Interview with Kieran Gilbert, Sky News Afternoon Agenda

Kieran Gilbert
Interest rate increase and cost of living; National Reconstruction Fund

KIERAN GILBERT: Let’s bring in the Industry Minister, Ed Husic, who joins me. The rates - a big issue. McKim wants the RBA Governor to quit. If not, he wants the Treasurer to get rid of him. What’s your read on that? 

ED HUSIC, MINISTER FOR INDUSTRY AND SCIENCE: Look you need certainly, in those roles, you need to have a very calm view of how you manage those things. And that might be their view; I don’t think that will be happening whatsoever. We’ve got a job to do in terms of making sure we rein in inflation, remove the requirement for the bank to be putting these rates up that they started - under the Coalition, and have continued. In the upcoming budget, we’ll be looking at cost-of-living relief and continuing that work. 

KIERAN GILBERT: Because people are hurting, aren’t they? 

ED HUSIC: Absolutely. That’s what motivated us in terms of our energy price relief and bringing the Parliament back in December to start that process of reining in; of where energy prices were going to go, on top of all the other things that we’ve done. For instance, slashing the costs of medicines, improving access to childcare. There’s work to be done and we’ll get it happening. 

KIERAN GILBERT: The RBA Board is seeking to return inflation to 2 to 3 per cent range while keeping the economy on an even keel. This is the RBA Governor’s statement, which comes along with the decision. But “the path to achieving a soft landing remains a narrow one,” he says. Recession is a real possibility, isn’t it, this year? 

ED HUSIC: Look, we are focused on making sure that as well as we deal with the cost-of-living issues, that we do grow the economy and find ways for that growth agenda, see that deliver in terms of secure work and much stronger, in particular, regional communities delivered through. For example, the things I’m focused on with manufacturing that we think makes that contribution. It’s just – we’ve got to keep going the way that we are. 

KIERAN GILBERT: It’s such a blunt instrument, isn’t it, with rates? It’s a blunt instrument, but we’re talking about a sort of very delicate balance here because a lot of households, a lot of mortgage holders, a lot of businesses, as you would know, are feeling the pinch right now. 

ED HUSIC: And we are very conscious in terms of the impact on people's cost of living. That’s why we do have a number of measures in place to try and ease that cost of living pressure. And also with the longer-term view about what’s required to make the economy stronger in the long term. Dealing with some things like, for example, the pressure of supply chains that has, in part, contributed to what we’re seeing on inflation and provoking the type of reaction that you’ve seen out of central banks, not just here but overseas. Having to deal with some instances, for example, what’s happening with the war in Ukraine and the way it intersects with energy prices, and, again, dealing with some of that. So you’ve got a government that’s focused on making sure that we see some headway in regards to that, not picking fights and trying to create blame and create divisions, what we’ve seen under previous Coalition governments, just get on with the job. 

KIERAN GILBERT: You had a fair crack at the Coalition, though – the “No-alition”, as you put it – in question time. 

ED HUSIC: Yeah. 

KIERAN GILBERT: Over this proposed – the Government’s promise, you did take it to the election – a $15 billion National Reconstruction Fund. Is it the time to be putting government dollars into an economy where already those bottlenecks are in place and there’s a capacity really that looks like it’s being hit with inflation running high as well? Is it the time to be putting more government dollars into the economy? 

ED HUSIC: The National Reconstruction Fund will be one of the greatest peacetime investments in manufacturing capability for this country. It is really important that we address supply chain issues. The things we experienced through the pandemic, the goods we couldn’t get at the time we needed them, recognising we’re severely dependent on just one or two countries for some of our goods - we’ve got to be able to diversify. We’ve got to be able to strengthen manufacturing and see what that does longer term. 

The Reconstruction Fund will be loans and guarantees and equity, similar to the Clean Energy Finance Corporation that’s operated for quite some time, quite successfully. This is about investment capacity. It’s not about injecting money, along the lines of your question. It’s about building stronger businesses and stronger jobs as a result and dealing with the type of things we know are required. Modern economies really need strong manufacturing capability. From the medical sector, transport and energy through to resources and agriculture. They’ve all got to have that strong thread of manufacturing through them. 

We’ve basically dropped down the ranks of the OECD on manufacturing self-sufficiency. It will take a while to correct it, but the National Reconstruction Fund – that the Coalition is going to oppose and is anti-manufacturing in its stance in opposing the Reconstruction Fund – that fund will play an important role. 

KIERAN GILBERT: But isn’t it expansionary in its focus in terms of the policy? 

ED HUSIC: No, we’re investing in capacity, the capability of the economy. Particularly on the things that we think longer term will help us correct some of those supply chain issues that have driven inflation – 

KIERAN GILBERT: So not inflationary? 

ED HUSIC: No, it’s about building capacity. And for the Coalition to say no to this, I mean, they’ve not flagged their concerns about this fund. They’ve just come out of the blue and said that they will oppose it holus bolus. And the question I’ve got is why have they got such a problem with manufacturing in this country? When we needed to rein in energy prices that hurt manufacturers, they voted against that. Now they’re voting against the Reconstruction Fund. They seem to be only interested in manufacturing when there’s a vote in it. But we’re interested in it for the national longer term economic interests of the country, and it’s just absolutely staggering that the Coalition out of the blue would oppose a fund that’s designed to ensure we’re a country that continues to make things. 

KIERAN GILBERT: Sussan Ley says that your fund fails to address the issues that our manufacturers need the government to show leadership on – namely, energy prices, disrupted supply chains and labour shortages. 

KIERAN GILBERT: The Coalition voted against energy price relief to help manufacturers. This is about ensuring based on the advice of CSIRO about what’s longer term needed for economic growth. We’ve done that. Supply chain issues go to the heart of this fund in terms of reducing those dependencies. The Coalition just wants us to keep importing goods. If they’re not in favour of the National Reconstruction Fund, then that’s what their focus is. 

KIERAN GILBERT: Ed Husic, I appreciate your time. 

ED HUSIC: Thank you. 

KIERAN GILBERT: We’ll talk to you soon.