Rita Panahi:
Joining me now is senior fellow and chief economist at the Institute of Public Affairs, Adam Creighton, and former president of the Victorian Liberal Party, Michael Kroger. Michael, Jim Chalmer said he wanted to reimagine capitalism. He outlined his vision for this values-based capitalism. Well, we’ve got it now. It’s not working out too well.
Michael Kroger:
No, Rita, it couldn’t be going better. We’ve got record deficits. We’ve got 122 billion of deficits in the next four years. The housing market has crashed. Hundreds of billions of dollars of people’s wealth have been wiped off the value of their properties. Investors are leaving the market. First home buyers who put in their 5% deposit have lost their 5% of the market’s down more than that. We’ve got stamp duty state government stamp duty revenue will plummet, two billion in New South Wales alone over the next year because if there are no property sales, Rita, there’s no stamp duty payable. And of course, with the declining and crashing housing market, it means less work for real estate agents, conveyancing solicitor we put off. There’s less work for carpenters and others who are fixing, repairing homes that have been bought by people. And the coup de grace, all that isn’t bad enough.
Of course, what happens when mortgage applications go down? Banks make less profits. And the Commonwealth Bank of Australia, which has got 800,000 shareholders, has lost 40 billion in market capitalization in the last three weeks, including six billion dollars lost today alone. So 800,000 people have lost on average if they have the same number of shares. They’ve lost another 50,000 each because of their investment in the Commonwealth Bank. So this is an economic disaster brought about by people that have no idea what to do in managing an economy, Rita.
Rita Panahi:
Adam, it is pretty grim whether you’ve got shares in CBA or whether you’re invested in property. Everything seems to be going in the wrong direction. And it’s bad news for people who can least afford it. We’ve been talking this week about rents going up, rents going up dramatically by up to 30% in the next two years. Both the NAB and property groups are forecasting that.
Adam Creighton:
Yeah, certainly that will be a terrible outcome for those people. You’re quite right. And also they’re going to have to pay more tax as well to service all this debt. The trillion dollars everyone’s talking about, that’s great, but that’s just the tip of the iceberg. You’ve got to add into that 700 billion of state debt as well. So it’s actually 1.7 trillion.
Rita Panahi:
And we’re paying literally billions in interest every month.
Adam Creighton:
Yes, that’s right. So the Commonwealth I think is about five cents at every dollar of revenue it earns now, just goes to interest. We’ve already heard that Victoria’s going to be about 10 cents in every dollar of revenue there by 2030. This is a very worrying situation. And it’s all very well full left to say, “Oh, Australia’s debt’s very low to GDP. It’s 35%.” Well, actually first you must add states and it’s at 50%. And we already pay much higher interest rates than other countries with much more debt. Much higher rates in France and the UK, sometimes even the US. So basically the point is that we can’t have very high debt levels without paying extremely high interest rates. So very hard decisions are going to have to be made here. There’s going to have to be big cuts at some point because they simply can’t raise tax anymore than they already have.
Rita Panahi:
Adam, you’ve just released new research from the IPA revealing state governments have been overwhelmingly responsible for the increase in public debt since the COVID pandemic. States have increased the combined net debt by $270 billion over the last six years, which is more than four times as much as the federal government. States share of total net debt across both levels of government has steadily risen to 68% this year. Quadruple the share in 2016. The trends here are extraordinary.
Adam Creighton:
It’s quite possible the states could actually overtake the Commonwealth for total debt within five to 10 years, which is just extraordinary. And this is because they pay very low interest rates. Well, they pay the same interest rates the Commonwealth does because the people that lend to the states, they know that if push came to shove, the Commonwealth would have to bail states out. So they’re basically paying artificially cheap debt. And the scary thing with this new research is there’s all this COVID debt that was borrowed at 1.5% or 2% per annum, and there’s $277 billion of it outstanding just on the state’s books. Well, that’s going to all have to be refinanced at five and a half percent per annum from 2030 onwards. So the main finding from that research is that even if they don’t have any more deficits ever again, the interest rate costs will go up 25% a year from 2030 onwards.
Rita Panahi:
And we’ve tried to warn them during the COVID era that this largest is taxpayer funded craziness was going to come back and hurt us. And here we are. This was entirely predictable. Now, Victorian Premier Ben Carroll has announced a royal commission into corruption on Victoria’s big build projects. The inquiry will examine the conduct of construction companies, the CFMEU contractors, subcontractors, labour hire firms and supplies, as well as the role played by the Victorian government and its delivery agencies. The inquiry is due to report in August 2027 and will have a broad mandate to examine major public and civil infrastructure projects across Victoria. Michael, is this adequate? Is this precisely what the liberals have been crying out for?
Michael Kroger:
No, not at all, Rita. Look, the very people who’ve sat around the cabinet table for years and refused to hold a royal commission, including Ben Carroll now say, “We need a Royal Commission.” There’s only one reason there’s a Royal Commission because there’s an election held in three months. Victoria is mired in corruption and the age newspaper’s uncovered a lot of this to their credit. And because the public are furious that up to $15 billion has basically been stolen through corrupt practises in the building industry, the Labour government in trying to make it look as if they’re doing something, of course there’s Royal Commission. And we’ve seen what’s happened at a federal level. That’s been a very disappointing Royal Commission into antisemitism so far. So do the public trust them? No. The best way forward for the Royal Commission is to join up with the Queensland Royal Commission where there’s already a Royal Commission into the building industry.
So that would be the best way forward. And I hope that the Liberals position has a very close look at the terms of reference because they’ll be trying to cover up more than they’re trying to uncover, Rita.
Rita Panahi:
Well, Dan Andrews was an expert with the terms of reference, wasn’t he? Anytime he had any sort of probe inquiry, the terms of reference and the people appointed to carry them out, you almost had a guaranteed outcome. Politically, is this going to be enough? Is this going to address the concerns Victorians increasingly have about the level of corruption in this state? Because I don’t think people around the country realise a lot of these issues are almost unique to Victoria. What’s happened in this state is unprecedented. The levels of corruption that have been normalised are really quite disturbing.
Adam Creighton:
No, that’s certainly true. You don’t see the black and white pirate flags on construction sites in other states, which always shocks me in Melbourne. They’re all over the place. So that’s certainly unique. Look, the polls were obviously telling the Labour government that they had to have this. Let’s see the terms of reference. Let’s see who is called. The former premiers really do need to be called. But this is all going to happen after the election, I assume. So look, this is a safe thing they’ve done. Whether it’s enough, there’s been no bounce in the polls so far from what I’ve seen for state labour. So maybe it’s not enough. I would say it’s not enough. I think they have to do other things. They have to knock the SRL on their head and they have to get rid of this stupid work from home legislation, which they’re about to legislate in coming weeks.
And the first treaty body too, which Victorians voted 60 / 40 against, more or less, and which is costing hundreds of millions of dollars a year.
Rita Panahi:
And really the Liberals, Michael, have done very little work on the issue of the treaty, the state-based voice that we’ve had thrust upon us despite voting no in the referendum. They’ve said, “Oh, we will reverse.” But there’s been absolutely no talk about it. They don’t talk about the impact this treaty has on lawmaking, on just a day-to-day life in Victoria. I think most Victorians wouldn’t even know there is a treaty or a state-based voice.
Michael Kroger:
Well, the reason the coalition doesn’t talk about it every day is that they’ve stated their position and that’s to abolish this body.
Rita Panahi:
But Michael, that has no impact when it’s not an issue. If Victorians don’t know the detrimental effects of this body, then it’s not going to become an issue. They’re not going to vote for the liberals to abolish something that they don’t understand or even know.
Adam Creighton:
For instance, there’s a job that’s currently advertised, $480,000 a year to lead this body. They should be making hay with that.
Rita Panahi:
And every piece of legislation that’s now introduced has to have consideration of this body. We’ve spoken on this programme about just how broad and far-reaching the influence of this body is, but I think most Victorians don’t know that, Michael. If you’re not going to make it an issue, it’s not going to be something that people are going to base their vote on.
Michael Kroger:
Don’t worry, they have made an issue, a big issue, and they said we’re going to abolish it. And people who are interested in this type of body are well aware of the Wilson opposition’s policy towards it. Don’t forget, you seem concerned that we’re not discussing an FBA. No, it’s actually not the biggest issue in Victoria. The biggest issue in Victoria is the cost of living crisis. The poor debt we’ve got in Victoria, which in four years time will be gross debt of 230, 240 billion. We have record crime rates, murders, gang warfare in Victoria, fire bombings all over the place. Middle Eastern crime gangs on the rampage. And we’ve got alleged union corruption in the building sector, which has allegedly sobbed off 15 billion. So of course it’s an important issue, but against those issues, it’s not at the top of the list for the opposition and nor should it be when corruption, crime-
Rita Panahi:
Well, no one’s saying it should be the top of the issue, but it should be an issue. And it’s somewhere an issue you can really wedge labour because so many of those other issues you’ve mentioned, they will change their positions. They will copy your policies. They will do anything to be reelected. That is one area where they’re not going to be able to reverse course. They’re going to have to justify why they thrust this body on the Victorian public who voted no to the voice. And I just think it’s a lost opportunity. It shows lack of courage to just put that to the side and say it’s not a cost of living issue. Well, in many ways, it impacts every facet of life, every piece of legislation. So it can be.
Adam Creighton:
Also, Victorian businesses just briefly are still paying a COVID debt levy on their payrolls. There’s no other state doing that. That should be an obvious win for the coalition. We will get rid of the COVID debt levy, which no other state pays. That’s a billion dollars a year from employers. Very significant. That’s an easy political win, I would say.
Rita Panahi:
That is an easy one. Now, before you two go, this is a little bit lighter, but I wanted to play this from Kate Langbroek. She’s taken aim at the Logies over jokes targeting Dave Hughes and Karl Stefanovic. Have a listen to what she said.
Kate Langbroek:
It’s like they’re just a pack of animals who, the second where they sense the power shift, they’re like, “Oh, let’s get stuck in.” All those years, they really enjoyed his antics and Karl turns up drunk and he talks to everyone. And so suddenly it’s like, “Oh no, we can’t like Karl.” And I’m just like, “You pitiful, pitiful mind virus idiots.”
Rita Panahi:
Pitiful mind virus idiots. Bravo, because she’s sticking up for a mate there. She’s certainly mates with Dave Hughes. And she’s telling the truth, Adam, about what is often such a toxic little cesspit. And so nasty despite sort of putting themselves out as being these progressive bastions of compassion and kindness.
Adam Creighton:
Dave Hughes and Karl, they’ve just seen the way politics is going. They’re with the people, not with these elites. That’s the end of the day. I don’t think that’s going to hurt them, what happened to the Logies, he’s far from it.
Rita Panahi:
Well, no, it’s not. But it’s, Michael, just the fact that the left do have a grip on the [inaudible 00:13:05] in this country. You have to admit that if you’ve got one individual, no matter how well they’re known how, no matter how successful, if they deviate from that leftist group think, they’re going to be attacked. And in case of Karl, he was sacked.
Michael Kroger:
Well, you can see how influential they are these days, which is not that much. Taylor Swift, the most popular, I’m told, pop artist in the world strongly endorsed Kamala Harris. And people are sick of the Golden Globe Academy Awards where these actors who live in gated communities and are worth hundreds of millions are getting up and lecturing people about working class issues. It just discredits those shows. And the Logies were just partly discredited, unfortunately, by these really pure juvenile criticisms of Hughes and Stefanovic and people making criticisms to [inaudible 00:14:00]. It was pathetic. There was a collective groan around the country when this nonsense came on and they just look like a poor man, poor woman’s Golden Globes. And it was pathetic. And Kate Langbroek was absolutely right to call it out.
Rita Panahi:
Gentlemen Michael Kroger, Adam Creighton, thank you so much for your time.
This transcript with Adam Creighton talking on The Rita Panahi Show – News24 from 20 August 2026 has been edited for clarity.
