CHRIS O’KEEFE, HOST: Now, is the Prime Minister crazy or is he crazy brave, trying to kill off negative gearing? So, he confirmed that Treasury is looking at ways to potentially overhaul negative gearing and the capital gains tax discount. So, he had the opportunity to rule it out today at a press conference and he didn't. Now, I've been on the phone to sources within the Government and none of them know for sure if they'll end up re-badging the Bill Shorten policies from 2016 and 2019, reshaping them. But this is the best I could gather as to some of the spit balling that's going on in the Albanese Government at the moment. Now, there is talk potentially of reviving the cap of one negatively geared home for every adult Australian, and then the money that is raised – or saved – goes into income tax cuts. Now, not to pay down debt or pay childcare workers or whatever it is, but to cut how much workers pay in tax on our income. Could that be sold? Could that work? I think they're a long, long way away from any of this being in concrete. But the problem that I've got is, in a housing supply crisis where we need to build more homes, is it really all that clever to even be talking about tinkering with this stuff, given how important negative gearing is as a psychological tool for investors? Well, let's see what they're up to. The Prime Minister, Anthony Albanese, is on the line for us. PM, thanks for your time.
ANTHONY ALBANESE, PRIME MINISTER: G'day, Chris, good to be with you.
O’KEEFE: Thanks for coming on. So, are you going to change anything about the current negative gearing scheme?
PRIME MINISTER: Well, what I'm focused on is exactly what you said we should be focused on, which is supply. Our Homes for Australia Plan. That's what I'm concentrating on. Some of what you just said is the first I've heard of it. The so called detailed plans there of negative gearing changes for income tax cuts – is something that I have not discussed with anyone.
O’KEEFE: Okay. What about changing the current negative tax gearing scheme at all? Because you've got a chance to rule it out now and I think it's important you rule it out if you don't plan on doing it.
PRIME MINISTER: Well, I have no plans to do it. It's not our policy. What we're doing is trying to get legislation through the Senate, to do two things –
O’KEEFE: Okay, well, we can get to that in a second, just quickly. So, that's an important point. When you say you have no plans to do it, you have no plans to do what? Tinker with negative gearing at all?
PRIME MINISTER: To do any of it.
O’KEEFE: So, you're not going to touch negative gearing? So, the 2025 election we’ll be voting on the current scheme that we've got now?
PRIME MINISTER: What we're doing is exactly what we said we would do, which is our Homes for Australia Plan. We have legislation. The key, Chris, is supply. And the concern I have with changes – and I've said this before – nothing new. I've said this. My concern with proposed changes to negative gearing is that it won't assist supply. And indeed the work that the Property Council have done is that it would dampen supply. And I don't want to do anything that impacts the supply of housing. That's the key. We don't have enough. That's why we should have the Senate pass the Build to Rent scheme that's about private rentals. That's why they should pass our Help to Buy scheme, which is about increasing home ownership. That's why we're putting record funding into social housing through our Housing Australia Future Fund. That is what my Government have been concentrating on at the same time as we've provided increases in Commonwealth Rent Assistance. Just a week ago, the second consecutive substantial increase in maximum rental assistance kicked in last Friday. That's what we've been concentrating on, Chris.
O’KEEFE: Ok, so I agree. So, the private sector, we both agree and everyone with the brain agrees that the vast majority of homes that we need will be built by the private sector.
PRIME MINISTER: Absolutely.
O’KEEFE: Now, you are here right now fundamentally saying that they can guarantee – this is really important because it goes to confidence when we're trying to build these homes, PM. You know this. I'm not being condescending, you know what I'm saying. But it's really important that on the front page of a newspaper when they talk about Treasury looking at reshaping negative gearing, and then you sort of half leave the door open in your press conference –
PRIME MINISTER: That's not right Chris.
O’KEEFE: That undermines confidence. So, here's your opportunity right now. Just say it's not going to happen.
PRIME MINISTER: With respect, what we're doing is exactly what we said we would do. And I've said the problem that I have with any changes to negative gearing, you would have to have convince me and need to convince people, maybe yourself as well, that any impact of any policy changes would not have a downward side on supply. And the truth is that at the moment, that has not been done. It's as simple as that. I mean, lots of people right, in the Public Service – what I said this morning was we have reinvigorated the Public Service and what we've said is that, you know, we want policy ideas to come forward. I note that in this morning's report in Nine Newspapers, I'm here on Nine radio, didn't have the Treasurer or any Minister quoted, didn't have any Members of Parliament. It said it was an ALP official. I mean, for goodness sake, there's only a few ALP officials and they don't do any policy stuff. What they do is organise how to votes and an election campaign.
O’KEEFE: All that's fine. We just want to know if you're going to stuff around with negative gearing or not.
PRIME MINISTER: Well, I've just said what my view of negative gearing is and it's been consistent. And what we are trying to do, though, when it comes to private rentals, is have a Build to Rent scheme. You know what the Greens Party said was the reason why they were voting against that? Because it was developers would build the homes. Of course developers will build the homes. How else do you get medium density homes built? But the Liberals in the National Party voting with the Greens to oppose that policy or to stop it being voted on was held up in the Senate, just as they've also held up in the Senate the Help to Buy scheme that's about helping people into home ownership through shared equity, even though that's actually Greens Party policy. So, I'm not interested in the sort of nonsense that the Greens are engaged with. What I’m interested in is policy –
O’KEEFE: Nobody's interested in the Greens nonsense. But what Australians, well – what Australians, Prime Minister, with respect, are interested in is their negatively geared properties and whether or not your Government is looking to tinker with that.
PRIME MINISTER: And I've made it clear that I've had no discussions that, you know, I don't talk about Cabinet or what have you, but, for obvious reasons. But I can assure you that we've had no discussions along the lines of which I read this morning. But there's nothing wrong with people having a look at things in the Public Service. That's what public servants should do.
O’KEEFE: Okay then, here's a question. Did you direct the Public Service to do that or did anyone in the Treasurer's Office direct them to do that?
PRIME MINISTER: No.
O’KEEFE: So, they just did it themselves?
PRIME MINISTER: Well, I assume so. Certainly I can speak for myself. I can't speak for everyone.
O’KEEFE: So no one said to the Secretary of the Treasury, 'hey mate can you have a quick look at this?'
PRIME MINISTER: I can't speak for everyone, you know, in the entire of Canberra. That would be disingenuous, Chris, you know that. What I can say is that I have not made that request and that the Government has been focused on our $32 billion Homes for Australia Plan, because we know that the key here is supply.
O’KEEFE: All right, let's talk about inflation. 2.7 per cent the monthly figure. So, we're in the target band of two per cent to three per cent. The Reserve Bank couldn't care less.
PRIME MINISTER: Well, the Reserve Bank, of course, met yesterday. But the truth is that we have brought inflation down to half of what we inherited – or less than half – and a third of where it peaked. Now, that hasn't happened by accident. That's because we've delivered two Budget surpluses. That's because we've delivered cost of living relief that has had that downward pressure on inflation. And no matter what figure you look at, whether it is monthly inflation down to 2.7 per cent from 3.5 per cent, or trimmed mean inflation of 3.8 per cent now down to 3.4 per cent. Non-tradable inflation, 4.5 per cent down to 3.8 per cent, or excluding volatile, those figures are 3.7 per cent down to three per cent. So, this is – it should be uncontroversial – that this is good news. Inflation moderating. We need to do more. We know that. We know people are under pressure. But what we've managed to do is to provide serious cost of living relief for people, whether it be the tax cuts for every taxpayer, the Energy Bill Relief, the Cheaper Child Care, the Fee-Free TAFE, all of that, while wages have been increasing and we've managed to put that downward pressure on inflation. That is what responsible economic management looks like.
O’KEEFE: And so it looks the same, then, it's responsible economic management in Canada, the United States, the United Kingdom, Japan, South Korea, inflation has come down all around the world, PM.
PRIME MINISTER: Many of them peaked at double digits. In the UK, for example -
O’KEEFE: Now it's at 2.1.
PRIME MINISTER: The UK and other economies went into recession. We didn't go into recession. We've had record employment growth, some 980,000 jobs created on our watch since we came into government. More than any government in Australian history. And we've managed to achieve that during what are very difficult global economic times.
O’KEEFE: Let's look at the US. 2.5 per cent inflation. They've just had a big cut in interest rates. They hiked interest rates a little further than us, but their unemployment rate, 4.2 per cent. Australia's is only 4.1 per cent and growth at 3 per cent. We had 0.2 per cent last quarter. Prime Minister, we're not going all that crash hot.
PRIME MINISTER: The United States inflation peaked much higher. Their interest rates are still higher than ours, even after the 0.5 per cent decrease in interest rates. And interest rates peaked a lot higher than where they were here.
O’KEEFE: What about the 20 per cent payment defaults at the moment in Australia? 20 per cent payment defaults in the last quarter with a view that when we're going to see serious foreclosures down the line.
PRIME MINISTER: We know that people are under pressure. That's why we not only have taken all of that action, such as making the difficult decision, you might recall we talked about it at the time, Chris. The decision that we took to change the income tax cuts so that everyone got a tax break was the right decision. But it wasn't the easy decision and we were criticised substantially for it before everyone voted for it. And everyone agreed that it was the right thing to do, even though the Coalition is still being critical of it.
O’KEEFE: Here's a question for you, and one of the reasons we've got 2.7 per cent today is the drop in power prices. So, 18 per cent drop in power prices. Now, most of that is because of the Energy Bill Relief.
PRIME MINISTER: That's a good thing.
O’KEEFE: Well, do you realise though, that it sounds silly when you put it like this? The taxpayer pays you, the Government, and then the Government pays the taxpayer to help us pay our power bills. Now you're sitting there trying to say that this is somehow genius economic policy.
PRIME MINISTER: Chris, we have done two lots of interventions into the energy market. One that you wouldn't have expected for a government to have the courage to put a cap on coal and gas prices.
O’KEEFE: I was supportive of that. But effectively you're going to have generations long power bill welfare the way we're going at the moment.
PRIME MINISTER: No, we did that because of what was happening globally. We intervened into the market in conjunction – credit where credit's due – in New South Wales, Chris, the Perrottet Government were very supportive and we did that in partnership with them. Unlike the Federal Opposition who opposed it. Now, we also provided Energy Bill Relief for this year. But that was just one measure that we were able to deliver that, Chris, one of the reasons was because of responsible economic management, because of surpluses.
O’KEEFE: Hang on. How is me paying you and then you paying me to pay my bills good economic management?
PRIME MINISTER: I'll tell you what good economic management is, Chris. It's turning a $78 billion deficit into a $22 billion surplus.
O’KEEFE: I didn't ask that. I asked about the power bills. How is that good economic management?
PRIME MINISTER: What good economic management of the Budget enables you to do is to provide cost of living support for people and providing that cost of living support for households has made a difference for them –
O’KEEFE: Here's an idea. What about just bringing down power prices?
PRIME MINISTER: And has been the right thing to do.
O’KEEFE: PM, I've run out of time, but I do appreciate you coming on.
PRIME MINISTER: We didn't even get into supermarkets, Chris.
O’KEEFE: Well, we talked about fake discounts. Maybe the inflation rate’s a fake inflation rate.
PRIME MINISTER: We're getting into the supermarkets and holding them to account as well, as part of putting pressure on to deliver for people out there who are doing it tough. We understand that. That's why we're turning this voluntary code that was there under the former Government into a mandated code. And we've put out that draft just on Monday, the very same day that the ACCC announced they were taking Woolworths and Coles to court because of the allegations that are there over 500 products between them where costs, prices go up by $1.50, down a little bit, and then they pretend that they're cheaper.
O’KEEFE: We see it. A lot of people on this program rang the ACCC and blew the whistle. So, thanks for coming on. Appreciate your time.
PRIME MINISTER: Thanks, Chris.
O’KEEFE: That's the Prime Minister, Anthony Albanese.