Chris Smith:
Adam Creighton is a senior fellow and chief economist with the Institute of Public Affairs and columnist with The Australian newspaper. He’s on the line. Adam, good morning to you.
Adam Creighton:
Good morning, Chris, and welcome back.
Chris Smith:
Thank you. It’s been a while.
Adam Creighton:
Indeed, it has. I’ve missed you.
Chris Smith:
That’s very good of you to say that. Thank you. I wish my kids would miss me as much, but anyway. Now, this might dull the noise over Gina Rinehart’s support of Pauline Hanson. The PM has attended a harborside dinner hosted by the son of a wealthy Chinese developer. The AFR says it was triggered by the promise of a $1 million donation to the ALP. The Chinese links that Labour has knows no bounds, do they?
Adam Creighton:
Yeah, look, it’s extraordinary. The hypocrisy, as you suggest, is just outrageous. Having a go at Pauline Hanson of One Nation for their alleged links to Gina Rinehart and yet here they are basically maybe accepting a million dollars as the financial review suggests from a wealthy Chinese donor. And of course, Gina Rinehart is an Australian and an Australian patriot at that. I mean, this family, I’m sure their allegiances quite naturally are more to China and to Beijing than they are to Australia. And yet, the governing party of the country is maybe accepting a million dollars from them. So really, I don’t think they should be criticising One Nation at all in relation to donation activities. And the interesting thing too where this was held, this extraordinary mansion, Mandalay, which I think is worth 50, $60 million or something, I mean, who owns that? Is that also owned by the Chinese as well? I mean, I’d like to know that, too.
Chris Smith:
That is worth knowing about. And then, you’ve got the chairman, Dan. He had to be in there somewhere, didn’t he?
Adam Creighton:
Yeah, that’s right actually. The former premier was there as well, who’s barely been seen in public at all for the past few years since he left office, and I assume that’s mainly because he’s worried about the abuse or otherwise that will be hurled with him in the street because of his handling of COVID. But yes, he is back up and about now. We’ve seen a few pictures of him recently, just one recently, I believe, with Paul Keating and Anthony Pratt and the prime minister too talking about super. So yeah, he’s out and about again. Obviously, the stroke he was supposed to have had was not as severe as some people were led to believe.
Chris Smith:
Certainly not when it comes to a donation of $1 million to the Labour Party. Now, some crook news on the economy today. Australia is on track to record the weakest decade of living standards in more than a century. In addition, a Newgate Mood survey has found that 70% of Aussies feel the country is heading in the wrong direction. These are signs that cannot be bolder for the government.
Adam Creighton:
Yeah. Look, I’d like to know the 30% who think it’s going in the right direction.
Chris Smith:
Yes.
Adam Creighton:
I’d like to know where they see that evidence. Well, it’s overwhelmingly a sad story. Everyone seems to be saying this today from the left and the right. You’ve got Bill Kelty. You’ve got former Governor Phil Lowe of the RBA. You’ve got the OECD, the IMF. Pretty much every institution is pointing out that our economic statistics are frankly among the worst in the world, really, the developed world, I mean. I mean, we’ve had the slowest GDP per capita growth for some years now. Real wages are down 5% on the conventional measure. And this is all actually while we still have the resource boom going on, by the way. We’re still getting very good earnings from our coal and iron ore, and yet, the standard living of your typical Australian is going backwards.
And the one that I really want to mention, which I think can’t be mentioned enough, is the rate of inflation. I mean, we have the highest core rate of inflation in the Western world in this country. It’s about 3.8%. It’s still rising, probably going to go up further now that the petrol price has jumped again because of the Middle East. And so, this just means it’s not just people just say inflation. I don’t really think what the consequences are, but this is the shrinkage in the purchasing power of ordinary people’s money by 4% every year. And for people out there on 70, 80, 90 grand, 4% a year shrinkage of their purchasing power is a huge punishment. It’s extremely penal and it’s terrible.
Chris Smith:
And my accountant said to me about a week and a half ago when I had to fill in some forms, he said, “Watch what happens because we’re also seeing the value of people’s property reduce.” And all of a sudden, when inflation goes up and interest rates increase, their mortgage is unaffordable. They cannot pay their mortgage. They walk away from their properties. Many, many, many hundreds of people walk away from their properties, and they’re left with the debt from that exchange.
Adam Creighton:
Yeah. Well, that’s right. In Australia, mortgages basically follow the individual around, so they’re still going to owe them even after the property is sold. So basically, they can’t escape the debt is what I’m trying to say. And look, it’s been a couple of months since the budget or more, and I think it’s increasingly the case that you can see the decline in transaction values, the decline in prices. It’s all basically due to the May budget and to the uncertainty that that’s thrown up in the air now. And frankly, it would be crazy, I think, to borrow a lot of money and buy a property right now because in my view at least, the prices have a lot further to fall. Yeah.
Chris Smith:
Yeah. On the superannuation front, now, we’re facing… Can you explain this for us? I think we’re facing a triple whammy the way I read it. Gains from super are going to be hit harder by the reduction in the discount on capital gains tax. Property development via superannuation funds is also under threat. And then, Alba wants to combine our personal super with Centrelink. Adam, this could be the hill that they die on.
Adam Creighton:
Yeah, look, it’s really… Well, actually, I think that’s super because as you well know, the Labour Party loves superannuation, and they don’t like self-managed super funds that is. They like the industry funds. They like the big consolidated funds run by the former union heavies. They’re the funds they prefer. I think capital gains tax within super hasn’t changed. It’s still 10%. So basically, the only way pretty much now to make any capital gain that’s not taxed at obscene rates is to put the money into super because there’ll be a lot less investment outside super, which is a bad thing, I think, because I think people should be able to do what they want with their money when they want. They shouldn’t have to wait until they’re 63 or whatever it is to access it.
But on the self-managed side of things, you can’t do that at all. You won’t be able to borrow and buy homes at all. So there’s even less demand for housing there and therefore less supply as well. Probably the more interesting question for super is what’s going to happen to the equity market with all of these changes? And if you’ve still got massive lack of confidence in the economy, then the share market’s not going to rise as much, and that means people retire on less. So I think that’s a big concern, too.
Chris Smith:
And then, they retire on less. They have less to give their kids and their grandkids, and yet, the whole intention of what occurred at the budget in May was to basically give the younger generation some of what the older generation had.
Adam Creighton:
Yeah. Yeah, that’s exactly right. This year, the whole intergenerational equity malarkey really is just absurd. I mean, just look at the government debt levels. I mean, it’s well over a trillion dollars just at the federal level, probably another 700 billion at the state level. I mean, who’s going to be paying that off? It’s the next generation, not this generation.
Chris Smith:
No.
Adam Creighton:
So actually, the equity’s gone the other way. I think the current generation’s kind of gorging themselves on the income of the future, and it’s going to have to be paid off eventually. And just briefly, Paul Keating’s mention of merging Centrelink with super, I mean, I kind of don’t quite get it, but I think he wants to make the super sector even more powerful so they control the eligibility tests for the age pension. I think that’s what he wants to do.
Chris Smith:
Right.
Adam Creighton:
Look, there could be some savings in bureaucracy, but the reality is I would not want to make the super funds any more powerful than they already are.
Chris Smith:
No.
Adam Creighton:
They’re already a fourth arm of government, if you like, anyway because they control such large amounts of money, and their voting rights are so massive in large Australian companies. So I think it’s a very bad idea, but I’m not surprised that Paul Keating thinks it’s a good one.
Chris Smith:
Yes, that’s right. Now, one last one, just on our energy regulator, AEMO. AEMO has cancelled the word blackout and replaced it with bureaucratic gobbledygook. What have they replaced the word blackout with?
Adam Creighton:
Yeah. So I wrote a column about this last week. It’s quite funny. They just released their latest 25-year plan for net-zero, and blackouts are now called involuntary load shedding, which is quite a funny one. But there’s other funny ones too called demand side participation. That’s when you have your power turned off or down, but you’ve agreed in advance that that’s okay as long as you get compensated in some way. So that’s called demand side participation. And they also hope that households become virtual power plants. So that means you and your neighbours agree to kind of form a power plant with your batteries and so forth, your solar panels, et cetera, and they can be controlled by a third party when there’s a need for greater energy in the system. So basically, they can turn yours off and use your batteries as a battery for the whole grid.
So there’s various phrases in that latest report which I found quite amusing. And I think people, when they realise what they actually mean, it’s basically a less reliable and far more expensive grid. And look, it’s not going to be happening anyway. As I also said, it’s just not scientifically and economically possible.
Chris Smith:
Am I being too cynical in suggesting that AEMO is the puppet of Chris Bowen?
Adam Creighton:
Well, look, the task is kind of impossible. I mean, it’s a government agency. They answered to the minister, to the government, and the government set these ridiculous parameters that they have to get to 2050 with no coal, with very minimal gas. The word nuclear energy is not mentioned once in the entire 150 pages. So it’s like a maths problem, a very difficult mathematical problem that have been said, but with no practical application whatsoever because in a few years, I mean, just take the nuclear question. Every other party, the nationals, the liberals of One Nation, they all support nuclear energy, but it’s not mentioned once in this document. So it’s not a serious document. And sadly for the people working there who I’m sure are very smart, they would know that too deep down.
Chris Smith:
Yeah, of course, they would. Adam Creighton, great to have you on. Good to catch up again, mate. Thank you.
Adam Creighton:
Thanks, Chris. Thanks for having me.
Chris Smith:
Good on you. A senior fellow and chief economist with the Institute of Public-
This transcript with Adam Creighton talking on Mornings with Chris Smith 2SM from 22 July 2026 has been edited for clarity.
