1 00:00:03,920 --> 00:00:06,370 Sean Aylmer: Welcome to the Fear and Greed Daily Interview. I'm Sean 2 00:00:06,370 --> 00:00:10,640 Sean Aylmer: Aylmer. The new Albanese government has a significant economic challenge 3 00:00:10,640 --> 00:00:14,600 Sean Aylmer: on its hands. The federal budget has been decimated by the pandemic, 4 00:00:14,600 --> 00:00:17,989 Sean Aylmer: that saw billions of dollars spent in support. While the 5 00:00:17,989 --> 00:00:21,730 Sean Aylmer: economy is now growing and unemployment is very low, how 6 00:00:21,730 --> 00:00:25,489 Sean Aylmer: do Treasurer, Jim Chalmers, and Finance Minister, Katy Gallagher keep 7 00:00:25,489 --> 00:00:28,690 Sean Aylmer: it growing while also trying to repair the budget? What 8 00:00:28,690 --> 00:00:30,580 Sean Aylmer: are the first steps for the new team? How far 9 00:00:30,580 --> 00:00:32,760 Sean Aylmer: do they go, and how quickly do they do it? 10 00:00:33,170 --> 00:00:36,890 Sean Aylmer: Stephen Koukoulas, aka The Kouk, is our resident economist. You'll 11 00:00:36,890 --> 00:00:39,520 Sean Aylmer: hear him every Monday on the week ahead. He's the 12 00:00:39,520 --> 00:00:42,700 Sean Aylmer: Managing Director of Market Economics and a former economic advisor 13 00:00:42,930 --> 00:00:45,560 Sean Aylmer: to a prime minister. So the perfect person to give 14 00:00:45,560 --> 00:00:48,639 Sean Aylmer: us an insight into the challenges facing the new government. 15 00:00:49,020 --> 00:00:51,530 Sean Aylmer: Stephen, what did you think of the weekend? 16 00:00:51,950 --> 00:00:55,700 Stephen Koukoulas: Well, it was huge. The support for the minor parties 17 00:00:55,700 --> 00:00:59,210 Stephen Koukoulas: was the standout, I suppose, and the collapse in the 18 00:00:59,250 --> 00:01:02,100 Stephen Koukoulas: Coalition's number of seats was the other thing. A few 19 00:01:02,100 --> 00:01:04,529 Stephen Koukoulas: of them drifted to the Labor Party, so they're probably going 20 00:01:04,530 --> 00:01:07,160 Stephen Koukoulas: to have that majority in their own right. But boy, 21 00:01:07,160 --> 00:01:11,770 Stephen Koukoulas: the Greens, the teal independents and other independents are going have 22 00:01:11,770 --> 00:01:15,669 Stephen Koukoulas: about 16 or 17 seats. So a very different Parliament, 23 00:01:15,709 --> 00:01:18,069 Stephen Koukoulas: and for me, it looks like just a refreshing change 24 00:01:18,069 --> 00:01:21,100 Stephen Koukoulas: too, that we've got people who are passionate about policy 25 00:01:21,100 --> 00:01:24,220 Stephen Koukoulas: reform and keen to implement change. So it's going to be a 26 00:01:24,220 --> 00:01:27,500 Stephen Koukoulas: fascinating first six months, let alone a three- year term. 27 00:01:27,709 --> 00:01:30,330 Sean Aylmer: Yeah, and I mean the Senate as well, whilst we've still 28 00:01:30,330 --> 00:01:32,929 Sean Aylmer: got quite a bit of counting to do there, it 29 00:01:32,930 --> 00:01:35,390 Sean Aylmer: looks like the Greens will probably have the balance of 30 00:01:35,430 --> 00:01:37,180 Sean Aylmer: power in that one, which will make a big difference. 31 00:01:37,280 --> 00:01:40,440 Stephen Koukoulas: Yes, and even here in the ACT, David Pokock, the rugby 32 00:01:40,440 --> 00:01:43,280 Stephen Koukoulas: player who's got a really progressive agenda, he seemingly has 33 00:01:43,280 --> 00:01:46,450 Stephen Koukoulas: taken the seat off the Liberal Party. So you'd imagine 34 00:01:46,450 --> 00:01:49,100 Stephen Koukoulas: that he'd be on many issues, not all, but many 35 00:01:49,150 --> 00:01:52,160 Stephen Koukoulas: would be leaning Labor's way. So the ability to get 36 00:01:52,160 --> 00:01:54,530 Stephen Koukoulas: change through the Parliament will be, I won't say it's 37 00:01:54,530 --> 00:01:56,559 Stephen Koukoulas: easy, but easier than if you're having to deal with 38 00:01:56,560 --> 00:01:58,960 Stephen Koukoulas: some of the really obstructionist minor parties. 39 00:01:59,340 --> 00:02:03,080 Sean Aylmer: Okay. So Anthony Albanese and Jim Chalmers, the new Treasurer, 40 00:02:03,890 --> 00:02:06,780 Sean Aylmer: step into the job. What are they inheriting? What's the 41 00:02:06,780 --> 00:02:07,870 Sean Aylmer: picture of the economy? 42 00:02:08,150 --> 00:02:10,250 Stephen Koukoulas: Yeah. Well, the good news is that the economy is 43 00:02:10,320 --> 00:02:13,440 Stephen Koukoulas: going quite nicely. We know that GDP growth's humming along 44 00:02:13,440 --> 00:02:15,720 Stephen Koukoulas: in the sort of three, three and a half percent 45 00:02:15,720 --> 00:02:18,700 Stephen Koukoulas: phase. That's great news. We do also know that the 46 00:02:18,700 --> 00:02:20,690 Stephen Koukoulas: unemployment rate, as we saw in the final days of 47 00:02:20,690 --> 00:02:24,280 Stephen Koukoulas: the campaign, fell below 4% for the first time in 48 00:02:24,360 --> 00:02:28,360 Stephen Koukoulas: almost 50 years. That's great news. Demand for labor's strong, 49 00:02:28,560 --> 00:02:32,230 Stephen Koukoulas: commodity prices are buoyant, and the growth outlook, despite a 50 00:02:32,230 --> 00:02:34,940 Stephen Koukoulas: few hiccups coming from the global economy, is still pretty 51 00:02:34,940 --> 00:02:38,139 Stephen Koukoulas: good. That's the good part of the economy, that they're dealing 52 00:02:38,139 --> 00:02:43,260 Stephen Koukoulas: with a growing economy with low unemployment, with, and this 53 00:02:43,340 --> 00:02:46,810 Stephen Koukoulas: is where some of the concerns come in, with really high 54 00:02:46,810 --> 00:02:49,790 Stephen Koukoulas: inflation. We know that inflation's going to be hitting 6% 55 00:02:50,180 --> 00:02:53,000 Stephen Koukoulas: in the next quarter or two, and with a very 56 00:02:53,000 --> 00:02:55,700 Stephen Koukoulas: large budget deficit and very high level of government debt. 57 00:02:55,760 --> 00:02:58,820 Stephen Koukoulas: That's where the challenging policy issues will have to be confronted. 58 00:02:59,190 --> 00:03:01,480 Sean Aylmer: Okay. Before we get to those, when they walk in 59 00:03:01,480 --> 00:03:05,080 Sean Aylmer: the door, do they know what they're facing? Like would 60 00:03:05,210 --> 00:03:08,340 Sean Aylmer: they have been briefed over the past three months, six 61 00:03:08,340 --> 00:03:11,710 Sean Aylmer: months about what the economic, well, I suppose you can tell what 62 00:03:11,710 --> 00:03:14,530 Sean Aylmer: the economic settings are, but the economic strategy from the 63 00:03:14,530 --> 00:03:17,350 Sean Aylmer: relevant departments, Treasury, would they be across that? 64 00:03:17,520 --> 00:03:20,100 Stephen Koukoulas: They'd be across the bulk of it and they'd be 65 00:03:20,100 --> 00:03:22,330 Stephen Koukoulas: across it in very broad terms, but we know that 66 00:03:22,330 --> 00:03:24,820 Stephen Koukoulas: over the weekend, Jim Chalmers actually met with the Treasury 67 00:03:24,820 --> 00:03:28,690 Stephen Koukoulas: Secretary, Steven Kennedy, to get the low down from the 68 00:03:28,690 --> 00:03:32,560 Stephen Koukoulas: Treasury Department. And he's already indicated too, Mr. Chalmers, that 69 00:03:32,560 --> 00:03:34,630 Stephen Koukoulas: he's going to be meeting the RBA Governor, the Head 70 00:03:34,630 --> 00:03:38,520 Stephen Koukoulas: of APRA and others to talk about those monetary policy 71 00:03:38,520 --> 00:03:40,760 Stephen Koukoulas: regulatory issues with them and get the lay of the 72 00:03:40,760 --> 00:03:44,120 Stephen Koukoulas: land. So they would've known a fair bit, but the nitty- 73 00:03:44,120 --> 00:03:47,630 Stephen Koukoulas: gritty, the fine detail about what these heads of department, 74 00:03:47,750 --> 00:03:50,210 Stephen Koukoulas: the Head of the RBA and APRA are thinking, are going to be 75 00:03:50,210 --> 00:03:54,100 Stephen Koukoulas: probably eyeopening for him and will just compound the issues 76 00:03:54,160 --> 00:03:55,480 Stephen Koukoulas: that he's going to be having to look at over these 77 00:03:55,740 --> 00:03:56,410 Stephen Koukoulas: first few months. 78 00:03:56,690 --> 00:03:59,190 Sean Aylmer: It'd be quite interesting what their view of Jim Chalmers 79 00:03:59,190 --> 00:04:02,400 Sean Aylmer: is too, because those three that you mentioned, Dr. Kennedy, 80 00:04:02,400 --> 00:04:05,559 Sean Aylmer: Dr. Philip Lowe, and Wayne Byres at APRA, are all 81 00:04:05,560 --> 00:04:08,480 Sean Aylmer: very highly regarded and have been in the job for 82 00:04:08,480 --> 00:04:10,440 Sean Aylmer: a long time. I wonder what their take on a 83 00:04:10,440 --> 00:04:11,710 Sean Aylmer: new person coming in is. 84 00:04:12,200 --> 00:04:15,490 Stephen Koukoulas: Well, I do know that Jim Chalmers knows Steven Kennedy 85 00:04:15,490 --> 00:04:18,820 Stephen Koukoulas: very well, when Jim Chalmers was Wayne Swan's advisor back in 86 00:04:18,960 --> 00:04:22,080 Stephen Koukoulas: the day. Steven Kennedy, who actually worked for Julia Gillard, 87 00:04:22,080 --> 00:04:25,979 Stephen Koukoulas: so there was an overlap there in the Treasury Department. 88 00:04:25,980 --> 00:04:28,190 Stephen Koukoulas: I know that Phil Lowe has been talking to the 89 00:04:28,190 --> 00:04:30,500 Stephen Koukoulas: Labor Party not in the same degree of detail as 90 00:04:30,510 --> 00:04:33,460 Stephen Koukoulas: he would with the Treasure, Josh Frydenberg, and the previous treasures 91 00:04:33,460 --> 00:04:35,370 Stephen Koukoulas: in the Liberal Party, but yeah, there is a dialogue 92 00:04:35,370 --> 00:04:37,950 Stephen Koukoulas: there. Probably not the same nitty- gritty that you get 93 00:04:37,950 --> 00:04:40,500 Stephen Koukoulas: as if you are the actual Treasurer, but I think 94 00:04:40,500 --> 00:04:43,589 Stephen Koukoulas: it's good and constructive that public servants can speak to 95 00:04:43,589 --> 00:04:46,740 Stephen Koukoulas: the opposition. I hope it continues now, that whoever is 96 00:04:46,740 --> 00:04:50,299 Stephen Koukoulas: the Shadow Treasurer when the Coalition get their act together, 97 00:04:50,300 --> 00:04:53,670 Stephen Koukoulas: that they can liaise with the bureaucrats to get a 98 00:04:53,670 --> 00:04:55,810 Stephen Koukoulas: little bit of information on these broad themes. 99 00:04:56,339 --> 00:04:58,359 Sean Aylmer: Stay with me, Stephen, we'll be back in a minute. 100 00:05:04,050 --> 00:05:08,289 Sean Aylmer: My guest today is economist Stephen Koukoulas. Okay, so budget 101 00:05:08,290 --> 00:05:11,159 Sean Aylmer: repair seems to be getting a lot of air time 102 00:05:11,160 --> 00:05:14,850 Sean Aylmer: at the moment, and the importance of improving the budget 103 00:05:14,850 --> 00:05:16,630 Sean Aylmer: given how much was spent over the past couple of 104 00:05:16,630 --> 00:05:19,240 Sean Aylmer: years due to the pandemic. How do you think Labor 105 00:05:19,240 --> 00:05:23,110 Sean Aylmer: will do? They're not necessarily known for their budget surpluses. 106 00:05:23,330 --> 00:05:26,700 Stephen Koukoulas: And they went to the election without a big bang 107 00:05:26,760 --> 00:05:29,770 Stephen Koukoulas: theory to get the budget back towards balance. Sure, they're 108 00:05:29,770 --> 00:05:32,700 Stephen Koukoulas: going to be putting some taxes on some multinationals, a 109 00:05:32,700 --> 00:05:34,969 Stephen Koukoulas: couple of other very small tax changes, I think they 110 00:05:34,970 --> 00:05:40,180 Stephen Koukoulas: flagged. Some trimming of spending. So looking at 'wasteful' government 111 00:05:40,180 --> 00:05:42,300 Stephen Koukoulas: spending, but I think as we saw when they released 112 00:05:42,300 --> 00:05:45,690 Stephen Koukoulas: their costings just before the election, these are a couple 113 00:05:45,690 --> 00:05:48,020 Stephen Koukoulas: of billion dollars a year, and that's handy, and of 114 00:05:48,020 --> 00:05:50,289 Stephen Koukoulas: course you do them. I think they're important little changes 115 00:05:50,290 --> 00:05:51,730 Stephen Koukoulas: that you can implement on the budget. You don't want $ 116 00:05:51,730 --> 00:05:55,589 Stephen Koukoulas: 1 wasted or not taxed properly from people who should 117 00:05:55,589 --> 00:05:59,010 Stephen Koukoulas: be paying their taxes. So they're important reforms, but in 118 00:05:59,010 --> 00:06:02,690 Stephen Koukoulas: total, they're only going to be trimming the budget bottom 119 00:06:02,690 --> 00:06:05,230 Stephen Koukoulas: line by a couple of billion dollars. And of course, 120 00:06:05,230 --> 00:06:08,480 Stephen Koukoulas: Labor have got to fund some of their spending policy 121 00:06:08,480 --> 00:06:10,779 Stephen Koukoulas: initiatives that they took to the election. Things like childcare, 122 00:06:10,779 --> 00:06:14,089 Stephen Koukoulas: for example, and the pharmaceutical payments and a range of 123 00:06:14,240 --> 00:06:17,900 Stephen Koukoulas: other things. So, to actually make a significant dent in 124 00:06:17,900 --> 00:06:22,210 Stephen Koukoulas: the budget deficit numbers, and they're still 50, 60, 70 billion dollars 125 00:06:22,370 --> 00:06:26,330 Stephen Koukoulas: per annum, to get them down significantly and towards a 126 00:06:26,330 --> 00:06:29,310 Stephen Koukoulas: balance, you need to take some big ticket items. And 127 00:06:29,520 --> 00:06:33,010 Stephen Koukoulas: so unless they, well, have a look at some policy 128 00:06:33,010 --> 00:06:35,140 Stephen Koukoulas: issues that are not on the agenda and haven't been 129 00:06:35,140 --> 00:06:36,860 Stephen Koukoulas: on the policy agenda, it's going to be pretty tough 130 00:06:36,860 --> 00:06:37,239 Stephen Koukoulas: to do. 131 00:06:37,830 --> 00:06:40,830 Sean Aylmer: Okay. So, should the budget repair be the priority, do 132 00:06:40,830 --> 00:06:44,190 Sean Aylmer: you think, or what else should actually be top line? 133 00:06:44,270 --> 00:06:47,170 Stephen Koukoulas: Well, continuing to grow the economy is the most important 134 00:06:47,170 --> 00:06:49,790 Stephen Koukoulas: thing, but when the economy's strong, and as we've been 135 00:06:49,790 --> 00:06:53,290 Stephen Koukoulas: discussing in our weeklies for quite a while, when it's 136 00:06:53,290 --> 00:06:57,520 Stephen Koukoulas: strong and inflation's high and unemployment is low, that you 137 00:06:57,520 --> 00:07:01,350 Stephen Koukoulas: can best repair the budget in those sort of circumstances, 138 00:07:01,350 --> 00:07:03,450 Stephen Koukoulas: that you do it when the economy's strong, not when 139 00:07:03,450 --> 00:07:07,390 Stephen Koukoulas: it's weak. I think it's not urgent, but I'll be 140 00:07:07,390 --> 00:07:09,900 Stephen Koukoulas: starting to sort of look at the structure of how 141 00:07:09,900 --> 00:07:12,930 Stephen Koukoulas: money's spent, where the taxes are coming from. The other 142 00:07:12,930 --> 00:07:17,700 Stephen Koukoulas: policy issues, which again, the problem on microeconomic reform is that 143 00:07:17,700 --> 00:07:20,100 Stephen Koukoulas: it takes so long to have an impact on the bottom- 144 00:07:20,100 --> 00:07:24,040 Stephen Koukoulas: line productivity numbers. The skills and training and education and 145 00:07:24,040 --> 00:07:27,360 Stephen Koukoulas: the childcare reforms, and these other things which are important 146 00:07:27,480 --> 00:07:31,670 Stephen Koukoulas: economic policy issues, they don't fix your economy and lift 147 00:07:31,670 --> 00:07:35,390 Stephen Koukoulas: your productivity tomorrow. They take in, many instances, several years 148 00:07:35,390 --> 00:07:37,679 Stephen Koukoulas: before they have an impact. So it doesn't mean you don't do them, 149 00:07:38,020 --> 00:07:41,010 Stephen Koukoulas: but you just don't get that immediate dividend in terms 150 00:07:41,010 --> 00:07:43,570 Stephen Koukoulas: of your bottom- line budget or in terms of your top- 151 00:07:43,570 --> 00:07:44,610 Stephen Koukoulas: line GDP growth. 152 00:07:45,160 --> 00:07:47,230 Sean Aylmer: Climate change in a sense was the biggest winner out 153 00:07:47,230 --> 00:07:50,100 Sean Aylmer: of the election, because voters obviously were thinking a lot 154 00:07:50,100 --> 00:07:52,570 Sean Aylmer: more about it, hence so many Greens and some of 155 00:07:52,570 --> 00:07:56,300 Sean Aylmer: the independents certainly. The government will have to think harder about 156 00:07:56,300 --> 00:07:59,930 Sean Aylmer: that, and that has massive economic implications. 157 00:08:00,300 --> 00:08:04,150 Stephen Koukoulas: Indeed, and it's not just putting charge stations along the freeways so 158 00:08:04,150 --> 00:08:07,160 Stephen Koukoulas: everybody can get an electric car, and as they're cruising 159 00:08:07,160 --> 00:08:10,520 Stephen Koukoulas: around, they can top up their power, as important as that is 160 00:08:10,520 --> 00:08:12,960 Stephen Koukoulas: too. But it is really the structure of how we 161 00:08:12,960 --> 00:08:15,870 Stephen Koukoulas: generate our power and that we move away from fossil 162 00:08:15,870 --> 00:08:19,080 Stephen Koukoulas: fuels. And again, that doesn't change quickly, and that's I 163 00:08:19,080 --> 00:08:22,250 Stephen Koukoulas: guess why we have a 2030 and a 2050 target 164 00:08:22,250 --> 00:08:27,800 Stephen Koukoulas: for emissions. Because again, to decommission coal- fired power generation 165 00:08:28,040 --> 00:08:31,660 Stephen Koukoulas: takes years, to put in the batteries and the generation 166 00:08:31,660 --> 00:08:35,579 Stephen Koukoulas: capacities from renewables takes years. So again, it's the structure 167 00:08:35,580 --> 00:08:37,980 Stephen Koukoulas: of the economy. I just noticed that a couple of the coal mining 168 00:08:37,980 --> 00:08:40,830 Stephen Koukoulas: companies' share prices are actually doing okay today on the 169 00:08:40,830 --> 00:08:43,230 Stephen Koukoulas: back of the election results. People aren't dumping their coal 170 00:08:43,230 --> 00:08:45,460 Stephen Koukoulas: stocks for example, so they're still going to be around for 171 00:08:45,460 --> 00:08:48,360 Stephen Koukoulas: some time. And of course, they're going to be driven by global 172 00:08:48,880 --> 00:08:52,370 Stephen Koukoulas: coal and energy prices themselves, but changing the way that 173 00:08:52,370 --> 00:08:56,079 Stephen Koukoulas: we have our power generated in Australia is going to 174 00:08:56,080 --> 00:08:58,250 Stephen Koukoulas: be sort of fast- tracked a bit more by the 175 00:08:58,250 --> 00:09:01,240 Stephen Koukoulas: Labor Party as opposed to the Coalition. And again, they're 176 00:09:01,240 --> 00:09:03,350 Stephen Koukoulas: expensive items too, so it feeds back into that earlier 177 00:09:03,350 --> 00:09:05,450 Stephen Koukoulas: point about how do you fund it without creating a 178 00:09:05,450 --> 00:09:06,490 Stephen Koukoulas: bigger hole in your budget? 179 00:09:06,780 --> 00:09:08,990 Sean Aylmer: How many weeks until we start talking about a carbon tax? 180 00:09:09,429 --> 00:09:13,400 Stephen Koukoulas: No. Oh, not long at all. Look, I don't think 181 00:09:13,400 --> 00:09:15,260 Stephen Koukoulas: they'd do that. They didn't take it to the election. I 182 00:09:15,260 --> 00:09:17,380 Stephen Koukoulas: think one thing that we've learned over time is that 183 00:09:17,960 --> 00:09:21,750 Stephen Koukoulas: if you're going to put in a major spending, or 184 00:09:21,750 --> 00:09:24,610 Stephen Koukoulas: more importantly a tax change, that you've really got to take 185 00:09:24,610 --> 00:09:26,640 Stephen Koukoulas: it to the election. So I'm wondering out loud here 186 00:09:26,640 --> 00:09:30,949 Stephen Koukoulas: whether... They'll do what they can and frame, I don't 187 00:09:30,950 --> 00:09:33,000 Stephen Koukoulas: know whether it's going to be a Henry Tax Review 188 00:09:33,000 --> 00:09:36,309 Stephen Koukoulas: or something of that ilk, that they really frame and then 189 00:09:36,450 --> 00:09:39,410 Stephen Koukoulas: get ready to take, dare I say it, to the 2025 election, 190 00:09:39,410 --> 00:09:42,160 Stephen Koukoulas: because I think you need the electorate to endorse it. 191 00:09:42,330 --> 00:09:43,969 Stephen Koukoulas: Even though they could probably get it through the Parliament, 192 00:09:44,270 --> 00:09:46,440 Stephen Koukoulas: as you alluded to, they've got a majority probably in 193 00:09:46,440 --> 00:09:48,780 Stephen Koukoulas: the House of Reps. The Senate would probably be very 194 00:09:48,780 --> 00:09:52,260 Stephen Koukoulas: friendly on hiking taxes on people on high incomes and 195 00:09:52,300 --> 00:09:53,830 Stephen Koukoulas: the like, so I think they'd get that through the 196 00:09:53,830 --> 00:09:57,000 Stephen Koukoulas: Parliament, but they'd be damaging their credibility in the eyes 197 00:09:57,000 --> 00:09:59,420 Stephen Koukoulas: of the electorate, and that is an important issue. 198 00:10:00,200 --> 00:10:02,599 Sean Aylmer: Gender pay gap. That's another one that we'll hear a 199 00:10:02,600 --> 00:10:05,360 Sean Aylmer: lot more about, given that finally we're getting a decent 200 00:10:05,360 --> 00:10:07,470 Sean Aylmer: number of women in Parliament. 201 00:10:07,720 --> 00:10:10,110 Stephen Koukoulas: Yes, it is, and there's sort of two issues that 202 00:10:10,490 --> 00:10:13,059 Stephen Koukoulas: are on the agenda. One is the childcare reform. We know 203 00:10:13,059 --> 00:10:18,260 Stephen Koukoulas: that female participation in the workforce increases when there's access 204 00:10:18,260 --> 00:10:22,170 Stephen Koukoulas: to affordable childcare, so that's likely to see women enter 205 00:10:22,170 --> 00:10:25,250 Stephen Koukoulas: the workforce. When you get paid employment, by definition you 206 00:10:25,250 --> 00:10:28,490 Stephen Koukoulas: get paid, and that improves the pay gap and the 207 00:10:28,490 --> 00:10:30,819 Stephen Koukoulas: superannuation gap, because of course, you get the 10% on 208 00:10:30,820 --> 00:10:34,770 Stephen Koukoulas: your income. The other one, which is a bit more 209 00:10:34,770 --> 00:10:38,410 Stephen Koukoulas: interesting, is that certainly in concert with the Greens, who 210 00:10:38,470 --> 00:10:41,200 Stephen Koukoulas: I know have advocated this, is going to the Fair 211 00:10:41,200 --> 00:10:45,130 Stephen Koukoulas: Work Commission and in the female- dominated sectors of the 212 00:10:45,130 --> 00:10:47,910 Stephen Koukoulas: economy, so a lot of the aged care, healthcare, the 213 00:10:47,910 --> 00:10:49,839 Stephen Koukoulas: teaching professions and the like, even though a lot of 214 00:10:49,840 --> 00:10:53,510 Stephen Koukoulas: those are under state government awards for the pay rates 215 00:10:53,510 --> 00:10:57,050 Stephen Koukoulas: there, is actually arguing for a higher than average pay 216 00:10:57,050 --> 00:11:00,939 Stephen Koukoulas: increase in the female- dominated parts of the economy. It 217 00:11:00,940 --> 00:11:03,130 Stephen Koukoulas: being by half a percentage point per annum, it doesn't 218 00:11:03,130 --> 00:11:05,040 Stephen Koukoulas: do a huge amount in the short term to close 219 00:11:05,040 --> 00:11:07,189 Stephen Koukoulas: the gender pay gap, but I think I've seen some 220 00:11:07,200 --> 00:11:09,210 Stephen Koukoulas: modeling that says over a decade, if you do that 221 00:11:09,210 --> 00:11:11,350 Stephen Koukoulas: every year for a decade, you close the pay gap 222 00:11:11,350 --> 00:11:12,819 Stephen Koukoulas: by about three or four percentage points. 223 00:11:12,910 --> 00:11:12,910 Sean Aylmer: Oh, wow. 224 00:11:12,910 --> 00:11:15,270 Stephen Koukoulas: So I think that might well be part of how 225 00:11:15,270 --> 00:11:18,620 Stephen Koukoulas: they both address the wage issue, but also the gender 226 00:11:19,059 --> 00:11:20,670 Stephen Koukoulas: inequality issues that are still there. 227 00:11:21,110 --> 00:11:25,380 Sean Aylmer: Okay, and then finally, wages. There was a big brouhaha, 228 00:11:25,380 --> 00:11:28,280 Sean Aylmer: that's a good word for you, Stephen, brouhaha about what 229 00:11:28,520 --> 00:11:31,030 Sean Aylmer: Anthony Albanese was saying, whether he'd support the 5. 1% 230 00:11:31,550 --> 00:11:34,360 Sean Aylmer: increase in the minimum wage. He kind of clarified it 231 00:11:34,490 --> 00:11:36,050 Sean Aylmer: and said it was only for some people that he 232 00:11:36,050 --> 00:11:38,709 Sean Aylmer: supported that. That's going to be a big talking point. 233 00:11:39,190 --> 00:11:41,239 Stephen Koukoulas: It is, and the funny thing about that is, of 234 00:11:41,240 --> 00:11:44,260 Stephen Koukoulas: course, by the time the Fair Work Commission submissions are 235 00:11:44,260 --> 00:11:46,310 Stephen Koukoulas: made by the government, we'll have another inflation number. So 236 00:11:46,440 --> 00:11:47,030 Stephen Koukoulas: it's probably going to be 6%. 237 00:11:47,030 --> 00:11:48,100 Sean Aylmer: Yeah, right. 238 00:11:48,540 --> 00:11:49,920 Stephen Koukoulas: That I'm sure will be asked, " What is it now, 239 00:11:49,920 --> 00:11:52,010 Stephen Koukoulas: 6%?" And then probably this time next year, inflation will 240 00:11:52,010 --> 00:11:55,040 Stephen Koukoulas: be back down to three and a half. I'm just 241 00:11:55,040 --> 00:11:57,550 Stephen Koukoulas: sort of saying that the annual inflation number is a moving piece, 242 00:11:57,550 --> 00:12:00,059 Stephen Koukoulas: but that said, I think Albanese is pretty clear on 243 00:12:00,059 --> 00:12:03,510 Stephen Koukoulas: he's wanting some decent sort of pay increases, and remember 244 00:12:03,510 --> 00:12:06,459 Stephen Koukoulas: that we had a lot of really weak wages numbers during 245 00:12:06,460 --> 00:12:09,130 Stephen Koukoulas: the COVID lockdown, that wages growth slowed I think at 246 00:12:09,130 --> 00:12:11,179 Stephen Koukoulas: one stage to about one and a half percent. So 247 00:12:11,610 --> 00:12:14,970 Stephen Koukoulas: it was very weak, and a lot of the public service wages were frozen, 248 00:12:14,970 --> 00:12:18,280 Stephen Koukoulas: or only got a 1% increase. I think that on the 249 00:12:18,290 --> 00:12:21,069 Stephen Koukoulas: minimum wage and some of the other awards that are there, 250 00:12:21,200 --> 00:12:23,589 Stephen Koukoulas: and certainly the Union movement, to the extent that they've 251 00:12:23,590 --> 00:12:25,929 Stephen Koukoulas: got much power, they've clearly got more with the Labor government 252 00:12:25,929 --> 00:12:28,630 Stephen Koukoulas: than the Coalition government, but they're going to be pushing 253 00:12:28,630 --> 00:12:32,170 Stephen Koukoulas: for a decent wage increase over the course of the 254 00:12:32,170 --> 00:12:35,110 Stephen Koukoulas: next year and two, because inflation's elevated and they said 255 00:12:35,110 --> 00:12:37,400 Stephen Koukoulas: they would. To the extent that they influence the Fair 256 00:12:37,400 --> 00:12:40,550 Stephen Koukoulas: Work Commission, they'll be advocating for those big pay rises, 257 00:12:40,550 --> 00:12:43,420 Stephen Koukoulas: and that's great for the consumer. There is a question 258 00:12:43,420 --> 00:12:45,679 Stephen Koukoulas: about what happens to business costs. But again, we know 259 00:12:45,679 --> 00:12:47,819 Stephen Koukoulas: that there's a shortage of skilled workers, so maybe businesses 260 00:12:47,820 --> 00:12:49,030 Stephen Koukoulas: will be happy to pay that anyway. 261 00:12:49,370 --> 00:12:50,410 Sean Aylmer: It's going to be fun, Stephen. 262 00:12:50,750 --> 00:12:53,760 Stephen Koukoulas: Oh, I love it. And just another thing to think 263 00:12:53,760 --> 00:12:55,670 Stephen Koukoulas: about when I'm trying to work out where this economy 264 00:12:55,670 --> 00:12:58,479 Stephen Koukoulas: is going and where official interest rates are going, a 265 00:12:58,480 --> 00:13:00,739 Stephen Koukoulas: change of government, it doesn't happen very often in Australia. 266 00:13:00,740 --> 00:13:04,010 Stephen Koukoulas: On average, about once every 10 years. So yeah, it's 267 00:13:04,010 --> 00:13:06,160 Stephen Koukoulas: going to be a fantastic short period where we see 268 00:13:06,160 --> 00:13:09,850 Stephen Koukoulas: what the initial policy response from the Albanese government is, and 269 00:13:09,850 --> 00:13:11,770 Stephen Koukoulas: then of course, over time once they get their act together. 270 00:13:11,990 --> 00:13:13,679 Sean Aylmer: Thank you for talking to Fear and Greed. 271 00:13:13,820 --> 00:13:14,280 Stephen Koukoulas: Thank you, Sean. 272 00:13:14,679 --> 00:13:18,160 Sean Aylmer: That was Stephen Koukoulas, Managing Director of Market Economics. Find him 273 00:13:18,160 --> 00:13:20,700 Sean Aylmer: at thekouk. com, or on Twitter using the handle TheKouk. 274 00:13:20,920 --> 00:13:22,580 Sean Aylmer: You might think it's a Monday morning, but it's actually 275 00:13:22,580 --> 00:13:24,590 Sean Aylmer: a Tuesday morning. We got Stephen to come in today 276 00:13:24,890 --> 00:13:27,179 Sean Aylmer: to help us out with the election and what the 277 00:13:27,179 --> 00:13:30,449 Sean Aylmer: new federal government faces. This is the Fear and Greed Daily 278 00:13:30,450 --> 00:13:33,020 Sean Aylmer: Interview. Join us every morning for a full episode of 279 00:13:33,020 --> 00:13:36,689 Sean Aylmer: Fear and Greed, Australia's most popular business podcast. I'm Sean 280 00:13:37,090 --> 00:13:38,119 Sean Aylmer: Aylmer. Enjoy your day.