PETE STEFANOVIC: Well, let's bring things down to earth now because a likely rate rise is coming from the RBA tomorrow. That'll be the 4th of the year and that'll be the biggest sting yet for mortgage holders and businesses with rates— if there is a rise, it'll be at a 15-year high. That might not even be the end of it. Joining us live this morning, Liberal Senator Dave Sharma. So you get a sense that this one's coming and the government's trying to push out some positive details this morning about its budget. So, hey, look over here. before you get whacked tomorrow. Is that how it looks to you?
DAVE SHARMA: It does. I think as households are bracing themselves for more pain, I mean, analysis we just produced today shows that a new buyer on an average household income is now spending 45% of their disposable income just servicing their mortgage. Now, if interest rates go up, that's another $1,400 a year on an average-sized mortgage, another $120 a month. They've already had 3 rate rises this year. They've had 15 rate rises under Labor. That means you're an average mortgage holder is spending about $2,500 more each month, $600 a week on interest payments since Labor came to office. Of course households are feeling the pinch right now.
PETE STEFANOVIC: That's just not sustainable. That kind of level of your wage going to paying off your mortgage doesn't leave a whole lot else for bills, for life, for everything.
DAVE SHARMA: And it especially doesn't when inflation is still out of control under this government and when your bills have gone up by around 30% since Labor came to office, whether it's food or electricity or insurance or medical or school fees. You know, so I think Australian households are doing it tough. And contrary to what Richard Marles tried to say on the weekend, under this government there is no light at the end of the tunnel.
PETE STEFANOVIC: Well, I mean, he says it's a mighty long tunnel anyway if there's going to be a light. But what does that— is that long-term? As I said, it's not sustainable. What happens then if there's multiple rises now? I mean, Peter Switzer said 3 rises and we're in a recession. There can't be any way to argue against that. That's what he believes. And I mean, like his point out there with the 45% of your wage going onto your home, I mean, if you get these multiple rate rises, you're talking about people who've got to sell under serious pressure.
DAVE SHARMA: Look, people have to— I mean, people are already having to make difficult choices about which bills they prioritise and, you know, which expenses they prioritise, whether they can keep their kids in the school of their choice. You know, do they— probably not taking a family holiday. All of these things households are having to grapple with. And it's because— this is the important point— because of Labor's economic mismanagement, because of spending that's out of control, because of inflation that's too high, because of debt that's high and growing. And because there is no productivity agenda from this government. Right.
PETE STEFANOVIC: As I pointed out a little bit earlier though, to give the government some leave, some leave, you've got the US that has increased rates, probably will have to do so again. The Fed Reserve saying it's because of the war in Iran and it's because of the AI boom. So that's happening here as well. So does the Treasurer have cover on that point?
DAVE SHARMA: Well, I'd say that our 3 rate rises early this year was not matched by the US central bank, by the UK Bank of England, by the European Central Bank. Australia has been uniquely bad at getting inflation under control, which means there's very little buffer. And I'd also point out, in countries like the United States and the United Kingdom, they've seen their living standards go up over the past 4 years. Uniquely in Australia, living standards have gone down. So, they're starting from a much higher floor of household comfort, if you like, or buffers in household finances. Australia's household finances have been run down over the past few years because of deteriorating living standards, reduced disposable income, higher taxes, and higher interest rates, which means households here do not much have— had much fat to bite.
PETE STEFANOVIC: Well, I mean, our total debt too, it's costing us more to pay that off.
DAVE SHARMA: It is. And I mean, there's a news story out over the weekend that because we're going to have to refinance government debt from a pandemic-era low of, you know, close to 0% to somewhere north of 5%, our interest bill is going to exceed what we spend on Medicare within the next year. I mean, that's an astonishing thing.
PETE STEFANOVIC: So, yeah, I mean, I'm not sure where this all ends up, but none of it appears to be good news. But this $6 billion that's going to be announced today, I mean, is that a good thing, or is that just them missing their own targets, as Peter Switzer pointed out a little bit earlier?
DAVE SHARMA: Any upgrade to government finance is a good thing, and we welcome it. But you've got to remember, who's— how has this come about? We'll see the details, but it's almost certainly because commodity prices have been higher than forecast in the budget, which means the thanks doesn't go to the government. The thanks goes to world markets and our exporters and our commodity producers.
PETE STEFANOVIC: Just separately to that, before we go, Dave, Sam Altman, there's a push to have him appear before a parliamentary inquiry this week. I think Thursday is when it might be on. Are you for that? Would you expect that to happen?
DAVE SHARMA: I'm for getting to the bottom of exactly what this OpenAI agent did to Medicare systems. And I think particularly the way we seem to be informed about this. I mean, It seems like OpenAI sent an email to a generic Services Australia inbox rather than picking up the phone and telling the government they'd been an incredibly dangerous software.
PETE STEFANOVIC: Should he appear?
DAVE SHARMA: Someone senior from OpenAI should appear. Now, the Senate doesn't have the power to compel a foreign individual to appear.
PETE STEFANOVIC: So doesn't have to.
DAVE SHARMA: He should be asked to appear, certainly, but I'd expect someone senior from OpenAI to front the Australian public and explain this. And to be honest as well, I think the government has some explaining to do here about the processes.
PETE STEFANOVIC: Just before we go, Dave, I asked Matt Thistlethwaite, the Assistant Foreign Minister, this question a bit earlier. Now, as we know, the supported America's war on Iran in the early stages. Now it says we've got to get out of there as fast as we can because it's driving all these costs up. Are you at the point where you believe the war on Iran was a mistake, given your foreign experience?
DAVE SHARMA: I mean, I'd say that I don't think it's our role in Australia to sort of cheer on or condemn any particular operation. We weren't part of the decision-making to go into— commence this operation. It was a United States and Israel operation. We obviously, once it started, we wished it success, and we still do wish it success. And I do fundamentally believe that an Iran that poses less threat to its neighbours and its own people is a good thing for the world. That doesn't mean that that's necessarily easy to bring about.
PETE STEFANOVIC: Well, I mean, and not necessarily easy to end, as we're learning. Dave Sharma, appreciate that. Thank you so much.
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