Television Interview - ABC 7:30 with Leigh Sales

23 Jun 2022
Prime Minister
Wages growth; inflationary pressures; economic and productivity growth; the Albanese Government’s first budget; cheaper childcare; energy; climate action; Australia’s relationship with France; Ukraine; Australia’s relationship with China; public housing;

LEIGH SALES, HOST: Prime Minister, welcome to the program.


SALES: Do you wake up every day now and go wow, I just had a dream that I'm - wait, I am the Prime Minister!

PRIME MINISTER: Well, it can be a bit like that sometimes, I’ve got to say. Sometimes, you watch your program and you're talking about the prime minister, and it's me. But it has been a very busy month, I've got to say. It feels like I've been in office for more than just the one month and two days.

SALES: Well, that's because there's a lot of issues around so let's jump into them. On the economy, do you back the RBA governor Phil Lowe in calling on business and unions to limit wage growth to 3.5%, to avoid causing a wage price spiral?

PRIME MINISTER: Well what I'll be doing is convening the job summit to bring together business and unions, to talk about how we grow the economy, grow productivity, so that you can have higher wages, higher profits, without having that inflationary pressure which is there. We need to make sure that we have an economy that works for people, not the other way around. And I'm confident that we'll be able to do so.

SALES: To take it back to first principles, do you accept that rising wages, increasing wages does contribute to inflationary pressure?

PRIME MINISTER: Well, what the Reserve Bank in fact says is that if you have just wage increases above inflation, without productivity increases, then that contributes to inflation. The way to grow the economy in a way that’s sustainable is to make sure that we have productivity growth, that's been something that had been forgotten, left on the shelf for too long. I'm very confident that business and unions can work together, and that the Government indeed can have a strategy to grow the economy in a way that is sustainable, that keeps downward pressure on inflation, because that’s important.

SALES: I interviewed the Reserve Bank Governor, Phillip Lowe, on the program the other week, and he said he thinks we need to have a national conversation about the kind of services we can continue to expect from government, given the economic constraints. What's your view of that?

PRIME MINISTER: We do have to have that conversation over a period of time. And that's one of the conversations that I started with the Premiers and Chief Ministers last week. Talking about an assessment that will go to the next National Cabinet meeting on the fiscal position of different levels of government going forward. What the pressures are on budgets, we know that we've got the NDIS has been growing, we know there are other pressures as well. And we know that they've got to be paid for. We know one way we can do that is to grow the economy. But we need to examine it and have that national discussion.

SALES: Well what about before the election, I asked you about income tax cuts for the highest income earners and you said, ‘well, they're legislated. We can't do anything about that.’ What about that? Can you really go ahead with that in an environment where you have high inflation and pressures on things that you want to spend money on like the NDIS?

PRIME MINISTER: Well they are legislated, and one of the things that people have a right to believe, is that when a politician makes a commitment before an election, they keep it and I intend to do just that. What we need as well, is to have that certainty, people have made assessments based upon the certainty that comes through legislated tax changes, and we intend to fulfill that, Leigh.

SALES: Is the first Albanese budget going to have to be tougher than people are perhaps anticipating because of this economic environment?

PRIME MINISTER: We're going to have to really put the brakes on some of the spending which is there. I've made it very clear, there are a range of things we would like to do, that we won't be able to do in our first budget. We will also be going through line by line looking for the waste which is there, and already, we've identified a range of measures that were made by the former government that frankly don't stack up, and we'll be taking appropriate action through Katy Gallagher as the Finance Minister, Jim Chalmers, as the treasurer. And now the ERC is already working very hard.

SALES: What do you think, I know it's a bit of a way ahead, but I mean, what do you think will be the theme and the goal of that first budget?

PRIME MINISTER: The theme will be, one, getting rid of some of the waste and the rorts that are in the budget, but secondly, as well, fulfilling Labor's commitments that we made at the election. Foreshadowing or implementing, according to the timetable we established, our plan for cheaper childcare, our plan to establish Jobs and Skills Australia, new industries and new jobs. The associated policies through the shift in the economy that will happen with cleaner, cheaper energy. That's the big transformation that will occur this decade. We just last week changed our nationally determined contribution of 43% by 2030 reduction, and that will have a range of policy implications. And they'll be there for all to see in the budget.

SALES: On foreign policy, you head to Europe next week. Do you have any plans to meet with French president Emmanuel Macron, to attempt a reset on that relationship?

PRIME MINISTER: I do. I've been invited by President Macron to meet with him in France and I'll be doing that in a week's time. We do need to reset, we've already had very constructive discussions, we've brought to a close the arrangements that were in place over submarines. That was due to cost the Australian Government, according to the former government's figures before Senate estimates, $5.5 billion, but we brought that cost down to $3.4 billion as a result of cooperation from President Macron and the French Government. It is important that that reset occur. France, of course, is central to power in Europe, but it's also a key power in the Pacific in our own region as well.

SALES: Are you going to be able to offer them anything, I guess, to kind of make amends?

PRIME MINISTER: Well, what we can offer is a relationship between our respective leaders that won't be leaked, in order to make an opportunistic headline in the newspaper. One of respect and honesty in the way that we deal with each other. And also, the way that we'll deal with climate change has obviously reset our relationship with all of our international partners.

SALES: You mentioned France's importance in our region, they obviously have interests here. Given the current geopolitical competition in the Pacific between China, or China's jostling for influence there. How reliant is Australia, for example, on French intelligence gathering in the Pacific?

PRIME MINISTER: Well, France of course plays a very important role in the Pacific and in the region. And it's just one of the reasons why this needs to be a relationship that's nurtured, not damaged, we're undertaking to do that. And next week's visit is a very concrete sign of the repair that's been done already.

SALES: I appreciate you might not be able to answer this because of security considerations. But how keen are you to try to get to Ukraine and meet with President Zelenskyy while you're in Europe?

PRIME MINISTER: Well we're getting national security advice on that. We don't want to cause a circumstance whereby there's risk to Australian personnel by undertaking such a visit. But we'll take that advice, and we'll act accordingly.

SALES: You've spoken about the need for a reset with France, what about China?

PRIME MINISTER: Well, China already there have been some improvements. But there's a long way to go. It will be a problematic relationship. I said that before the election, regardless of the outcome. China has sanctions against Australia that should be removed, they're damaging the Australian economy and jobs, but they're also causing damage to the Chinese economy. So common sense tells us that though, you need to have dialogue between countries, they're our largest trading partner, and it's a good thing that the defence ministers had dialogue just a week ago. I look forward to having further dialogue between ministers of our respective governments. The Premier of China wrote to me and congratulated me on my election, I gave a respectful and courteous reply back. But it is China that has changed, and China needs to remove the sanctions. And that will go a long way towards restoring improved relations.

SALES: With Australia's energy crisis, part of the solution is more storage and backup options. They're things that cannot happen just overnight. Does that mean Australians have to be prepared for the short to medium term to continue dealing with higher energy prices and the prospect of blackouts?

PRIME MINISTER: Well, we've dealt with a decade almost of denial and delay. And Australians are paying the price for that, whether it be households or business, you can't resolve it immediately. But the good news is that the path forward has been laid out - the Australian Energy Market Operator, with its integrated systems plan outlined how you fix transmission. The problem at the moment is that renewables can't fit into the grid, and all of the new energy investment, that's where it's headed, towards renewables, because it's the cheapest form. So we need to get it right, I'm confident that we can, and in the medium term start to see real improvements. Start to see that lowering of energy prices because that's the key to economic reform and to growth over coming years.

SALES: In your election night speech, you spoke about people who live in public housing, and you said you hoped that you becoming Prime Minister would give people hope. For people who live in public housing today to have any hope that their kids might be PM, they have to have access to good state schools. I know that that's a state responsibility to some degree, but what can you do to make sure that if the next little Albo is out there, they're going to have that same opportunity that you've had?

PRIME MINISTER: Well Labor is the party of aspiration and creating opportunity. And I know that having a secure roof over your head in terms of public housing made a difference to my life. And that's why just yesterday I was in Tasmania, spruiking our plan for our Housing Australia Future Fund and our increased support for public housing and community housing. We can do much more. When it comes to education, it starts with early childhood. I welcome the announcement by the Victorian and New South Wales governments that they've made in the last week. But also Labor has a plan to make childcare cheaper. That's where it starts, with early learning, given that 90% of human brain development occurs in the first five years. We'll also discuss with the states and territories how you get better funding and better resources, and more effective educational outcomes through the school system. And in particular, we know that disadvantaged people overwhelmingly will go to the local public school, or to many of them to systemic Catholic schools like I did. So we need to make sure that every child gets the opportunity to be the best that they can be. Because that helps not just that individual. That's the key to Australia as well. We need to be the smart country, we need to compete on the basis of how smart and innovative we are, not on the basis of trying to run down wages and a race to the bottom, we want to be a race to the top. And in this circumstance that we find ourselves, in the fastest growing region of the world in human history. There's enormous opportunities for Australia. I'm very optimistic about our future, but we need to seize those opportunities.

SALES: Another thing that you gave real priority to in your election night speech was that Uluru Statement from the Heart, indigenous recognition. What do you think it's going to take to ensure that a referendum on recognition succeeds?

PRIME MINISTER: What it will take is people of goodwill to recognise that this is just about good manners. It's about First Nations people being consulted about matters that affect them. That's the way I was brought up, it's just what we should do as good human beings and good citizens with each other. It's also about recognising that Australians will have great pride when we recognise in our national birth certificate, our Constitution, that our history didn't begin in 1788, it began at least 65,000 years ago. And it should be a great source of national pride that we have the oldest continuous civilisation on the planet, right here on this great island continent of ours. So with a bit of goodwill, we can reconcile, we can advance the interest not just of Indigenous Australians, but our country as a whole. And it can be a source of pride. I'm determined to get this done. We can't afford to just have another three years of drift, where it's now more than five years since the Uluru Statement from the Heart. There's this generous, gracious statement, seeking just a hand out and seeking that hand to be joined.

SALES: And will you press ahead with the referendum, if it doesn't appear there's Coalition support for the wording or so on?

PRIME MINISTER: Well, I think that the question that we'll ask ourselves at that point in time, is if there's a choice between pressing ahead with the support that I know is out there, from community organisations, from people of goodwill, from churches, from businesses, from media organisations. Or, and a risk in that, if there's not support across the political spectrum, or just putting it aside, is that a bigger risk? Is that just a risk of it just drifting away? And if we don't do something in the next term, then we're talking about eight years since the Uluru Statement. Indigenous people are very patient, but there's a limit to their patience. And there's a limit to the patience of others as well.

SALES: Well, thank you. This is your first interview with 7:30. Unfortunately, our final because I'm finishing up next week. Thank you very much, and all the best for your term in the Lodge.

PRIME MINISTER: Well, can I thank you Leigh for what you've done over many years I've spent watching with various capacities over the years and you've done an extraordinary job, and I wish you well for you and the family in your future.

SALES: Thank you Prime Minister