The Point Live: Coalition still to land a blow on Albanese-less Labor, surprise surge in inflation. As it happened.

Shadow Treasurer Ted O’Brien is on his feet again, with another question to Treasurer Jim Chalmers about today’s inflation uptick.

The Treasurer has gone from bored eye rolling to annoyed tutting.

Ted O’Brien:

Will the Treasurer now concede it is time to stop Labor’s spending spree?

Jim Chalmers:

You can’t believe a word he says. The way that he just characterised my earlier answer has no relationship with reality. Leaving that aside for one moment, I think the Shadow Treasurer, once again, has impeccable timing, asking me about government spending and the budget position in the week that Fitch ratings agency has reaffirmed Australia’s triple A credit rating. The reason they’ve done that is because our budget position is one of the strongest in the G20. That’s because, unlike those opposite in ways unrecognisable to them in government, we’ve banked most of the upward revisions to revenue. We’ve found $100 billion in savings. We delivered two surpluses in our first two years when those opposite couldn’t deliver a single one in nine years. We’ve got the deficit down to about a fifth of what we inherited from those opposite. We’ve got debt down by $188 billion since we came to office, and that’s saving the Australian people $60 billion in interest … We’ll stack up our record against yours any day.

Back at the Revenue Summit we are hearing from a panel about ways to fix Australia’s housing policy.

In Australia we are seeing rising rents, declining home ownership and policies that favour cashed-up investors.

Josie Lee from Oxfam Australia argues Australia’s tax system is “fueling inequality”.

“We are seeing a system in Australia that is failing to tax wealth,” said Ms Lee.

“Negative gearing and the capital gains tax… has been driving up housing prices.

“If we really want to tackle the problem, scrapping the capital gains tax is a winner”.

Maiy Azize from Everybody’s Home says incresaed revenue would allow the government to make a huge investment in public and community housing.

“The government is taking a lot of action – the wrong type of action,” she said.

Advocate Jordan van den Lamb, also known as ‘Purple Pingers’, highlighted housing inaccessibility and the large number of long-term vacant properties that remain unoccupied amid our national housing crisis.

He said politicians are scared to lose votes and that’s why they are not doing anything to fix housing.

“Meanwhile, people are dying,” he said.

Shadow Treasurer Ted O’Brien has another crack on inflation:

Yesterday, the governor of the Reserve Bank said a 0.9% increase in core inflation would be “a material miss”. Today, it came in even higher. Given the Treasurer always takes credit for when inflation falls, will he now take responsibility for today’s news of inflation increasing?

Treasurer, Jim Chalmers:

Actually, I share credit when inflation comes down, as I have on many occasions from this dispatch box. I make the point that government is playing a helpful and meaningful role in our economic progress, but that the credit belongs to the Australian people, who work hard and provide for their loved ones and do the best they can. So if he’s going to get a very rare question, he may as well get it right and quote me accurately. I always share credit when things go well in our economy. And I take responsibility for working through the challenges as they present themselves in our economy. I take responsibility for the fact that this Cabinet and this government has cleaned up much of the mess that those opposite left us in the budget. I take responsibility for the fact that we work together with the Australian people to deliver two surpluses when those opposite couldn’t deliver a single one in nine years. I take responsibility for the fact that we’ve got real wages growing again after a decade of deliberate wage suppression and wage stagnation. We take responsibility for the fact that living standards are recovering after they were falling sharply under those opposite. We take responsibility to work through the challenges in our economy, whether those challenges are inflation or business investment or more work that we need to do when it comes to the sustainability of the budget. 

The first crossbench question comes from Rebekha Sharkie on out of pocket expenses for older Australians on home care packages.

Rebekha Sharkie, Member for Mayo:

Fred has a Level 3 Home Care Package. Today, his package covers his needs to stay home. Fred’s been advised, once Support at Home starts this Saturday, he will pay $21.87 out of pocket for each hour of cleaning, gardening, and meal preparation. Fred can’t afford this, and says he’ll be forced to cancel his care package. Can the minister explain how Fred not being able to afford homecare is putting the “care” into “aged care”?

Sam Rae, Minister for Aged Care:

The Albanese Labor government’s once-in-a-generation aged care reforms are focused on ensuring that we have an equitable and sustainable aged care system that delivers the care that every older person across our country needs and deserves. The new funding model is designed to make our aged care system more sustainable and to encourage investment in new facilities. These are both important parts of our plan to support the growing needs of an ageing population. In the next 40 years, the number of Australians aged over 65 is expected to more than double, while those 85 or older will more than triple. We worked closely with those opposite to seek a bipartisan approach to aged care sector sustainability. The new Aged Care Act, which starts this weekend, legislates a new funding model which was developed in response to expert advice from the Aged Care Taskforce. Under the new model, people who can contribute to their care will, while people who are less well-off will receive extra support. These changes are about ensuring that the government can afford to continue as the primary funder of the aged care system. Importantly, the government will continue to cover the full cost of clinical care for all residential and in-home care. A key feature of Support at Home is the services list, which outlines services that can be accessed under the program. The department engaged with it a range of aged care stakeholders to test and refine the Support at Home service list to ensure it recognises the needs of older people in the context of the broader universal health system, including Medicare. There are protections in place so that people aren’t worse off. A person who is in residential aged care when the new laws come in will remain under the current means-testing arrangements unless they choose to opt in to the new system, and with Support at Home, the in-home care program, the no-worse-off principle applies so, anyone who was in the system before 12 September 2024 will have their contributions grandfathered. Older people having difficulty paying their co-contributions will be able to apply for very substantial hardship assistance through Services Australia and a lifetime contribution cap will apply for everybody. Our goal is to make sure that every older person across Australia can access the safe, dignified, and high-quality care that they need and deserve.

Opposition Leader, Sussan Ley:

Earlier this year, the Treasurer went on a victory lap, declaring inflation is down substantially and in a sustained way. Yet today, inflation has shot up above all expectations, jumping to 3.2%. This means no relief for households, no relief when seeing the doctor, no rate cuts in sight and families paying an additional $1,800 on their mortgage. With Australians suffering through the largest decline in living standards in the developed world, why is it, when Labor fails, Australians always foot the bill?

Treasurer, Jim Chalmers:

If the Opposition Leader really cared about cost-of-living pressures, she wouldn’t have just gone to an election promising to increase taxes on every single taxpaying Australian worker. If they cared about cost-of-living pressures, they wouldn’t oppose our efforts to provide responsible cost-of-living relief. 

Inflation is higher than we’d like, but it is around half what we inherited from those opposite. And so, if those opposite want to make this point about inflation at 3%, what do they say about inflation that they had running north of 6% and rising when we came to office? Inflation is half what we inherited from those opposite … they were spending more, they had bigger deficits, and they had more debt. The point that I would make about the numbers today more specifically is that the headline number increased largely as a result of the end of state energy rebates, but it is still much lower than its peak.

First question is from Opposition Leader Sussan Ley to Acting Prime Minister Richard Marles.

It’s a loose reference to today’s slight uptick in the national inflation rate.

Sussan Ley:

Because of Labor’s economic vandalism, households are paying 15% more for their food, 20% more for their insurance and nearly 40% more for their electricity in the last year alone. Australians are suffering through the largest decline in living standards in the developed world during Labor’s cost-of-living crisis. Why is it that, when Labor fails, Australians are always left to foot the bill?

Richard Marles:

What today’s figures demonstrate is that Australian households are still under pressure and we understand that the work is never done, which is why we will continue to pursue cost-of-living measures. But it is worth noting that even the headline inflation rate today is about half of the headline inflation rate that we inherited when we came to office. Indeed, the core inflation rate today means that, for three successive quarters, the core inflation rate has been within the Reserve Bank band. That is in no small part due to the way in which we have been managing, in a prudent way, the Commonwealth budget. Annual spending growth under our government over the last three years has averaged at about 1.2%. When those opposite were in government, the average increase in annual spending was around 4.1%. They doubled debt before the pandemic, and they left us with a trillion dollars of debt with absolutely nothing to show for it.

Ebony Bennett, Deputy Director of  The Australia Institute, has told the Revenue Summit that Australians are right to demand better scrutiny of the $368 billion AUKUS agreement.

Research from The Australia Institute shows two-thirds of Australians want a review of AUKUS, while fewer than half think it will make us safer. 

“The AUKUS deal comes with no guarantees for Australia,” Ms Bennett said. 

“Not only do we have no guarantees, there’s nothing in the print (or fine print) to say that if Australia doesn’t get submarines there’s no guarantee Australia will get its money back. “

“That is what the Australian government has signed up to”. 

Imagine what else Australia could spend $368 billion on… 

You can sign a petition calling on a Parliamentary Inquiry into AUKUS here: https://nb.australiainstitute.org.au/aukus_parliamentary_inquiry_now

As US President Donald Trump prepares to meet Chinese President Xi Jinping for the first time since 2019, he’s coming off the back of what many in his administration will view as triumphant tour of South East Asia. 

In Malaysia, he pitched himself again for the Nobel Peace Prize, claiming credit for the ceasefire between Thailand and Cambodia (never mind that it was largely mediated and delivered by Malaysia). He made his role in signing the ceasefire a condition of his visit to Malaysia, once again upstaging his host.

In Japan, he addressed US troops and crowed about Japanese investment in America. He also signed critical minerals deals with both Japan and Malaysia (newsflash: we aren’t special).

But as usual with Trump, the devil is in the (lack of) detail. Malaysia seems to have only promised to not do something: it “committed to refrain from banning, or imposing quotas on, exports to the United States of critical minerals or rare earth elements”.

Same with Japan, where the two nations agreed only to “support the supply of raw and processed critical minerals and rare earths crucial to the domestic industries of the United States and Japan.”

Xi is many things, but silly is not one of them – he knows who he’s dealing with. Trump might think he’s walking into the meeting with the upper hand after all this deal making and his promises of a great new deal with China. We can never really know how these things will go, but it seems likely Xi will give Trump his deal, in the full knowledge that Trump only wants the glory and a photo op.

In the words of Matt Duss from the Centre for International Policy in Washington, D.C.: “You can’t trust Donald Trump. But you can trust Donald Trump to be Donald Trump.”

The President’s self-interest is usually at the heart of his “deals”. We’ll know more after their meeting on Thursday, but as always – treat Trump’s big announcements with the scepticism they deserve.

We are in the down hill slide towards question time, which means we don’t have long to hold on to whatever is left of your sanity today.

I’ll be speaking on a panel at 2pm, which means I will miss this QT (oh, how will I survive?!) which means you’ll be in the hands of Glenn Connley for the worst hour of the day.

Go grab whatever you need to get through it. Dealer’s choice.

Back at the Revenue Summit we are hearing from a panel about the cost of energy, and how big, foreign-owned gas companies are taking the piss out of Australians. 

“The gas price hurts everybody,” said Geoff Crittenden, CEO of Weld Australia. 

The discussion is about how in other sectors, users pay for what they consume (bakers pay for flour, builders pay for bricks, commuters pay for public transport).

However, foreign companies pay little to no royalties, petrouleum resources rent tax, or corporate tax. 

Deidre Willmott, Strategic Advisor at Fortescue, has been talking about the need move away from disesel subsidies and instead redirect incentives towards cleaner technologies. 

Greg Jericho, Chief Economist at The Australia Institute, has highlighted the many ways that “big gas is taking the piss”. 

Australians pay more in HECS than gas companies pay in PRRT,” said Mr Jericho.

In Western Australia, drivers pay more rego than gas pays royalties, and gamblers in Western Australia pay more tax from gambling than gas does from royalties”. 

Incredible, given WA doesn’t even have poker machines.