JIM CHALMERS:
We are making welcome and encouraging progress in this fight against inflation but we know that people are still under pressure. We welcome the news today that monthly inflation has moderated from 4.9 to 4.3 per cent – still higher than we would like – but what this number shows is that the government's policies are helping to put downward pressure on inflation in our economy. We know that people are under pressure. We know that inflation is higher than we would like it to be but these numbers are welcome, they are encouraging, they show that we are making progress, but there's still progress to be made.
We're making progress in this fight against inflation, but the fight against inflation is not over yet. One of the most encouraging aspects of this new data out today is it shows clearly the positive impact of the government's policies helping to put downward pressure on inflation. What we know is that without the government's policies on electricity, instead of electricity prices going up 19 per cent since the middle of last year, they've gone up something like 8.8 per cent. Instead of rent going up the last 12 months 8.8 per cent, we're seeing an increase of 7.1 per cent. This shows very clearly that the government's policies are working. It absolutely beggars belief that these policies which we now know are putting downward pressure on inflation were not supported by the Liberals and Nationals in the parliament. The Liberals and Nationals voted for higher electricity prices when they voted against our electricity rebates. The Liberals and Nationals have been in opposition now for almost two years, they've got no alternatives, they've got no costed policies, they've got no idea and they've got no credibility. And these numbers once again show that under the Liberals and Nationals inflation would be higher and wages would be lower if they had their way. We know that from a decade of wage stagnation, we know that from their votes in the parliament. Now there are no shortage of challenges in the Australian economy or indeed the global economy. We know that inflation is still the defining challenge in our economy. And that's why dealing with these cost‑of‑living pressures is still the Albanese Government's number one priority – no shortage of challenges in the global economy, global uncertainty, the impact of higher interest rates around the world, the slowdown in China, and here closer to home heavy weather as well. All of these things are weighing on growth in our economy. This is why it's so important that we have a plan to combine tens of billions of dollars in cost‑of‑living relief, with investments in strengthening our economy and housing and energy and skills and in other ways, and also getting the Budget in much better nick as a buffer against this global economic uncertainty, which has been made clear in the World Bank report, which was released overnight.
We are coming at this inflation challenge from every angle, competition, migration, infrastructure, cost‑of‑living relief that we are rolling out, Budget repair, investments in our economy. This is welcome and encouraging news that the government's policies are helping to put downward pressure on inflation. But we know that there's more work to do because people are still under pressure.
JOURNALIST:
Your government's been outspoken about building resilience into recovery. How is the federal government funding support for this region going to ensure that it builds back in a way that in five, 10 years’ time, we're not seeing roads obliterated again, and an economy brought to its knees?
CHALMERS:
This is a wonderful community and it's an important part of the national economy. And we share the frustration that local people feel about the increasing regularity of these natural disasters and having to rebuild infrastructure each time, I understand that that is a source of some frustration here. This is why we're putting so much effort into mitigation. That's why the Prime Minister and the Premier have been here the last couple of days, working out what we can do together to help rebuild this community stronger. As you know, I've had important discussions with Advance Cairns while I'm here and with other groups. We will consider in the usual way, any proposals that people put to us so that we can make this really important community and really important local economies more resilient.
JOURNALIST:
One of those key points of resilience, is the Cairns water security project, are you able to rule out the possibility that additional federal funding won't be forthcoming for that?
CHALMERS:
Look, I'm not prepared to make an announcement today. As the Prime Minister said, we will give that proposal proper consideration. As you know, there's already substantial investment flowing in water in tropical Far North Queensland. What we're talking about here is an increase in costs, which is familiar to infrastructure projects, water or otherwise, right around Australia. The Prime Minister has said and I repeat today – we are prepared to give that project proper consideration. I don't want to pre‑empt the usual processes to do that. I assure local people that we'll do what we can, what we can afford to do, what we can responsibly do, to help this really important community rebuild.
JOURNALIST:
Treasurer, as we get closer to the 3 per cent target does it mean that the government won't have to do as much in the May Budget for cost of living.
CHALMERS:
We know that people are still under pressure, even as inflation in our economy moderates substantially. This 4.3 per cent today is substantially lower than the 4.9 per cent we saw in the month before. It's much lower than the 6.1 per cent that we inherited from our predecessors, and it's about half of what it was at its peak. So this is a really welcome and encouraging outcome, but we don't get carried away because we know people are still under the pump. That's why we're rolling out this cost‑of‑living relief, which is helping we saw that again in today's figures. That's why we are prepared to consider in the May Budget any additional help that we could provide in a usual responsible and affordable way.
JOURNALIST:
Do you think the impact of the stage three tax cuts has already been modelled into inflation forecasts? Katy Gallagher said in a letter to David Pocock that no such modelling document exists within Treasury or Finance, will you release the modelling done to ensure Australians those tax cuts won't reignite inflation?
CHALMERS:
What I said and what I say every time that I'm asked about this, is that the inflationary impact of the tax cuts which were legislated some years ago have been baked into the Treasury forecasts and the Reserve Bank forecasts and that is the case. When the Treasury and the Reserve Bank make forecasts for inflation or economic growth or employment, or all of the other forecasts that they make they factor in the announced and legislative policies of governments. And that's what's happening here.
JOURNALIST:
Treasurer, can you talk a little bit more about this supermarket review you're doing and why it's taken so long for the government to act on it?
CHALMERS:
I don't accept that we have. We released the terms of reference to this review towards the end of last year. Today, we're appointing a first class appointment and Craig Emerson to help lead the review. And there has been work ongoing since the terms of reference were released by my colleague Andrew Leigh, so we are coming at this inflation challenge from every angle. Part of that is making sure that we can get a fair go for families and farmers, people are under pressure. We want to make sure that the groceries market is operating as its intended. This is all about strengthening the Food and Grocery Code so that we can do that. We want a better deal for producers and for people. We understand the pressures that people are under. We released the terms of reference towards the end of last year, in the second week of January, we're appointing the reviewer. That work is really important and it's underway.
JOURNALIST:
Treasurer there are other industries up here in Far North Queensland – other businesses that aren't receiving these big support packages that are currently being announced. How is the federal government going to ensure that businesses across the board are going to receive their fair share of support?
CHALMERS:
Well, there is support for businesses of all kinds, but today's emphasis has been on the tourism industry as you know. And what we have done is we've provided cash payments to people doing it tough. There are other arrangements for businesses, which are under pressure but today this new investment is about helping to ensure that tourism businesses can survive the next couple of months without letting their people go and that's really important. But as Steven Miles has said, as Anthony Albanese, Murray Watt, myself have all said – we'll do what we can to help people through tough times. In difficult times, communities like these are there for each other and we'll be there for people as well.
JOURNALIST:
Do Coles and Woolworths have something to worry about in an inquiry about their cost of goods?
CHALMERS:
We've said really clearly that this is a big opportunity for the supermarkets to do the right thing by their customers. When prices go down at the farm gate, we want to see prices go down on the supermarket shelves as well. Whether it's the Food and Grocery Code, whether it's our broader review or competition settings, whether it's the conversations I've been having with the ACCC chair about any possible additional monitoring of prices, it's all really about the same thing. And that's when inflation moderates when the price is moderate that supermarkets pay, we want to see the prices moderate for ordinary men and women in the supermarket aisles as well. That's what motivates us here. We're interested in making sure the market works as it should. We're counting at that in a number of different ways at the same time as we roll out the cost‑of‑living relief, which the new numbers show today are helping to put downward pressure on inflation. Once again the Opposition, the Liberals and Nationals, need to explain to the Australian people why did they vote against the cost‑of‑living help which is putting downward pressure on inflation and helping to drive this welcome and encouraging the outcome that we've seen today. Thanks very much.