Speaker 1: From Schwartz Media. I'm Daniel James. This is seven am.
Speaker 1: The Reserve banks should lower interest rates and if they don't,
Speaker 1: the government should make them. That's according to the Greens.
Speaker 1: Their spokesperson for Economic Justice, Nick McKim, has said he
Speaker 1: won't support the government's reforms to the RBA unless the
Speaker 1: Treasury intervenes and the bank's decision making processes and tells
Speaker 1: them to lower interest rates. It's a big demand, something
Speaker 1: that's never happened before and is unlikely to now, with
Speaker 1: Labour saying the Greens are out of control, and there
Speaker 1: is also unrest within the Greens about the position, with
Speaker 1: some concern the demands go too far at a time
Speaker 1: when the party is looking to make itself a viable
Speaker 1: alternative to the two major parties at the next election.
Speaker 1: Today National correspondent for the Saturday paper Mike Sekham on
Speaker 1: just how independent the Reserve Bank is and what the
Speaker 1: Greens are playing at. It's Friday, September twenty seven. Mike,
Speaker 1: thank you so much for joining us.
Speaker 2: It's always a pleasure.
Speaker 1: What was your reaction when you heard the Greens were
Speaker 1: demanding the government forced the RBA to lower interest rates?
Speaker 2: Well, Frankly, I wondered what they were playing at, and
Speaker 2: I would suggest so did most other commentators out there.
Speaker 2: You know, clearly the Greens have been on a bit
Speaker 2: of a roll of late. You know, they've done very
Speaker 2: well raising the issue of the high cost of housing,
Speaker 2: which now has the government looking at maybe changing the
Speaker 2: tax breaks around negative gearing. So a win. But equally clearly,
Speaker 2: this particular one is not something that this government or
Speaker 2: any other government, I would suggest. Whatever, do you know
Speaker 2: they are not going to take the interest rates setting
Speaker 2: power off the Reserve Bank. I was a bit flummixed
Speaker 2: by it, and so I called Nick McKim, who's the
Speaker 2: relevant Green spokesman on treasury matters, and ask him to
Speaker 2: tell me why I think the government should do this.
Speaker 2: I guess the question is are we really in extraordinary
Speaker 2: circumstances at the moment? I mean, so, I caught him
Speaker 2: just a few hours before the RBA's Tuesday rates announcement
Speaker 2: and he gave me a prediction. He said that the
Speaker 2: Central Bank would not lower rates and that the government
Speaker 2: will respond with quote the usual ritual of ashen faced
Speaker 2: hand ringing, ringing.
Speaker 3: Every time interest rates go up, where they go out
Speaker 3: and pretend there is nothing they can do about it,
Speaker 3: so they can empathize with people that are getting smashed.
Speaker 3: It's theater.
Speaker 2: He also said the Reserve Bank is not independent and
Speaker 2: never has been.
Speaker 3: The so called independence of the Reserve Bank is just
Speaker 3: a great big lie told by labor and liberal treasurers
Speaker 3: over other decades.
Speaker 2: And so the bank announced its decision, Jim Chalmers came
Speaker 2: out and behave pretty much exactly as McKim predicted he would.
Speaker 2: He held a media conference in Brisbane and uttered variations
Speaker 2: of the I word are independent or independence seven times
Speaker 2: in the space of about a minute in response to
Speaker 2: questions from the media.
Speaker 4: I don't preempt and I don't second guess decisions taken
Speaker 4: by the independent Reserve Bank. I've made that very much.
Speaker 2: And he went on to stress that the government's legislation,
Speaker 2: which is stalled because of the Greens action, we're about
Speaker 2: trying to make the Reserve Bank more independent, not less.
Speaker 4: So these decisions are taken independently by the Reserve Bank.
Speaker 4: My efforts have been about trying to make the bank
Speaker 4: more independent, not less independent. I respect and cherish its independence.
Speaker 4: They've taken this decision.
Speaker 1: So charmers is saying that the bank is independent. Nick
Speaker 1: McKim is saying the exact opposite. Who's right here, Mike.
Speaker 2: Well, As a debating point, I think you'd have to
Speaker 2: say McKim was right. I mean, it's in the act.
Speaker 2: Section eleven of the Reserve Bank Act provides that the
Speaker 2: Treasurer can rule a bank decision, but there's a somewhat
Speaker 2: convoluted process involved that includes a requirement that the bank
Speaker 2: should produce a statement and I'm quoting here a statement
Speaker 2: in relation to the matter in respect of which the
Speaker 2: difference of opinion has arisen. So, in other words, when
Speaker 2: the Bank and the government aren't getting on, there has
Speaker 2: to be a public airing of why they're not getting on.
Speaker 2: I would suggest that's perhaps one reason why no Treasurer
Speaker 2: has ever used the power, because you know, it bring
Speaker 2: on an enormous public stout. The other reason I think
Speaker 2: that it's never been used is that Australia has not
Speaker 2: experienced a major economic crisis in which the bank and
Speaker 2: the government were seriously in conflict.
Speaker 1: So the Greens are emphasizing in relation to this that
Speaker 1: the government could tell the Reserve Bank to lower rates.
Speaker 1: Like you said, it's never happened before and there's no
Speaker 1: signs that it will happen again, which makes it an
Speaker 1: interesting political choice by the Greens to run this line.
Speaker 1: What did you find out about why they're pushing this
Speaker 1: particular line of argument.
Speaker 2: Well, well, I called a number of people from the
Speaker 2: Greens room because I wanted to know why they decided
Speaker 2: to take this tack. Some of them spoke on background.
Speaker 2: I think probably the most telling though, was the person
Speaker 2: who didn't speak, and that's the Senator Peter wish Wilson,
Speaker 2: who politely but firmly declined through his spokesperson to get involved.
Speaker 2: And I think this is interesting because he's a person
Speaker 2: with pretty serious economic credentials. He's one of a couple
Speaker 2: in the Greens party. He is one. The other is
Speaker 2: Barbara Pocock. Wish Wilson has a master's degree in economics.
Speaker 2: For almost eight years until he entered Federal Parliament in
Speaker 2: twenty twelve, he taught university economics. Before that, he worked
Speaker 2: as a banker and a broker for more than a
Speaker 2: decade with Merrill Lynch on Wall Street and with Deutsche
Speaker 2: Bank in Hong Kong. He was also the Green's finance
Speaker 2: spokesman between twenty fifteen and twenty sixteen, and then he
Speaker 2: became the party's treasury spokesman, which is a position he
Speaker 2: held until September twenty twenty, when he was reshuffled out
Speaker 2: of the role by the new leader, Adam Bann. So
Speaker 2: you know, he's a fairly serious voice on the matter,
Speaker 2: and the fact that he's choosing to stay strom on
Speaker 2: this I think suggests that maybe he's not entirely in agreement. Nonetheless,
Speaker 2: you know, I rang him thinking that he might have
Speaker 2: some pertinent observations to make about this insistence that you know,
Speaker 2: politicians are more to be trusted on interest rates setting
Speaker 2: than the econocrats of Australia's Central Bank, which is a
Speaker 2: pretty extraordinary thing to posit I would suggest wish Wilson
Speaker 2: isn't talking. But certainly others in the Greens party room
Speaker 2: are uneasy about the line their colleague, you know, the
Speaker 2: Treasury spokesman, Nick McKim has taken. Some of them wonder
Speaker 2: if it was necessary to pick this particular fight with
Speaker 2: the government. They worry that Anthony Alberanesi's line that the
Speaker 2: Greens and the coalition parties have formed what he calls
Speaker 2: a noalition to styre me not just this but other
Speaker 2: bits of a number of other bits of government legislation
Speaker 2: in the Senate. They worry that line's getting a bit
Speaker 2: of traction.
Speaker 1: After the break the political calculation behind the Greens demand. Mark,
Speaker 1: You've been speaking to a lot of Greens about the
Speaker 1: Reserve Bank into their demand that the government force interistrates down.
Speaker 1: Can you tell me about what you found out about
Speaker 1: how they landed here?
Speaker 2: Well, how it happened was that the government ordered a
Speaker 2: review into the Reserve Bank, an independent review, and it
Speaker 2: reported back last year with fifty one recommendations, all accepted
Speaker 2: by the government. The government was planning to legislate and
Speaker 2: until very recently had been working with the coalition to
Speaker 2: implement the reforms, and things seemed to be going swimmingly.
Speaker 2: Jim Chalmers made some amendments to take account of opposition concerns,
Speaker 2: and then quite suddenly and recently without any notice, the
Speaker 2: coalition parties just walked away from the deal that was
Speaker 2: very close to being done. So what this means is
Speaker 2: that suddenly the government needs the Greens and the cross
Speaker 2: Bench if it's going to get its reforms through the Senate,
Speaker 2: and the Greens are concerned with a couple of provisions
Speaker 2: in the legislation, particularly with the idea that Section eleven
Speaker 2: of the Reserve Bank Act, the one that gives the
Speaker 2: Treasure a power to overrule the Bank in extraordinary circumstances,
Speaker 2: is to be abolished. And this is of course the
Speaker 2: very part of the Act that McKim is wanting the
Speaker 2: Treasure to use right now. His Senate colleagues have gone
Speaker 2: along with him. He told me this was a party
Speaker 2: room decision arrived at through the quote normal processes unquote,
Speaker 2: and taken within the past couple of weeks. But another
Speaker 2: source tells me that in fact there had been differing
Speaker 2: views expressed in the party room. Nonetheless, it was decided
Speaker 2: that the Party would block the RBA reform legislation in
Speaker 2: the Senate until interest rates began coming down. Then it
Speaker 2: would waive most of the changes through, but it would
Speaker 2: insist that Section eleven was retained. That was agreed. McKim
Speaker 2: went out, but he went further than a lot of
Speaker 2: his colleagues were expecting. He went out and demanded not
Speaker 2: just that sectional even be retained in case of some
Speaker 2: future crisis, but that the government should immediately use it,
Speaker 2: and that a source told me, was not how some
Speaker 2: of us expected it to be announced. They thought the
Speaker 2: government should retain that Section eleven power, but saying it
Speaker 2: should be used immediately were quite different things.
Speaker 1: Right, So Senator Nick mckin has gone beyond what his
Speaker 1: colleagues agreed to and beyond what basic cleaning were on
Speaker 1: the ouse, either inside or outside the party is calling for.
Speaker 1: What does he have to say about that.
Speaker 2: Well, he's not taking a backward step. When it was
Speaker 2: put to mc kim in an interview with the online
Speaker 2: news site criche this week that he was quote pretty
Speaker 2: alone unquoted in his demands, he said, and I'm quoting.
Speaker 2: I can't help it. If the neoliberal worms have consumed
Speaker 2: the minds of other people, that's their problem, not mine. So,
Speaker 2: you know, pretty bolshy stuff. And of course, after the
Speaker 2: interest rate decision came not on Tuesday, within minutes in
Speaker 2: Mainbox plopped a press release from mckim's office in which
Speaker 2: he's said a number of things that drove it home
Speaker 2: to the Labor Party, one of which was Labor is
Speaker 2: watching the Reserve Bank drive people to the wall and
Speaker 2: doing nothing. So there's a good measure of ideology here.
Speaker 2: But also a pretty good measure of politics as well.
Speaker 1: Yeah, you mentioned politics. This sounds like there's a fair
Speaker 1: degree of politics and all of this mic. How is
Speaker 1: this playing out politically for the Greens?
Speaker 2: Well, one columnist called it trumpest, suggesting that it was
Speaker 2: very like the sort of thing Donald Trump might come
Speaker 2: up with. And I might add that this particular columnist
Speaker 2: was not a notably right wing one, but you know,
Speaker 2: center left. Another headline suggested that the Greens were advocating
Speaker 2: a hostile takeover the Reserve Bank, so you know, you
Speaker 2: kind of get the tone from that. It has not
Speaker 2: been well received pretty much across the board.
Speaker 1: So what does this tell us about the Greens overall
Speaker 1: strategy when it comes to dealing with the government. How
Speaker 1: are they are approaching working with labor and are they
Speaker 1: having a kind of impact that they want to have.
Speaker 2: Well I spoke with the Greens leader Adam band about
Speaker 2: all this, and he said that this wasn't some knee
Speaker 2: jerk move or simplistic attack on the RBA. He pointed
Speaker 2: to quite a long list of other things that he
Speaker 2: said the government could do that might actually obviate the
Speaker 2: need to lean on the Reserve Bank to lower interest rates.
Speaker 2: You know, he said that if the government did things
Speaker 2: like introduced to vestiture powers to break up supermarkets that
Speaker 2: were gouging, if it brought in a super profits tax,
Speaker 2: if it did something about negative gearing, it did a
Speaker 2: whole lot of things that the Greens think are fueling
Speaker 2: the Australia's current inflation and cost of living crisis, then
Speaker 2: there may be no need for the Reserve Bank to
Speaker 2: use the frankly blunt instrument of interest rate rises to
Speaker 2: try and deal with inflation. But all of this suggests
Speaker 2: to me anyway that the Greens, maybe not including Nick McKim,
Speaker 2: but the Greens generally are not really that's serious in
Speaker 2: their demand that Jim Chalmers take control of monetary policy
Speaker 2: away from the Reserve Bank, rather than kind of using
Speaker 2: this for leverage to make a point about not monetary
Speaker 2: policy but fiscal policy and government policies more broadly, and
Speaker 2: of course to make political capital on the way.
Speaker 1: Is there a risk that the government will just peg
Speaker 1: the Greens as being obstructionists or fringe and that sort
Speaker 1: of framing of that narrative could hurt them politically.
Speaker 2: Well, the Government is certainly portraying them in that way
Speaker 2: there's a raft of quotes on the record of the
Speaker 2: past week or so from you charmers.
Speaker 4: The Greens that their primary task is to make up
Speaker 4: numbers and put out press releases. We actually have to
Speaker 4: run the place, run there, Katie gallaher Bank legislation. I
Speaker 4: mean the Greens are out of control.
Speaker 2: Anthony Albineasi.
Speaker 4: What the Greens do is engage in populism, often in
Speaker 4: conjunction with their partners in the Nooalition, the Liberal Party
Speaker 4: in the National Party.
Speaker 2: So certainly the government doing its best to white hand them.
Speaker 2: Whether it works or not, I don't know. I mean
Speaker 2: they have clearly been appealing to a certain part of
Speaker 2: the demographic, particularly those young people who are locked out
Speaker 2: of the housing market. And I would note that at
Speaker 2: the last election the Greens had a record result. They
Speaker 2: did better than they ever have before. And the way
Speaker 2: the polls are looking at the moment, it could well
Speaker 2: be the case that neither of the major parties gets
Speaker 2: a majority in its own right in the Parliament, and
Speaker 2: that could place the Greens and the Teals and assorted
Speaker 2: other cross benchers in a position of great power to
Speaker 2: decide what gets up and what doesn't. As to how
Speaker 2: this will play out, Whether it does them could or not.
Speaker 2: I don't know. Your guess is as good as mine,
Speaker 2: but I would leave it by quoting one of the
Speaker 2: party sources that I spoke to, who said, the politics
Speaker 2: of this is that people don't know what these changes
Speaker 2: are about their bloody pissed off about their interest rates.
Speaker 2: If that's the message that gets through, it's probably not
Speaker 2: a bad thing for the Greens.
Speaker 1: Mirk, thank you so much for your time.
Speaker 2: Thank you for yours.
Speaker 1: Also in the news today, Australia has joined the International
Speaker 1: Corps for an immediate twenty one day ceasefire across the
Speaker 1: Lebanon Israel border to provide a safe space for diplomacy.
Speaker 1: The joint statement was negotiated on the sidelines of the
Speaker 1: UN General Assembly. It says the recent fighting is intolerable
Speaker 1: and presents an unacceptable risk of a broader regional escalation.
Speaker 1: It comes as the chief of Israel's army said the
Speaker 1: IDEF was preparing for a ground invasion into Lebanon and Quanas.
Speaker 1: Travelers have been put on alert for flight disruptions as
Speaker 1: engineers at Melbourne Airport walked off the job from Thursday morning.
Speaker 1: Members of the quantas of engineers Alliance are pushing for
Speaker 1: a fifteen percent pay rise following more than three years
Speaker 1: of wage frees. The strikers expected to roll out across
Speaker 1: all major airports during the next two weeks. Seven Am
Speaker 1: was a daily show from Schwartz Media erran in the
Speaker 1: Saturday paper and hosted by me Daniel James and Ruby Jones.
Speaker 1: It's produced by Shane Anderson, Zoltanfecho, and Zaia Tangral. A
Speaker 1: technical producer is Atticus Bastow. We are edited by Chris
Speaker 1: Dangate and Sarah mcvee. Eric Jensen is our editor in chief.
Speaker 1: Our mixer is Travis Evans. A theme music is by
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Speaker 1: this week. Thanks for listening.