Interview with Mark Levy on 2GB Mornings

Subjects: Housing downturn and property taxes, mortgage stress and interest rates, RBA, superannuation for housing, political polling, CHOGM, Andrew Charlton and Jim Chalmers.

E&OE....

Mark Levy:

I thought we'd catch up with the Shadow Housing Minister Andrew Bragg. He joins me on the line. Senator, good morning to you.

Senator Bragg:

G'day Mark, how are you?

Mark Levy:

Very well, thank you, mate. Jeez, there's a fair bit to talk about. Let's start off with this data out this morning that house prices are falling and we're looking at a significant housing downturn.

Senator Bragg:

Well Mark, these taxes have smashed the housing system, and now what we've got are fewer houses, higher rents, fewer mortgages to owner-occupiers. So these taxes don't help anyone, and when we had the Treasury Department and Katy Gallagher there last week at Senate Estimates, she couldn't point to anyone who wins from these taxes.

Mark Levy:

Surely it's time for them just to put up the white flag and admit that they've got it wrong. I know accountability doesn't mean much for this Albanese Government, but I mean it's there in black and white. The changes that they made in the Budget have backfired, and backfired big time.

Senator Bragg:

Well mate, Jim Chalmers says he did a PhD on Paul Keating. He obviously didn't study it very carefully, because Paul Keating actually made this mistake in the '80s when they cancelled negative gearing in '85, and then they had to bring it back in '87. So I think if Chalmers is going to survive, he's going to have to axe these taxes, otherwise I think he's going to have to walk the plank pretty soon, because his unrealised gains tax collapsed, his Budget's collapsed in five different ways—I mean, this guy's hopeless.

Mark Levy:

Well, you know, you factor in mortgage stress: more than half a million households have now been plunged into mortgage stress since the Albanese Government took office. There again, black and white, Australians that are struggling. Half a million of them now wondering where they're going to get the money to meet their mortgage repayments.

Senator Bragg:

Well, as I say, if you're a renter you're worse off, if you're an investor you're worse off, if you're an owner-occupier you're worse off. I mean, no one wins from these high taxes, and the normal rules of economic orthodoxy haven't been suspended in the housing sector. All you have to do is look at the scoreboard and you can find out that we're getting 30,000 houses fewer under the Albanese Government compared to the last Liberal Government, despite them spending billions of dollars and talking about it endlessly. I mean, they've been absolutely hopeless.

Mark Levy:

Well, I think off the back of the inflation data last week, a rate rise tomorrow is inevitable, isn't it?

Senator Bragg:

Well, look, we hope not because it's not going to be good for the punters. We don't want people to have to pay more on their interest rates, but I think it's disgraceful to see on the weekend the Prime Minister blame the RBA for all this. I mean, he's the guy who's led spending to the highest rate since '86–'87, a 40-year spending high. He has fiscal policy at his disposal and he refuses to use it to cut spending, to rein in inflation, and if he did that we'd have lower interest rates. So I just think this guy has run out of ideas, and I thought the attacking of the RBA on the weekend was one of the most disgraceful things I've seen in economic policy for a long time.

Mark Levy:

It'd be nice if the RBA Governor just told us what she actually thinks. I know she's got to be careful and she's got to be respectful, but the only lever the RBA has is the cash rate—to raise the cash rate or to hold firm on the cash rate—all the while the muppets in Canberra, and I mean that respectfully of the Government, they just spend, spend, spend.

Senator Bragg:

Well mate, what are you supposed to do? I mean, they have a job to do. If inflation's running at high threes and fours, they have to raise rates. This is the job they have, so I think attacking her is a pretty low blow. I don't think anyone wants to raise interest rates, but they have one tool and it's the cash rate, and they need to raise it because inflation's out of control because of Government spending.

Mark Levy:

Yeah, the Government's backed them into a corner, that's what they've done. What about the super policy? You know, trying to help people get into the housing market, there's this debate within the Liberal Party about letting people use super to buy a property. You back this idea—why do you support this?

Senator Bragg:

Well, I don't want Australia to become a nation of retired renters, and over the next five years we're going to hit 1 million retired renters. And Mark, if you are a retired renter on the Pension, you're going to have a hard time in retirement. So we think it's very important that we make sure that we align the housing systems, the retirement and superannuation systems as part of an overall housing policy, because we don't want people to be without a house in retirement. When super started back in '92, it was assumed that you'd own a house and everything else was a top-up. Now we're starting to see people retire with no house, but a reasonable amount of super.

Mark Levy:

Wouldn't that be inflationary, though?

Senator Bragg:

Well, it depends how you do it. There's a whole lot of different ways you can do it. And I think at the end of the day, we're the party of choice. We've always wanted people to have the most choice available to them, because we think that they know more than the state. We don't think that the Government generally does a good job of making judgments for individuals.

Mark Levy:

But do you see what I mean though, Andrew? I mean, here we are talking about trying to tame inflation, but if you sort of go along with this, people suddenly have more access to cash, meaning they can spend more on a house. That just does nothing to attack the main problem we have, the underlying contributor to inflation, which is the amount of money that's being spent. So it's sort of going to backfire on what we're trying to do at the moment, and that's bring that inflation level back down to that band that the RBA wants it in.

Senator Bragg:

Look, I'm not convinced that people paying off debts is going to be necessarily inflationary. I think the Government is the 10-pound gorilla here in the market. We want to rein in spending from the public sector. But more broadly, you'd only do some of these policies as part of a massive supply-side revolution, which is what we need. Because at the end of the day, as you know—I know you talk to a lot of builders—one of the biggest problems is that people can't make a buck out of housing. So we've got to make sure that we cut taxes, cut red tape to make building houses viable again, because I'm sure a lot of the people who listen to your program, Mark, would say, "Well, I used to build houses, but now I build commercial or industrial or even data centres, I'm involved in that, because I can't make any money out of housing because of the red tape and the taxes."

Mark Levy:

Yeah. Let's go onto the polling. Jeez, there's a fair bit of it out today. The McKinnon Index has shown trust in politicians has collapsed.

Senator Bragg:

I’m shocked.

Mark Levy:

We've asked time and time again how this can be fixed, and I think Jess Wilson sums it up best: just be upfront and honest, that'd be a nice start.

Senator Bragg:

Yeah.

Mark Levy:

Then you look at the Newspoll: Labor's numbers have crashed, there's been a slight uptick for the Coalition, and I think it's off the back of Angus Taylor seizing on the struggles of the economy and the cost-of-living pressures that Labor's doing nothing about. What do you make of the numbers today?

Senator Bragg:

Well, on the first part, I'm not surprised people don't trust politicians, because politicians have helped crash the system. If you want to summarise our plight now in Australia, I'd say we're a great country, but we've been poorly run. So that doesn't surprise me, I think people can see poor management. On the political polling, look, obviously we've got a long way to go here, but the most important thing, as you say, is we focus on the economy, because that's where we can make real gains at the next election, because the Government have done such a bad job.

Mark Levy:

What are your thoughts on the Prime Minister going to the Commonwealth Heads of Government Meeting off the back of potentially another interest rate rise tomorrow? There's some people saying he should be here addressing cost-of-living pressures, but at the same time it's a fairly important meeting, I would have thought.

Senator Bragg:

Look, I don't think CHOGM is as important as it was in the '80s, for example, but it is still an important gathering. But I think he needs to think very carefully about how this looks for him, given that we're about to have potentially almost an 18-year high in interest rates. So that's really a matter for the Prime Minister to manage his own perception. I think he's done a poor job of late, and maybe he should reflect on that.

Mark Levy:

How long before Andrew Charlton takes over as the Treasurer of this country? Is it Andrew Charlton out of anybody in that party?

Senator Bragg:

Well Mark, I'd be shocked if Andrew Charlton wasn't the Treasurer sometime in this term. And I think that would be good for Australia, but not so good for us politically, to be honest. Certainly, I think Chalmers has run out of petrol tickets here, and Charlton is probably one of the smartest people in Parliament, so I think it's inevitable that he'll be in that job. Because how long can Chalmers carry on for after all his tax policies have collapsed on him and he's presided over this spending and inflation disaster?

Mark Levy:

Why do you say Andrew Charlton is bad politically for you?

Senator Bragg:

Well, I think ultimately the Labor Party have been so bad at managing the economy, if they have better people, then that'll be good for them. So to be honest with you, it'll be good for Australia, but maybe not so good for us.

Mark Levy:

Sounds like you're a bit worried about Andrew Charlton, hey?

Senator Bragg:

Well, I just think at the end of the day, he would be a big upgrade for the Labor Party in the Treasury, because the current guy, along with Albanese, I think has run out of ideas and out of petrol tickets.

Mark Levy:

All right, fair enough. Andrew, nice to catch up, mate, we'll talk again soon.

Senator Bragg:

Thanks Mark, see ya.

Mark Levy:

Thanks buddy, Shadow Housing Minister Senator Andrew Bragg.

[Ends]

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