JIM CHALMERS:
The focus of this government, not just this week but every week, is ensuring that Australians can earn more and keep more of what they earn. Our submission to the Fair Work Commission will be all about making sure that low paid workers in this country don't go backwards.
We know that cost‑of‑living pressures disproportionately impact people on the lowest incomes, that's why we are enthusiastic backers of the low paid in our country, it's why we will be making a submission a bit like the first two that we made in government to ensure that low paid workers don't go backwards.
If you think about where we're at in our economy right now, we've got this really welcome and encouraging trifecta. We've got real wages growing, inflation has been moderating and we've got the unemployment rate falling in that data last week as well.
We want to make sure that people can earn more and keep more of what they earn. Our submission will reflect that. Our broader economic plan is about helping people deal with these cost‑of‑living pressures that we understand people are under, but not just acknowledging that cost‑of‑living pain, actually doing something about it.
A tax cut for every taxpayer, tens of billions of dollars in cost‑of‑living relief and getting wages moving again after a decade of deliberate wage stagnation – all of these things are really important ways that we can help people deal with the cost of living without adding to these inflationary pressures that are in our economy.
Later this week we'll get a monthly inflation number. The monthly number is notorious for bouncing around. Whether it ticks up a little or it ticks down a little bit, it's already clear the direction of travel in inflation is welcome and encouraging.
Inflation has come off substantially since those peaks that we saw in 2022 and that's a good thing but it's not mission accomplished on inflation because we know people are still under pressure. It's why our cost‑of‑living help is so important, it's why a decent pay rise for low paid workers is so important, and it's why a big focus of the Budget in May will be rolling out these tax cuts for every taxpayer. And if we can afford to do additional cost‑of‑living help in a responsible, methodical, meaningful and affordable way, obviously we'll look to do that as well.
JOURNALIST:
Treasurer, isn't there a risk that increasing wages will just contribute to inflation?
CHALMERS:
We don't have an inflation challenge in our economy because the lowest paid Australians are earning too much – that's very clear – and in recent times the Treasury, the Reserve Bank and others have said that they don't fear a wage price spiral in our economy. Our inflation challenge has a range of sources but low paid workers getting paid too much is not one of them.
What we have demonstrated is a way to get wages moving again in our economy, to roll out cost‑of‑living help in a way that takes the edge off inflation rather than add to it. We know that inflation's still the defining challenge in our economy, even as the balance of risks in our economy shifts towards growth.
In the submission we make on Thursday we'll recognise the economic pressures and challenges that we confront, but primarily this is about ensuring that people can earn more and keep more of what they earn. That's really a defining objective of this government and you'll see that reflected on Thursday in our submission.
JOURNALIST:
You mentioned cost‑of‑living relief there. More than 100,000 people are struggling to pay their energy bills at the moment. Is there going to be any kind of help in the Budget when it comes to energy bill relief?
CHALMERS:
Well that's under consideration. We've made it clear that there are a range of options available to the government, whether it's another round of electricity bill relief or other ways that we could help ease some of these cost‑of‑living pressures.
The biggest cost‑of‑living relief in the Budget will be a tax cut for every Australian taxpayer on 1 July, and a bigger tax cut for more people to help with these cost‑of‑living pressures. If we can do more on top of that in an affordable, responsible, meaningful, methodical way, then we will obviously look to do that. We haven't taken a decision on that. We're obviously working our way through the major decisions in the Budget over the next few weeks.
I want to say this about electricity bill relief. Electricity prices have gone up I think about 3.5 per cent since the middle of last year, without our energy plan it would have been more than 18 per cent. Now you would remember, Amanda, that the Liberals voted against giving hundreds of dollars to families to help with their energy bills.
The Liberals and Nationals in this Parliament who have been whinging about this voted against helping people with their energy bills – they voted against hundreds of dollars for families to help cope with energy bills in the household budget and they need to explain why they did that. We hear all of this politicking from the Liberals and Nationals, it's time for them to explain if people are under such pressure with their energy bills, why did they vote against helping them? That's the question for the Liberals and Nationals today.
JOURNALIST:
And just quickly on Newspoll, it's not looking great for Labor. Is that a concern?
CHALMERS:
Well, opinion polls don't always pick the outcomes of elections even a week or two out, so I don't like their chances necessarily of picking an election result maybe a year or so out.
I've always thought the next election will be close and hard fought. We don't take any outcome for granted when it comes to the next election. Our job is to do the right thing for the right reasons and the politics will take care of themselves.
We frame budgets based on the economic cycle, not the political cycle. We're very focused on the economic pressure that people are under, not the political pressure that a government might be under from time to time, and we see those opinion polls in that light.
JOURNALIST:
In regards to the increase to minimum wage, is it more of an indexation to bring it to a standard where it was before or are you looking for something that's a vast improvement?
CHALMERS:
What our submission on Thursday will make clear is that we don't think that there is necessarily an automatic mechanical relationship between the inflation rate and a decision on the minimum wage.
We understand the Fair Work Commission factors in a whole range of economic data when it comes to the decision that they make. Our view is that low paid workers shouldn't go backwards, that's been our view the first two times and it will be our view on the third occasion on Thursday as well and that's because we recognise people on low incomes get hit harder when there are cost‑of‑living pressures.
We've had real wages growth in our economy for the first time in ages and that's a really good thing. One of the reasons why we've seen wages moving again after a decade of deliberate stagnation is partly because of these minimum wage decisions. So we want to see a decent pay rise for Australia's low paid workers.
This Albanese Labor government backs people who work hard and want to provide for their loved ones and get ahead. It's all about making sure people can earn more and keep more of what they earn. You'll see that reflected in the submission.
JOURNALIST:
And can I just quickly ask –
CHALMERS:
Of course you can, it's your hallway mate.
JOURNALIST:
Thank you. So the stage three tax cuts of course only apply to taxpayers. For those that are under the threshold, are you looking at extending welfare payments so that there is actually a benefit for them in the Budget?
CHALMERS:
Well one of the things I'm proudest of in the first couple of budgets is the way that we've been able to get the Budget in much better nick, not instead of helping people on low and fixed incomes but in addition to that.
And so you saw in the last May Budget a boost in income support, changes for single parents, changes in terms of the permanent rate of JobSeeker, the way that we've come about cheaper medicines, cheaper early childhood education – so much of this is designed to help people on low and fixed incomes. It's true that the tax cuts will apply to every Australian taxpayer from 1 July, but that's not the only thing that we're doing to help ease these cost‑of‑living pressures, and so much of what we're doing elsewhere in the Budget is targeted to people on low and fixed incomes, including people under the tax‑free threshold.
Thanks very much, have a great day.