Topics: Interest rates, Inflation figures, Albanese government’s deflection

CHRIS KENNY: Let's go to Canberra now and catch up with the Assistant Minister for Treasury, Shadow Assistant Minister for Treasury, Dave Sharma. Sorry to promote you into government there ever briefly, Dave.

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DAVE SHARMA: No, no problem with me, Chris.

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CHRIS KENNY: Yeah, you would take that any day. Um, talk about interest rates a bit of backpedalling from the RBA governor, the Reserve Bank Governor Michelle Bullock, not really wanting to blame this on government spending. But, but surely the massive amounts of government spending, the poor efforts to reign it in has to be a factor in what's happening to our economy.

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DAVE SHARMA: They are a huge factor. And now look, Michelle Bullock, because of the position she's been in, she tries to be as diplomatic as, as possible of the position she's in. But if you look at any independent commentators, whether it's HSBC, whether it's Chris Richardson they'll all say that government spending is driving this. And we're in a situation where government spending is the highest level it's been in 40 years, outside the pandemic, in the last budget growing at four times the rate the economy. What's that's doing is crowding out the private sector and pushing up the prices for goods, essential services and, and Labor. That's what's pushing inflation up, and that's why Australia alone, amongst all developed countries, has inflation going up and as a result, interest rates going up too.

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CHRIS KENNY: Yeah, we're running, against the tide internationally. Let's have a look at a bit more of what Michelle Bullock had to say.

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[CLIP STARTS]

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MICHELE BULLOCK: I've heard the treasurer say is that he is focused on inflation. It's his number one thing he's focusing on at the moment. So I think he's conscious of it, but, um, I think we can work... I, think the idea that somehow, we work hand in glove, um, is not the way, is not the way these things work. We are independent. They are independent, and we work with what we've got.

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[CLIP ENDS]

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CHRIS KENNY: Yeah, well, independence being the key word there. But more worrying,  were the words from Michelle Bullock that she expects inflation to keep going up in the next couple of months, that it'll top 4% in June. Surely that suggests we will have more interest rate rises.

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DAVE SHARMA: It does. That's all the prognosis is terrible. I mean, the, the RBA has inflation rising for the next six months. It doesn't have it returning to their, their target band, if you like, for at least 12 months, which means that if the economy's running too hot and the government is not going to cut spending and they've shown no inclination, then the Reserve Bank has only one lever to pull and that's to push up interest rates. And households pay for that. Mortgagees pay for that, and small business owners who rely on debt and cash flow credit will all pay for that as well.

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CHRIS KENNY: Well, when it came to dealing with these issues in the parliament today, both Anthony Albanese and Jim Chalmers just kept deflecting onto a divided dysfunctional opposition. Now, that's not going to help them run the economy, but it's a bit of a distraction a pleasant distraction for them politically at the moment. How quickly can the coalition be put back together? David Littleproud and Sussan Ley seem to be at loggerheads.

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DAVE SHARMA: Look, to be honest with you Chris, I don't know if it can be put back together. I don't know if it will be put back together. I'd like to see it put back together, but it needs to be on the basis of a functional set of arrangements that works in the interests of both parties. So, those discussions are still ongoing. I believe that a discussion was had last night, a proposal was put to the nationals today, which they've, rejected. Let's see if they come back to anything come back with anything to us.

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CHRIS KENNY: So you would oppose former national shadow cabinet ministers, you would oppose them coming straight back into the shadow cabinet? You want them to serve a penance of at least six months?

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DAVE SHARMA: Look, I'm not going to say, on any individual term, I support this and I don't. But I think it's important that if we get back together, it has to be on the basis that one party room cannot override a decision of the shadow cabinet and cannot override a decision of the joint party room. That's always been the way the coalition has worked, and we can't have a situation where it's coalition a la carte, where you just take what you want from the menu and you turn back other things. If we're going to work as a team together, we need... there's no a la carte menu.

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CHRIS KENNY: It's an important point, and coalition a la carte is a great way to express it. Thanks for joining us, Dave. Dave Sharma there is the Shadow Assistant Minister for Treasury.

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[ENDS]