KIERAN GILBERT:
Jim Chalmers, great to see you as always. Now, I've just been talking about how the Fed has revised its own outlook when it comes to inflation. Do our mortgage holders in Australia also have to be more patient now, do you think?
JIM CHALMERS:
Morning Kieran. Good to see you fit and well. I think what we saw in the United States and also in Canada with their headline inflation is that even though inflation has come off pretty substantially over the last couple of years, it doesn't always come off in a straight line. It can zig and zag and that's why you saw in the US a little tick up in inflation last week. And that's obviously something that we focus very closely on, as do most of the economies around the world. Here in Australia, our situation has been a little bit different – we peaked later and lower than the US, our inflation number has come off quite substantially since 2022 but it's not mission accomplished yet because people are still under pressure.
GILBERT:
It's not mission accomplished. And we will be looking at this inflation number on Wednesday. Can you get a scenario – it'd be the ultimate soft landing if you can – but where unemployment is low and rates start to come down. That's obviously what you're hoping for. Can it – can you get both of those things at the same time?
CHALMERS:
That's certainly our objective, Kieran. The labour market's been remarkably resilient, that's a good thing. Inflation has been moderating as I said, also a good thing. We've got real wages growing again. We've had faster jobs growth than any major advanced economy. We've got the budget into surplus for the first time in 15 years. All of these things are good things, but our economy is slowing, our labour market is starting to soften, and that's because we've got these rate rises in the system already and they are still playing out and that's combined with what is a fraught and fragile global economy right now, with tensions rising in the Middle East and growth slowing in China, inflation lingering in the United States and elsewhere. And so what this means for Australia is our Budget in 3 weeks’ time will have a premium on responsibility and a focus on economic security, and that's what your viewers should expect to see.
GILBERT:
Yeah so, in simple terms, does that mean you're going to have the mindset about trying to be cautious when it comes to inflation, or do you try and boost growth in the face of a revision downwards when it comes to some of our key trading partners like China, the United States and others?
CHALMERS:
Yes, those are the key considerations as we put the finishing touches on the Budget. Now, we need to recognise the balance of risks in the economy is shifting and our budget strategy needs to shift as well. We are trying to land a second surplus because we think that's a good way to recognise that the inflation fight is not yet over but you can imagine a focus in the budget in the later years towards much more substantial investments in growth. One of the key reasons why our budgets in 2022 and 2023 were right for the times is that we aligned our fiscal strategy with the economic conditions, and that's what we'll do again and part of that is recognising that the economic conditions are changing in ways that you just described.
GILBERT:
The NSW Government's really having a crack right now about the GST carve‑up and pushing back at the Grants Commission. Do you feel in this scenario, like, you know the old saying, who needs enemies when you've got friends like this?
CHALMERS:
Well, first of all, the decisions about the distribution of the GST are taken at arm's length from the Albanese government by the Independent Commonwealth Grants Commission and from time to time, states are unhappy about the conclusion that that independent body draws – we recognise that. It's not unprecedented for states to want more money from the Commonwealth and when it comes to NSW, there are billions of extra dollars coming from the Albanese government into NSW in health and hospitals and housing incentives, and in the no worse off guarantee as well. We are enthusiastic supporters of the government and the people of NSW. I work closely with and I respect and I like Daniel Mookhey and I think it's entirely appropriate for him to raise concerns about pressures on his budget. Wrong to blame the Commonwealth government for all of that, but I think we need to all recognise, collectively, state and territory treasurers of both political persuasions and federally – we've all got pressures on our budget, we've all got to manage that. It's not unprecedented for a state treasurer to want more money from the Commonwealth or to point the finger at the Commonwealth when the budget is hard to land.
GILBERT:
Yeah, very true. That is certainly not unprecedented. I want to ask you about a bit of a sombre story. We've had a tough time, obviously, in recent weeks with the stabbings in Sydney and so on. As a father of young kids, I know you've got young kids. I look at the behaviour at some of these social media companies and they just don't seem to have any sense of social licence, do they?
CHALMERS:
I think it's one of the key reasons we worry about the kind of country that we hand to our kids, isn't it, Kieran – this idea that misinformation and disinformation can thrive and prosper on social media. I would have thought the least that Elon Musk and others could do would be to help countries like ours protect our kids from the sorts of rubbish that they can read on social media. I am really concerned not just for my kids, for all Australians, about the impact of this misinformation and disinformation that flies around. We're doing something about it and Elon Musk should comply with the Australian law and give us a hand.
GILBERT:
Yeah, absolutely. We're all for free speech and free media and so on, but you've got to be held to standards and they think they're above the standards.
CHALMERS:
No doubt about it, that's why I think people are filthy at Elon Musk and you can see the kind of rubbish that gets peddled on his business. The very least he could do would be to comply with our laws and give us a hand as we try and clean it up a bit, especially at times like we saw in the eastern suburbs of Sydney and then in the western suburbs of Sydney. Some of the rubbish that you see on social media, if we can even just take some of the edge off that, we've got a responsibility to do it.
GILBERT:
One hundred per cent. I know it's a busy time for you. You've got the Budget a few weeks away, got various ERC meetings and so on. I'll let you go. Thanks.
CHALMERS:
Appreciate it, Kieran. All the best.