Interview with Andrew Clennell, News24

Subjects: News Bargaining Incentive, housing, NDIS, interest rates Andrew Clennell: Joining me live now Assistant Treasurer Daniel Mulino. Thanks for your time, Daniel Mulino. Let’s start with these talks between the Prime Minister and Opposition Leader on legislation around the news media bargaining code and the gambling advertising legislation.

What can you tell us? Daniel Mulino: Well what I can say is that the NBI, the News Bargaining Incentive, is a really key measure to ensure that media can on a more sustainable footing employ public interest journalists. Their business model is being undermined by the fact that a lot of news is being shared on digital platforms without appropriate remuneration.

So we announced response to the exposure draft legislation recently and what we’ve said is that we are going to make sure that there is sufficient revenue going to media organisations, 2.5 per cent on all digital advertising revenue. We’re going to bring LinkedIn in, and we’re going to make sure that digital platforms have to engage in at least 6 deals to fully acquit their obligations.

Are you going to up that? Are you going to make it more generous? Because that’s I think what the Opposition want, certainly what media companies want.

They say that you’ve ripped them off a little bit with this deal. Well as I indicated when I announced the response to the exposure draft legislation, the 2.5 per cent on the digital advertising revenue based on Treasury modelling puts media organisations in the same place that they were on the commercial deals entered into previously. But look, we’re engaged – Before inflation?

Yeah, we’re engaged in discussions with other parties to see what we can do to get this legislation through. Because inflation obviously means, you know, the media companies argue, and clearly I have a conflict here, but they argue that it should be more money because of the – there’s been inflation and other costs in the meantime. Do you agree with that?

So what our arrangements allow for is for the amount of money going to the media organisations to grow with the growth of digital advertising revenue, and that has actually been growing faster than inflation in recent years. Will you have a more generous package than what you’ve announced, do you think, when the legislation comes through? Well, so look, I had announced a response to the exposure draft legislation and that was a response that took into account consultation with media organisations, with digital platforms and others.

We’re now engaged with the Opposition and the Greens and that’s very normal. On gambling, when it comes to banning will we see – I mean I think the PM said they’re banning inducements. Can you qualify which ones at this point?

Well, so look, again, that’s a set of discussions that are under way right now. I’m obviously not in a position to comment on the details. But what the Prime Minister indicated in that clip that you just played, but also what Minister McAllister indicated is that we’re looking for a balanced approach.

We want to look at stronger controls when it comes to advertising, but we also recognise that a lot of people in the community want to be able to have a punt. Is there a chance of a more far‑reaching advertising ban or is it just inducements you’re moving on? What I can say is that we’re engaged in genuine discussions, and that’s as it should be.

So we’ve got a set of controls that are stronger than any that have been put forward by any other government, but we need to talk to other parties to get anything through the parliament and we’re engaged in those discussions right now. If you did a more far‑reaching advertising ban would you consider compensating media companies for the losses from banning that advertising?

I don’t want to get into hypotheticals, but what I can say is that the government is engaged in genuine discussions. This is a really important area of reform. The government has already undertaken actions in this space and, as I said, the reforms that we’re looking at are further reaching than what any government has brought to date.

This figure out from Westpac today; total mortgage applications have slumped 20 per cent since your budget tax changes. That can’t be good news for the economy, is it? So I’d say, first, that a lot of things affect the housing market.

A lot of things affect the rates of credit and housing market – housing loan applications. It includes interest rates, people’s perceptions of where interest rates are headed, housing supply. There are lots of – You’re not going to pretend it’s not ‘cause of the tax, are you?

There are lots of things that affect housing markets, and what we’re looking at are structural changes in the budget that will affect the housing market over the medium term. We can’t assess the impact – Okay, but can you admit – so I had with Jenny McAllister yesterday. Do you admit the tax changes have any role in that?

Surely they have a role in that, that 20 per cent decrease? It’s not for me to kind of disentangle day‑to‑day different movements in the housing market. What do you think?

You’re the Assistant Treasurer. Do you think the tax changes have had a material effect on the fact that Westpac is reporting since the budget, what a coincidence, there are 20 per cent less applications. A lot of the media commentary has been looking at week-to-week changes in auction clearance rates, for example.

What we’re looking at are structural changes to the housing market to make it easier for first-home buyers to get into a house. And if you look at the relationship between the tax system and the housing system, over 20 years since the John Howard government’s changes to CGT, what we’ve seen is a doubling in the rate of house price growth relative to income growth.

That was over 20 years. Okay. But do you admit lower house prices now are partly a result, and less applications, are partly a result of your tax changes, yes or no?

What I would look at is the fact that there are many things affecting the housing market, but what we’re looking at is getting more young people into homes and the – Mr Mulino, has it had any effect? But the modelling – Has the tax changes had any effect? But the modelling that we’ve seen from the budget is that over the medium term 75,000 people will get into houses as a result of the tax changes.

So if you’re wanting a real time commentary – But this is just talking points, Mr Mulino. Sorry. Do you think it’s had any effect on house prices, the tax changes, or on applications, mortgage applications?

So what I can point to – Why won’t you admit it has? No, the Treasury modelling is that the tax changes that we put in will see a 2 per cent reduction relative to where house prices would have been. So over the medium‑term house prices are still expected to increase.

Is that a no? If what you’re looking at is, you know, week-by-week commentary on the effect of different policies on housing markets, that’s not the right way to look at serious structural change when it comes to the housing markets. Who do lower prices do to an economy do you think in terms of confidence, even if it is only 2 to 6 months, over 2 to 6 months?

In your experience as an economist and Assistant Treasurer, what do lower house prices do to an economy? So what the Treasury modelling clearly shows is that over the medium‑term house price growth will be slightly lower as a result of our changes by 2 per cent. You have said that, but I’m asking for your opinion as an economist and as Assistant Treasurer.

What do you think – let’s talk about a hypothetical world where house prices decrease over 6 months. What does that do to an economy? Well so I don’t want to talk hypotheticals because, you know, it gets away from the kinds of impacts on the economy that can be discussed in a clear and modelled way.

What I can say is that our policies are targeted at getting more people into homes, getting more first-home buyers into homes. Which means lower house prices. That’s what the modelling points to.

Which means lower house prices. Well, and the Treasury modelling shows that over the medium term it’ll be 2 per cent less over the coming years relative to where it would have been. Did they model the short‑term?

They looked at the next few years because – Did they look at the first 6 months? Because what the Treasury modelling isn’t about is looking at week-to-week changes in auction clearance rates. Why isn’t it about looking at the first 6 months and what sort of effect that would have?

I mean that’s half a financial year in your budget, bottom line. Because what we’re looking at are structural changes that are going to lead to our housing market being more accessible to first-home buyers. That’s the way we should be looking at these kinds of changes, making reforms that are going to have lasting impacts.

Do you think someone who’s had a house price decrease by 10 per cent will be buying what you’re selling at the moment in terms of just hang on for the medium term? Or do you think they’ll be unhappy with the government? Well what I’d say to people in the housing market at the minute is that first-home buyers who were taking advantage of our 5 per cent deposit scheme, first-home buyers that are getting into homes who wouldn’t have otherwise, I’d say people who are benefitting from the fact that we’re putting billions of dollars into extra supply, those people I’d say would be pleased with the fact that they’re being able to buy a home rather than having to rent.

What did you make of the Newspoll? It wasn’t great reading for the government, was it? I think stepping back a little, if you look at recent times and going back even over the medium term, it’s fair to say that both major parties have been trending down over the longer term.

There’s been a move away from both major parties, but I’d also say you’d much rather be in the government’s position than the Opposition at the moment. And of course there are concerns in the community, that’s being reflected in some of the shifts we’re seeing in the polling. But that’s exactly why we’re looking at policies to deal with some of those concerns, cost‑of‑living, people’s living standards, and we’re addressing that through a range of economic reforms, through supports, most of which the opposition have not supported.

So look, there are concerns in the community and we’ve got policies that are looking to address those. That’s the best way to deal with that. Can you win an election with a 29 per cent primary vote with this sort of splintered system with One Nation in the mix do you think?

Well our focus at the minute is not on whether or not a particular number’s going to win an election, but on what we can do to provide outcomes for people. We’re focused on getting concrete outcomes in the community, whether it comes to bulk billing rates going up to 84 per cent today which is a significant shift up from where it was, getting more young people into homeownership, giving tax cuts to all Australian taxpayers.

We’re going to be delivering our fifth tax cut through 3 different mechanisms. So these are the things we’re delivering, real benefits to people that will make a difference in their lives. On the NDIS, the Minister revealed yesterday 9 out of 10 small plan managers have been flagged for fraud.

Does that shock you? Well what I’d say is that the NDIS is one of the really important planks of our safety net now, and I think it’s something which Labor governments should be proud of having brought in, but there’s a – Does it shock you? The changes that we brought in in the Budget are a reflection that we need to do better when it comes to fraud and getting money to people who deserve that money.

But instinctively does that shock you? Do you go – It’s a concerning number. It’s a concerning number.

And that’s why we’ve brought in really significant changes in the budget, changes in relation to fraud, better governance, higher penalties. But also changes in relation to benefit levels in some circumstances and eligibility. We’re still going to see the NDIS grow over the years ahead but it’s going to be in a much more sustainable way.

That’s going to be better for the scheme and for the recipients. Sure, if you can achieve it. I mean how confident are you in reducing the growth of that scheme to 2 to 3 per cent a year?

Because your budget depends on it. Well, look, there’s a bill that’s being reviewed this week. I think that review will finish this week.

It’s now incumbent upon other parties in the parliament, including the Opposition and the Greens, to pass that bill. This is really critical for the health of the NDIS and for the people who rely on it. Are you expecting an interest rate rise tomorrow?

I think you’ll be not surprised to hear that I don’t speculate on the independent Reserve Bank. What would a rate rise do to the economy? Look, what I’d say is that the government is managing the economy in such a way that we have through the budget achieved a lot of savings, we’ve been banking the fiscal uplift.

All of that puts downward pressure on inflation and in the last inflation reading we saw it coming in a bit below market expectations. So as the Treasurer and others have said at that time, and myself, it’s still above where we’d want to see it but that was welcome to see those numbers coming in below where some had expected it. Assistant Treasurer Daniel Mulino, thanks so much for your time.