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August 13, 2025
SALLY SARA: Well, joining me now is James Paterson, the Shadow Minister for Finance. James Paterson, welcome back to Radio National Breakfast.
SENATOR JAMES PATERSON: It is good to be with you, Sally.
SALLY SARA: The Treasurer, Jim Chalmers, said the interest rate cut is very welcome relief for millions of Australians. Does the Coalition see it that way, too?
SENATOR JAMES PATERSON: Oh, absolutely. There's no question if you're an average mortgage holder with about $600,000 of debt, that your repayments will go down by about $100 a month. And that's very welcome. But to put that in context. Over the last three years, you're still paying $1,800 more a month than you were when Labor came to power. So you're still more than $20,000 a year worse off in terms of your repayments. And that's before we even contemplate your higher electricity bills, your higher grocery bills, your more expensive insurance, or so many other things. So the Treasurer might want to do a victory lap and say that mission has been accomplished, but a lot of Australians out there are still struggling.
SALLY SARA: The Shadow Treasurer says the rate cut demonstrates that the Reserve Bank doesn't support Labor's management of the economy. What's the evidence for that?
SENATOR JAMES PATERSON: Well, I think Ted O'Brien was referring to the RBA's decision to lower their expectations about productivity growth on this government's watch down to 0.7%. Now, to put that in context, in the 80s and 90s, productivity was growing about 3% a year. In the early 2000s, it was growing about 2% a year. In the 2010s, it was going about 1% a year, so to drop to now 0. 7% is crisis levels of productivity growth. And the reason why that's important for your listeners is that's their living standards. If productivity doesn't grow, living standards don't grow. And we are poorer than we should be on this government's watch.
SALLY SARA: Do you concede that this is an international phenomenon? It's happening in many other countries, including OECD nations.
SENATOR JAMES PATERSON: Yes, but even among OECD nations, Australia's per capita living standards have performed among the worst. In fact, in the last three years on this government's watch, our productivity went back to 2016 levels, and there are international comparisons like the World Competitiveness Yearbook, which are published, that show Australia is right down the bottom of the international league table. So while this is a western, developed world phenomenon, Australia is at the bottom of the pack, not at the head of the pack, and we should be really concerned about that.
SALLY SARA: Let's look at the economic roundtable, which will be held next week. How is the Coalition prepared to work with the government to implement reform and boost productivity to deal with these problems?
SENATOR JAMES PATERSON: Well, if good ideas are brought forward at the round table, and if the government adopts them and chooses to move forward with them, then we'll offer bipartisan support for them to be legislated and enacted. If there are ideas that reduce red tape and regulation, we're up for that. If there are ideas that reduce the tax burden on Australians, we are up for that. We're open minded about anything that can improve productivity because it is so critical to our prosperity as a country. Where we have reservations is if the government tries to do things it doesn't have a mandate for, because it didn't earn it at the election, for example, increasing taxes. Labor didn't tell anyone before the election that they would raise taxes, and a hand-picked roundtable of people in Canberra doesn't provide them the mandate they failed to earn at the election.
SALLY SARA: Does that mean that things need to be sorted out with cuts rather than increased taxes in your view?
SENATOR JAMES PATERSON: Well, government spending as a proportion of the economy is the highest now that it has been in about 40 years, outside recessions and pandemics. And it's very clear that the growth in government spending on this government's watch is not sustainable and does need to be reined in. That doesn't mean that there needs to be big cuts, though. All that it means is that fiscal discipline needs to be applied so that government spending grows more slowly than the economy grows, rather than faster than the economic growth as it has on Jim Chalmers' watch.
SALLY SARA: If, as you're saying, big cuts are not required, why was it the Coalition's policy at the election to implement significant cuts then?
SENATOR JAMES PATERSON: Well, I think that the most significant cut we took to the last election was a reduction of the public service by 41,000 people, and we've acknowledged, and I, particularly as the shadow minister for the public service in this term of parliament, have acknowledged we got that wrong. I think that would have been difficult to implement in practice, and I think many Australians were alarmed by that and the impact it would have on service delivery. So that policy, along with all our others, is up for review, and we will take a different policy to the next election. We'll still insist on efficiency in the public service. We don't want to see a waste of taxpayer dollars, but we won't be taking cuts like that to the next election.
SALLY SARA: Any closer to a final timeframe on when this policy review and election review will be completed now?
SENATOR JAMES PATERSON: Well, it's an ongoing process. Every day, we're reconsidering policies that we took to the last election, and we're considering our position on legislation that Labor brings forward through an orderly Shadow Cabinet process. And we'll be releasing policies throughout the term, but generally they'll be more at the back end of the term, as we have a better idea of the economic circumstances and the state of the budget. Remember, there's going to be three budgets and probably three MYEFOs between now and the next election, which will change our understanding of where the state of the fiscal order is at.
SALLY SARA: So if you're talking about policies being released at the back end of the term, more likely, does that mean we're not really going to see any meaningful policies from the Coalition this year?
SENATOR JAMES PATERSON: No, I said generally speaking, they will be close to the election. That's the normal way that oppositions work. We release policies towards the next election because they have fiscal implications, and it would be irresponsible to commit to them without having the information you need. That doesn't mean that there won't be policy announcements between now and then. There almost certainly will be as there was in the last term.
SALLY SARA: Let's look at the issue of Palestinian statehood. The Leader of the Opposition, Sussan Ley, said the Coalition would revoke recognition of Palestinian Statehood if elected. How do you know that that's what Australians want?
SENATOR JAMES PATERSON: Well, we'll take it to the election, and Australians can decide whether or not that's what they want, along with all our other policies. But there are two reasons why we will do that. One is, we disagree in principle with recognising a state which is in part run by a terrorist organisation that to this day still holds hostages. And secondly, we don't share the Prime Minister's confidence in the Palestinian Authority, and in particular, Mahmoud Abbas' ability to deliver on the commitments he's made. This is an 89-year-old president of the Palestinian Authority, who is 20 years into his first four-year term and has made lots of commitments like this in the past and failed to deliver on them. And if he's already got recognition from Australia, he has no incentive to adhere to those commitments.
SALLY SARA: Do you have confidence in the Arab League states, which want to see a temporary international stabilisation mission? They have a lot at stake in the success of that.
SENATOR JAMES PATERSON: They do, and those are certainly welcome developments and encouraging developments, but I think our optimism should be tempered by the reality of the experience in the Middle East and particularly the Palestinian territories over the last 20 years. Hamas has run Gaza ever since Israel withdrew from Gaza in 2005, and they have won elections and continue to prove to be popular in opinion polls conducted in both the West Bank and Gaza. It's the main reason why there haven't been elections for the Palestinian Authority for about 15 years, because of the widespread fear that Hamas would win those elections. So the Prime Minister says Hamas should have no role, but he's actually got no power to ensure that that's the case.
SALLY SARA: Senator James Paterson, thank you for coming back onto Radio National Breakfast this morning.
SENATOR JAMES PATERSON: Thanks for having me.
ENDS