SKY NEWS AM AGENDA
MONDAY, 21 OCTOBER 2019
SUBJECTS: Economy; ACCC bank inquiry; interest rates; press freedom.
ANNELISE NIELSEN: Welcome back. We're joined live by Shadow Assistant Treasurer and Shadow Minister for Financial Services, Stephen Jones. Thank you for your time.
STEPHEN JONES: Great to be with you again.
NIELSEN: The economy was a huge discussion last week, it really dominated the last week, why exactly did Labor want to have a debate on the economy? Is there anything you could achieve in that debate that you couldn't just achieve in Question Time?
JONES: Yes, because Question Time is Labor asking questions of the Government and the Government not answering. Debate means both sides putting alternative points of view, trying to perhaps find areas of commonality.
NIELSEN: Isn’t that worse for you guys? If you get the chance to just put your points, isn't that what you want?
JONES: Absolutely not. Labor has got a view about what we need to be doing with the economy. You've got the IMF downgrading, a significant downgrade, of economic growth outlook for the next 12 months. You've got the Reserve Bank Governor in an important speech in New York last week saying he expected the low inflation, low wage outlook to persist for a another decade at least. If those two things put together doesn't jog or jar government response, I don't know what will.
NIELSEN: But job figures are up. That's a good thing.
JONES: Sure, job figures are up. But basically they're absorbing the excess capacity within the labour market. More people entering the labour market, more people getting an additional hour a week, but when you've got one point eight million people either looking for a job or looking for more hours in the job that you've got, things are far from okay. Every serious commentator an economist is saying the same thing. We think there needs to be an economic plan. Only in Scott Morrison's kooky little mind does Labor calling on the Government to implement, or bring forward, some of its own policies amount to a crisis or a panic.
NIELSEN: Anthony Albanese was quoting Global Financial Crisis level stimulus, surely that's quite alarmist.
JONES: He was quoting an approach, which said if you know things are crook, if every indicator is that things are slowing down, wages are tanking, you actually need a response. And twiddling your thumbs is not a response. Doing exactly the same thing this year as you did last year is not a response when everything's heading south. Our plan, let's get some of that infrastructure spending moving and interestingly and what Philip Lowe said in New York last week. He said we have got a depletion in both public and private sector capital investment. If we're going to turn productivity around we need to be investing in that productivity-enhancing infrastructure now. Instead the Government is pulling on its old break glass in problems go to IR lever and it's simply not going to work.
NIELSEN: How are they doing that?
JONES: Well Josh Frydenberg, in response to the Reserve Bank Governor’s speech, said well look we've got a plan and it involves more industrial relations changes. That's code for penalty rate cuts. That's code for wage cuts. We need a bit more imagination than reverting to the solutions of last decade, which did nothing for productivity.
NIESLEN: The Government also has a plan for a budget with a surplus, which your party would not have been able to achieve if you were in government without very high taxes, which would have also had people also taking home less money.
JONES: I've got to take issue with that. Absolutely not. The Government has basically stood still and an improvement in the tax take particularly from the corporate sector is going to get them over the line. Let’s just not kid ourselves.
NIELSEN: Isn’t that the Labor policy though, to tax big business as opposed to workers?
JONES: Absolutely not. As you know, all of our policies are under review. Yes, we made some mistakes. Let's just get that out there. There's some things that we're going to have to review. But that's not a get-out-of-jail-free card for the Government who is simply not doing anything but standing still and twiddling their thumbs. Investment in infrastructure is absolutely needed, you know that over 90% of the infrastructure spending that the Government is promising doesn't happen in the next three years? In fact, it doesn't happen until halfway through the next term of government. In regional areas crippled by drought, crying out for investment in bridges, roads, rail and dams, surely they’re the things that we can be bringing forward that investment in infrastructure for.
NIELSEN: Do you think, as this reviews pretty imminent from the Labor Party about your policies, should any changes to franking credits be taken off the table?
JONES: Look, we're going to review all of those things. I have personally got a view that we've got to go through in a calm and methodical way and look at all of those issues. Look at the revenue that was going to be raised. Look at the impacts both economic and political and take a review of all of those things. What I do know is the Government has baked into the budget a 95 billion dollar black hole. That's the unfunded round 3 of personal income tax cuts to high wage and salary earners. That is something that either side of politics is going to have to account for, so you can forgive me if I'd say today we're not going to rule a whole bunch of stuff out when we got to look at what the shape of the economy is towards the end of next year.
NIELSEN: The banks are facing an ACCC inquiry about interest rates. Do you think they should be passing on the full interest rate cuts when that would undercut depositors?
JONES: I think the banks can do more in a couple of areas. Yes there's probably some areas where they can be passing through some of those headline rate cuts. Frankly, they can also be doing a lot more for their existing mortgage holders. They call it the loyalty tax. I know from my own bank that unless you ring them up and ask them for a reduction, you'll be paying the mortgage rate payments from a year or two or three years ago. Whereas new mortgage holders are getting the lower rate.
NIELSEN: Just on that point of passing on the interest rate cuts. Should the bank be forced to pass on interest rate cuts in full when it will impact depositors
JONES: I've said to you in the past, there are three stakeholders that the banks have: their shareholders, their mortgage holders and their deposit holders. We are very close to a situation where deposit holders would be better off having money under the bed than in a bank account. I think there is a limit, I'm not saying that we're there yet, but there is a limit to monetary policy and there's a limit to how low the banks can go before it starts to impact on savers. I think we're pretty close to it. It gets more to my primary argument that, and what the Reserve Bank Governor himself said last week, people who are relying on the Reserve Bank and monetary policy to get us out of this problem are going to be very disappointed indeed. We have reached the limit of monetary policy. Time for Scott Morrison to put aside the ad man rhetoric and start getting onto the playing field.
NIELSEN: Finally we have this massive campaign, all these media organisations coming together to fight for press freedom. Do you think that the Government is doing enough to protect journalists who are reporting on stories of public importance?
JONES: Absolutely not. In a time when you've got a Prime Minister who refuses to answer any questions from the Press Gallery, we need a strong robust media who's able to access information through Freedom of Information laws and get a Prime Minister to answer a question based on that information not go to jail, or have the threat of going to jail, just for doing their job. Change in the law is needed.