Prime Minister Anthony Albanese has managed to emerge unscathed from an awkward interview in which he was told that traditional Labor voters are losing faith in his government.
Sunrise presenter Nat Barr introduced the interview by talking about a conversation she had with the taxi driver who took her to the Channel Seven studios on Thursday morning.
“He (the driver) said: ‘I’ve been a Labour voter all my life, but for the first time I think I’ll vote differently at the next election,'” Barr said.
The cab driver told Barr that things had become too expensive and he had to work two jobs to make ends meet, but he didn’t think the government was doing anything about it.
Barr then introduced an uncomfortable-looking Mr Albanese and said: “This is your biggest problem: people like this taxi driver are losing faith. How do you respond to that?”
“Cost of living pressures are real, but that is why we have undertaken responsible economic management to reduce inflation while providing cost of living relief,” the Prime Minister replied.
“Yesterday’s figures show that headline inflation has dropped from 3.5 percent to 2.7 percent. This is a good result.
“There is still a lot of work to be done, but we have managed to achieve this while also offering a tax cut to that taxi driver, who would have gotten nothing under the previous plan.”
Prime Minister Anthony Albanese (pictured right) had to endure an awkward interview with Nat Barr (pictured left) on Thursday.
Mr Albanese went on to list his government’s actions, saying inflation had tended to decline “although not uniformly”.
Barr seemed unimpressed and attempted to correct Mr Albanese.
“That’s fine, but some would argue about government spending, and the RBA has said progress in reducing underlying inflation has slowed,” he said.
“So not everything is going in the same direction as we need. Let’s move to negative leverage…”
Mr. Albanese interrupted.
“With all due respect, Nat, those statements were before these latest figures came out,” Albanese said with a laugh.
“A day earlier,” Barr replied sternly before flashing a tight-lipped smile.
“These figures came out yesterday,” Mr Albanese attempted to continue.
“She (Ms Bullock) said that literally the day before,” Barr insisted before Mr Albanese appeared to concede the point by saying “that’s correct”.
Reserve Bank Governor Michele Bullock made clear Tuesday that when the central bank decided to keep the official cash rate at 4.35 percent, the bank’s board was sticking firmly to its target core inflation band of 2 to 3 percent.
He said the bank would look for “sustainable” downward moves before cutting rates.
In a sign of tension with the Labor government, Ms Bullock suggested that $300 energy rebates would do little to tackle underlying inflation and expressed concern about high immigration.
Meanwhile, Stephen Smith, a partner at Deloitte Access Economics, also warned that government spending was keeping inflation high for longer.
“High government spending and migration are injecting demand into the economy, meaning the RBA’s hands are tied – the labour market is still too strong to allow it to follow the US Federal Reserve and cut rates at this stage,” he said.
Reserve Bank Governor Michele Bullock has made it clear that rates will not be cut until there are “sustainable” measures to reduce inflation.
Amid reports that the Albanese government has asked Treasury to model aspects of eliminating or limiting negative leverage, Barr questioned why the government was reviewing a policy that was blamed for Bill Shorten’s loss of the “unmissable” 2018 election.
Mr Albanese, however, dodged the question without giving a yes or no answer.
He said reforming negative gearing “will not solve the supply problem, which is the real problem”, and expressed continued frustration that Labour’s plan to build more homes was blocked in the Senate.
Barr asked whether curbing negative leverage was a way to win more support from the Greens, who are siding with the Coalition to block Labor’s housing measures.
“No, I’m not interested in the Greens’ approach. They are blockers, not builders. They don’t have a plan to actually achieve anything,” Albanese said.
“You may have to work with them. What if you’re stuck in a minority government?” Barr insisted.
“There will be no coalition with the Greens,” Albanese said.
“I am committed to governing in the right of the Labour Party.”
Negative gearing policies allow real estate investors to claim tax deductions when the costs of owning and maintaining their investment properties, such as loan interest and maintenance fees, exceed the rental income they earn from them.
This tax benefit can reduce the real estate investor’s taxable income and is used by investors to reduce their tax bills.