I'm Daniel James and you're listening to seven AM. This week Australians will hit with another reminder that the cost of living crisis isn't over and the government's room to move is narrow and fast. And it just rate rises sharpened the pressure on Anthony Alberanezi and Jim Charmbers. Just as a federal budget looms, the government is now forced to weigh up expectations of economic reform versus political risk. Meanwhile, the opposition is unraveling in plain sight, the coalition split,
with the Nationals relegated to the cross bench. Today Press Gallery veteran pau Bon Jorno and how exposed the government really is, how bold it can afford to be, and how the opposition's collapse is reshaping the political contest. It's Saturday, February seven, Paul, great to see you again. Let's start with interest rates. This week's rate rise is a headache for a lot of Australians, but also for Anthony Albanezi and Jim Charmers. How much pressure does this hike put on the government.
Well, I think it's the biggest challenge to the credentials of the Albanesi government. The management of the economy since they were elected almost four years ago. Because remember at the time of the election we were being told and there was evidence at the time that inflation had been tamed, and the claims of the Prime Minister and the Treasure was that would turned the corner. Well, these numbers show that the Australian economies turned a corner.
We're turning the corner.
The economic figures. The intervening six months have seen a dramatic revision that has really undermined the assumptions and projections of Treasury and the Reserve Bank, and we've seen these this week with the Reserve Bank having a big rethink. Well the first time in more than two years, mortgage holders are this morning counting the cost of a great hike the Reserve Bank. Now, I know this is not the news that Australians with mortgages want to hear, but
it is the right thing for the economy. And of course that means that the government has been put completely on the back foot now and as it were, has to reset. So, as Jim Chalmers said in a number of interviews and in Parliament, whatever the political argument, and there's a big one between you know, the government the opposition and others. This really is hurting three million mortgage holders, and not only mortgage holders, people who are borrowing, small
business and all of that. The only consolation I think Labor has. I was speaking to one of the cabinet ministers and he said, well, look, the problem for Susan Lee and Ted O'Brien, hers shadow treasurer, is that they and this has massed in all the opinion polling and the shambles that they're in, they have no real credibility.
As the minister said to me, he said, well, look, there is no doubt there are real challenges out there and people are really hurting, but nobody believes the Libs have got the answers.
There are predictions of at least one more rise this year, and we've also got the federal budget coming up where the government will be under scrutiny over spending. How dangerous is this territory for the government, What sort of things will they be looking the cat?
Well, that's the perennial question, and it does presume that everybody believes that the government spending is bad by definition. You know, it's almost a meme that Labour's political opponents have been using basically for the last hundred years or more. But I think the experience of the pandemic particularly was that people do expect the government to look after them, even the ones who say, or you're spending too much,
but it's all right if you spend on me. And I think we've got to recalibrate just a little bit that argument. But coming back to your point, yes, the government does need to be able to demons straight that it is not, as the Liberals claim, spending like a drunken sailor that it is spending wisely, that it is spending in a way that amereli orates the impact on
the standard of living of Australians. And one would hope, and this is of course the challenge of the upcoming budget that it does do things, maybe with taxation, maybe with the way the government operates, that will actually restore the standard of living that's taken a pretty big hit in recent years.
Speaking of taxation, it's been reported that the government is looking to slash the capital gains tax discount in lieu of an effective opposition. At the moment, it should be easy enough to do and they are looking to be bolder. But how difficult is it for governments to take away a benefit that is firmly embedded.
Well, it's politically, it's extremely difficult. But people say, oh, every time Labor says it wants to do something on negative gearing capital gains tax, it loses an election. Yes, from opposition. There is a huge difference between a government being able to bring in a reform that it can manage and design and an opposition saying, first of all, vote for us, trust us to get into government, and then trust us when we're in government that we will
do this reform. And given the political capital that Albanese has also by default also by the default that his political opponents are a shambles, you would think that the sort of risk historically that these reforms generate is more
than manageable. The Parliamentary Budget Office, at the request of the Australian Greens, looked at this and it found that the cost of this concession for capital gains tax discount is going to be in the order of two hundred and sixty billion dollars over the next ten years and the main beneficiaries are the top one percent the richest people in Australia are the main beneficiaries now, surely the government can argue in this regard as it did with
the Stage three tax cuts. Yes, there will be losers with this reform, but there are people who can afford to lose something, and they certainly won't be losing.
Everything coming up? Could an alliance between the Nationals and One Nation be the next twist in the coalition saga? Paul just how brave Albanezi will be his contingent on if and when the opposition sorts itself out. How extraordinary was it the sea the Nats relegated to the cross bench in Parliament this week.
Well, it was utterly extraordinary. In fact, the Leader of the House, Tony Burke said, you'd have to go back almost one hundred years to see something like we were seeing now where the cross Bench had as many members on it as the official opposition. That's a situation that we've now got and how long it'll last is anybody's guess. But the indications are that while Susan Lee remains Liberal leader and David Little proud Nationals leader, we're not going to see a reproachemont anytime soon.
They're constructed, they're ongoing, and we'll keep working through it.
They were friendly, they were constructed, we agreed to keep talking. So look, this does, by the way, Daniel put a hell of a lot of focus on what's going on in the Liberal Party, and the suggestion is that next week we could well see Angus Taylor mount his challenge. Now the Liberal moderates the support, especially those quite close to Lee, they suspect based on the ultimatum that you might remember Little Proud made where he said that while
Susan Lee is leader, we can't have a coalition. That in fact Little Proud and Taylor are colluding, if you like strong word, but working together to dislodge Lee's leadership, to reform the coalition in terms that are more acceptable, particularly to the conservatives on the Liberal side, but in terms it would be mightily acceptable to the Nationals.
David lilprou was also asked about whether or not one nation could be part of a coalition to form government. I think a lot of this is just a little bit of entertainment rather than let's just work. Card. He hosed it down, but he didn't exactly say no either. So do you think unholy matrimony could actually take shape anytime in our lifetime?
Paul Well Daniel, you would have to appreciate there's one iron law in politics, and that's called the numbers. So it would depend on where the numbers are. Now, let's just get real for half a second. Right now, one nation has one number in the House of Representatives and his name is Barnaby Joyce. For one nation to be in that sort of position, they would have had to win quite a number of seats from the Nationals and even the Liberals before anyone would be prepared to talk Turkey.
But you could imagine that if enough Liberals and Nats scrape back in and if Labor loses a huge number of seats, if Hanson's got the numbers, then some sort of deal would be done. But even talk of this right now, that's politically toxic. Hanson is identifying already with Trump, who is poisoned in Australia, and that one nation, despite the spike in its vote, it's coming predominantly from the
non labor side of politics. So that talk doesn't really help the non labor side of politics to come back into the center where governments are formed.
So if it is leaking from the non labor side of politics to one nation, pool. Does that provide an opportunity for the government to stay centrist but also move slightly further to the left.
Well, one probably who would wish that. And it does then come down to how you define the left. Now, I'm inclined to define the left as being more progressive, being more inclusive. That seems to be the mood of
a majority in urban Australia. But those of us have been observing Anthony Albanesi ever since he got into the parliament, even though as a student he was a left wing warrior if you like, Really his performance in parliament and certainly in government sees him more as a default conservative.
You know. One of his colleagues told me last year, when there was a bit of complaint about Elbow being so cautious, that well, you've got to understand that Albanezi himself is personally quite conservative.
And finally, Paul, we saw both sides of politics finally speak out in Parliament on the Perth Invasion Day rally attack, which has now been declared a terrorist act. What did you make of their response.
Well, the first thing I made of it. Finally, finally we face up to a brutal reality. So that was good. It was interesting that Albanesi's response was more fulsome in the impact that this terrorist act had had on First Nations people on the Aboriginal communities in Australia than Susan Lee.
This alleged act of terrorism was deliberately aimed at Aboriginal antire Astra Islander Australians, mister speaker, this was alleged terrorism driven by racism and hatred.
Although she did mouth in her short speech to the Parliament the right words and the right sentiments. Australia is defined by tolerance and respect. We can never accept a situation where we turn to violence to settle our political differences. Everyone knew the act was a criminal act, but apparently for it to be a terrorist act, you've got to
get to the intent. What did the perpetrator intend? And there is now evidence through his use of the Internet that he is a white supremacist and that he deliberately targeted not anybody but Aboriginal Australians. But look, I'm very grateful that the response politically is very different to what we saw after what happened at Bondai. You might remember, within almost twelve hours the federal opposition leaders in the Jewish community were accusing Albanezi of literally pulling the trigger.
Josh Fredenberg said he was personally responsible because he and the Australian government had recognized the Palestinian state. Now, if you use the logic of that and apply it in this attack, does that mean that Peter Dutton, the Nationals, Pauline Hanson, who has made her whole political history an attack on the privilege in inverted commas of First Nations people, and just sent to Namba jimper Price who said if you vote yeah, yes, you're dividing Australia because Aboriginal Australians
aren't all that special. That was the real argument there. Thank god, nobody is pointing the finger at any of these people saying they are the ones through the bomb. But if we're going to talk about factors, if we're going to talk about what fuels hate and anti semitism on one side, well what fuels racism and discrimination against our First peoples that we're still struggling to come to terms with.
Paul always wonderful to speak with you, Thanks for coming on.
Thank you.
Daniel by seven Am is a daily show from Solstice Media. He's made by Atticas Basto, Ariel Richards, Chris Danegate, Crystal Color, Nicole Johnston, Travis Evans, Zotonfecho and Me Daniel James. Our theme music is by Ned Beckley and Josh Hogan of Envelope Poortier. You've been listening to seven Am. Have a great weekend.