SUBJECTS: Reserve Bank Review; May Budget; Cheaper Child Care
NATALIE BARR: Details of the impending shake-up to the Reserve Bank have been unveiled with the Treasurer choosing to adopt all 51 recommendations from a scathing review into the bank.
The biggest change is the splitting of the Board, a new monetary policy board made up of external experts will set interest rates. They will meet only eight times a year, compared to the current 11, giving Aussie households more time to swallow any further interest rate rise.
Let's bring in Education Minister Jason Clare and Deputy Leader of the Liberal Party Sussan Ley. Good morning to both of you.
SUSSAN LEY: Good morning, Nat.
BARR: Jason, is this overhaul enough to really restore the nation's confidence in the central bank?
JASON CLARE, MINISTER FOR EDUCATION: I think so, Nat. It will strengthen the operation of the Bank, and it will also make sure that the Bank is communicating better with the Australian public. Having regular press conferences after every decision I think are really important because the decision that the Bank makes doesn't just effect those of us with a mortgage, it affects everyone in Australia. It affects the prices of everything at the supermarket, it affects the level of employment. So, this report is a really important one.
The other thing I'd say is this: inflation is not just a problem here in Australia, it's a problem all around the world. We see the equivalent of reserve banks, central banks, jacking up interest rates in America and Europe as well. This report identifies what are the best practice approaches of central banks all around the world and tries to apply them here in Australia. I think that's a good thing.
And finally, just a rap for the Opposition. We don't often agree on things, but this is a great example of bipartisanship from the two major parties here in Australia working together on this and I think that's important to restore a bit of trust in the important decisions that the Reserve Bank makes.
BARR: Yeah, good point, because I think people want to see that, don't they, on these big important issues?
CLARE: You bet. You bet.
BARR: Sussan, the review said look, they haven't done a bad job over 30 years, the RBA Board has performed well but there are problems now, and this is how a lot of the rest of the world does it, by having this separate board. Have we been behind not doing a major review like this do you think?
LEY: Well, Nat, as Australians would expect we're closing with the Government on this change to the RBA, and of course everything that happens in the RBA, with the RBA, happens in your home, happens in your business, happens in your mortgage so it's absolutely vital that they get it right, and it is not without risk.
And remember, Jason mentions the inflation challenge, the response to that is to reduce spending. The less that Anthony Albanese does in the lead-up to the budget and beyond the harder the RBA has to work.
So while of course we're working constructively I do want to make the point that this is not risk-free and the Government absolutely has to get this right. And yes, inflation is a worldwide problem, but we need here, in Australia, the right plan to tackle inflation and that's what we're not seeing.
So that's the test for this budget and it's a big test but it's a really important one for Australian households.
BARR: Yeah, it'll be a big budget. Let's look at the cost‑of‑living as well. The Greens have accused the Government of not making the hard choices in the budget, that's after Labor this week down‑played recommendations to increase JobSeeker by a significant amount.
So Jason, this committee, the Economic Inclusion Advisory Committee said, "Put up JobSeeker by $100 a week". That would still make it below the poverty line and you guys are saying no. Why?
CLARE: Nat, it will be a responsible budget that we hand down in 18 days’ time. You can't do everything in one budget, that's just a fact, particularly when you've got a trillion dollars of debt that was left to us by the former Liberal Government.
But we can do things and will do things in this budget to help Aussies that are doing it tough, and that includes those $230 payments to go to electricity bills that Australians are having to pay right around the country. That will take pressure off Aussies with electricity bills. The Liberals voted against that, but we got that through the Parliament and that will be in the budget.
As well as cutting the cost of medicine, cutting the cost of a script at the pharmacist from 42 bucks to 30 bucks. That's the first time we've cut the cost of medicine in Australia in 75 years.
And on the 1st of July, in 71 days' time, we will cut the cost of child care in Australia for more than a million Aussie families. If you're a family at home on a combined income of 120 grand, that'll cut the cost of child care by 1,700 bucks a year. That's a big deal. That's real money. That'll help a lot of families that are doing it tough at the moment.
BARR: Yeah, Sussan, I know you've been out on the road in the last fortnight talking to people. Would you increase JobSeeker by the $100 like the committee is suggesting?
LEY: I'm halfway through 16 electorates in 16 days, Nat, so it's a blitz across the country and everyone is screaming about the cost‑of‑living. But they're also asking for good workers. So, we back everyone who wants a job right now because small business, and indeed the broader economy, is asking for you, but everybody is raising cost‑of‑living and they're raising it in the context of broken promises by this government.
Power bills are going up. People are not coming through the door of small business to spend money, energy costs are - and of course these small businesses are anchored by often a home mortgage. I'm talking to business owners who say they feel like they have to pick up the responsibility for the cost‑of‑living crunch with every one of their workers, because as you know their workers are their family.
So, this is really, really challenging and I can tell Jason that what I hear from people out here across Australia in their businesses and on the floor of their manufacturing enterprises, is it is really tough and you, the Labor Government, have broken promises.
BARR: Okay, we'll leave it there.
CLARE: I just hope, Sussan, that you told them that you voted against cutting their electricity bills, because you voted against $230 for families right across the country, and that's just a fact.
LEY: I'm telling them, Jason, that we're here for them. That we are here for them.
CLARE: You just don’t vote for them.
BARR: Okay, thank you very much. We've heard both sides, we'll leave it there.