIME MINISTER: Well, hang on. You just asked me a question. I’m just saying what the facts are. I wasn’t making any conclusions about them. I mean, interest rates are at historic lows. In the last 30 years, [inaudible] the cash rate’s 4.5 per cent. And so it’s obviously at a level that is well below what has been conventional and orthodox and we’ve seen that all around the world and I don’t make any great claim about that. I remember when when rates were falling back in 2019, the Labor Party attacked us for rates falling and they said that was because of a weak economy. Now they want to make the argument that if rates rise that it’s because of economic management. Well, they can’t have it both ways. I mean, we had the Labor Shadow Housing Minister today saying rates needed to rise to improve housing affordability. So Labor is all over the place.
PRIME MINISTER: No, I’m just simply saying this. I’m just saying there is serious pressure on interest rates around the world. I mean in the last 12 months, the IMF has more than doubled their estimates forecast for this year on inflation to well over 7 per cent for this year from about the mid threes. Now that’s what’s changed in the last 12 months. That has changed massively and we know all the reasons why: war in Europe, supply chain disruptions and here for fruit and veg we will continue to see the impacts of recent floods. We saw a bit of that in the latest inflation data. But I suspect we will see more. There is more pressure than we’ve seen. Those pressures are coming from those events. So the question is, who do you think will be better able to manage those pressures? A Government that has had an economic plan that has taken us through the worst economic challenges since the Great Depression. Or Mr Albanese, who’s never had a finance portfolio in his entire time in Parliament, has never done a Budget and an inexperienced Labor team. Who is going to be better able to manage those serious, significant pressures that families, households and businesses will face? That’s what this election is about.
JOURNALIST: Are you happy to leave this issue with AGL’s demerger to the market given Mike Cannon-Brookes recent acquisition of shares in the company? Or do you favour of AGL being able to proceed with its plan and decouple the retail and generation parts of the business?
PRIME MINISTER: Well, firstly, that will be in the first instance, a matter for the company to resolve. It’s a matter for the company. But what we have been very clear about and how we’ve been managing these issues is we want to ensure that there is reliable and affordable energy in the market. And where we’ve had to make interventions like the Kurri Kurri gas plant we have and we’ve ensured that we take those actions. Why do we do it? Because if you allow electricity prices to rise by having unbalanced emissions reduction targets, then the price of all of this goes up. It just all goes up. I mean, that’s the very conversation we’re having. We’re talking about the costs of living. And if you don’t support reliable, affordable energy and don’t have balanced targets on these things, then you’re going to put more pressure on families and households and small businesses. Now we’re doing the opposite. We’ve actually seen electricity prices fall under our, under my Government in particular, fall by around about 10 per cent because we did take on the big electricity retailers and the big energy companies. We did put the big stick legislation in place. We did get rid of those sneaky default deals which forced up people’s electricity prices when they went to the default market offer. We did do all of these things and that has helped keep prices down. And with the gas security mechanism, we ensured we had a memorandum of understanding which guaranteed the supply of gas in Australia, which means that we’re paying three- to about a third to a quarter of what of the international price on gas now, which is also keeping electricity prices down. Now these are the things that we can do about price increases. And same’s when, it’s the same when it comes to managing the pressures on interest rates, it’s about ensuring that you manage your finances well, that you keep a strong economy, you maintain your AAA credit rating, you get people off welfare and you get them into work. And you have the right tax environment to see businesses grow and prosper as is happening right here.
JOURNALIST: Do you acknowledge that there are pressures that will be coming to bear on households as a result of even a small rise in the cash rate today?
PRIME MINISTER: Yes.
JOURNALIST: What do you say to those people? The government has policy levers. Haven’t you failed to use it appropriately to make sure that people aren’t under further pressure?
PRIME MINISTER: Well, no, I do acknowledge that any movement in rates up are, of course, going to put pressure on those who are paying those extra in for an average mortgage that for a 25 basis point increase. What you’re looking at there is just over about 80 bucks a month. But what I’m encouraged by is that Australians have been aware of the pressures and that’s why they have switched from variable rate mortgages to fixed rate mortgages.
JOURNALIST: Not everyone though.
PRIME MINISTER: No, it’s about gone from 20 per cent to 40 per cent and the other thing they’ve done if they’ve been on variable rates is the amount of getting ahead of their mortgage has also doubled during the pandemic. My point about these, is Australians have been taking wise decisions as the Government has. We’ve been doing what they have been doing. Now on top of that, the other thing we did working with APRA was to ensure that the lending practices of banks was making decisions on loans where they had to be sure that they could be meeting mortgage payments 300 basis points higher than the rate they were being offered. So there’s been prudent lending practices. Australians I think, have prepared themselves as best as they can for the pressures that are real and that we will face. The inflation pressures which while strong here, are far greater in other advanced economies where that shield has not worked for them in the same way as it worked here. And so, yes, it is real. And what I’m saying is we need to do everything we can and are to continue to shield Australia from these increasing pressures. And there’s a very real question. Do you think Mr Albanese, who has never done a Budget, who has never held a finance portfolio, is going to be more effective in doing that? Or myself and Josh Frydenberg and our team, and I’ve done eight Budgets, and our economic plan has seen Australia through one of the worst, if not the worst, economic crisis we’ve seen since the Great Depression.
JOURNALIST: Prime Minister, do you think that a rate rise today would be a bit of a blow to your campaign, considering you are campaigning on economic management and considering the last rate rise in 2007 saw John Howard lose office?
PRIME MINISTER: Well, I’ve made this point a couple times. At that time in 2007, the cash rate was 6.5 Per cent. Today, it’s 0.1 per cent. At that time, there was not a war in Europe. At that time, we had not just been through a global pandemic and we weren’t seeing the massive supply chain disruptions that we’re seeing and continue to this day, including up in China, which is significantly locked down, which is putting further pressure on prices and the transport and logistics issues in terms of international sea freight, which is pushing up prices. And of course, we got the impact of floods and natural disasters, which has a particular impact on fruit and vegetable prices. So I think those situations are very different.
So what are these pressures about that are impacting on interest rates? I mean, the Labor Party’s argument seems to be that it has been the Government. Well, what is the spending that they disagree with that is putting pressure on interest rates? Do they think we shouldn’t have cut the petrol tax by half? Do they think we shouldn’t have given pensioners $250? Do they think we shouldn’t have allowed Australians to keep $420 more of what they earn in tax cuts? Do they think we shouldn’t have had tax rates that mean that if you’re a $90,000 a [year] that you’re paying $50 a week less tax than you would have been on Labor’s? Did they should, think we shouldn’t have done JobKeeper or shouldn’t have had the cash flow boost or the instant asset write-off which have kept all these businesses in place? If they think those policies were wrong and it put pressure on interest rates, then they should say so. Well, they should be honest with Australians, because Australians know the pressures that we’re facing here in Australia are real. They are overwhelmingly being determined by things beyond Australia. And what they do know is our Government has put up an economic shield for Australians, Australian businesses, Australian jobs, Australian incomes to get us through one of the worst crises we’ve seen in generations. Thanks very much, everyone.