JIM CHALMERS:
The independent Reserve Bank will make a decision today on interest rates. We understand that when these inflationary pressures are coming at us from around the world and felt around the kitchen tables, that higher interest rates are part of the pain that Australians feel right around the country. We don't pre-empt or predict decisions taken independently by the Reserve Bank, but a lot of Australians will be bracing for difficult news later today when the Reserve Bank meets. That's the expectation of the markets and I think that's the expectation of the Australian people. But understanding that there are likely more rate rises on the way doesn't make it any easier for people. We do understand that when interest rates go up, that has implications for household budgets, and it has implications for the economy as well.
This is precisely why the inflation challenge is the Albanese Government's number one focus. Inflation is the major challenge in our economy, and it's the major focus of the Albanese Government. Our plan to address this inflation problem has three parts. First of all, responsible cost-of-living relief in a way that doesn't add to inflation or make the problem worse, which has an economic dividend. That's why cheaper early childhood education is so important, cheaper medicines, and also the electricity bill relief that will be central to the May Budget. The second part of our plan to address this inflation challenge is dealing with the issues on the supply side of the economy, whether it be the energy chaos which is making us more vulnerable, dealing with that, whether it is making sure that we address issues in our supply chains, whether it's dealing with these labour and skills shortages, which are such a big challenge for business, and a big part of the issues in our supply side of our economy as well - that's the second part of our plan. The third part of our plan is spending restraint, which would be unrecognisable to our predecessors. Banking 99 per cent of the upward revision to revenue over the next two years in the October Budget, real spending growth flat across the forward estimates 0.3 per cent. All of the ways that we have shown spending restraint, which would be unrecognisable to our predecessors, that's important too. So the three parts of our plan to address this inflation challenge are responsible cost-of-living relief, dealing with the supply chain issues which are pushing up inflation, and also showing spending restraint in the Budget, so that we're not making the inflation challenge in our economy worse.
Now, our economic plan and our strategy to deal with inflation has been backed in enthusiastically by the ratings agencies, and by the international organisations. They know and we know that our plan to address inflation is the right one. Responsible cost-of-living relief, dealing with workforce shortages and issues in supply chains, at the same time as we show spending restraint. These are the three best ways to deal with the inflation challenge in our economy.
The Opposition, of course, have not been able to identify one thing that they would do differently. The only thing that they've done differently so far, is to vote against the household assistance for electricity bills. Remarkably, they talk about inflation at the same time as they try and prevent some assistance going to families and small businesses and pensioners, dealing employees the most pressing part of the inflation challenge which is high electricity prices. So the Opposition have made themselves irrelevant to this. They don't have any alternative suggestions. They vote against the government's efforts to take some of the sting out of high energy prices, and so I think we can see their contribution in that light. But we know that Australians are doing it tough right now. Inflation will be higher than we'd like for longer than we'd like. We know that there are pressures coming at us from around the world and felt around the kitchen table. We've got a lot coming at us but we've got a lot going for us as well. We're optimistic about the future of our country and the future of our economy. But we are realistic about the impact of global conditions and the impact of these rate rises on households, on people, but also on the broader Australian economy.
JOURNALIST:
Should we still be looking at giving concessions to some of the nation's biggest earners? There's an argument this week going around to can the stage three tax cuts that are about to come in and put that money into JobSeeker to help some of the lower paid people in our economy? Is there a case for that?
CHALMERS:
Those arguments aren't new, we've been hearing versions of those arguments for some time. Our position on those tax cuts hasn't changed and we are working with a number of people around the social security system. We will always try and do the right thing by people but we need to do that conscious of the fact that we don't want to make the inflation problem worse in our economy. We did inherit a Budget heaving with a trillion dollars in debt and so we've got to work out where we can make a meaningful difference, where we can afford to do that and where we can do that without adding to inflation. We've already got out there substantial cost of living relief in the form of cheaper medicines, cheaper early childhood education is on the way, the household assistance and small business assistance for energy bills will be a key part of the May Budget as well. So we'll provide cost of living relief where we can, we'll do that in a responsible and affordable way. Suggestions will be made to us along the way and we will listen to them respectfully.
JOURNALIST:
Do you remain committed to delivering those stage three tax cuts on schedule and without any tweaks?
CHALMERS:
Our position on those tax cuts hasn't changed.
JOURNALIST:
You've spoken a lot about what you're already doing [INAUDIBLE] Will there be any further measures in the Budget for cost of living relief?
CHALMERS:
One of the central features of the May Budget will be relief for people in their energy bills. One of the things that I'm working hardest on right now with my colleagues in the states and territories is landing bill relief for households and small businesses dealing with these high energy prices. Energy is a big part of the inflation challenge in our economy, we recognise that - that's why we came back here in the Parliament at the end of last year with a comprehensive plan to take some of the sting out of these price rises and to try and make life a bit easier for families and pensioners and small businesses. Remarkably, the Opposition doesn't support that. Now in the October Budget, I put out some numbers which showed the sorts of increases that the Treasury was anticipating when it came to electricity prices and gas prices. We saw those numbers and decided the best thing to do was to act. The Opposition says we should do absolutely nothing about that. The Opposition is desperate for Australians to be under more financial pressure, they seek political advantage in that. We are working around the clock to provide that responsible cost of living relief in an affordable way without adding to inflation and where there's an economic dividend. That was our focus in October in our first Budget, it will be a focus in May in our second.
JOURNALIST:
Will you rule out changes to the fuel tax credit scheme before the Federal Budget?
CHALMERS:
We haven't been contemplating changes to that.
JOURNALIST:
So is there something that you're working on to bring down energy bills in the Budget in addition to the gas caps and the caps on coal?
CHALMERS:
Our plan for energy has a number of components. First of all, capping gas prices. Secondly, the states capping coal prices. But an important third part of our plan that was passed through the Parliament in December is to provide some relief for people in their energy bills when they receive their bills. One of the things which is important to recognise about it involves a lot of work with states and territories. They've all got different regimes, they've all got different pressures and so we've been working over Christmas around the clock with state and territory colleagues to try and land that. We've said that that'll be a centrepiece of the Budget in May and it will flow ideally not too much longer after that. Now the most important thing to recognise here when you hear the Opposition bleating about cost of living pressures is that they voted against relief for people in their energy bills. Remarkably, they put their hand up and said that Australians and small businesses do not need or deserve the sorts of energy bill relief that we'll be providing in the May Budget. I think that speaks volumes about them.
JOURNALIST:
What's your reaction to Senator Lidia Thorpe's resignation, and how will that impact in terms of getting bills through the Senate?
CHALMERS:
At the end of the day, it's a matter for Adam Bandt, for the Greens and for Lidia Thorpe. We engage with all of the senators in the spirit of cooperation and respect where we can, and that will continue to apply. For example, we've had discussions with the Greens and with Senator Thorpe and with others about important parts of our agenda so far, and that will continue no matter the makeup of the crossbench in the Senate. When it comes to the Voice more broadly, we want this to be something which is determined by the people and not just by the politicians. This is a big opportunity for Australia. It could be a big unifying moment where we go forward together in a spirit of unity and respect, where we try and improve the lives of First Nations people by consulting them on the issues that affect their communities. It is overwhelmingly about recognition and it is about consultation and it's an opportunity for Australia, I think that we shouldn't miss.
JOURNALIST:
Alcohol bans will be reinstated in Alice Springs. Should they have been allowed to lapse in the first place? And why was the previous Stronger Futures legislation not extended?
CHALMERS:
The issues in Alice Springs are very complex. They are long standing and I'm proud of the package that the Prime Minister and the Chief Minister announced yesterday. I think that there are a series of issues around intergenerational disadvantage, which aren't easily fixed. They have taken a long time to build and you can't just flick a switch and fix them overnight. But I think an important place to start is where the Prime Minister and the Chief Minister started yesterday. I think what Linda Burney said is 100 per cent right: the right to be safe should trump the right to drink. And our priority there in particular is the women and children of those communities who have every right to be safe. That's why we've taken the steps that we have. I commend the Northern Territory Government and the key players in our government for coming to the outcome that was announced yesterday.
JOURNALIST:
Was it a mistake allowing that legislation to lapse?
CHALMERS:
I'm not into second guessing those kinds of decisions. I think we've got the right balance right now. We're realistic about it. We don't pretend that there are easy fixes here. Clearly, the circumstances have not worked in Alice Springs in the last little while and that's why we're acting in the way that we are.
JOURNALIST:
The Greens announced last night they will be supporting the Voice to Parliament - what are your thoughts on that?
CHALMERS:
Obviously, we want as many people as possible to support the Voice. We welcome Members of Parliament, crossbench parties supporting the Voice. Obviously, we would prefer that than they oppose it. But this is a decision that the Australian people should make together, not a decision imposed on them or determined solely by politicians. This country has an opportunity this year to do the right thing here and then move forward in that spirit of unity and respect and make a tangible difference to people's lives by consulting them on the issues that affect their communities. I think it's really important. Obviously, we welcome to support other parts of the Parliament, but much more important than that is that we build a big constituency for change here. I'm confident that it exists. I'm not complacent about the outcome. We want it determined by the people and we will continue to make the case.
JOURNALIST:
The New Zealand Prime Minister is visiting today - any hopes out of that?
CHALMERS:
I say to Prime Minister Hipkins, kia ora and welcome. It's absolutely terrific to have Prime Minister Hipkins here. He is going to be such a wonderful and worthy successor to Prime Minister Ardern. I'm looking forward to engaging with his Cabinet. I'm really delighted that Grant Robertson stays on as the Finance Minister. He's a close mate of mine, someone who I really enjoy working with. Our relationship with the New Zealand Government and with New Zealanders is a relationship of brothers and sisters, and to have Prime Minister Hipkins here on his first international engagement means a lot to us and we welcome him enthusiastically. This is a huge year for Australia and New Zealand relations. This is the 40th anniversary year of Closer Economic Relations, which is the framework through which we engage our two economies. So in that 40th anniversary year, we think it's terrific Prime Minister Hipkins has come here first. I know Prime Minister Albanese is really looking forward to having lunch with him today and to spending time with him today. We are all looking forward to working with him and his colleagues. Thanks very much.