Peter Stefanovic, Host: Joining us live this morning, the Assistant Foreign Minister, Matt Thistlethwaite, the Shadow Cabinet Secretary, Zoe McKenzie. Good morning to you both. So, Matt are you trying to sneak in some good news here before mortgage holders are whacked by the RBA tomorrow?
Matt Thistlethwaite, Assistant Minister for Foreign Affairs and Trade: Good morning, Pete. Obviously, when we get upgrades in the Budget figures, we release them. And I think that that $6 billion upgrade reflects a couple of things. Certainly, there's been some revenue upgrades, but we've also made some savings in the Budget, particularly around aged care expenditure and expenditure on the NDIS, so that's reflected some good economic management. Australia's Budget position remains relatively strong, particularly when you look at international comparisons. We've got one of the lowest Budget deficits to GDP anywhere in the world. Our debt-to-GDP ratio is one of the lowest in the OECD, and our expenditure-to-GDP as well is very low by international comparison --
Stefanovic: 27 per cent.
Assistant Minister: So we're trying to do the right thing to help Australians, but the inflation challenge remains. We know that. We know Australians are doing it tough with their cost of living. That's why we're introducing tax cuts. That's why making childcare cheaper. That's why we're helping students with the cost of their fees. All of those measures are designed to help with the cost of living, but at the same time, try and not put pressure on inflation and get that inflation down. As Peter Switzer said, the war in Iran is playing a big factor in this. It's pushing up prices and pushing up costs.
Stefanovic: Well, he also mentioned you’re spending at 27 per cent of GDP, is that low?
Assistant Minister: It is by international comparisons. It's one of the lowest in the G20 by international comparisons. But we've made some changes to our Budget to ensure that we've reduced expenditure, particularly in aged care. We made some changes regarding the rebate. That's been opposed by the Coalition, so I don't know where they're going to find savings in the Budget. And we've made some changes to the NDIS. So, that's reduced government expenditure --
Stefanovic: Just back to this $6 billion. You mentioned their revenue upgrades. Is that higher commodity prices?
Assistant Minister: It has in the past been --
Stefanovic: Which you had nothing to do with.
Assistant Minister: Higher commodity prices. Yeah, we accept that that's prices that are factors in international markets. But the things that we do have something to do with is the reductions in government expenditure, and that's responsible economic management by getting some of that expenditure down and doing the right thing by the Australians. Also, where we've had those revenue upgrades, we haven't spent them, Pete. We've saved them. So, we put most of the savings that we get back into the Budget, and that's why the Budget deficit reduces.
Stefanovic: Alright Zoe, how do you counter all of that?
Zoe McKenzie, Liberal Member for Flinders: I'm literally stunned. I saw exactly where that Budget improvement is coming from, a couple of weeks ago, when I was in Port Hedland, I was up there looking at the vast, expansive operations as we dig iron ore up out of those mines, put them on a boat and send them to Asia. That is where this has come from. Matt talks about responsible economic management. You must be kidding and one of the examples he cited was in relation to aged care. What that's doing is actually ripping the additional rebate out of the hands of the over-65 cohort. I have thousands of people in that cohort in my electorate, and I have got hundreds of letters from them telling me this is the difference between heating and insurance. It's the difference between food or a present for my grandkid and insurance at exactly the time they need it. And mind you, when you take that additional rebate over 65-year-olds and they have to give up their private health insurance, where do they go? The public health system. So, this supposed grand saving will actually put more pressure on the public system, which ultimately the Commonwealth has to fund, and the states have to fund as well. The other great saving they had until recently was to cap allied health care for our veterans at $5,000. I had near in tears veterans in my electorate talking to Michael McCormack recently, not understanding how they can have a life of service to our nation only to be slapped down at exactly the time they need it. The supposed savings from this government who keeps spending like drunken sailors has been callous and cruel to those who have worked hard to put away for their future or have served our nation in our time of need. And frankly to sit there and take credit for the fact that Australian exports, whether it's iron ore in the Pilbara or as I saw last week I was in Taiwan on a bipartisan delegation, the critical minerals that we are able to sell from this country that are absolutely vital to the nation's future in relation to whether that's building EVs or in AI. That's where this dividend is coming from. Not from any --
Stefanovic: Yeah, I mean the allied healthcare, they ended up winding that one back because they knew that one was a mistake. But Matt, do you accept that first point on those rebates being taken out from those of our in our aged care sector who need it?
Assistant Minister: Pete, we've equalised the rebate, so we haven't removed it. Seniors got an additional rebate above what the rest of the population got. So, we reduced it to, so everyone is equal. Everyone is equal now in terms of the private health insurance rebate, and we needed to do that, Pete, because we needed to find additional resources to fund dementia support throughout the country. We unfortunately know that more and more Australians are getting dementia as the population ages. They need additional support in our aged care system. So, that change that we made their funds additional dementia support units throughout the country. Now, the Coalition have complained about this, and they voted against it, but where's their alternative? What are they going to do to support dementia patients in aged care facilities, and how are they going to find the savings in the Budget? They haven't had any alternative policies that would fund these savings to deliver those resources that elderly Australians need.
Stefanovic: Let's just go back to the big picture, Zoe. I mean, the US is on the up as well when it comes to rates, recently raising rates. There's probably going to be another one this year as well. So, a similar track to us. They cite the war, they cite the AI data boom. So, does that give the Treasurer some cover if rates rise tomorrow?
McKenzie: No, because the rest of the world is not experiencing the inflation that we are experiencing here at home. They keep spending, they keep driving up inflation. And inflation is quite clearly what the RBA is citing each and every time it has risen rates, which it has now done 15 times. Tomorrow we'll make 16. There are reasonable forecasts of another one or two in the next six months. The average Australian household with a mortgage is already having to find more than $30,000 a year in after-tax dollars just to meet the interest payments on their mortgage. I have no idea where anyone would find an extra $30,000, which means to earn an extra $60,000 roughly to be able to make their mortgage repayments. And the RBA is quite clear it is about the spending that this government continues to pump out. We have a clear policy which is, in the event of unexpected windfall gains from commodity sales, 80 per cent of that money will go into paying down debt. This government does not have that. They simply turn around and say, it was our good work. Oh, poppycock. It was not your good work. It was the Australian industries’ good work. It was Australian exporters’ good work. It was Australian commodities’ good work. Not the good work of the Albanese Government.
Stefanovic: Matt, in my recent discussion with the Treasurer, Jim Chalmers, he mentioned that the end of this war in Iran can't come soon enough and there's been a few members, Richard Marles said that as well in my program last week. Are you getting to the point where you'd admit that the war in Iran was a mistake after initially supporting it in its first stages? Do you think the war in Iran is a mistake by the US?
Assistant Minister: Well, we certainly think that this conflict has gone on for too long --
Stefanovic: Was it a mistake, though, to begin?
Assistant Minister: Well, we supported it in the beginning because it was aimed at ensuring that Iran cannot acquire a nuclear weapon and that was the right thing to do and we stand by that. So, that was not a mistake. That's the right thing to do. But this conflict has now dragged on for too long, in our view, and the Australian people have every right to be completely frustrated by this ongoing conflict and it's stop-start nature We get a resolution, we seem to have solved the issue, but then it starts up again, and that is forcing, because of the closure of the Strait of Hormuz, it's forcing up fuel costs and energy costs throughout the world, and they're flowing on to particularly household items like groceries. And that's --
Stefanovic: But by supporting it, did you misjudge what the Iranians would do in response?
Assistant Minister: No, we didn't, because it was the right thing to do to ensure that Iran cannot acquire a nuclear weapon. So, we stand by that decision. But we do hope that President Trump and the Iranians can reach an agreement so that the Strait of Hormuz can reopen as quickly as possible.
Stefanovic: Ok, Matt and Zoe, appreciate your time on this Monday.