TRANSCRIPT - Sky News Newsday with Kieran Gilbert

PAUL FLETCHER MP

Shadow Minister for Science and the Arts

Shadow Minister for Government Services and the Digital Economy

Manager of Opposition Business in the House

TRANSCRIPT

SKY NEWS NEWSDAY

31 JULY 2024

Kieran Gilbert: Let's go live now to the Manager of Opposition Business, Paul Fletcher. The Treasurer today, in response to that inflation number, he says inflation is broadly in line with where the RBA had forecast, that underlying inflation continues to moderate, and he says that that tells us the general direction of price pressure is downwards. Do you agree with that assessment? 

Paul Fletcher: No, this is a very concerning number. We now know that full year inflation is at 3.8%, up from 3.6% in the last quarter and this is consistent with what the Coalition has been saying, that we have a persistent inflation problem in Australia. It's not going away.

Labor is not taking it sufficiently seriously. Jim Chalmers is not taking it sufficiently seriously. There's plenty of spin from him in the budget in May this year. We warned at the time that we had a real problem with government, with executive government, setting fiscal policy in a way that was at odds with the Reserve Bank's approach to monetary policy.

You've got the Reserve Bank trying to get inflation down and using interest rates as its tool at the same time as you've got very expansionary policy settings from a Labor government which has now spent an additional $315 billion since they've come to government and today's numbers just confirm exactly what we've been saying. We have a persistent inflation problem. It's not moving, and that is bad news for Australians. 

Kieran Gilbert: So when you're suggesting that, the government put its reply to you is, what would you cut? What of the government's expenditure would you cut? 

Paul Fletcher: We've actually been very specific as an opposition about things that the government did that we would not be doing. You know, they've committed $24 billion in additional spending over the next four years for 36,000 additional public servants. Well, that's a difference between the Coalition and Labor. 

Labor likes more public servants because most of them are unionised. Most of them live in the Canberra bubble. Labor holds all three seats representing the ACT, but we represent people all around Australia, including lots and lots of people working in the private sector and, of course, lots of people who've taken the risk to open a small business, generate employment for others. 

And there are lots of people who are finding it very challenging at the moment and you've got a government that is out of touch with the concerns facing mainstream Australians.

Kieran Gilbert:  Do you think we're heading for a rate hike next week? Is that your read? 

Paul Fletcher: I think there is a risk that the Reserve Bank may well look at these numbers and conclude that inflation is not going anywhere, that it's sticky, that in fact, the trend is up. 3.6 to 3.8 is up, not down, not sure which planet Jim Chalmers is on, but 3.6% to 3.8% is up and it may very well be that the independent Reserve Bank looks at this and says, we have got to get this under control, because we know that once inflation gets out of control, it is very, very difficult to restrain it. 

You know, 50 years ago under the Whitlam government, we saw the lesson when a government headed by an old style lefty loses control of inflation, it creates misery for millions of people. You know what? Today we've got another government headed by an old style lefty, and they're losing control of inflation as well. And we need to get it under control and so there is, I think, a real prospect that the independent Reserve bank may well determine that it needs to increase interest rates again to get inflation under control, because at the moment it is clearly not under control.

Kieran Gilbert: You say it's not under control, but to be, to be fair, that it is six quarters in a row where underlying the trimmed mean inflation has fallen.

Paul Fletcher: Let's be clear from the numbers that have come out today, domestic inflation, the bit that we control, the bit the Australian government controls, is rocketing ahead. Where we've seen a lower number is in the international, the traded inflation, but the non-traded is very high and so the clear reality is we have a consistent and persistent inflation problem.

We've got a government that is not taking it sufficiently seriously. We've got an independent Reserve Bank that has the statutory task of keeping inflation under control. And when they look at these numbers, I think there's a real prospect they may decide that another interest rate increase is needed.

Kieran Gilbert: Manager of Opposition Business, Paul Fletcher. Thanks as always. We'll talk to you soon. 

Paul Fletcher: Thank you.