Interview with Chris Kenny on Sky News

Subjects: Inflation figures, Housing Australia, Net Zero

E&OE………

Chris Kenny

I want to go to Canberra now and catch up with Andrew Bragg, who's the Shadow Housing Minister. Good to talk to you, Andrew.

Chris Kenny

G'day, Chris.

Chris Kenny

First up on inflation. These figures have come out of the blue. They've completely kiboshed the Reserve Bank Governor, and of course, Jim Chalmers' inflation fight.

Senator Bragg

That's right, Chris. Inflation is too high, and you can see in these figures that the government is still pump-priming expenditure that is impacting here. And I don't think there's any prospect now of a rate cut in this year, which is bad news for mortgage holders and bad news for people who want to invest in our economy.

Chris Kenny

It doesn't give us a lot of faith in the Reserve Bank, either does it, because this is way in excess of what they were predicting.

Senator Bragg

Well, look, right now, a lot of the economic indicators are wildly wrong. I mean, the predictions in the Budget on productivity and everything else are completely wrong. And the PBO, the Parliamentary Budget Office, has shown, actually, that Chalmers has got a $60 billion hole in his Budget just by virtue of having the wrong productivity parameters. So, I'd say a lot of the data right now is actually wrong.

Chris Kenny

Yeah, and also, there's those federal electricity rebates still flushing through the system - they go through till the end of this year, three and a half billion dollars a quarter being flushed through the system there - when they come off, we'll see the same effect won't we? And consumers get a double whammy then because their power bills will go up. And of course, that will push up inflation and keep the pressure on interest rates?

Senator Bragg

Yeah, it's a massive band-aid, and, I think the economy generally is quite sick. I mean, 85% of the jobs growth last year was in the non-market economy. In the main, the actual economy is not really putting more people on. Investment is pretty anaemic. We've got a heavy amount of red tape. And as I say, I think a lot of the numbers in the Budget papers are actually wrong. I don't think we're on track here.

Chris Kenny

85% of the new jobs, either directly or indirectly, funded by government, that is a hell of a worry when it comes to general levels of spending. I want to get you on housing; you've been very strong on the government's $10 billion Housing Fund. That's in a shambles. The Chair, the person running this has stepped aside, and there's now going to be a national audit. Tell us, firstly, how many homes are actually being built, and what are the key problems with the fund?

Senator Bragg

Well, the Housing Fund's on a duck. It's had two years of operation. It's got $10 billion of taxpayers funds, and it hasn't built any houses. It has bought houses, maybe 500. It's literally making the housing crisis worse by inserting the Federal Government into the market. And the governance of the fund is a disgrace, we're trying to get to the bottom of what's actually happened here. But the bottom line is, there's a huge amount of taxpayers funds sitting in the fund, it doesn't build houses, and the proposals that it does have to build in the future are at massively inflated prices compared to the market.

Chris Kenny

What do we expect this national audit to come up with? Will it to recommend ways for the government to fix the Fund, or is the whole idea beyond reproach?

Senator Bragg

Well to start with, the idea that a housing bureaucracy could solve the housing crisis is completely deft, daft, I mean. It's just crazy. But the other point is that you're spending, in some cases, $1.3 million of taxpayer funds on a single house. Now, the average cost to build a new house is about 500 grand. The first question is, why are taxpayers funding massively gold-plated housing projects? In many cases, all this money is going to the big super funds anyway. We'll look at what the Audit Office come back with. We'll consider whether we make a referral to the Anti-Corruption Commission because there are some problems here and irregularities with how the programme has been devised and how it's been rolled out.

Chris Kenny

Well, this is insane. Let me step through a couple of those things. If these houses are costing so much, double the cost of normal housing, they're not gold-plated houses, the money is being chewed up in bureaucracy, isn't it?

Senator Bragg

Yes, and also payments to the investors. So $2.8 billion of Round One of the Housing Fund tender goes to the big super funds. Now, the big super funds have set up shopfronts to launder the money effectively. And so, the cost of the house is not just the cost of building the house, but it's also paying the investors over the long term, which is just crazy. I mean, if the government wanted to build public housing...

Chris Kenny

I want to be careful about what you're saying here, are you suggesting that you might make a recommendation to the Corruption Commission to examine the relationship between this Fund and some of the major Industry Superannuation funds?

Senator Bragg

Jim Chalmers, the Treasurer, had a number of meetings with the big super funds, the investors, back in 2022-2023, when they were setting up the Housing Australia Future Fund. The big super funds made a number of representations to the government about how the payments should be made. And lo and behold, when Round One tender came around, they were the biggest beneficiaries. So we haven't been able to get to the bottom of it because the government blocks FOIs, and they block Orders of the Senate at rates not seen since the Keating Government. So, I think that there are more questions to be asked here, but we just want to see what the Audit Office comes back with first.

Chris Kenny

All right. Now, just getting back to inflation and cost of living pressures. Obviously, electricity is driving that. It's the push to Net Zero by 2050 that's driving those cost increases, isn't it?

Senator Bragg

Well, I think you know that the Labor Party's Net Zero has been a disaster. They have presided over a disaster in the energy grid. They have trampled over regional communities. I think they've actually destroyed a lot of support for Net Zero because they've done such a bad job in implementing it. I think your question goes to, what do we do next? Look, I think that's an open question. I think we could do it better than Labor. I think that you could cut and dice it in a way that you could maintain your international credibility, but also push down power prices, but also do some heavy lifting on the environment and emissions front.

Chris Kenny

You had a colleague, Senator Andrew McLachlan, cross the floor today on a climate bill, breaking with the party. He's saying you've got to stick by Net Zero. Do you agree with him that the party must stick by Net Zero?

Senator Bragg

Look, I think it's very important that Australia, as a serious country, maintains fidelity to international agreements. We're all in this together at some level, but we shouldn't do economic self-harm...

Chris Kenny

Let me just jump in. Aren't you saying we should pretend? Because none of the other; well, very few of the, any other countries who have signed up to Net Zero by 2050, any of the significant countries, they're not going to make it. They're not on track to make it. America's out, and you know where China is going. Why would we go through this pretence of signing up to something that would cripple us if we actually tried to achieve it?

Senator Bragg

I don't think we should be signing a Net Zero blank cheque. I think we should look at the timetables. We should look at the industries that are in or out. For example, New Zealand has agriculture exempted. China and India don't get there in 2050, they get there in 2060 or 2070. I think there are a range of options that you can look at which allow you to focus on Labor's failings here rather than have an unending debate about ourselves.

Chris Kenny

Well, Net Zero sometime is not too bad an option, is it? Why would you need to put an artificial deadline on it?

Senator Bragg

Well, maybe that's not a bad compromise. I think the idea that you're hemmed in to an agreement that other countries aren't going to actually deliver on and that under Labor's Net Zero, we probably won't get there anyway, I think is crazy. So, my view is you should show fidelity to your international agreements, you should try and cut pollution and emissions, and you should try and protect your economy. And I think there's heaps of different ways you can do it. The idea that you can't cut and dice Net Zero to suit yourself is not a serious argument. There's a thousand different ways you could do it.

Chris Kenny

Yeah, and most of them involve nuclear...

Senator Bragg

That's right.

Chris Kenny

Thanks for joining us, Andrew. appreciate it.

[Ends]