Interview with Sally Sara, RN Breakfast, ABC Radio

Subjects: ACCC oversight over fuel prices, house prices, the 5 per cent deposit scheme Sally Sara: Well, to federal politics now, and discounts to the fuel excise and the heavy vehicle road user charge both lapsed today after the federal government decided not to extend them into August. The federal Treasurer, Jim Chalmers, has now written to the watchdog, the ACCC, asking it to increase monitoring of fuel prices in the coming days.

The Treasurer says the expiry of the discount quote cannot be used as a pretext for false, misleading or otherwise unjustified price increases. The Treasurer is my guest this morning. Treasurer, welcome back to Breakfast.

Jim Chalmers: Thanks very much Sally, how are you? Very well, thank you, Treasurer. If the ACCC does detect that fuel companies are doing the wrong thing, what can be done about it?

What will be the consequences? Well, we’ve substantially increased the penalties for servos or suppliers who are caught, you know, behaving in a false or misleading fashion or engaging in anti‑competitive practices, and so the ACCC has the powers that they need to fine servos and suppliers up to $100 million per offence. And so servos and suppliers are on notice.

The regulator will be watching them like a hawk, and they can’t use the return to normal settings with the excise as cover for treating motorists as mugs. The current petrol prices are similar to the pre‑war levels in Sydney, Melbourne and Brisbane, but they are considerably higher elsewhere. They’ve increased in the past month as prospects of an end to the Middle East war have deteriorated.

Will you bring back the discount if prices climb further? Well, let’s unpack that for a minute, Sally. It’s certainly right to say that in the last month or so prices have come up a bit as we’ve seen the escalation and uncertainty in the Middle East.

That is true, but if you compare prices from when we first introduced the excise relief at the end of March to now, petrol prices were in the 250s at the end of March in those major markets, now in the 190s; diesel prices were in the 320s towards the end of March and now in the 230s and 240s in those major markets. So, prices have come up a bit, but they are substantially lower than when we first introduced this excise relief.

The excise relief has played a really important role in taking some of the edge off these cost‑of‑living pressures that have been turbocharged by a war in the Middle East. It was never intended to be permanent. We extended it and tapered it for another month, and we made it very clear that it was coming off.

It’s done a really important job, but we can’t afford to continue it forever. Will you bring back the discount if prices climb further? Well, prices have come up a little bit, but as I said, they’re down substantially.

So, that’s not something that we’ve been considering bringing back, you know, reintroducing this at some future point. Obviously we keep all of our policies under review, particularly when there’s this much uncertainty in the world, but it’s not our intention to bring it back. It’s done a really important job.

Prices are substantially lower than they were when we first introduced it at the end of March, even though they’ve come up a little bit in recent weeks because of very unwelcome developments in the Middle East, which are another reminder that from an economic point of view and from the point of view of Australian motorists and families, the end of this war, a proper end of this war in the Middle East, can’t come soon enough.

Diesel prices are also much higher than their pre‑war levels. Why not keep the heavy vehicle road user charge discount, given the potential that high trucking costs will be passed on to consumers in the prices of groceries and other goods? Well, we’ve seen that relief that we’ve provided over the last 4 months as going hand in hand with the relief that’s been provided in the petrol market as well.

So, petrol and diesel, we did both of those things together for cars and for heavy vehicles together. And they’ve come off together for good reason. We see them as going hand in hand.

Data on house prices from Cotality show prices fell by 0.7 per cent nationwide in July. Falls were recorded in Brisbane, Adelaide, where prices had previously been growing strongly. Is this still consistent with your budget projections or is the downturn moving faster and spreading wider than you anticipated?

Well, the budget assumptions were that over the course of the next couple of years we will see prices continue to grow, but a bit more modestly than they have been. And obviously this is only the first couple of months of that 2‑year period. But we also need to maintain a sense of perspective in other ways as well.

Even that Cotality release that you’re referencing in your question, Sally, made it really clear that there’s a whole range of factors playing out in the housing market. You know, they specifically identified, for example, interest rate movements earlier this year, higher fuel costs that we’ve been talking about, the hit to confidence from the war in the Middle East, as well as changes in the budget.

And so all of those things together are playing a role here, not just one factor or another. The second piece of perspective, Sally, is that it’s not uncommon to see prices come off in this fashion. If you look over the past couple of decades, even if we’ve had over that period a period of extraordinary price growth, we’ve still had in that 2‑decade period, I think at least 7 times where prices have come off.

They came off in 2022 at the beginning of the rate hiking cycle. They came off quite substantially between 2017 and 2019 under our predecessors. And so it’s not uncommon to see prices come off the way that they are now.

Now, the third piece of perspective – and thanks for your patience, Sally – is that, investment in housing is a long‑term investment. People don’t make investments in housing from day to day or week to week, month to month, and so from time to time you will see movements in prices like these. But housing is a long‑term investment, and we continue to expect over the course of the coming years that prices will continue to rise, but more modestly than before.

Your Housing Minister, Clare O’Neil, said on this program in June that we were seeing, quote, a correction in the housing market. Is that how you see it? Well, I dealt with this at the time and made it clear there’s a technical definition of a correction, which is not the definition I think that Claire was intending to use.

There’s all kinds of ways to describe the fact that prices have come off a bit. I’ve just run through the reasons for that. The Australian is reporting that one couple who accessed the government’s 5 per cent deposit scheme had a combined income of $674,000.

Is it a good use of taxpayer money to be guaranteeing the mortgage of people on high incomes? Oh, look, I haven’t read The Australian today, but if the point of the story is to point out that the 5 per cent deposit scheme is getting more Australians into housing, then obviously we see that as a good thing. There are some markets around the country, where people, even on relatively good incomes, have found it difficult to get a toehold in the market.

If you look right across our very ambitious housing agenda, all the efforts on supply, the efforts on the 5 per cent deposits, the ambitious tax reform that was at the core of the Budget, all of this is about building more homes and making it easier for people to get a toehold in a difficult market. And all of those policies are working together to that end. Finally, on a separate issue, your caucus colleague Luke Gosling has been charged with assaulting the Northern Territory administrator.

Luke Gosling denies the allegation Yesterday, the Health Minister, Mark Butler, said there was no need for Mr Gosling to stand aside from his role as Special Envoy for Defence Veterans and Northern Australia because he had no executive power and was effectively a backbencher. If the Special Envoy role has no executive power, why not stand him aside to avoid the distraction for now?

Well, I think the most important point here, Sally, is that there’s a legal process underway and there are good reasons not to comment on it any further. And I don’t intend to comment on it any further. Jim Chalmers, we’ll need to leave it there.

Thank you for your time. Appreciate it Sally, thank you.