‘Blame thrower’: Jim Chalmers ignores the ‘real danger’ of core inflation

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[00:00:00]Joining me now is former New South Wales Labor Treasurer Michael Costa and GXO Strategies Director Cameron Milner.

[00:00:06]Welcome to you both. Michael, I'll start with you. Is the treasurer right? Is he as much a victim in all of this as we are?

[00:00:14]Well, look, you know what I think of this treasurer? I called him a blame thrower for throwing blame everywhere.

[00:00:20]Uh, however, on these monthly figures, I think he's got a point. Um, but the point relates to the headline, not the core inflation. And that's where the real danger here is. The c core inflation has stayed exactly the same.

[00:00:33]Even after that uh rate increase, that last rate increase, it hasn't moved. And I think that's where our fundamental problem is. You know, the RBA will look through that headline number. It'll look at that core inflation number. And that's why I think it uh has to move very quickly because um you know, it's been behind the ball on inflation. And the core number is the one that would really concerning us. Well, Cameron, the other lesson in all of this is that, and it's a very expensive lesson, uh it's dangerous to become a nation that outsources everything. We're now so reliant on imports that we'll be inevitably caught out whenever there's a crisis overseas.

[00:01:12]Well, absolutely. And it's a terrible situation that Australia has got themselves into where we have to rely on the Middle East for our fuel security. I mean for goodness sake one of the most unstable areas of the world run by a terrorist state on one side of the Gulf which is blocking the straight of Hermus. To think that we don't actually look after our own fuel security is an indictment on our country and it's a wakeup call to the political class to get with it and make sure we're a lot more secure. Japan has 240 days. We had less than 30 at the start of this Iran war.

[00:01:38]>> Indeed. All right. Speaking of spending, Labour's launched what looks to be a publicity blitz to sell its budget spin to voters. Addressing speculation around the focus of the budget, Jim Charas had this to say.

[00:01:51]>> If you look at the way that we've changed and delivered three tax cuts, for example, that's all about intergenerational fairness. If you look at the changes we made in superanuation, that's about intergenerational fairness.

[00:02:02]So, we've got an interest and a responsibility to respond to what I think are legitimate concerns uh about intergenerational equity. And so, you know, that as we've been putting this budget together, that's been a key feature of >> by my count. He used the phrase intergenerational equity and intergenerational fairness about 3,582 times, give or take. Uh claims made by the Commonwealth Bank this afternoon indicate that intergenerational fairness really is just double speak for tax changes. Australia's largest bank said the government is preparing to ax negative gearing and replace the 50% capital gains tax discount with indexation. Cameron, what do you make of that spin?

[00:02:43]>> Well, I don't think it's spin. I mean, it's 10 years old. I mean, Shorton went to the election with these plans for negative gearing capital gains taxes.

[00:02:49]It's nothing new. It was Alba who tried to put them in bury them, you know, after 2019 and walk away from labor reform. And now he's crawling back on hands and knees because they're the only tax levers available. So no, I think this this is good reform. The danger is that Elbow will simply spend the money every which way rather than spending it correctly. So I don't mind raising taxes to actually do something to reform the system. But the danger with Elbow is it's going to be more more pen pushing public servants and more, you know, you know, gender war stuff as well. gender dysphoria didn't just, you know, dystopia, you know, that's the problem.

[00:03:23]>> Michael, do you agree with that take?

[00:03:25]>> Look, I think there needs to be tax reform, but I think it has to take the form of cutting um pay as you go taxes and business taxes. If you want to stimulate the economy, that's where you got to look. Let's look at this proposal and and we don't have the details at the moment, so we're speculating. But if they're talking about reducing uh the capital gains discount down to 33% from the 50%. I mean let's be clear here that's going to give you about $2 billion a year. That dumb policy they took to the election to cut um you know the hex payments non- means tested by the way anti- labor policy cost $16 billion. So it's going to take them based on those figures 5 and a half years to recoup what they've already spent. If you're really serious about intergenerational equity, get the budget into surplus consistently. Deal with the structural deficits. I mean, who's going to be paying for the trillion dollar debt that we've left? In fact, our our kids and our grandkids. So, there's the real intergenerational equity. This government's got to stop spending and stop spinning. You know, Elbow's just a clueless slogan peddler. This is another slogan, mate.