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RUBY:

From Schwartz Media, I’m Ruby Jones, this is 7am.

The economic news got worse this week, with rate rises and some dire economic forecasts.

But so far, the help the government is offering has been targeted – it probably won’t raise jobseeker except for over 55s, and it’s unlikely to pause rising HECS debt.

So, after a decade or more of young people falling behind economically, will we see any help at all on budget night? And what are the risks politically if the government doesn’t offer something?

Today, columnist for The Saturday Paper Paul Bongiorno, on the priorities going into budget night – and what Anthony Albanese is thinking as he visits London.

It’s Friday, May 5.

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Archival tape -- News Host (7News):

“Good afternoon. The Reserve Bank has lifted Australia's official cash rate by another quarter of a percent-...”

Archival tape -- News reporter (Sky News):

“So despite having kept the interest rates on hold last month, the interest rate here is now at 3.85%-...”

Archival tape -- 9 News:

“3.85."

“Oh, another interest rate hike-…”

Archival tape -- 7 News:

“That is the 11th rate rise in 12 months-...”

Archival tape -- 9 News:

“So that has come as a surprise and really that is going to be a pretty devastating move for a lot of people out there…”

RUBY:

Paul, this week the Reserve Bank raised rates once again with the RBA Governor Philip Lowe warning that inflation isn't falling at the rate that the bank wants it to. So how is this latest raise being felt in government and how much does it change things ahead of the budget?

PAUL:

Oh well, Ruby, it was basically a shock to the market and I think a shock to the government. Everyone was saying that the Reserve Bank would sit on its hands, that a lot of the evidence about inflation and the economy was mixed. But there is a view and I think the statistics back this up, that inflation has begun to slow. So it was something of a shock when the Reserve Bank went back putting inflation as the number one enemy and not looking at other things like employment and like wage growth. That quarter of a per cent rise to 3.85 is the highest interest rate, official cash rate for 11 years.

Economist Stephen Koukoulas isn't alone, being highly critical of the bank's decision. He says that the record of the bank in forecasting inflation has to quote him “under Dr. Lowe, been shockingly bad.” And of course the bank acts based on its view and its forecast of where inflation is going. Now the ACTU, the peak union body, well they’re very unimpressed. Sally McManus, the secretary of the ACTU, said there should be no more interest rate rises, that it's not the workers who should be bearing the brunt of fighting inflation. And she points the finger at corporate Australia, record profits and price gouging, which of course is adding to the cost of living. All of this, of course, gives us a new context, if you like, for the budget. So you've got Anthony Albanese who boasts and says that Labor governments should always be governments for the disadvantaged. You might remember that one of his slogans in the campaign was ‘leaving nobody behind.’ Well, how does the government juggle all of this while at the same time giving the promised cost of living relief? It's certainly going to be, and it is a very hard challenge.

Archival tape -- Jim Chalmers:

“This is a really difficult decision for a lot of Australians who are already under the pump. This is a reminder that inflation remains the primary challenge in our economy.”

PAUL:

But Jim Chalmers, on Tuesday after the Reserve Bank's decision, well, he promised there would be a cost of living package in the budget and it would prioritise the most vulnerable Australians.

Archival tape -- Jim Chalmers:

“There will be a substantial cost of living package. It will have a number of elements. It will prioritise the most vulnerable Australians and it will be conscious of the inflationary environment that we find ourselves in.”

PAUL:

But just to remind us, Chalmers said that the interest rate rise and I'm quoting “was really a pretty stark, pretty brutal reminder of the difficult economic conditions that we confront.”

RUBY:

And Paul, the cost of living relief that we've seen announced so far, it's been pretty skewed - Jobseeker rates to rise, but only for those who are over 55. And we've also recently seen the government vote down a bill that would have frozen HECS debt. So it seems like young people once again are being asked to shoulder the cost of living crisis by themselves while the government focuses on helping older Australians.

PAUL:

Well, that's certainly the way it looks and it's the way the argument has gone in recent days, in recent weeks. But Jim Chalmers, while he bristles at the idea that his package will exclude any relief for younger Australians.

Archival tape -- Jim Chalmers:

“We will be very conscious of the pressure on younger Australians in the budget and we know that Australians, particularly vulnerable Australians, are doing it tough across the board.”

PAUL:

It does look pretty certain now that those over 55 will get an increase in the JobSeeker rate. The Treasurer was given more than one opportunity to say that wouldn't happen this week, in fact gave arguments for why it should.

Archival tape -- Jim Chalmers:

“Particularly for women over 55, who find it harder to get back into the workforce, particularly for the long term unemployed. If you're over 55, it's harder to find a job, even when unemployment nationally is at three and a half percent…”

PAUL:

But you're right. Young people are also hurting in this cost of living crisis. It looks like they'll be waiting for any significant rise in the JobSeeker rate. But it does seem they'll be getting something.

RUBY:

Okay. But it does seem, Paul, whichever way this all goes on budget night, there's almost certainly going to be disappointments for some.

PAUL:

Well, certainly, I mean, Jim Chalmers himself points out that no government Liberal or Labor can live up to expectations. I think it's true that an incoming Labor government has higher expectations, especially when it does come to the issues of family support and Social Security, Scott Morrison, as we saw in robodebt, or the view that anyone on welfare or anyone on government payments, their default position was to try and take the taxpayer down. Well, Labor doesn't share that view. However, Labor has the same problem as the Morrison Government and that is the demands on government spending far outstrip revenue. And this, you know, Ruby, is a key issue. Everybody wants the government to look after them. Wealthier Australians don't want their billion dollar tax concessions to be touched. And of course, those who aren't doing so well, well they expect the government to do much more for them.

I don't know whether we'll ever get around to having a government who can say “look, we want to do all these things for you, but we do need to raise a few taxes here and there.” That would be very courageous. And as we know, courage in politics is a word for...hmm...political suicide?

RUBY:

We'll be back in a moment.

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RUBY:

Paul, let's turn to the Prime Minister Anthony Albanese, and his appointments this week. He is currently in the UK for the coronation of King Charles and when he arrived he did this interview with conservative TV host Piers Morgan. What did you make of that?

Archival tape -- Piers Morgan:

“You're here for Coronation of King Charles the third. How do you feel about that? You're a lifelong Republican. What are you doing here, Prime Minister?”

Archival tape -- Anthony Albanese:

“Well, I think you can be a lifelong Republican, which I am, and still respect our institutions.”

PAUL:

Well, I have to admit, Ruby, it was eye-raising, certainly my eyebrows raised when I heard about it. But then again, this is of a piece of Albanese's attitude to interviewers who he knows are not very sympathetic to him or to his brand of politics.

Archival tape -- Piers Morgan:

“So what are you going to do in Westminster Abbey when you are urged to say the oath of allegiance to King Charles?”

Archival tape -- Anthony Albanese:

“I do that every term.”

Archival tape -- Piers Morgan:

“Well, I know, but are you going to say in the Abbey with the world's cameras watching?”

Archival tape -- Anthony Albanese:

“I will do what's entirely appropriate as the representative of Australia.”

PAUL:

Albanese, of course, even when Labor was in opposition, he was the only senior Labor person that would ever agree to be interviewed by Andrew Bolt. And Albanese's argument is, look, when I'm interviewed by people like Bolt or Morgan or others, I'm given access to their audience and I'm given the chance to defend or to put my point of view and who knows, I might convince a few of them that their attitudes need to be challenged and maybe they could change their thinking.

Archival tape -- Piers Morgan:

“Let me ask you…when you're tough on border, you’re anti-cancel culture, you know what a woman is. Are you sure you're a progressive left? You’re not a secret story in disguise, are you?”

Archival tape -- Anthony Albanese:

“I'm an absolutely consistent Labor Prime Minister.”

Archival tape -- Piers Morgan:

“Are you an old fashioned liberal? Of my kind. An old fashioned who actually realises the woke left is pretty nutty, and that way madness lies.”

Archival tape -- Anthony Albanese:

“I'm a social Democrat who believes in markets, but believes that the state, the power of the state can make a positive difference to people's lives.”

RUBY:

And Paul, the coronation this weekend, it caps a pretty interesting week of engagements for Albanese because last weekend he was celebrating the wedding of Australian radio host Kyle Sandilands, which drew a lot of media attention. So how do you think all of this looks to the electorate, Paul, weddings and coronations while we grapple with the cost of living crisis?

PAUL:

Well, I don't think Albanese or anybody can do too much about the coronation. We do have, as Albanese pointed out in his interview with Piers Morgan, the monarch of Great Britain, as our head of state and as Prime Minister of Australia, he has really no option but to go to Westminster, represent Australia and to sway the oath of allegiance, which by the way, every Australian politician has to do after every election. Albanese pointed out that the people of Australia in 1999 chose to stay with the British monarch and as an elected Australian Prime Minister, he has to, well, toe the line and he says he will of course do that. Now as regards the Kyle Sandilands wedding, well that is a very different kettle of fish.

Archival tape -- Sky News:

“Why is Prime Minister Albanese and New South Wales Premier Chris Minns at the wedding of a famous radio host yesterday? It caused a bit of a stir.”

“It has raised our eyebrows, that's for sure, and headlines…”

PAUL:

I think it's an example of Albanese's shameless pragmatism when it comes to dealing with the media people like Kyle Sandilands, who we should remember is Australia's number one shock jock and he has a daily audience of a million listeners.

Archival tape -- 9 News:

“But it was the Prime Minister that everyone was talking about, right, Albo? DJ Albo.”

“What happened there? Did he, did he get out early? Did he stay and party the night away?”

“He gave himself a get out of jail free card earlier in the day because there was lots of hoo-ha brewing earlier in the day and the night and the night before about whether he was going to DJ and whether that was appropriate for a sitting Prime Minister.”

“So he didn’t DJ?”

“He didn’t DJ.”

“Okay.”

PAUL:

He turned up to the wedding, which was $1,000,000 worth of celebration. And I guess I'd have to say the only reason why the wedding could cost $1,000,000 is because Sandilands is one of the highest paid performers in the Australian media. Having said all of that, did he need to go? In my humble opinion he didn't. But I suspect that Kyle Sandilands has been speaking well of him in the past few days on radio.

RUBY:

And amidst all of this Paul, Anthony Albanese has been consistent in saying that his priority is the voice to Parliament and a joint committee has been looking at the wording of the referendum. It's been hearing testimony and the plan is for a report back in a couple of weeks. So what have we learned from that, Paul?

PAUL:

Well, we've learned quite a lot, Ruby. The arguments being put by those who oppose the referendum, especially the arguments about if we say yes, it'll gum up the works, that the Voice will be running off to the High Court every other day to stymie what government is on about. Well, we saw that the overwhelming evidence presented to this committee by constitutional experts and lawyers was that all of that was, to quote one of them, Bret Walker, SC: “Silly.” It's interesting to know that the committee had a Liberal deputy chair, Keith Houlihan, from Melbourne who's opposed to the Voice.

So it seems pretty sure and this is information I've got from sources in the committee that the majority of the committee will recommend that the form of words agreed by the expert panel set up by Albanese, mainly of very senior Aboriginal leaders and lawyers, will be the form of words that will be put to the people later in the year. Noel Pearson in the last day of the public hearings, well he locked horns with Tony Abbott. Tony Abbott says it's all being rushed. It should be taken off the table and we should start again. Pearson pointed out that far from being rushed, this whole process has been going on for 16 years and at various stages Tony Abbott as Prime Minister actually supported the Voice, but he's now changed his tune.

PAUL:

So the committee will report to the Parliament by May 15 and we're expecting legislation setting up the referendum by the end of June. So it's really now the final act in this whole Voice saga. The indications in the public opinion polls are that a majority of Australians in a majority of the states do support the yes vote. I certainly hope that these polls are accurate. It'll be a great day for the country if they are.

RUBY:

Paul, thank you so much for your time.

PAUL:

Thank you, Ruby. Bye.

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RUBY:

Also in the news today…

Aged care workers will receive a pay boost of 15 per cent, with the government committing to a funding boost in next week’s budget.

Unions have been seeking a 25% increase, arguing low pay was contributing to issues of neglect highlighted in the royal commission into aged care.

And…

The National Australia Bank has announced record half-year profits of $4.1 billion dollars, an increase of 17 per cent.

In it’s financial statement NAB said it was benefiting from the rise in interest rates, which helped widen its margins.

CEO of the Bank Ross McEwan said he believed Australia would not have a “pronounced economic correction” and was optimistic inflation would soon be under control.

7am is a daily show from The Monthly and The Saturday Paper.

It’s produced by Kara Jensen-Mackinnon, Zoltan Fecso and Cheyne Anderson.

Our technical producer is Atticus Bastow. Our editor is Scott Mitchell.

Sarah McVeigh is our head of audio. Erik Jensen is our editor-in-chief.

Mixing by Andy Elston, Travis Evans, and Atticus Bastow.

Our theme music is by Ned Beckley and Josh Hogan of Envelope Audio.

I'm Ruby Jones, see you next week.

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