Source: Australian Parliamentary Secretary to the Minister for Industry
Andrew Clennell:
Live at the desk in Canberra before his fourth Budget in a term, he’s just told me he’s the first Treasurer to deliver that since Ben Chifley, is the Treasurer, Jim Chalmers. Thanks for your time.
Jim Chalmers:
Good morning, Andrew.
Clennell:
Let me start by asking about this energy bill relief. A week ago it was announced power bills were to go up by up to $200 a year, and you’re giving people back only $150. They’re not going to be dancing in the streets over that, are they?
Chalmers:
Well, we’re doing what we responsibly can to help people with the cost of living. These cost-of-living pressures are front of mind for a lot of Australians and they’ll be front and centre in the Budget and this energy bill assistance is a bit of extra hip pocket help for households.
Even with all the progress we’re making as a country together on inflation, we know that people are still under pressure, and this responds to some of that pressure.
Clennell:
It looks like an election bribe, really, I mean you’re doing it for 2 quarters, then cutting it off.
Chalmers:
I don’t think so. This is the third time that we’ve done the energy bill rebates, 2 lots of $300 and now extending it for 6 months and again it’s about recognising that even with all this progress on inflation, we got inflation from higher than 6 per cent and rising when we came to office, now 2.4 per cent, we know that people are still under the pump and so we’re doing what we responsibly can to help people with the cost of living, not just energy bill rebates, but cheaper medicines, but also this historic investment in bulk billing – because more bulk billing means less pressure on families too.
Clennell:
It feels like a big band-aid over a deeper problem with the energy transition.
Chalmers:
There are 2 things that we’re doing simultaneously. If you look at the Default Market Offer that was released in the last fortnight or so, one of the big issues there is the unreliability of the legacy parts of the system, and so we need to make sure that we continue to get more cleaner and cheaper and reliable energy into the system – we’re doing that, and in the meantime we’re helping people with their electricity bills.
Don’t forget in the last year to December in the official inflation data, electricity prices went down by 25 per cent because we’re helping people with their energy bills. We’re extending that for another 6 months because we recognise people are still under the pump.
Clennell:
I mean effectively you’re taking people’s taxes and giving them back to them on their energy bills, right?
Chalmers:
If you look right throughout the Budget, whether it’s investments in Medicare and bulk billing, whether it’s investments in cheaper medicines, what budgets are all about is taking the country’s priorities, and in this case the government’s priorities – Medicare, cost-of-living, making our economy more resilient – making room in the Budget to do those things. And we’ve helped engineer a stunning turnaround in the Budget, $200 billion improvement in the Budget since we came to office, the biggest nominal improvement of all time and that’s helped us make room for these investments, whether it’s helping with the cost of living or building Australia’s future, or making our economy more resilient in the face of all of this global economic uncertainty.
Clennell:
Is any part of this policy an apology to voters for not coming through with that promise to cut their power bills by 275 bucks? In 2022 you yourself recorded on camera really pushing that policy. Is any of this sort of an apology for that?
Chalmers:
I’d describe it differently, as you’d expect, and I would describe it as hip pocket help for households. I would describe it as a government responding to the pressures that people still feel despite this progress that we’ve made on inflation. And if you take a step back for a moment, the Budget will be about the progress we’ve made together to here, and a plan to make the most of that progress from here, and part of that plan is rebuilding living standards which were falling sharply when we came to office. That means helping with the cost of living, getting wages moving again, the tax cuts which are already rolling out in the economy. All of this is about recognising that people are under pressure, we can respond to that in a responsible way, and that’s why really the defining feature of our term in government, and certainly the defining feature of Tuesday night’s Budget will be helping with the cost of living.
Clennell:
Are you sorry you couldn’t deliver on that now?
Chalmers:
We’re always trying to do the best we can for people, whether it’s electricity bills, whether it’s Medicare, strengthening Medicare with these historic investments, whether it’s women’s health, whether it’s cheaper medicines, cutting student debt. There are a whole bunch of ways that we are doing the absolute best we can for people. There’s more than one way to provide cost-of-living help. And here I think it’s really important to draw the distinction and to draw the contrast, and that is this Labor government doesn’t just recognise people are under pressure, we’re doing something about it, it beggars belief that the Liberals and Nationals have opposed that cost-of-living relief at almost every turn, and that means Australians would be even worse off now if Peter Dutton had his way.
Clennell:
Jane Hume says they’re going to pass it. What do you make of that?
Chalmers:
Well, that will be the first time if it’s the case. I mean they opposed the first 2 rounds of energy bill relief, they didn’t want to see the tax cuts, they opposed our cost-of-living relief
Clennell:
What’s your reaction to them passing it this time?
Chalmers:
Well, let’s see, let’s see.
Clennell:
Well, she’s just said it. She said, “We’re not going to stand in the way of it”, so –
Chalmers:
David Littleproud earlier today, I’m told, said that they probably will, which sounds a little bit less than definitive as far as I’m concerned.
This week, what we will see is the contrast. My budget is about a plan for the economy and helping with the cost of living, the Liberals and Nationals are about secret costs and secret cuts which will make people worse off. This is their opportunity to come clean on the $600 billion they need to find to fund their nuclear reactors and what that means for Medicare and pensions and payments and housing and veterans and all of the other things that they’ve described as wasteful spending.
Clennell:
Peter Dutton says power bills have gone up $1,000 since you were elected. Do you dispute that figure?
Chalmers:
Well, the most recent data says electricity bills have come down by about 25 per cent.
Clennell:
Because of the subsidies.
Chalmers:
Partly, but not entirely because of the subsidies. So power bills in 2024 would have gone down 1.6 per cent, instead they went down 25 per cent.
Clennell:
Is he right though with the $1,000 figure?
Chalmers:
I haven’t checked his numbers. The numbers that we rely on are the official CPI numbers, and what they’ve shown is they’ve come down 25 per cent last year primarily because of our efforts to give people help with the cost of living, and don’t forget, you asked me about Peter Dutton, if Peter Dutton had his way, electricity bills would have been $300 higher last year because he opposed our efforts to help people.
Clennell:
In MYEFO there were predictions for real GDP of 2.5 to 2.75 per cent annual growth. Have they been revised up in your Budget?
Chalmers:
Well, we’ve revised all of our forecasts in the usual way, and –
Clennell:
Are they up?
Chalmers:
– you’ll see those in the Budget. What the growth forecasts have to recognise is the weaker growth that we’ve seen in the last little while. Growth is rebounding solidly in the most recent numbers, the private sector’s taking its rightful role as the main driver of that growth but don’t forget we’ve been through an especially soft period of economic growth and so the forecasts have to account for that as well. I’m not prepared to go into the ins and outs of all the forecasts here – there will be changes to forecasts which recognise what we’ve been through to here and what we expect from that.
Clennell:
Because obviously, I guess, if they do go up, that can reduce your deficits, right, that’s one aspect of that occurring. Is that what we’re going to be looking at?
Chalmers:
Well, don’t forget we’ve also got all of this global economic uncertainty casting a shadow over the world, and also over our economy and our Budget, and so there are always swings and roundabouts in these forecasts, there are always a number of influences.
The 2 primary influences on our Budget are cost-of-living pressures, despite this progress on inflation, and the global economic uncertainty casting a shadow over the Budget and the economy, and the Budget is really designed to deal with those 2 pressures at once.
Clennell:
The MYEFO also showed an increase in deficits – they were up to $47 billion and $38 billion in 25–26 and 26–27. Given some of the campaign promises we’ve seen, are they going to be even higher than that?
Chalmers:
What you’ll see in the Budget is that because the midyear budget update was only about 3 months ago, that’s a bit unusual to have them so close together – the bottom lines are broadly similar, there are some changes but broadly similar, and that means it reflects that very substantial progress we’ve made since we were elected.
If you compare the budget situation now to the preelection outlook in 2022 it’s night and day, we’ve made huge progress, enormous strides cleaning up the mess that we inherited, a $200 billion improvement, 2 surpluses in the first 2 years, a smaller deficit this year than when we came to office, and that’s an important demonstration, I think, of our responsible economic management. You’ll see how the bottom lines have changed a little bit but not a lot on Tuesday night.
Clennell:
It feels like you’re back to Australian Treasurer reality a bit. You’ve had the dream, you know, you’ve done the work on it obviously, but you’ve had the dream of presenting a surplus, your old boss Wayne Swan a number of other Treasurers have never had that. Now you’ve got to dole out the red ink. That must be a bit personally disappointing for you.
Chalmers:
Oh, I don’t see it in personal terms. Collectively, we are the first government in almost 2 decades to deliver back-to-back surpluses, and we’re also got this deficit now –
Clennell:
Does this ruin the story a bit?
Chalmers:
I don’t believe so. Our government is defined by responsible economic management. We’ve seen that in the first 3 Budgets, and we’ll see that in the fourth and one of the things I’m proudest about is we’ve got the Budget in much better nick, we’ve cleaned up the mess left to us by our predecessors at the same time as we’ve provided responsible, meaningful, substantial cost-of-living relief and invested in building Australia’s future and that’s really what people can expect to see again on Tuesday.
Clennell:
When do you anticipate an Australian Government could next deliver a surplus?
Chalmers:
Well, it remains to be seen, and certainly our efforts have been about trying to make the Budget as responsible as we can, some savings, banking most of the upward revision of revenue in our time in office, delivering those 2 surpluses, getting interest costs down, paying down the Liberal debt, but it remains to be seen when the next surplus is.
Clennell:
It could be a decade again, couldn’t it? It was 15 years between drinks when you did it. It could be that long again, couldn’t it?
Chalmers:
It was almost 2 decades between surpluses but don’t forget the 2 surpluses that we’ve already delivered and paying down all of that Liberal debt as a consequence is saving us tens of billions of dollars in interest costs already and so it’s got a structural purpose to it – it improves the Budget in a structural sense, so do our efforts on the NDIS and aged care and in other ways as well. So we’ve improved the Budget in the near term, we’ve made a structural improvement in the medium term, but the work of Budget repair and responsible economic management continues.
Clennell:
The NDIS – Jane Hume mentioned it before – said there needs to be more reform. She actually said it needs to grow at the same amount as the economy, so not the 8 per cent you’ve got it down to from 14 per cent. Is that something you’re committed to longer term?
Chalmers:
Well, that’s a new announcement from Jane Hume today. That means huge cuts to the NDIS and that would send a shiver up the spine of a lot of people who rely on the program.
Now we are way too late in the parliamentary term for these characters to still be making it up as they go along. They’ve got secret plans for cuts. Those cuts will make Australians worse off, we know that.
Peter Dutton said on another program on a Sunday morning that there are lots of cuts but they won’t tell people till after the election.
Now this is a very scary proposition. I think in this building we’re tempted to think that their economic policy is some kind of slapstick comedy but it actually masks a much more sinister intent and that is to keep these secret cuts secret until after the election with grave consequences for people on the NDIS, people on pensions and payments, and especially people who rely on Medicare.
Clennell:
The NDIS is out of control though, isn’t it? As a Treasurer, you can’t sit and look at the growth of NDIS and be happy.
Chalmers:
We’re not sitting and looking at it, we’ve taken very substantial steps over the life of this government to make sure that spending on the NDIS is still growing but growing in a more sustainable way, cracking down on the rorts, getting it from growing at something like 14 per cent to something like 8 per cent, and we’re on track for that.
Clennell:
There’s more ways to be tackled though, isn’t there, or is there?
Chalmers:
Well, we’re doing it the most responsible, considered, methodical way that we can, and where we find waste, we’ve shown an enthusiasm to deal with that. That’s why we’re getting growth in the NDIS to more sustainable levels.
Now if Jane Hume is saying that she wants growth in NDIS spending to be between 2 and 3 per cent instead of 8 per cent, then they need to come clean on what that means for Australians with a disability. That is a very scary proposition for a lot of people watching your program today and wondering what it means for them.
Clennell:
She also indicated that she is looking to sack 36,000 public servants, because she said she wanted it at the levels after COVID.
Chalmers:
Let’s see the detail. They are way past due coming clean on what their agenda for secret cuts means for people, what it means for Medicare in particular.
I thought 2 things that were said in the last few weeks are very important; both Angus Taylor and Peter Dutton said in different ways, the best predictor of future performance is past performance. Peter Dutton went after Medicare when he was the Health Minister, Coalition governments always come after wages, they cut pensions and payments when they were last in office, and so they need to come clean this week on what are these secret cuts, what do they mean for people, where are they going to find the $600 billion to pay for these nuclear reactors.
Clennell:
It leaked during the week the Opposition’s looking at increased defence spending as it promised perhaps 2.5 per cent of GDP. Will there be an increase in defence spending in this Budget?
Chalmers:
Well, we’re already increasing it, and it’s already budgeted for.
Clennell:
So there’s not a further increase we’re looking at Tuesday?
Chalmers:
We’ll update the figures, but what people can expect to see is the existing $50 billion plus that we’re investing in defence over the course of the next decade
Clennell:
So correct me if I’m wrong, is that about 2.38 per cent GDP?
Chalmers:
A little bit over.
Clennell:
Yeah.
Chalmers:
By the early 2030s we’ll get defence spending to a bit more than 2.3 per cent of GDP, remembering it’s 2 now, that’s a very substantial increase. Now again, if they’re going to increase defence spending by $15 billion a year, let’s hear how they’re going to pay for it and what they’re going to cut and what that means for Medicare.
Clennell:
You finally released the report by the ACCC on the supermarkets, but you know, it’s a bit of damp squib as a consumer, I have to say, I didn’t see any strong action against the supermarkets. The other mob are saying, we’ll at least threaten you with a big stick. What are you actually going to do about it? What difference does this whole process of the ACCC report make?
Chalmers:
Well, the ACCC report I think is 441 pages from memory, and not on any of those pages does it recommend divestiture, because divestiture can have unintended consequences.
What it’s really about is more transparency, more scrutiny and more competition, and we’re acting on all of those fronts; making the Food and Grocery Code mandatory, empowering and funding the ACCC, dealing with mergers and acquisitions, working with the states and territories on zoning and planning so we can get more competitors to the supermarkets.
We are taking very decisive action to crack down on the supermarkets, to get a fairer go for families at the checkout and for farmers at the farm gate.
Clennell:
Are we expecting less or more net migration in your Budget predictions? Why do we need so much migration at the moment, because it feels like we are becoming Kevin Rudd’s Big Australia?
Chalmers:
We are managing the net overseas migration numbers down quite considerably. I think we saw, I think it was last week from memory in the migration figures, there were about 10,000 people fewer than what was anticipated. The Budget will update all of those forecasts but what they will show overall is the trajectory is down. That’s deliberate. There was a spike in net overseas migration after COVID, students, tourists and the like and fewer departures. We’ve been steadily managing that down and we saw that in last week’s figures.
Clennell:
So will it be 230,000, will it be less?
Chalmers:
You’ll see in the Budget.
Clennell:
Because the students are still coming in in big numbers, aren’t they?
Chalmers:
You’ll see in the Budget.
Clennell:
Is it less?
Chalmers:
The international student market is an important earner for Australia but it needs to be responsible. We need to make sure that we’re managing that and that’s why we’re trying to take the steps that we are taking. Overall we’re managing the program down, we’re doing that in a considered and methodical way, and you’ll see that in the numbers.
Clennell:
What can you say to Australians who look at the strains on housing, on infrastructure that are watching this and hear Peter Dutton saying, “I’m going to slash this”, about why we need this net migration at the moment?
Chalmers:
First of all, there’s a horrendous inconsistency even in what Peter Dutton is saying. He announced he was going to do something, then he pretended he never did, then he pretended there wasn’t an inconsistency. Nobody has any idea –
Clennell:
Yeah, but let me take you back to the point because we’re nearly out of time, sorry. What would you say to Australians about why we need the level of net migration we’ve been having?
Chalmers:
I’d say to them; we’re managing net migration down and we’re building more houses at the same time so that there are more houses for Australians to rent and buy.
Clennell:
How are you feeling about the election, because if the government was to lose, you’re favourite to become Opposition Leader.
Chalmers:
Look, I spend all of my time thinking about the Budget and the economic plan and what we would do as a government and as a country if we win the election. I spend absolutely no time thinking about what I would do if we lost the election. I’d much rather be the Treasurer of Australia than the Leader of the Opposition. I enjoy the work I do for Anthony and our team. We work very, very closely together, and we want the economy to be front and centre in this election.
The stakes are high in this election because the stakes are high in the economy. There’s a lot going on around the world, people are under pressure still, we’ve made a lot of progress together, but we’ve got a plan from here as well, and that’s the difference between us and our political opponents.
Clennell:
You’re seen as one of the best communicators in the government. Have you ever been frustrated the PM hasn’t been able to communicate as clearly as you do at any time in his term?
Chalmers:
No, never, and we’ve got a lot of good communicators in our Cabinet and in our Party Room more broadly and we work together very, very closely with the Prime Minister and with others to put together and convey an economic plan, which is one of the reasons why we’re making so much progress together as a country, but we recognise there’s more work to do, and that’s what the Budget will be all about.
Clennell:
Treasurer Jim Chalmers, thanks so much for your time.
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