Interview with Patricia Karvelas, Afternoon Briefing, ABC

Subjects: new inflation data, ending the fuel excise and the Victorian Royal Commission into the CFMEU Patricia Karvelas: For more on the economic news of the day, because there’s been quite a bit. I want to bring in Assistant Treasurer Daniel Mulino. Welcome to the program.

Daniel Mulino: Thanks for having me on, PK. We’ll start with inflation. It did ease today, but it’s still not exactly where it should be.

As you know, it’s not within the RBA’s preferred band. And the trim mean also is also just sort of stagnant, really. So, are you worried, Minister, that it’s kind of stuck.

That, that we’re in this stuck pattern now? Well, what I’d say is it’s encouraging that it’s come down both in quarterly and monthly terms. It’s come down to 3.8 in monthly terms, but also it’s come down now 3 months in a row.

You’re right. That the trim mean is stable at 3.6. What I’d say is that, yes, we acknowledge that people are doing it tough, so that’s why we have a whole range of cost‑of‑living supports in place.

But I think it’s encouraging that inflation in the headline sense is coming down despite all of the uncertainty and pressures that we’re seeing around the globe. Yeah, but that, you know, it’s, it’s, as you say, when it’s stabilised, that means it’s not going down, and that’s the preferred measure. I mean, that’s not really much of a victory, right?

In terms of inflation, this is not where it should be. Well, I think where it is is below where both the government and the RBA had forecast it would be at this point. It’s also lower than market expectations.

So, yeah, look, it’s not that we’ve gotten to where we want to be, it’s higher than we would want it to be, but certainly it’s encouraging and welcome news today to see it come down by 0.2 of a per cent. And the government has a strategy for continuing to manage the economy with putting downward pressure through our spending restraint. We’ve got a range of measures on productivity growth, so we’ve got a holistic and comprehensive economic strategy that is still playing out.

And what does it mean for interest rates? Do you expect that they won’t rise in August? Well, I don’t speculate on the way the Reserve Bank, as an independent monetary authority, looks at these things, but I think, you know, the Reserve Bank would look at this and clearly they’d look at it having come down.

I think the markets have made a reading on this, but, look, they don’t always get it right. But I think clearly it’s a welcome development today. I want to move to some other issues.

The fuel excise, it’s going to be over. Petrol will be more expensive next week. What do you say to average Australians who are already under the pump, already struggling with cost‑of‑living issues and their petrol will be higher when the war is clearly still going on?

So, this has been a really important measure and I’ve talked about this on a number of occasions. I think it was a really targeted measure that provided particular assistance to people who, for example, were running businesses that needed to use diesel fuel, people in the outer suburbs who were travelling large distances and didn’t have access to, or easy access to public transport, people in the region.

So, it’s been incredibly important. But as the Treasurer said, it was always designed as a temporary measure. And so what we did was we extended it by a month to taper it off.

I think that was a very sensible measure to take. But this measure was always temporary and I think it’s played its part. Ok, but the war’s not over.

And people would think, hang on a minute, the war’s not over, it’s impossible, it seems, to find a deal to end this war. Every day we see new evidence of escalation. That means that petrol prices are going to be up.

Right, that’s, that’s inevitable. Well, petrol prices will increase by the amount of the levy coming off on, on Monday. But we’re also seeing, you know, full price oil.

Oil prices high. This is the problem. Yeah, but oil is at the moment lower than it was at its peak when this measure was brought in.

And look, what I’d say is, I’m not going to speculate exactly how this conflict will play out. What we’ve said right from the start is that the length and severity of the conflict is going to be the prime driver of the impact on oil prices and the economy more broadly. So, we’re still seeing impacts from the conflict over in the Middle East, in Iran.

But look, oil is lower than it was at the peak, and I think this particular measure has played a part for 4 months now, and I think it’s helped people in that particular set of situations. I have to ask you, the Northern Territory and the Queensland governments have rejected mandatory green energy standards for data centres. Are the standards dead?

No, I wouldn’t say that. And look, I’d just firstly take a step back and say, I think the Prime Minister did a really important thing in leaning forward and saying that we need a nationally coordinated approach on data centres. They’re an incredibly important part of our overall economic growth at the moment.

And hasn’t that national approach already fallen apart? No, no, but we need the social licence, and a big part of that social licence is making sure that we manage the way in which they impact with the grid. So, what I’d say to those 2 governments is that we need to make sure that these data centres not just contribute to the grid, but do so in a way that’s consistent with the clean energy transition.

So, look, you don’t always get complete agreement across the federal government and agencies, So you won’t override them. Can you override them? How do you have national standards if they don’t want to agree to that?

Well, look, I think we continue the discussion. This is a really important area. You think you can make them budge?

Well, it’s not my portfolio, but I think the Commonwealth government can engage both through Minister Bowen, through the leadership more generally. I think this is an area we’ll continue to have discussions. Okay.

And is there the possibility that you will take out the part that actually mandates the renewable part of that story, that you would allow different energy sources? I mean, Tim Wilson, I spoke to him a little earlier, we’re about to play the interview, but he says nuclear, all of it should be on the table. Well, I wouldn’t want to try to guess how the discussions will go.

But look, I think we’ve had an initial discussion. It’s been really important, and as I said, I think it was really important that the Prime Minister has brought data centres, the way we manage it in terms of land use, energy, water, international cabinet. So, let’s.

Let’s see these discussions play out. Again, quoting Tim Wilson. People will see him in a moment, but he’s arguing that there should be a national Royal Commission into the CFMEU and their behaviour.

Are you prepared to support one? No, I think what happened yesterday was really important. Can I just say, in relation to what happened yesterday, that Jacinta Allan leaves behind a big legacy.

And I just want to say that, you know, she’s contributed, both as a local member, as a Minister for over 2 decades and as a premier in relation to significant infrastructure across this state. Ben Carroll is the new Premier. I’ve worked with Ben over a number of years.

Our electorates are right next to each other. I see how active he is locally. I welcome the fact that he’s called a Royal Commission, and I think – Do we need it to be wider?

No, I think let’s. That set of issues that he’s dealing with is a set of issues that has been ventilated in the public square, in the media, and I think it’s an important set of issues that, that can be looked through in terms of reference, that are suitably framed. One of the arguments that is being made is that Labor was in a rush, Ben Carroll was in a rush to announce a Royal Commission.

So, it’s all within terms of reference, which are safer for the Andrews and Allen governments, and that the Liberal, only the Liberal Party, if they win, will be able to have a wider and more robust Royal Commission. What’s your response to that? No, I think if Labor wins the next election, and I think they’re in a good position to.

They’re not really in a good position. Well, look, I think they’ve got a good record they can argue on and I think the Royal Commission that Ben Carroll will see through at the start of next term, if he wins, I think that Royal Commission will look at these issues in great depth. Should it start before the start of next term?

Well, look, I think these things are complicated and take some time to set up. I think it’s better to do it properly. Ok, so you think that.

That they shouldn’t rush to do it before the November election? Look, I don’t want to try and give Ben advice on micromanaging each and every issue, but I think my understanding is that one of the first key things that he pointed to was setting up a Royal Commission. That commitment is extremely important.

He’s going to go to the next election on that issue. I think doing that after the election, to me makes sense and is something which I think will resonate well with the Victorian people. Thanks so much for coming in.

And that was the Assistant Treasurer, Daniel Mulino, on new inflation data out today, the discount to the fuel excise ending at the end of the week and more.