The deputy governor of the RBA has been questioned about government spending’s impact on interest rates during Australia’s Economic Outlook.
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Prime Minister Anthony Albanese addressed the forum hosted by Sky News and The Australian before a sit-down Q&A with Sky News Political Editor Andrew Clennell.
The economic forum also heard from the country’s leading business leaders and economic minds, including Reserve Bank of Australia Deputy Governor Andrew Hauser.
RBA pressed on government spending’s impact on interest rates
Sky News’ Business Editor Ross Greenwood has questioned Mr Hauser about the role that government spending has on the RBA’s cash rate decisions.
If something is disproportionate in any area, it’s not as though you suddenly move interest rates according to that particular area – be it the government (or) big data centres – it is the total,” Greenwood said.
The RBA deputy governor stressed the central bank examines the whole economy to best understand how it should set rates.
If government gets bigger, then there’ll be implications for households, Mr Hauser explained.
If companies invest, that will have an impact on interest rates.
So those elements of the economy all interact with the each other, that’s why we do study the economy as a whole.”
RBA governor Michele Bullock has previously noted that government spending has played a role in the bank’s decision, despite Treasurer Jim Chalmers claiming otherwise.
RBA deputy governor reveals the point where inflation will start to skyrocket
The RBA deputy governor Andrew Hauser has been questioned about where Australia’s economic speed limit” is.
This is the point where the economy can grow without putting pressure on inflation.
It’s around two per cent a year,” Mr Hauser said.
If you go back, it’s about 2.5 per cent in the previous decade, three per cent in the (decade prior). It’s coming down.
Two per cent … is pretty good going. There aren’t many economic growing at that rate right now.”
Australia needs to address its ‘high-cost environment’ on tax, BHP warns
BHP Australia’s President Geraldine Slattery said that Australia needs to address the nation’s high taxing that is hurting local businesses.
On taxation, we are a high-cost environment for business and we need to do more in that area,” Ms Slattery told the panel.
I think that’s well telegraphed (and) well understood.”
Her call comes as major mining companies look to other nations for future projects as business conditions in Australia discourage investment.
Labor’s industrial relations laws ‘complex’ for businesses, BHP boss says
The BHP Australia president weighed in on how Labor’s industrial relations laws had hindered the company’s ability to operate.
The industrial relations laws that have progressively come in since 2022 have given rise to an environment that is more complex and more contested,” Ms Slattery said.
There are more cases before the Fair Work Commission, there are more bargaining instances that have been initiated by the unions that have been authorized by the current laws.”
She stressed that BHP, which faces battles with unionised employees at Port Hedland, was committed to working with people” but noted that shutdowns could have significant financial implications.
We produce just shy of a million tonnes (of iron ore) a day from Port Hedland … and most of you know the iron ore price is sitting at around $100 per tonne, a little bit more than that,” Ms Slattery said.
So you can do the maths and get an understanding.”
Business leaders panel to shine a light on major economic challenges
The Australian’s Wealth Editor Julie-anne Sprague is joining a series of leading business figures to discuss challenges facing Australia’s economy and corporate sector.
Ms Sprague is speaking with Uber Eats APAC’s Regional General Manager of Retail Lucas Groeneveld, BHP Australia’s President Geraldine Slattery and TechnologyOne’s Executive Vice President, Sales and Marketing Barry Dietrich.
The panel will discuss Australia’s business conditions, high inflation and falling productivity.
Albanese refuses to apologise for broken promises
Prime Minister Anthony Albanese was asked: Do you owe the Australian people an apology for violating their trust by going to an election, never mentioning these policies?”
Mr Albanese said he was not interested in word games” and neither was the Australian public.
They will make a judgment. Part of the judgment will be, of course, about when governments change positions, but (also) on the merits of what we are doing”.
“It strikes me, if anyone out there thinks that the housing market is working, then they’re bonkers. They’re not speaking to young people,” he said.
The government has said about 75,000 additional renters will be able to transition to homeownership under its tax changes.
This amounts to one per cent of the entire rental market.
‘You didn’t have the ticker to take it to an election’: PM grilled on broken election promises
Mr Albanese, speaking on his tax changes and broken election promises, said “people haven’t had the ticker to take it on”.
His comment was also in relation to a series of opinion pieces criticising the changes.
Sky News Political Editor Andrew Clennell shot back: “You didn’t have the ticker to take it to an election.”
“If you believe so much that we need this, if you have always had the desire to end negative gearing and get rid of CGT discounts, to tax trusts, that this 1999 system of John Howard and Peter Costello was so faulty, why not take it to the last election?” Clennell said.
Mr Albanese said this was not Labor’s position at the time and has since changed it.
Albanese says ‘populism’ is a problem after Labor lost out to One Nation
Mr Albanese has raised concerns about the “rise of populism” and “grievance-based politics” after One Nation overtook Labor under his leadership.
Trust in the major political parties has fallen to all-time lows as One Nation support rises, but Mr Albanese said populism is the problem.
“I tell you what’s not ideal, it’s to see the rise of populism, whether at the right or the left,” he said.
“Populism and opportunism without answers, whether it be One Nation or the increasing blurring of the lines between the Liberal Party and One Nation.”
“I’m critical of the leaders of that political movement, but I’m never critical of voters, if voters are sending a message.
“(People) don’t think that the economy is working for them, and they don’t want to work for the economy.”
Albanese buddied up with Paul Keating
Prime Minister Anthony Albanese has said the negative gearing and capital gains tax changes were his, and not those of former Labor prime minister Paul Keating.
Mr Keating was understood to be encouraging Mr Albanese and Treasurer Jim Chalmers to wind back negative gearing and capital gains tax discounts.
“I talked to Paul Keating all the time… This is my budget in 2026,” Mr Albanese said.
“He supports what we have done, but we make our decisions in 2026 and it might surprise you if you to know how often I talked to (Tony Abbott) as well.”
PM won’t weigh in on RBA decision
Mr Albanese won’t weigh in on the upcoming Reserve Bank of Australia decision on interest rates.
There have been low growth figures and inflation of about 3.5 per cent – outside the target band – but Mr Albanese won’t say if the RBA should hold interest rates.
“I think what’s appropriate as Prime Minister is that the Reserve Bank are independent,” he said.
Why can’t you win an election by telling the truth?
Sky News Political Editor Andrew Clennell has taken a seat next to the Prime Minister for a live Q&A about the state of the nation.
Mr Albanese has been asked why he can’t win an election by telling the truth, after he backflipped on superannuation changes, the Uluru Statement, and negative gearing.
“We did win the election… We couldn’t continue to kick the can down the road,” Mr Albanese said.
“We’ve made a difficult decision. We’ve changed our position, that’s a difficult thing to do, and we understood that there would be criticism of that.”
Mr Albanese did not explicitly admit to lying or breaking his promises, but he continues to repeat “we have changed our position”.
“We’re not going to sit around for two years and just occupy the space, and so we’ve made what is a difficult decision,” he said.
Albanese says CGT, negative gearing changes are crucial for ‘social cohesion’
The Prime Minister said his tax reforms to negative gearing and capital gains tax are crucial for social cohesion.
He stressed the changes were important for making the tax system more equitable and bolstering younger Australians’ lives.
“This matters … for our democracy and our social cohesion more broadly,” Mr Albanese said.
“When Australians feel like the economy is not working for them, that their hard work is simply not adding up to fair reward, that they’re worried that their children or grandchildren will have less security and fewer opportunities than they did – this sentiment has not come out of nowhere.
“It is pressure that has built up and it’s built up over years. It’s not just a vague feeling, it’s a reality that Australians feel like they’re up against.”
PM sideswipes Coalition, One Nation
Mr Albanese has taken a subtle dig at the Coalition and One Nation over their “brand of politics” after he delivered Labor its worst poll result under his leadership.
“You might be able to build a brand of politics out of amplifying frustration and seeking to harvest it, but that doesn’t take our country forward,” he said.
“What counts, what matters, what makes a difference is whether you have a plan to do something about it.”
The Prime Minister has repeatedly claimed One Nation does not have policy solutions, and described the party as appealing to “dark forces”.
PM praises productivity efforts despite recent slump
Mr Albanese has stressed his government is pushing for a “long overdue turnaround in productivity”.
This came just days after the Australian Bureau of Statistics revealed that productivity declined 0.6 per cent in the March quarter and flat lined in the previous quarter.
“Our government knows how important it is that we keep working to boost Australia’s productivity so that our economy has the headroom to grow without putting pressure on inflation,” the Prime Minister said.
“So that the sacrifices Australians have made are repaid with higher taxes, lower wages and a better standard of living.
“This is a problem that business and government can only solve together.”
Albanese lauds ‘growth and productivity’
Mr Albanese has praised his government’s focus on growth and productivity, despite the country suffering dismal productivity and falling GDP growth.
“Our government’s agenda for growth and productivity is about investing in our national strengths and broadening them out,” he said.
Mr Albanese said he wanted to “incentivise business to create jobs in our nation and engage with our regions”.
His recent tax reforms have been met with fury by the private sector, including a viral meme campaign on social media and anti-tax billboards popping up in Canberra.
PM says his government is making ‘hard decisions’
Mr Albanese said global uncertainty has provided his government with the chance to deliver reform.
“We do not view global uncertainty as an excuse to delay. We see it as a reason to act,” he said.
The comments appear to be a reference to his tax reform, including CGT changes, announced in the federal budget.
“They say the best time to fix the river is when the sun is shining, but the work we have to do cannot wait for blue skies,” he said.
“Hard decisions cannot be put on hold for easier times. The challenges confronting Australia are too urgent to hang back, and the opportunities ahead of us are all too important to miss our miss.”
He said that his government was focused on delivering productivity, despite Australia’s GDP growth shrinking to a dismal 0.3 per cent in the March quarter of 2026.
Albanese says his leadership plagued by global shocks
Mr Albanese has taken the stage and reflected on his time in power, for what is his fourth address at Australia’s Economic Outlook.
He said his first speech came amid the Russian invasion of Ukraine, then later President Trump’s tariffs on Australian industry.
Now, this year, Mr Albanese said the economic climate has been rocked by the US-Iran War and the disruption of oil shipping routes.
“Just as workers and employers are dusting themselves off from the last international shock, the next one comes along,” he said.
“These headline events, pandemics, conflicts, and crises are not passing storms, they are the extremes of a more volatile global economic climate.”