In this interview, Daniel Wild appeared on Credlin Sky News Australia and discussed the IPA’s research on Australia’s taxation system.
All media appearances posted onto the IPA website are directly related to the promotion and dissemination of IPA research.
Below is a transcript of the interview.
Peta Credlin:
Its highest level in 16 months. Joining me now to discuss this and more, Deputy Executive Director at the IPA, Daniel Wild. Senior Fellow at the Menzies Research Centre, the wonderful, Nick Cater. Well, Dan, bad news of course. We know that number is the number that the RBA will pay close attention to. Not so much the headline there, but the underlying inflation number, but that’s also spiked. That’s a problem for the government. It’s at its highest level since December 2024. So I think any chances of a rate cut in the future, well, they’re gone.
Daniel Wild:
Look, sadly, that’s the case. Peta, the next move is likely to be up, not down. There’s some banks who are saying there’s going to be a 50 basis point increase over the next year and a half or so. Now, obviously, that’s bad news for mortgage holders, but bad news for the economy, higher interest rates mean that the economy is going to slow down even further.
Now, there’s three key causes. Obviously, there’s the energy price increase of over a third in just a year. You’ve got this mass migration programme, which has been completely unplanned for which is putting pressure on supply, because there hasn’t been the provision of services we need to keep up with it.
And the third factor is massive government spending. If you look at the government’s own budget figures, these aren’t made up figures. You look at the government’s own budget, they’re saying that government spending is going to increase by about 3% in real terms, but the economy is only going up by 2% in real terms. So you’ve got spending that’s growing at one-third faster than the … Productivity that’s going backwards. Now, productivity is a measure of how much your economy can actually supply. So when you’re cranking up demand in the context of an economy that’s actually going backwards in terms of its supply capacity, well, prices are going to go up, and that’s exactly what’s happening.
Peta Credlin:
Nick, every single time the Treasurer says renewables are cheap, that the cheapest form of energy, he might be talking about their generation. He’s not talking about getting them to market, getting them from where the turbine turns or the sun hits the solar panel, getting it from that paddock to your PowerPoint. 37% increase to power bills. I’m not telling any of our viewers anything. They are paying for these bills. But surely, the government has got to stop that lie given these stats are coming in month after month. And we also know they promised big at two elections and they have not delivered.
Nick Cater:
I think certainly the public are cottoning onto this, Peta, thanks to a large part because the reminder that comes through their letter boxes every quarter. But I thought the interview last night with Matt Kean on Sky News that Andrew Clennell did.
Peta Credlin:
Andrew Clennell, yeah.
Nick Cater:
I thought that was very, very telling, because Andrew pressed Matt Kean, who is essentially the mouthpiece for the government on these issues. He pressed him time and time again. So when will prices come down? And Kean just couldn’t say. He obviously could not deny they’ve gone up, that the $275 reduction of our power bills did not happen. That renewables are not cheaper at the moment, but could not say when they would be. So I just think that this is just collapsing as a narrative and I think that it’s part of the reason or a large part of the reason why, as you said earlier, Bowen is not long for this position.
Peta Credlin:
Let’s go to those comments today in the speech at the press club by the Shadow Treasurer Ted O’Brien. And I thought he was very shrewd. To make the point Dan would be blowing out by a further $100 billion over the next decade. If it wasn’t for bracket creep, people at home might think, “Oh, good on bracket creep.” Well, bracket creep just means you are paying more that you’re falling into another tax bracket just by natural increases in your wages that are offset anyway by what you’re paying with inflation. So this is not a good thing. This is coming from your pocket, Australia. And so unless the system, the progressive tax system is reformed, poor old punters, are we paying as they always do?
Daniel Wild:
Yeah, that’s right. I mean, obviously, the Liberal Party is sensitive to having gone to the last election promising higher taxes rather than lower taxes. So this is I think is a way of them trying to get around that and say, “Well, Labor’s going to crank up your taxes.” Just through bracket creep alone, I think there’s an issue here, which is that Australia is heavily reliant on income tax compared to any comparable nation for our overall tax take. It’s one of the highest comparable nation, and that means that salary earners have to carry the back of the entire budget.
I think the other point, Peta, is that we need our political leaders to start actually talking about economic growth. When was the last time we had a political leader, state or federal talk about growing the economy? As I mentioned before, the government’s own budget says they’re only going to get two and a half percent real economic growth. Hawke had it at 4% or 5% real economic growth. Howard had it over the 3% year after year.
So the only way we’re going to get out of these problems, the debt, the deficit, the high taxes, is to grow the economy. And we need to have leaders who are ambitious for that to try to get to 4% or 5% real growth once again. Now, yes, there’ll be some in the media who say, “Well, that’s never going to happen, those days that are behind us.” But we can absolutely do it. But to start with, you actually have to have that as the ambition and as the aim. And I hope that the coalition has a big ambitious economic growth agenda that they take to the public at the next election.
Peta Credlin:
Well, Nick, you can grow the economy, as Dan rightly says. This is a productivity measure by getting off the back of small business, by getting off the back of business broadly, cutting red tape, making it easier to come into Australia and start something up and hire people and grow and keep the tax burden low. Or you can grow the economy with the Ponzi scheme of immigration, which is what they’re trying to do. And they’ve been doing this now ever since labour got into power.
They’ll say all the right things that the election about cutting immigration. By the end of this year, it will be at Australia’s highest level over a 12-month period in history. So forget what they say, look at what they do. And of course, they’re not willing to really do what they should do and cut spending. They’re going to do some rats and mice cuts, they say about department spending, but they’re not going after the big programmes. They’re not looking at things like the welfare system. They’re just going to go through paper clips and staplers down in the Department of Finance or something like that. They’re not serious about really getting the budget into repair.
Nick Cater:
No, that’s right. And I think what the government is now facing is the reality coming home after more than three years in government. In this second term, it’s going to be much, much harder for them to pursue the line that 28% of GDP spent on government. It doesn’t matter, the increase from less than 25% to 28%.
They were lucky in the first term, because as you remember, we had that great royalties boom and other things in our favour, which meant that it didn’t really add to gross debt and it seemed like they were going to get away with it, that the pneumatic economics that they’re preaching was working, but that is not going to work from now on. We’re seeing with energy prices, that whole narrative is now destroyed, and we’ll see it soon with this idea that governments can keep on spending as much as they like and it doesn’t matter. It does matter, and they’re beginning to find out about that and it’ll, in two years’ time as we approach the next election, let’s hope the coalition is much fit because it’s going to be a very winnable election.
Peta Credlin:
Now, this is a worry. We’ve got a credit ratings downgrade for Tasmania. This is from Moody’s. Downgraded Tasmania today to the lowest of all the Australian states. The treasurer at a press conference was asked whether he would have to intervene. Let’s have a listen.
Jim Chalmers:
Obviously, I’m aware of developments in Tasmania, and it’s a crucial part of the Commonwealth and a crucial part of our national economy. We haven’t been contemplating any kind of bailout for Tasmania.
Peta Credlin:
I’ll tell you what, Dan, the budget in Tassie is spare change compared to the mess in Victoria. There, it’ll be $236 billion. If a bailout is required in Victoria, that’ll hit the Commonwealth’s rating.
Daniel Wild:
Yeah, that’s right. I mean, the bailouts are coming. The bailouts are already here really. I mean, Victoria has had an increase to its GST allocation, which means that other states get less, because Victoria’s economy is just so bad it’s been destroyed. There’s no doubt that Tasmania is going to get a bailout.
The federal government has also decided to keep underwriting the boondoggle Suburban Rail Loop, giving more money to that. Because if the state government was going to try and finance that, you would see a downgrade straight away. And most of your viewers aren’t in Victoria. But the reason we talk about Victoria so much is that if Victoria goes down, it’s going to drag the entire nation down with it. Not just through the bailouts that are going to happen, but through reducing the overall size of the Australian economy.
And what happens is Victoria is going to come to another state, whether it’s Tasmania or elsewhere, and there’s no ambition in Victoria whatsoever to try to fix the budget at all. So I very much think, and particularly when we come towards an election, I guarantee you, there’s going to be handouts left, right, and centre going into Victoria and Tasmania.
Peta Credlin:
Just on that in Victoria, breaking news this afternoon, political editor, Shannon Deery at the Herald Sun says the government just announced they’re going to have a special sitting in the Parliament, Victorian Parliament on December 9. Premier will get to her feet and make a formal apology to the state’s indigenous population. Now, we have the right apology, we’ve got reconciliation week, we’ve got national sorry day, we’ve got closing the gap day. I mean, really and truly, you can’t open an envelope in Victoria without a Welcome to Country. What on earth will this achieve?
Daniel Wild:
Well, it’s going to achieve absolutely nothing. It’s divisive. You just don’t want this. Victorians voted no to the voice. Victorians strongly opposed the treaty by over 60%. Opposed the treaty when they understand what is actually in it. As you rightly say, another apology at the state level won’t do anything to fix real problems in indigenous communities, in remote areas.
So I just think Victorians and Australians are well and truly sick of this. We’ve seen a sharp turn of the public, a very sharp turn against Welcome to Country ceremonies and Acknowledgement of Country and everything else, the three flags as well. People are over this, and we need the Liberal Party here in Victoria to campaign hard on these issues.
Peta Credlin:
You’re not wrong. We’ll leave it there. Thank you, gentlemen.
This transcript with Daniel Wild talking on Credlin Sky News Australia 26 November 2025 has been edited for clarity.
