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Transcripts
December 4, 2025
SALLY SARA: Well, earlier in this half hour, you heard from the Treasurer talk about the latest economic figures, which show Australia's economy grew by 0.4% in the September quarter. We're staying with federal politics now and the economy. James Paterson is the Shadow Minister for Finance and joins me now. Senator, welcome back to Radio National Breakfast.
SENATOR JAMES PATERSON: Good to be with you.
SALLY SARA: The Shadow Treasurer, Ted O'Brien, yesterday acknowledged that these figures aren't a catastrophe. Can you see some positive signs in the latest data?
SENATOR JAMES PATERSON: Only very limited ones, because growth came in about half of what the market expected it to be, and an annual rate of growth of 2.1% by historical terms, it is actually pretty modest economic growth. And yet, even still, we're seeing a breakout of inflation. That's the most worrying thing out of the figures. And the deputy governor of the RBA, Andrew Hauser, has drawn attention to this. An economy growing that slowly shouldn't be generating inflation, but inflation is now above the target band, both in headline terms and underlying terms, and the RBA is having to contemplate potentially interest rate increases rather than further cuts that many Australians were relying on.
SALLY SARA: Why do you think inflation is still running with those kinds of growth figures?
SENATOR JAMES PATERSON: Well, the RBA's been very clear that this is due to productivity. Australia's productivity performance, particularly under this government's watch over the last few years, has been disastrously bad. It went backwards by about a decade on the government's first term. And even in these figures, the growth in productivity is really anemic. It's really just ticking along at the lowest levels we've seen in a long time. And so if the economy is not becoming more productive, then it can't grow very fast without generating inflation, and that's what's happening.
SALLY SARA: Jim Chalmers, the Treasurer, says the big story out of this data is what he describes as the stunning improvement in new business investment alongside welcome growth in housing investment. Do you agree with his assessment on those issues?
SENATOR JAMES PATERSON: I think “stunning” is a bit strong, and he might be willing to declare mission accomplished on private sector investment, but that's not what any market sector economists are saying. It's an increase from the previously very low levels of investment, and it appears to be driven primarily by investment in data centres, which is a good thing, but that's not an economy wide uptick in private sector growth. Actually, what we have seen is that public spending is at forty-year highs under this government's watch. And the Reserve Bank governor testifying before a Senate committee yesterday acknowledged that all else being equal, if deficits are growing, as this government's deficits are, then that puts upward pressure on interest rates.
SALLY SARA: The government is going to make a decision for the mid-year budget update on whether to extend the energy rebate, which we were just discussing. What would the Coalition do?
SENATOR JAMES PATERSON: Look, it's a hypothetical of what we would do if we were in government. I mean, our priority would be fixing the energy system so that these kinds of subsidies weren't necessary, and it wasn't necessary to also subsidise heavy energy users like Tomago and other smelters. We want to have an energy system which is competitive and affordable, and we wouldn't want to have in perpetuity, as I think the Treasurer doesn't want, subsidies which mask the costs of the energy system. So that would be our focus and our priority.
SALLY SARA: When you look at the situation for households, do you think those rebates need to continue right now?
SENATOR JAMES PATERSON: Well, I do agree with the Treasurer when he says that they can't continue forever. It's a matter for government to decide whether they should continue for a little while, but I think in the long term, everybody agrees with a budget heading to a $42 billion deficit this financial year, it's just not sustainable in perpetuity to pay these bills. So it's up to the government to decide when they turn that tap off.
SALLY SARA: So you don't have a view one way or the other for this decision?
SENATOR JAMES PATERSON: Well, we are not in government, and it's really a matter for the Treasurer and the expenditure review committee of cabinet. They've got to decide do they want Australians to feel the full weight of the energy policy failure on this government's watch, a 40% rise in electricity prices, or are they going to continue to try and mask that and let the budget bear the burden of that failure?
SALLY SARA: So we won't hear any criticism from the opposition one way or another when this decision comes through?
SENATOR JAMES PATERSON: Well, we will express a view depending on what the details are. I think it matters what the details are.
SALLY SARA: You're listening to Radio National Breakfast, my guest is the Shadow Minister for Finance, James Paterson. The government has confirmed it's asked federal departments and agencies to find further efficiencies, up to 5%, but it says it's not an exercise in job cuts. Does the Coalition believe the number of public servants currently is about right?
SENATOR JAMES PATERSON: The government's been really tricky about this. They're refusing to release the correspondence. They initially tried to say that the correspondence didn't exist before admitting it actually did exist. It just came from the acting Prime Minister, not the Finance Minister. I'd like to see the details of what savings the government is seeking. They're calling them reprioritisations. Of course, when you do cuts, it's reprioritisations. When your political opponents do cuts, it's cuts. I think they should just be upfront and honest and say that they plan to cut spending, and we want to see exactly where that is. There's no question the public service has ballooned significantly on this government's watch. We'll wait and see where it's at the end of the term before we decide what our policy response would be.
SALLY SARA: So there's not a view at the moment on that issue?
SENATOR JAMES PATERSON: Only that we acknowledge that we got the policy wrong at the last election. It would have been very difficult to implement and deliver in practice, and whatever we take to the next election will be different to what it was at the last election.
SALLY SARA: What should the government be looking at, do you think? Are there areas that stand out to you?
SENATOR JAMES PATERSON: One thing which we've been particularly vocal about is this tax incentive to take on an EV. It's ended up costing about ten times what it was forecast to cost when Labor first committed to doing it, and the benefits skew overwhelmingly to high income earners and the cost of abating carbon emissions from doing it is about a thousand dollars a ton, according to the Productivity Commission, which is a really inefficient measure if your objective is to lower carbon emissions. So that's one good example. It costs billions of dollars on the budget.
SALLY SARA: Let's look ahead to the new year. The Coalition has made it through a very difficult period. Do you and your colleagues now need to rally behind Opposition Leader Sussan Ley as we go into the new year?
SENATOR JAMES PATERSON: I think it is important that we demonstrate unity and discipline. I think it was understandable after a big election loss that we wanted to have a debate about the future direction of the party, but I've been saying consistently for months now that that's not a debate that can continue forever and that our task now is to hold the government accountable for their policy failures and to articulate our alternative vision for Australia and demonstrate the that we've done the policy work that means we're ready for government. And so that's my focus.
SALLY SARA: Those within the party who might disagree with the leadership of Sussan Ley and perhaps have ambitions of their own, what's your message to them?
SENATOR JAMES PATERSON: Well, my view is that Sussan won the ballot, that we should abide by the decisions of the party room.
SALLY SARA: Are you expecting more leadership turbulence in the new year?
SENATOR JAMES PATERSON: That's not my focus, and I don't think it's where the overwhelming focus of my colleagues is either. I think most of them are focused on the big policy questions facing Australia, whether it's energy or immigration or the economy, and articulating solutions, Liberal solutions, to those problems that give the Australian people confidence that if we're elected at the next election, their lives would get better and our country would get stronger.
SALLY SARA: What message do you think it would send to Australian voters if the Coalition is focused on itself and talking about itself in the new year and beyond?
SENATOR JAMES PATERSON: Well, I addressed that in a speech a couple of months ago. If voters get the impression that we're focused on ourselves and not on them, then they will judge us harshly for it, and they'll punish us for that. And I think that's part of the reason why our polling since the election has been weak. They think that we are divided internally. We need to demonstrate that unity and that discipline and that resolve and that focus.
SALLY SARA: If unity improves, do you expect that the Coalition's polling will improve and you will get back, particularly, some of those voters from One Nation?
SENATOR JAMES PATERSON: I certainly hope that it does, and I think some of the positions that we've taken, particularly on net zero, and I hope soon what we'll articulate through Jonno Duniam and Paul Scarr on immigration, will demonstrate to voters who are frustrated with mainstream political parties that we do have solutions for the problems that they're concerned about. I don't think it's good for our political system to only have those concerns being catered to by marginal voices in the political system. Mainstream political parties must have reasonable answers to those questions.
SALLY SARA: James Paterson, thank you for coming in again this morning.
SENATOR JAMES PATERSON: My pleasure.
ENDS