Radio Interview - FiveAA

DAVID PENBERTHY, HOST: To deal with the many cost of living issues facing us right now, we have our old mate from Two Tribes who we no longer call Albo now that he's the Prime Minister of Australia. Prime Minister, good morning. Thank you for your time.

ANTHONY ALBANESE, PRIME MINISTER: Good morning, David. Good to be with you. And an unlikely source of some respect there.

PENBERTHY: I know. It jars was my natural approach. But you know, the authority of office, we have to doff our cap to it.

PRIME MINISTER: Indeed. Well, congratulations to Will, by the way.

PENBERTHY: I know. Well, it's been a big couple of weeks here. We've got Lucy co-hosting the show now. She's been doing a great job for the last couple of weeks while Will is off celebrating the miracle of creation with baby number one with his wife, Alison.

PRIME MINISTER: Fantastic.

PENBERTHY: We'll pass on your best wishes, PM. Now, look, in terms of of best wishes, there was a combination of brickbats and bouquets for the Albanese Government's first Budget. One of the central criticisms was, is the Government doing enough to help people at a time when we're facing a cost of living crunch? I understand though, that you and also the Treasurer, Jim Chalmers, are giving a pretty major speech tonight where you're going to argue that this sort of handout mentality could do more harm than good.

PRIME MINISTER: Well, that's right, David. We know that yesterday, the Reserve Bank once again gave an interest rate increase. This time, a relatively smaller one compared with some of the others, up to 2.85. And what we need to do is to make sure that at a time when the Reserve Bank, like central banks right around the world, are tightening monetary policy, what that means in less technical terms is they're all hiking up interest rates all around the world because there's a common challenge of inflation, in part arising from the Russian invasion of Ukraine has led to increased energy prices that's built into inflation throughout the supply chain. And reserve banks are all acting. Now, if governments, through their budgetary policy or fiscal policy in a technical term, work against that, then what that will do is just encourage central banks to push up interest rates even further. So, it ends up being counterproductive. We need monetary policy and fiscal policy to work together. So, whilst we understand that people are doing it tough, it would have been easy politics to put in more cash handouts like we saw before the election held in May this year, in the March Budget. But that would have hurt people in the medium-term pretty quickly, because it would have encouraged the Reserve Bank to put up interest rates by even more than it otherwise would have.

PENBERTHY: Can you understand the confusion, PM, though? I mean this time a year ago, the Reserve Bank was telling us we shouldn't expect any interest rate increases until 2024. Now, we've had seven in a row. I mean, it's been quite the turnaround, hasn't it?

PRIME MINISTER: Absolutely. And I think the Reserve Bank Governor has done a mia culpa about those declarations that were made a year ago. And they are unfortunate, but the Reserve Bank, of course, is independent of the Government. They have been hit, like the whole world has, by this inflationary spiral. It is expected to peak at around about eight per cent by the end of the year. That's tough. But it's a lot better than the double digit figures we're seeing in parts of Europe and North America. And that requires a response from the Reserve Bank. The Reserve Bank have been out there explaining the decision that they made. And it is difficult for people. We certainly understand that. In addition to that, of course, those pressures globally, we've had the floods that have had such a devastating impact on the food bowl. I've been in places like the Murray area around Victoria, the Goulburn Valley, parts of Forbes and the Riverina. I was in Griffith last weekend. They were expecting bumper crops. And instead of that, they've had these devastating floods that will also push into inflationary pressure because of these crops being devastated, which is bad for farmers, I feel so sorry for them, but also bad for people when they go to the supermarket.

PENBERTHY: To your broader point about how the Government can't just keep handing out money, I think everyone who thinks about that sensibly would have to agree with it, particularly given how much money governments, both federal and state, have spent tackling COVID over the last couple of years. But I thought one part of your Budget that was very open to criticism was on energy policy, where the Treasurer seemed to do a great job documenting how big the increases are going to be over the next two years, but was pretty light on for explaining in a structural sense what the Commonwealth is doing policy wise to address the energy crisis. I mean, we've seen in the last 24 hours a pretty much open spat has erupted between the Victorian and the South Australian state governments over policies with gas. The Andrews Government is being criticised for not allowing onshore gas exploration. Surely, the Federal Government needs to do more to clarify the chaos in the energy market right now?

PRIME MINISTER: Well, I will make three points. The first is, when we came to office immediately, you might recall in June, I think we might have discussed it on air, there was talk about lights going out. And we secured that supply. We got together the energy companies, we brought together the energy ministers. Energy ministers had not met for the year before the election. It's quite astonishing given that in so many states, half the states indeed around Australia, the energy companies are actually owned by state governments. So, you didn't have a policy framework. We did that. And we fixed that. The second thing we did was then there was talk about supply not being enough and there was going to be, according to the ACCC, a shortfall of 56 petajoules. We delivered 157 petajoules in the Heads of Agreement with the gas suppliers to make sure that certainty can be there going forward. The third element is price. And on price, we need to examine short-term measures in the long-term. We need to secure transmission and supply. We've already done deals with Tasmania and Victoria. We have our Rewiring the Nation program of $20 billion to fix transmission. Your listeners will know that they've put solar panels on their roofs, many of them, not just because of the environmental impact, but because once you put that upfront money, pretty soon you get that repaid and then your bills are cheaper. That's the same principle that applies throughout the economy with renewables. The problem is that renewables and the transmission system isn't fit for purpose for the 21st century. It needs to be plugged in, if you like, so that when renewables are created, they can fit into the national energy grid. Now, that's something that can't be done overnight. We've had effectively ten years of denial and delay. Four gigawatts have left the system and only one gigawatt gone in. Now, common sense tells you, at a time when the population is increasing, that is just diabolical. And that is as a result of ten years of 22 different policies and none of them being landed. Now, we have landed a policy. We're getting on with that investment. We're working with the private sector to encourage that investment to fix transmission in this country. But it can't be done overnight. And in the short-term, what we're looking at is advice, including working with state energy ministers who met with Chris Bowen last Friday, advice on what the best way is to provide that short term-relief.

PENBERTHY: I've got to say, it's the number one issue energising right now. I'd say even more than interest rates at the moment is energy policy.

PRIME MINISTER: Well, because everyone's impacted by the cost of turning on a light and using energy. It's impacting everyone. It's impacting business as well. And we're very conscious of that. The combination of the two factors, ten years of not having a policy plus a Russian invasion of Ukraine that has had such an enormous impact on global energy prices is having an impact here.

LUCY LOKAN, HOST: Prime Minister, just before we let you go, you are coming to Adelaide later this morning. What's involved in your short trip here?

PRIME MINISTER: I am, Lucy. I'm really looking forward to heading to Somerton Park to Goodstart. We are looking at our child care policy, which is cheaper child care in order to provide that cost of living relief that doesn't put pressure on inflation. And it was a major central point of our first Budget, and indeed was the first major commitment I made as Labor Leader to the electorate, way back in 2020. And it is a commitment that we are delivering on. Cheaper child care, cheaper medicines, more affordable housing, and trying to lift wages. We understand there's a range of measures you need to do to take pressure off people's cost of living pressures which are there.

PENBERTHY: Good on you, Prime Minister. Thanks for joining us. And we'll catch up again next time you're in town.

PRIME MINISTER: Thanks very much, guys. And good luck, Lucy. Maybe you can get a permanent gig there instead of David or Will.

LOKAN: Thank you. No, no, no. Their jobs are safe, don't you worry. Thank you, Prime Minister.

PENBERTHY: The rumours are going to be out of control now we've got the Prime Minister getting involved. What about that?

LOKAN: Thank you, Prime Minister. Very kind of you to say.

PENBERTHY: He's always liked getting involved in factions.

LOKAN: Maybe if I do take one of your jobs, I'll bring back his theme song.

PENBERTHY: He's on Team Lucy.

LOKAN: Drunk with power.

PENBERTHY: He wants one of us to go.

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