WILL GOODINGS, HOST: We're joined live on FiveAA breakfast by the Prime Minister of Australia, Anthony Albanese. Prime Minister, good morning to you.
ANTHONY ALBANESE, PRIME MINISTER: Good to be with you.
DAVID PENBERTHY, HOST: Great to have you on PM. Can I just start by asking? We know that the Reserve Bank is independent and you respect its independence, obviously, like our previous Prime Ministers before you. But do you think, in your view, has this Budget made it easier or harder for the Reserve Bank to cut interest rates next time it meets or later in the year?
PRIME MINISTER: Well, our job is to look after fiscal policy and then, or the Budget, essentially, and their job is to make their decisions independent. But what we have done is make sure that fiscal policy, if you like, is working in harmony with monetary policy. And we've done that by producing the second Budget surplus in a row. It's projected to be $9.3 billion. And that, of course, follows the $22 billion surplus that we bought down last year. And that stands in stark contrast to the $78 billion deficit that we inherited. Our task in the Budget was to give cost of living relief without putting pressure on inflation. And we've done that by producing tax cuts for every single taxpayer and energy bill relief for every household listening to this program, as well as doing important social policy like strengthening Medicare in every community through increasing the number of urgent care clinics, by putting a freeze on the costs of medicines as well.
PENBERTHY: What do you make of the criticisms, though, about some of the spending measures, particularly the $300 not being means tested? I mean, there's a lot of middle class people that might just see that money and think, ‘I'll just buy a dozen bottles of red or nip down to Zara and buy a new outfit’. That part of it could be inflationary, couldn't it? And did you consider doing it not through bills but through the tax system so it could have been means tested?
PRIME MINISTER: No, it won't be inflationary because it will take money off people's bills. If we had to send out money, that would have had an impact. So, we've deliberately designed our cost of living relief, whether it be the way that the energy bill relief is delivered, fee-free TAFE, that reduces the cost of TAFE, or other measures as well, to have that downward pressure on inflation. And indeed, Treasury estimate that our cost of living measures will take three quarters of a percent off inflation this year and half a percent off next year. So, we are seeing inflation moderating. We do need to get it down further. It's not job done. But it is down to an annual figure of 3.6 per cent. That's half of what we inherited just a couple of years ago. Tomorrow is two years since the election, and to halve inflation is, I think, a significant achievement. And it's come through hard work and by making sure that the design of any cost of living relief is done in that way.
PENBERTHY: So, do you have no concerns then about criticisms like people like former Reserve Bank board member Warwick McKibbin saying that this energy rebate policy is an attempt to game the CPI data and that it will be seen through by the Reserve Bank as precisely that?
PRIME MINISTER: No, have a look at what Treasury has said and have a look at what the Reserve Bank have said in the past about our previous energy bill relief. That did have that downward impact as well on costs. If you reduce the costs of something that people are paying, you're reducing inflation, you are assisting with cost of living.
PENBERTHY: The gaming element, though, relates to the fact that it's a temporary change in the cost. It's not changing the underlying structural issue.
PRIME MINISTER: But what you're doing is you're giving people a rebate, effectively, off the cost that they're paying in their pocket. They will be $300 better off than they would have been have we not made this decision. And taxpayers will be, particularly those in middle Australia, will be substantially better off. Now, it is easier to target support to people who are on government payments, by definition, because there's that relationship between the Government and the people receiving the payment. What we needed to do in this Budget, as we did by redesigning the tax cuts, and you'll recall at the time, guys, that there weren't front pages there screaming out that this was a terrific decision. There's no one now saying that was a bad decision. And it went through Parliament unanimously, through the House of Reps and through the Senate, because it didn't target just people on government payments, it provided support to those middle income Australians, those hard working Australians who are doing it tough. Now, they might be on a reasonable income, but they've had pressures on cost of living. They might have kids, a mortgage. And we wanted to, unashamedly, provide that support to middle Australia.
PENBERTHY: You made the point, you have made the point repeatedly over the course of the last week that the consecutive budget surpluses stand in contrast to your predecessors. And it's a sign of good economic management. Why does that end as of next year and the remaining years of the Budget return to deficit, then?
PRIME MINISTER: Well, it doesn't end. We have improved the budget bottom line by literally hundreds of billions of dollars over the medium term. What we have is, yes, you're right to say there are deficits, but they're far smaller than what was predicted in the 2022 Budget when Josh Frydenberg handed down his Budget in 2022, that had a substantial blowout. In addition to that, of course, we're saving some $80 billion on interest payments that would have been there had we not made these tough decisions. So, yes, there are still in the medium term, deficits. But they are far smaller. What we've done is each and every year, we're improving the budget bottom line as a result of decisions that we've taken. The previous Government had no savings whatsoever in their last Budget. Not one, not a zack. What we've done is produce savings at the same time as we're providing that cost of living relief.
PENBERTHY: Prime Minister, your previous comments about governing for middle Australia sounded very much like a potential election slogan. Will it be this year or next year?
PRIME MINISTER: It'll be when it's scheduled, which is a scheduled next year. But what we do is, well, that is the anticipated date. I think that three years is too short. I'd like to see four year terms.
PENBERTHY: Prime Minister for life.
PRIME MINISTER: Four years isn't quite life, mate. I reckon I'll make it. Have you got some news? Something you want to tell me?
PENBERTHY: I was just checking what the outer limit on your imagined parliamentary term was.
PRIME MINISTER: I'm not having one of those $19 schnitties for lunch and dinner every day, you know. I reckon I'll make it to the end of next year.
PENBERTHY: I think the smart money is on that. We just wanted to make sure you weren't declaring yourself Prime Minister for life on an Adelaide radio show.
PRIME MINISTER: No. Democracy is very important. I just wish that it was four years. Every state government and territory has four years. The Federal Government has three.
PENBERTHY: But that is ridiculous, particularly given that the bailiwick of federal governments is so much broader.
PRIME MINISTER: I mean, of course it is.
PENBERTHY: Should it be changed? Are you up for another referendum?
PRIME MINISTER: Referendums are pretty hard. We've tried twice.
PENBERTHY: Hawkey tried.
PRIME MINISTER: Hawkey tried and it was tried, I think it was Gough who tried, but someone has tried before as well. Hawkey certainly tried and it got smashed. Didn't win one state or territory.
PENBERTHY: That was the four question referendum very early in his term, wasn't it?
PRIME MINISTER: And none of them got up anywhere. You know, that's what happened. Everyone said they'd support it at the beginning and then didn't. So, sounds familiar.
PENBERTHY: Absolutely. Must be having flashbacks. Anthony Albanese, always great to catch up. Thanks for joining us, Prime Minister.
PRIME MINISTER: Terrific, guys.