Category: Finance

Source: The Conversation (Au and NZ) – By Michelle Grattan, Professorial Fellow, University of Canberra

While the world’s media is largely focused on conflict in the Middle East, the focus for many Australians remains at home, with the government preparing the long task ahead of trying to lift Australia’s productivity.

Last week, Prime Minister Anthony Albanese announced a productivity roundtable, which will be held in mid-August. Now Treasurer Jim Chalmers has flagged the roundtable will be part of a much more ambitious debate, indicating he’s open to a broad discussion of major tax reform.

In this podcast, Chalmers is frank about his own belief in the importance of seizing the moment – even if “there’s an element of political risk” whenever governments talk about tax reform.

The way I see this is that I become very wary of people who say, because of the magnitude of our majority, that we will get another term. There are, as you know, few such assurances in politics, particularly in modern politics.

I can kind of hear that [office] clock ticking behind us, and I want to get on with it. You know, we’ve got a big job to do to deliver the big, substantial, ambitious agenda that we’ve already determined and taken to an election. But I am, by nature, impatient. I think the country has an opportunity to be ambitious here. And so if you’re detecting that in my language, that’s probably not accidental.

[…] There’s no absence of courage. There is an absence of consensus, and it’s consensus that we need to move forward. And that’s what I’m seeking, not just in the roundtable, but in the second term of our government.

Chalmers says one of his takeouts from reading Abundance, a new book currently fashionable with progressives, was the need to “get out of our own away” to build more homes and renewable energy, while maintaining high standards.

A lot of regulation is necessary. So we talk about better regulation. But where we can reduce compliance costs and where we can wind back some of this red tape in ways that doesn’t compromise standards, of course we should seek to do that.

One of the things I’m really pleased I got the cabinet to agree to earlier this week is we’re going to approach all of the regulators and we’re going to say, ‘please tell us where you think we can cut back on regulation and compliance costs in a way that doesn’t jeopardise your work’ […] We’re not talking about eliminating regulation. We’re talking about making sure that it’s better.

[…] I think renewable energy projects is part of the story here. I speak to a lot of international investors, there’s a big global contest and scramble for capital in the world […] One of the things that international investors say to us about Australia is ‘we don’t want to spend too long burning cash while we wait for approvals from multiple levels of government and other sorts of approvals’.

So if we can speed some of that up, if we can make sure it makes sense, if our regulation is better, then I think we give ourselves more of a chance of achieving our economic goals, but also our social and environmental goals.

On the productivity roundtable, Chalmers wants bold ideas.

We have an open door and an open mind. This is a genuine attempt to see where we can find some common ground. In some areas that won’t be possible, in other areas, I think it will. And I think we owe it to ourselves to try.

This is a very different discussion to the [2022] Jobs and Skills Summit. Much smaller, much more targeted, a bigger onus on people in the room to build consensus outside of the room.

We’re specifically asking people to consider the trade-offs, including the fiscal trade-off when it comes to what they’re proposing. We’re asking them to take a nationwide, economy-wide view, not a sectoral view about their own interests.

On whether any new major changes – including greater tax reform – would require a fresh mandate, Chalmers wants to wait and see.

I think it depends on the nature of the change. I’m sort of reluctant to think about sequencing and timing and mandates before we’ve got everybody’s ideas on the table and worked out where the consensus and common ground exists […] I think that remains to be seen.

E&OE Transcript

MICHELLE GRATTAN, HOST: Treasurer Jim Chalmers has declared improving Australia’s dismal progress on productivity is at the top of his priorities for Labor’s second term, but addressing the National Press Club on Wednesday, it was clear that his ambitions for economic reform are wide, much wider than we’ve heard from him or from the Prime Minister in the previous term or in the election campaign.

From August 19 to 21, the Government will hold a roundtable to seek ideas for reform from business, unions, civil society and experts. This will be a small gathering held in Parliament House’s Cabinet room.

Notably, Chalmers has invited participants to put forward ideas on tax reform.

The Treasurer is our guest today. Jim Chalmers, before we get to the roundtable, let’s start with the escalating Middle East war. What are the economic implications of this so far, and on one specific issue, what are the implications going to be for oil prices?

JIM CHALMERS, TREASURER: Thanks, Michelle. This is obviously a very perilous part of the world right now, it’s a perilous moment, perilous for the global economy as well.

We’re primarily focused on the human consequences of what’s going on, including around 2,000 people who’ve registered with DFAT to try and get out of the particularly dangerous areas right now, so that’s our focus, but there will be big economic consequences as well, and we’ve already seen in the volatility in the oil price – the barrel price for oil went up between 10 and 11 per cent last Friday when a lot of this flared up, and I think that is an indication of the volatility that this escalating situation in the Middle East is creating in the economy.

I get briefed every day on movements in relevant commodity prices and the like, and there’s a lot of concern, again primarily about the human cost, but there’s a lot of concern around the world about what this means for petrol price inflation and what it means for global growth as well.

GRATTAN: Also on the international scene, are we making any progress on getting concessions on the US tariffs, or will that have to wait for a rescheduled meeting between Donald Trump and Anthony Albanese? There’s now talk, incidentally, of a meeting possibly at NATO next week, although we don’t know whether that will happen or not.

CHALMERS: The Prime Minister’s made it clear that he is considering going to the NATO meeting. By the time people listen to this podcast, it may be that that’s been determined, but whether or not he goes to Europe, we’ve got a lot of different ways and a lot of different opportunities to engage with the Americans on these key questions, and the Prime Minister met with some of the most senior people in the economic institutions of the US overseas – and he met with leaders from Japan and the UK and Germany and Canada and others, so a very worthwhile trip.

We’ll continue to engage wherever we can and whenever we can, because our national economic interest is at stake here. We’ll continue to speak up and stand up for our workers and our businesses to try and make progress on this really key question.

GRATTAN: But no progress yet.

CHALMERS: We’re continuing to engage. We have had discussions at every level, including at my level, and the Prime Minister’s had discussions. Like the whole world right now, people are trying to get a better deal in the aftermath of the announcement of these tariffs; we’re no exception.

We’re better placed and better prepared than most countries to deal with the fallout of what’s happening with these escalating trade tensions, but we are seeking a better deal for our workers and businesses and industries. The Prime Minister’s engagement reflects that, and so does the rest of ours.

GRATTAN: Now, to turn to your productivity roundtable, give us some more details about it, including whether the sessions will be public and will the Premiers be there?

CHALMERS: There are some of those details that we’re still working out. I can’t imagine it will be public in the sense that we’ll have permanent cameras in the Cabinet room, but we don’t intend to be heavy‑handed about it, we’re not seeking people to sign non‑disclosure agreements ‑ I can’t anticipate that we’ll make it kind of Chatham House rules or confidential discussions, but we’re working through all of those issues. When it comes to the states, obviously we want the states involved in one way or another, and we’re working out the best way to do that.

I already engage with the state and territory treasurers at the moment on some of these key questions. I’ll continue to do that, I’ll step that up, and we’ll work out the best way to make sure that the states’ views are represented in the room.

You know how big the Cabinet room is, Michelle, it’s about 25 seats around an oblong table, so we can’t have everybody there, but we will do everything we can to make sure that the relevant views are represented, including the views of the States and Territories.

GRATTAN: When you say you wouldn’t see you having cameras in the Cabinet room, wouldn’t you want some of it to be public, because if it wasn’t, then whoever was telling the story would be putting their slant on it?

CHALMERS: Well, we’ll try and strike the best balance. I think what will happen is, inevitably, people who are participating in the roundtable, indeed people who are providing views but not necessarily in the room, there will be a big flourishing of national policy discussion and debate; that’s a good thing. We’ll try not to restrict that excessively. I just think practically having a kind of live feed out of the Cabinet room is probably not the best way to go about things.

But I’m broadly confident ‑ comfortable, broadly comfortable with people expressing a view outside the room and characterising the discussions inside the room. There may be a convincing reason not to go about it that way, but I’m pretty relaxed about people talking about the discussions.

GRATTAN: In your Press Club speech, you spoke about seeking submissions. Now, would those be submissions before the roundtable?

CHALMERS: Absolutely, but also, we’re trying to work out, in addition to structuring this roundtable – which will be a really important way for us to seek consensus – in addition to that, we’re trying to work out how do we become really good at collecting and taking seriously the views that are put to us by people who are experts in their fields.

Not everybody can be around the Cabinet table. People have well-informed views, and we want to tap them. So we’re working out the best way to open a dedicated Treasury channel, primarily and initially, about feeding views in for the consideration of the roundtable. But if there are ways that we can do that better on an ongoing basis, we’re going to look at that too.

GRATTAN: What do you say to those in business who came out of the 2022 Jobs and Skills Summit rather cynical thinking, really, they’d been had, frankly, that this was basically a meeting to legitimise the Government giving what it wanted to to the unions?

CHALMERS: I’ve heard that view, but I don’t share it. I’ve taken the opportunity in recent days to look again at the sorts of things we progressed out of the Jobs and Skills Summit, it was much, much broader than a narrow focus on industrial relations. So I take that view seriously, but I don’t share it.

And my commitment, I gave this at the Press Club, and I will give this commitment every day between now and the roundtable if that’s necessary, we have an open door and an open mind, this is a genuine attempt to see where we can find some common ground. In some areas, that won’t be possible, in other areas I think it will, and I think we owe it to ourselves to try.

This is a very different discussion to the Jobs and Skills Summit, much smaller, much more targeted, a bigger onus on people in the room to build consensus outside of the room. We’re specifically asking people to consider the trade-offs, including the fiscal trade-offs. When it comes to what they’re proposing, we’re asking them to take a nationwide, economy-wide view, not a sectoral view about their own interests.

Let’s see how we go. We are approaching it in that fashion, a different discussion to Jobs and Skills, and we want to give ourselves every chance to progress out of that discussion with something meaningful.

GRATTAN: You say you accept the need for tax reform. This is really a big statement from you, and it is a change of emphasis from last term. Up to now, you’ve resisted any suggestion of undertaking comprehensive reform of the taxation system. So, where do you actually stand now? Are you looking for ideas for incremental change, or are you looking for something that’s really bold?

CHALMERS: First of all, I do accept that the economic reform, and particularly the tax reform we’ve engaged in so far, it has been sequenced, it has been methodical – but it’s also been, I think, more substantial than a lot of the commentary allows, about half a dozen ways we’re reforming the tax system, and I’m proud of the progress that we’ve made.

When it comes to the roundtable, the point I’ve made about tax, the thing I welcome about the roundtable is it’s not possible to think about and talk about productivity, budget sustainability and resilience amidst global volatility without allowing or encouraging, welcoming a conversation about tax. So that’s the approach I’m taking to it.

What I’m trying to do, and we’ll see how successful we can be at doing this over the course of the next couple of months, but what I’m trying to do is to not pre‑empt that discussion, I’m trying not to artificially limit that discussion about tax, and that’s because I know that people have well‑intentioned, well‑informed views about tax reform; let’s hear them.

GRATTAN: But you do seem open, from what you said, to a possible switch in the tax mix between direct and indirect.

CHALMERS: I think that will be one of the considerations that people raise at the roundtable, and I think it would be unusual to discourage that two months out. Let’s see what people want to propose. You know, I think that’s an indication of my willingness, the Prime Minister’s willingness, the Government’s, to hear people out.

And we broadly, whether it’s in tax and budget, whether it’s in productivity, resilience – I don’t want to spend too much at this roundtable with problem ID, I want to go from problem ID to ideas. That’s because we’ve had really for a long time now – probably as long as you and I have known each other, Michelle – we’ve had a lot of reports about tax, and important ones. I think the time now is to work out where are their common interests, where does the common ground exist, if it exists, on tax, and to see what we can progress together, and that requires on my part an open mind, and that’s what I’ve tried to bring to it.

GRATTAN: Of course, your former Treasury Secretary, who’s now the Prime Minister’s right-hand man as head of the Prime Minister’s department, I think has made speeches pointing out that you really do need such a switch.

CHALMERS: Yeah, and Steven Kennedy’s a very influential person in the Government. I’m delighted – we’ve been joking behind closed doors about Steven being demoted to PM&C from Treasury, but the reality is it’s amazing, it’s the best of all worlds from our point of view to have Kennedy at PM&C and Wilkinson at Treasury. That’s an amazing outcome for anyone who cares about economic reform and responsible economic management, a wonderful outcome.

Steven has made a number of comments in the past about the tax system, probably Jenny has as well. They are very informed, very considered, big thinkers when it comes to economic reform, and we’re going to tap their experience, their interest and their intellect.

GRATTAN: Well, he can now get into the Prime Minister’s ear on this matter. The other thing on tax, you did seem to wobble a bit on changing the GST; you’ve been pretty against that. I guess you left the impression at the Press Club that basically you were still probably against, but you did seem a bit more open-minded than usual.

CHALMERS: What I’m trying to do there, Michelle, and I’m pleased you asked me, because I think that was a bit of a test, a bit of an example of what I talk about in the speech, which is that obviously there are some things that governments, sensible, middle of the road, centrist governments like ours don’t consider – we don’t consider inheritance taxes, we don’t consider changing the arrangements for the family home, those sorts of things.

But what I’ve tried to do and what I tried to say in the speech is if we spend all of our time ruling things in or ruling things out, I think that has a corrosive impact on the nature of our national policy debate, and I don’t want to artificially limit the things that people bring to the roundtable discussion.

I was asked about the GST – you know that I’ve, for a decade or more, had a view about the GST. I repeated that view at the Press Club because I thought that was the honest thing to do, but what I’m going to genuinely try and do, whether it’s in this policy area or in other policy areas, is to not limit what people might bring to the table.

And so that’s what you described as a wobble, I think that really just reflects what I’m trying to do here is to not deny what I have said about these things in the past, but to try and give people the ability to raise whatever they would like at the roundtable. I suspect there will be other occasions like that, other opportunities like that between now and the roundtable where I’ll do the same thing. I’ll repeat what I’ve said, I won’t walk away from it, I haven’t changed my view on the GST. I suspect people will bring views to the roundtable about the GST. Let’s hear them.

GRATTAN: Well, of course, the GST can be a bit like a wild dog when it’s let off the leash. You’ll remember when Malcolm Turnbull let Scott Morrison as Treasurer float the idea of changing the GST, and that didn’t end well.

CHALMERS: No, I think I can recall a fascinating part of Malcolm’s book about that, if memory serves, or perhaps something else that he said or wrote subsequently. I’m obviously aware of that history, you know, and there’s ‑ let’s be upfront with each other, Michelle, when you do what I did at the Press Club today and say bring us your ideas and let’s see where there’s some common ground, there’s an element of political risk to that.

There’s a lot of history tied up in a lot of these questions, as you rightly point out in this instance, and I guess I’m demonstrating, or I’m trying to demonstrate, a willingness to hear people out, and there will be people who write about that in a way that tries to diminish this conversation that we’re setting up. That will happen. I’m open to that, relaxed about that, but let’s see what people think about our economy, about productivity, sustainability, tax, resilience, and let’s see if we can’t get around some good ideas that come out of that discussion.

GRATTAN: Which tempts me to ask, will Ken Henry be on your guest list of the famous Henry review?

CHALMERS: I think some people were surprised to see Ken there today at the National Press Club. Ken was there at the Press Club, and I think I said in the question and answer, if memory serves, and I hope it’s okay with Ken that I said this, but we’ve been engaging on drafts of the speech – we talk about some of the big issues in the Press Club speech I gave today.

I’m not sure about the final invite list. Once you start putting together a list of about 25 people, you’ve got some ministerial colleagues, you’ve got peak organisations, including the ACTU, Sally McManus will be there, maybe a community organisation, someone representing the community, some experts. Before long, it’s very easy to hit 25 people.

You’ve planned a few dinner parties in your time, Michelle, and an invite list of 25 people fills up pretty quick. We haven’t finalised that yet, but whether we invite Ken or Ken’s outside the room, he’s one of a number of people that I speak to about these big policy challenges, and regardless, I hope that he’s okay with us continuing to tap his brain.

GRATTAN: Maybe you need to adopt a sort of restaurant approach of rotational sittings.

CHALMERS: Yeah, well! –

GRATTAN: Now, I know you said today that you don’t like gotcha questions and gave us a bit of a lecture ‑‑

CHALMERS: This doesn’t sound like a good introduction, Michelle.

GRATTAN: ‑‑ about that, but your controversial tax on capital gains on superannuation balances that are very big, critics worry that this could in fact be the thin end of the wedge extending to other areas of the tax system. Would you care to rule that out?

CHALMERS: I think I said today, and I’m happy to repeat with you, Michelle, that we haven’t changed our approach here. We’ve got a policy that we announced almost two and a half years ago now, and we intend to proceed with it.

What we’re looking for here is not an opportunity at the roundtable to cancel policies that we’ve got a mandate for; we’re looking for the next round of ideas.

Now again, a bit like some of the other things we’ve been talking about, I suspect people will come either to the roundtable itself or to the big discussion that surrounds it with very strong views, and not unanimous views about superannuation. We read in a couple of our newspapers on an almost daily basis that people have got strong views about the superannuation changes, and not the identical same views, and so I suspect that will continue.

But our priority is to pass the changes that we announced, really some time ago, that we’ve taken to an election now, and that’s how we intend to proceed.

GRATTAN: So, you’re open to considering other views?

CHALMERS: On that particular issue, I think we have a pretty good sense of people’s views. I mean there’s ‑ I don’t pretend for a second that there’s unanimous support for it.

GRATTAN: I mean, extending it to other areas.

CHALMERS: No, I mean that’s not something we’ve been contemplating even for a second, and we haven’t done any work on that, we haven’t had a discussion about that, that’s not our intention.

But more broadly, when it comes to the system, I suspect people will have views about that at the roundtable – but thanks for the opportunity to clarify, we’re not planning for or strategising for extending that in additional ways.

GRATTAN: Now, artificial intelligence is obviously being seen as the next big productivity enhancer when you’re talking about the big things, but it’s also going to cost jobs, and that will exercise the unions.

Your Industry Minister Tim Ayres, has emphasised the unions have a role in this transition, must be consulted, brought into it, but you’ve said that while regulation will matter, and I quote, “We are overwhelmingly focused on capabilities and opportunities, not just guardrails. The emphasis here is different”. Do you see this as being a bit like the tariff reforms in the Hawke/Keating time, when there were big gains to be made but there were also very significant losers, and how do you deal with that situation?

CHALMERS: First of all, I think unions do have a place and a role to play in this. I can’t imagine meaningful progress on AI or technology more broadly where we wouldn’t include unions and workers in that conversation. That wouldn’t be consistent with our approach, and it wouldn’t make a lot of sense, so I share Tim’s view on that. I work closely with Tim Ayres and also Andrew Charlton, who will have a key role in some of these policy questions.

The point that I was making was it’s not a choice between regulation or capability, it’s not an either/or. Obviously we need guardrails, obviously we need regulation, but from my point of view, I see this as a game‑changer in our economy, I see it as one of the big ways that will make our economy more productive and lift living standards.

It’s not all downside for workers either – we’re talking about augmenting jobs, we’re talking about some of the routine tasks that are not the most satisfying parts of people’s work, so of course we want to include the union movement, of course we want to make sure that we’ve got appropriate guardrails.

The point that I was making in that interview with the Financial Review which you’re quoting from is that we need to get our capabilities right, we need the right skills base, I think we’ve got a huge opportunity with data centres and the infrastructure that supports artificial intelligence, and so that is a big part of the focus of our work. When it comes to productivity, when it comes to growth more broadly, industry policy, our work with the Productivity Commission, data and digital, AI, data centres, all of that I think are going to be key parts of the future economy in Australia.

GRATTAN: The last time we spoke on this podcast, you said you’d been reading the book Abundance by Ezra Klein and Derek Thompson, and you described it as a ripper. Now I think you’re making all your Cabinet colleagues read it too, and I’m not sure whether they thank you for that, but there it goes.

What are some of the ideas in the book that attracted you, and in particular, do you agree with the thesis that red tape is holding us back, particularly when it comes to housing and renewable energy and the transition to renewables?

CHALMERS: First of all ‑ we should be on a commission for this book, I think, from Andrew Leigh through a whole bunch of colleagues ‑ a lot of us have either read it or are in the process of reading it.

The reason that we are attracted to it is because it really is about working out as progressive people who care deeply about building more homes, rolling out more renewable energy, to make sure that the way we regulate that and approach that doesn’t get in our own way, that we don’t make it harder for us to achieve our big economic goals in the energy transformation; in housing and technology and all of these sorts of things.

What the Abundance book reminds us to do, and I think in a really timely and really punchy way, is it says, “As progressive people, let’s get out of our own way”. A lot of regulation is necessary, so we talk about better regulation, but where we can reduce compliance costs and where we can wind back some of this red tape in ways that doesn’t compromise standards, of course, we should seek to do that.

One of the things I’m really pleased I got the Cabinet to agree to earlier this week is we’re going to approach all of the regulators, and we’re going to say, “Please tell us where you think we can cut back on regulation and compliance costs in a way that doesn’t jeopardise your work”. I suspect from that, maybe not from every regulator, but from some of the regulators, I think if we are genuine about it, I think we can make some progress there to get compliance costs down, to speed up approvals so that we can deliver the things that we truly value as an economy but also as a society, and that’s what the Abundance book’s about.

GRATTAN: Of course, one of the problems is, while this sounds very good, a lot of stakeholders say we need more regulation of this or that, we need to protect flora, fauna, climate, whatever.

CHALMERS: Yeah, of course we do.

GRATTAN: And that all gets in the way of clearing away red tape, doesn’t it?

CHALMERS: We’re not talking about eliminating regulation, we are talking about making sure that it’s better, that we can use regulation in the service of our social and environmental and economic goals, but to make sure that we’re not overdoing it, that it’s not unnecessary, that it doesn’t prevent us achieving our aspirations and our objectives, including in the environment.

I think renewable energy projects are part of the story here, and I speak to a lot of international investors, there’s a big global contest and scramble for capital in the world. People are rethinking their investments, and there’s a lot of interest in Australia, and one of the things that international investors say to us about Australia is we don’t want to spend too long burning cash while we wait for approvals from multiple levels of government and other sorts of approvals.

If we can speed some of that up, if we can make sure it makes sense, if our regulation is better, then I think we give ourselves more of a chance of achieving our economic goals, but also our social and environmental goals as well.

GRATTAN: Another of your priorities is budget sustainability, and you say the Government’s made progress, but there’s a way to go. So, where are you going now? Do you need to make big savings in what areas, or are you really having to look at the revenue side more?

CHALMERS: I think there’s this kind of strange binary analysis of the budget situation. Some people say it doesn’t matter, some people say it’s beyond repair, and obviously, like a lot of things in politics and policy, the truth lies somewhere in between.

We’ve made a heap of progress on the budget; two surpluses, biggest ever nominal turnaround in the budget, we got the debt down, got the interest costs down. But what I acknowledge and what I will continue to acknowledge is there’s always more work to do to make it more sustainable.

For us, we made a heap of progress on aged care, the NDIS and interest costs, but we need to make sure that even when we think about the policy ideas that people bring to us at the roundtable, budget sustainability really matters. Where we do find something that we want to invest more in, we’ve got to consider the trade-offs, we’ve got to work out how to pay for things.

There’s probably not a day, certainly not a week that goes by where Katy Gallagher and I aren’t in one way or another engaging with colleagues on some of these structural pressures on the budget, because they do matter.

GRATTAN: Well, one, of course, is defence spending, and I was interested that you did in your remarks to the Press Club seem, while cautious, while saying, “We’re spending a lot on defence”, you seemed open to the idea that over the next decade governments will have to increase defence spending.

CHALMERS: I think the point I was trying to make there, Michelle, was it would be strange over a period of 10 years if there were no changes to any policy or levels of spending. But the thing that’s not, I think, sufficiently acknowledged is we’ve already quite dramatically increased defence spending, and you know, it’s not easy to find the extra $11 billion we found over the forward estimates, or the almost $58 billion I think we found over the decade.

We are dramatically increasing our defence spending. I acknowledge and accept and respect that some people, including some of our partners, want us to spend more on defence, but we are already spending a heap more on defence, and we’ve had to find room for that in the budget, and that’s what we’ve done.

GRATTAN: So we should be up for that conversation, as Richard Marles would say?

CHALMERS: I think what Richard’s saying, to be fair to him, is that we are more or less continuously engaging with our partners about things like defence spending, and when it comes to the Americans, they’ve made it clear around the world that they want people to spend more on defence. That’s not an unreasonable position for the Americans to put to us. We decide our level of defence spending, and we have decided collectively as a government to dramatically increase it.

GRATTAN: As Treasurer, you’re the gatekeeper for foreign investment decisions, big decisions, and there’s a takeover bid at the moment from Abu Dhabi’s national oil company for Santos. Can you give us some idea of the process, the timetable, when you would make a decision if the matter comes to you?

CHALMERS: This is a really big transaction potentially, and it raises – there are a lot of considerations around the national interest, it’s in a sensitive part of our economy for all of the obvious reasons.

What usually happens with a transaction of this magnitude, tens of billions of dollars, is it goes through a number of stages. One of those stages is a Foreign Investment Review Board process where I’ve got a heap of terrific colleagues in the Treasury who advise me on these things. What I try to do is to make sure that I refrain from commenting on these sorts of deals before I’ve got that Foreign Investment Review Board advice. I take that advice very seriously, and that means not pre‑empting it.

I know that there will be a heap of views, a heap of interest, I do acknowledge it’s a very big transaction which involves a really key sensitive part of our economy, and I’ll do what I always do with these big FIRB approval processes, which is to engage in it in a really methodical and considered way.

That will roll out over the course of the next few months. The last time I asked, which I think was yesterday, we hadn’t ‑ the FIRB hadn’t had a chance to go through or hadn’t received yet the Foreign Investment Review Board proposal. That may have changed since then, but regardless, these things take a little bit of time.

GRATTAN: Before we finish, let’s come back to productivity. You’ve said the work will take more than a term. So just give us a snapshot of where you would want to be at the end of say three years, six years.

CHALMERS: Yeah. The point I’m making there, when it comes to productivity is, unlike some of the other really important measures in our economy, there’s no instant gratification. It’s very hard to flick a switch and get an immediate, substantial, meaningful shift in the data.

The point that I’ve made is that we’re enthusiastic and very committed, very dedicated to doing meaningful things on productivity, but even those things can sometimes take a while to play out in the data, so I’m just really trying to say to people, this is important, it will pay off, some of it will pay off in the medium term and the longer term, but that shouldn’t deter us, the fact that some of these challenges take a little bit longer to fix.

Now, if there was a switch that you could flick to make our economy instantly more productive, somebody would have flicked it already. Unfortunately, there’s not, and so we’re left in a world where we have to do a lot of things at once, and some of those things will take a little while to pay off.

GRATTAN: Can you set any sort of target in terms of growth, annual growth? –

CHALMERS: I’m reluctant to do that.

GRATTAN: – productivity growth.

CHALMERS: I’m reluctant to do that. The budget assumes a level of productivity growth, which is higher than what we are currently seeing, so it wouldn’t be a bad start to try and get closer to the forecast. But I’m reluctant to put a target on it.

GRATTAN: And that forecast is?

CHALMERS: The Treasury changed it to 1.2 per cent, and we’re currently tracking a bit lower than that on the current 20-year average, and so we need to do better. I tried to be quite blunt about that at the Press Club. Our economy is growing, but it’s not productive enough, our budget is stronger, but it’s not sustainable enough, our economy is resilient, but not resilient enough. And this is my way of saying to people, we’ve made a lot of progress together, but we’ve got a further ‑ we’ve got more to do, and productivity is our primary focus in that regard, but not our only focus.

GRATTAN: For really big changes, say for tax changes, do you think you need another mandate or not?

CHALMERS: I think it depends on the nature of the change. I’m reluctant to think about sequencing and timing and mandates before we’ve got everybody’s ideas on the table and worked out where the consensus and common ground exists, and so I don’t like to be evasive with a good question like that, Michelle, but I think that remains to be seen. It will be to be determined once we get a firmer sense of the way forward.

GRATTAN: Just finally, you sounded in your speech rather like a man who’s been liberated since the election. Has your attitude changed? Do you think it’s just time to go for it?

CHALMERS: The way I see this, Michelle, is that I become very wary of people who say, because of the magnitude of our majority, that we will get another term. There are, as you know, few such assurances in politics, particularly in modern politics, and so I can kind of hear that clock ticking behind us, and I want to get on with it.

We’ve got a big job to do to deliver the big, substantial, ambitious agenda that we’ve already determined and taken to an election. But I am by nature impatient, I think the country has an opportunity to be ambitious here, and so if you’re detecting that in my language, that’s probably not accidental. I think we know what the challenges are, we know what people’s views are broadly, there’s no absence of courage, there is an absence of consensus, and it’s consensus that we need to move forward, and that’s what I’m seeking not just in the roundtable, but in this second term of our Government.

GRATTAN: Jim Chalmers, it’s going to be an interesting few months, and thank you for talking with us today. That’s all for today’s podcast. Thank you to my producer, Ben Roper. We’ll be back with another interview soon, but good‑bye for now.

Michelle Grattan does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

– ref. Politics with Michelle Grattan: an ‘impatient’ Jim Chalmers on taking political risks in Labor’s second term – https://theconversation.com/politics-with-michelle-grattan-an-impatient-jim-chalmers-on-taking-political-risks-in-labors-second-term-259269