Anthony Albanese has downplayed fears that Labor’s extra spending, detailed in its costings today, could fuel further inflation.
The costings show Labor’s deficits over the forward estimates will be more than $7 billion higher than those outlined in the federal budget.
“Have you looked at the inflationary impact that extra spending could have on the economy? Are you confident that that additional spending won't further inflame what we already know is going to be higher inflation?” Mr Albanese was asked.
“Look, the way you can boost wages and boost profits without putting pressure on inflation is by making sure that you boost productivity,” the Labor leader argued.
“And the measures that we’re (talking about) here, whether it’s childcare, clean energy or skills and training, are precisely aimed at that. That’s why we have prioritised those investments.”
“You’re talking about increased government spending. We’re in the inflationary situation we are, in part, because the government’s pumped so much cash into the economy. How is that $7 billion in extra spending not inflationary?” a reporter followed up.
“Because what it will do is it will produce a return, it produces economic activity,” said Mr Albanese.
“If for example, childcare … what childcare will do is to increase workforce participation of women. It will produce a return.
“Now because of the way that budgets work, you can't include second round effects. So what will happen here, what's included here if you like, is the out-balance. What isn’t included is the in-balance.
“Now, if you if you boost childcare, you will boost workforce participation. That's the objective here … and you’ll produce that return by boosting productivity.”
Asked when Australians could expect to see those returns, Mr Albanese responded with the vague words “very quickly”, particularly when it comes to Labor’s clean energy policies.
“You know why? Because it will send a signal that businesses have been asking for, immediately. And that is certainty.”
Asked whether he could guarantee that there would be no surprise cuts to spending after he wins power – if he wins power, that is – he said Labor would go through the budget “line by line” in search of the government’s “hidden funds”.
“You know, because you've been in budget lockups, as have I, with the so called contingency reserve,” he said.
“Remember, on the Saturday before the last budget, the Minister for Veterans Affairs made a declaration publicly about the need for veterans affairs spending. And you had this bizarre circumstance where it's not there in the budget papers. And then on the Tuesday night of the budget they said, ‘Oh, well, it's in the contingency.’
“It's nonsense, complete nonsense. That's not the way that budgets work. So this government has abused the issue of contingency.
“We'll have a look at what's there. But we're being very transparent about what we will do and what we won’t do going forward.”
