Interview with Minister Kearney and Greg Jennett, ABC Afternoon Briefing - 14 February 2023

Read the transcript of Minister Kearney's interview with Greg Jennett on RBA Governor, interest rates, Housing Australia Future Fund, COVID and aged care and vaccines.

The Hon Ged Kearney MP
Assistant Minister for Health and Aged Care

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GREG JENNETT: Joining us Assistant Health Minister, Ged Kearney, welcome Ged. And Shadow Health Minister, Anne Ruston back with us in the studio. A bit of a health flavour emerging, we might come to that in a moment. Ged, to you first on the points Stephen Jones raises there, he says we, we believe there is already enough pressure in the pipeline from what the Reserve Bank’s done. That is fairly naked pressure being exerted on the Governor and the board, isn’t it?

GED KEARNEY, ASSISTANT MINISTER FOR HEALTH AND AGED CARE: At the end of the day, the Governor and the RBA operate independently, they do what they have to do. I agree with Stephen, it's a tough job what they do. Our job is to manage the fiscal side of things, while Stephen was acknowledging that yes there is a lot of pressure on households at the moment, and increasing interest rates will put more pressure on household budgets, it's our job to make sure we deliver that household relief and I do believe the Treasurer is very focused on that, very focused on inflation and making sure any measures we do implement to give households budget relief is not inflationary. He has thought this through very carefully and he’s been talking in recent days about relief - cheaper medicines, cheaper childcare, capping energy increases, energy costs, making sure they are affordable. And then of course he is talking about repairing with the National Reconstruction Fund, which is looking to the future and the long-term - making sure people have skills so we can give them good, decent, well-paid jobs. Of course, we are all about people having decent pay and making sure they can have good wages when they do work. And then restraint in the Budget from our perspective, so that’s our job.

JENNETT: Some of those things don't come through, in the Budget’s case until May. Stephen Jones appears to be directing some comments in the near term, possibly ahead of the next monthly meeting.

KEARNEY: Well that’s up to the RBA Governor if he wants to listen to that, as I said he is completely independent and there is nothing we can do about the decision. It’s our job is to make sure we handle things on the fiscal side of the Budget and make sure we do all we can to relieve pressure on households.

JENNETT: Alright Anne, your side has been relentless in pursuing this in the House of Reps questions and I suppose also through the Estimates process, do you see anything untoward in members of the Government, in this case the Assistant Treasurer, in letting the Reserve Bank know that maybe it needs to stop and pause to wait and see the effect of what is already done?

ANNE RUSTON, SHADOW HEALTH MINISTER: The main point is the Reserve Bank is independent, treasurers and finance ministers have gone before us, have always taken the view that the independence of the Reserve Bank was one of the great strengths of how it operated with Government. And clearly monetary policy is the domain of the Reserve Bank and fiscal policy the domain of the Government and I think I would say many of the actions taken by the Government so far have actually been inflationary not deflationary so I would be calling on the Government to have a think about some of the measures they are talking about, as comments from the Assistant Minister about the Reconstruction Fund. These kind of really huge sums of money that are hidden off balance sheet are still stimulus to the economy, so I think we do need to have a look at some of the fiscal measures that the Government is putting in place. Back to your point about the Reserve Bank, it is independent and it should be treated as such.

JENNETT: Just the Reconstruction Fund, and we can bracket with that the Housing Australia Future Fund, your party has taken a decision to oppose both. Now the headline figures on those are enormous - $10 billion dollars and $15 billion, yet what they pump out an annual spending is much smaller in the case of the housing fund, only up to $500 million a year, spread across all the states, and all the housing requirements. That's not a huge amount of money, are you certain it would be inflationary to the housing market?

RUSTON: It’s going to be one of two things, neither of which will deliver the outcome being sought here. One is if it does deliver those sorts of outcomes and you have to remember before it is inflationary, we have two pay $400 million a year interest on it before one cent is even sent to housing, but if that occurs and we do get the kind of dividend we are talking about then it will be inflationary. The reality this is $10 billion of increased borrowing, increased borrowing will increase inflation, increased inflation puts up interest rates and that hits the bottom line of people's mortgage repayment. It's a bit of a tricky financial engineering exercise to stick $10 billion here and $15 billion there into off-balance sheet funds. If you want to spend the money, be transparent, be honest, stick it on your balance sheet and let Australians see that in the Budget.

JENNETT: And could you end up doing that anyway Ged - we had a discussion earlier with other guests, the Greens pointing out that the earnings from the future fund weren’t great in the last financial year, in fact they were negative. So if your Housing Fund didn't produce the earnings you wanted it to, the Government would just have to spend from the Budget anyway wouldn’t it, to meet its housing commitments and would you?

KEARNEY: The answer from certain sectors of the Parliament are to just put more money in, to make it bigger and better, but what we are seeing here Greg is we are going from zero investment in affordable and social housing. We have a homelessness crisis right now, to a $10 billion investment. We are absolutely positive it will deliver homes, not only homes that are affordable and accessible but homes for people who are affected by domestic violence, who need somewhere to live, veterans. This is a massive social investment - that I have to say only Labor Government ever really deliver big reforms like this, and we are absolutely confident that it will have outcomes that will address the crisis that people are facing right now. I don't know how anybody in their right mind could possibly object to us having a go and actually trying to fix a really serious problem that Australians are facing right now, that is housing affordability. Even Anne would agree that homelessness is a big issue right now, housing affordability is a big issue and this is a really bonafide, all of Government, it’s across all levels of Government attempt to fix that. Let's get together and make it happen and make it work.

JENNETT: Just about your point about debt and deficit, or borrowing, if you like Anne, to fund these functions, were you still in Government, you wouldn’t have an Australian Housing Future Fund but you would still have to fund housing, wouldn’t you through the agreements with the states, so you would still be borrowing since we are in deficit? Aren't we talking about essentially the same thing?

RUSTON: I think it's about thing transparent. Ged just made a comment that is a $10 billion investment – it’s not a $10 billion investment, it’s a $10 billion dollars of borrowing against the Australian taxpayer, which they are estimating may produce up to $500 million a year. The track record in governments about providing 300,000 new homes through that mechanism, the support provided when we were in Government through community housing providers, and in my place in Social Services was proud to deliver the Safe Places Program which enabled over 6,500 women and children escaping domestic violence every year to have a safe place to go. You can deliver this kind of social housing, particularly in the case of people escaping domestic violence without sticking the mortgages of people up. I'm not questioning the need to make sure that we have social and affordable housing and for people escaping domestic violence, but I'm just questioning the means by which it is done, and also the fact we don't know whether the fund will deliver one house.

KEARNEY: But the beauty of this fund Anne is that it is a sovereign fund and it will be there in perpetuity. It won't rely on good people like yourself to say let's invest in housing, it will be there for perpetuity, for future Governments that can actually exist and be assured, people can be assured that this will be there to be invested in nothing else but housing and that it's the beautiful thing about the fund.

JENNETT: And I think the Morrison Government did similar things with the Medicare funding account, didn’t it, setting aside pots, well certainly if you want another comparison there is the original future fund for Commonwealth public servants. Let's move on, since we did start on the Reserve Bank, Ged are you in that band of Labor MPs who think that Phillip Lowe's time as Governor will and should expire in the middle of this year?

KEARNEY: It's entirely a responsibility of the Treasurer and he has made it clear that no decision is going to be made until the turn is up until the Governor’s turn up which I think is September? – October.

JENNETT: - October, with a decision made before that. But there is a level of anxiety it seems coming from backbenchers in particular who are finding a voice - none has demanded his term come to an end but they seem anxious about?

KEARNEY: That really is a decision for the Treasurer and I will leave that up to him.

JENNETT: Alright Anne Ruston, you are not a decisionmaker in this anymore but what do you read from the tea leaves here, that there is frustration in the Government over Phil Lowe’s performance, do you share any of that?

RUSTON: Well I think the most disappointing thing is the undermining the of integrity of the Reserve Bank is an unfortunate consequence of people making public comments about decisions that have been made and intentions into the future, I would probably say to the Government it’s probably best to respect the independence of the Reserve Bank to maintain its integrity and then as Ged said, it is up to the Treasurer what he intends to do. This ongoing commentary doesn't serve any process in terms of confidence of the Australians in their Reserve Bank.

JENNETT: There is a process underway there, we will watch how that unfolds in the months ahead. And because you are both in the health space, we thought we might switch over to themes that you’re more familiar with. Ged, we saw announcements from Mark Butler, your senior portfolio Minister, around extra COVID measures in aged care, incentive payments coming back for vaccine rollout. Is any of that working? Are levels of doctor and nursing attendants actually picking up yet?

KEARNEY: In aged care facilities?

JENNETT: Yes in aged care.

KEARNEY: This is a brand new announcement so it is a little bit early to tell if it is actually working, but the reason we are doing that is because the last wave of COVID as you would know, the last wave we thought it was going to be short and sharp but it lasted longer than we thought, started in October, peaking in December, it is coming down now, thank goodness. We’re going to take learnings from that and what happened and how we can do things better if there is another wave. But specially for our most vulnerable people, those in aged care, that’s where we really want to focus a lot of attention. The Minister did announce some extra incentives for GPs and pharmacists to actually assist nursing homes, to go in and help deliver the vaccine, the next round of booster which I think is incredibly important.

JENNETT: That would be a process that hasn't kicked in yet. But you would expect it to show results in what time period?

KEARNEY: We should expect it to show results very soon, I can't tell you exactly the time frame for that, we have to wait to see if doctors do take up that insensitive and go in. But what I understand is on the back of that the department is going to be individually calling aged care facilities, making sure that they are ready and ensuring residents are getting the vaccines. What I have heard also is that the introduction of the antivirals has made a huge difference in aged care facilities, in my electorate and ones I have visited said it has just been game changing. We are fairly confident with all these measures going in hopefully all the protection necessary for aged care residents are there.

JENNETT: Lessons learned, Ged says from past peaks Anne. That is the benefit of coming in after you guys. Are you critical in any way of the response to aged care settings in particular, particularly in the last three or four months?

RUSTON: You only have to look at the statistics that sadly tell the story. More people have died in aged care from COVID in aged care facilities in eight months this Government has been in Government than the whole first two and half years of the COVID pandemic. You would have two suggest those statistics would indicate some in his been terribly amiss over that period. In terms of providing additional incentives, we are hearing from aged care facilities they haven't even paid for COVID costs that were incurred last year, so whilst we would welcome support for our aged care facilities because old Australians need that support, I would question what's been happening over the last eight and a half months, and it took eight and a half months before we made these changes, I hope they are enough but the statistics would tell a different story.

JENNETT: In your experience are incentive payments to GP and pharmacists are something that those professionals respond to quickly? Could it have a quick result once it does flow?

RUSTON: Obviously any incentive you would hope would have a positive impact but what has been put in place so far doesn't seem to have worked, as I said those tragic numbers around the number people have died in aged care tell the very sad story of the last 8.5 months.

JENNETT: By the way, those statistics, are they with COVID or from COVID?

RUSTON: They are recorded as they have been recorded right the way through the pandemic, so it’s a like-for-like analysis between the two, but we do need to make sure we are protecting our most vulnerable Australians in aged care because we know that for the rest of us the COVID pandemic is to a large extent behind us but for vulnerable people it's not and we owe them a duty of care which has been sadly missing for the last little while.

JENNETT: It’s true we probably haven't spoken about it in recent months as we did a year ago.

KEARNEY: Just a reminder for everyone to get their next booster, ATAGI as you know has advised that if you haven't had COVID in the last six months or you haven't a your booster, it’s time to get the next one.

JENNETT: Points made, with our expert health panel on hand today we will wrap that up.

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