JIM CHALMERS:
Welcome to the Greenbank RSL. Today, in RSLs like this one and in communities right around Australia, we gather to remember the service and sacrifice of all of those who served. It’s a special day, it’s a solemn day, Lest we forget.
It’s also a day that we remember our roles and responsibilities in the world. And tonight, in that respect, I’ll be delivering a speech to the Australian Institute of International Affairs.
Economic policy and foreign policy have always been interlinked but now they’re almost indistinguishable. There is a lot of volatility and a lot of vulnerability in the global economy and we are confident that we can navigate that volatility and vulnerability together. In a world of churn and change, I like Australia’s chances. Obviously a new administration in the United States brings a new suite of policies. We are confident that we can navigate that change as partners. We are confident that we will do what Australia has always been able to do which is to work with American friends, no matter who is leading either country from any one point in time to another.
We are well placed and we are well prepared and we’ve done the work. We are well placed, we are well prepared and there’s a lot at stake. Trade is around half of the Australian economy so we know that we need to make this work for us, not against us. We have a lot at stake, we are well prepared, we are well placed but we also know that we won’t be immune from any consequences of policies being followed by governments around the world. That’s why we work through these issues in a methodical and a diligent and a considered way, always making sure that front and centre are the workers and businesses and investors here in Australia.
Our focus after the American election but before the American election as well is the cost of living. We are focused primarily on the domestic economics of what we’re seeing around the world but we know that there’s been a lot written and said as well about the politics of what’s happened in the United States. We didn’t need an election on the other side of the world to prompt us to focus on the cost of living. The cost of living is the main game, and it is the Albanese government’s major focus – that has been the case for some time. Our number one focus is the cost of living and that’s because we know that cost‑of‑living pressures are the main game in communities right around Australia.
Today the ACCC supermarkets inquiry holds another hearing. This is all about making sure the supermarkets get the scrutiny they deserve, and that Australians get fairer prices at the checkout. It’s all about a fair go for farmers and families. It’s all about making sure that when Australians are at the checkout, they’re not being taken for a ride. Australians are under enough pressure as it is. Despite the welcome and encouraging progress we’re making on inflation, they’re under enough pressure as it is, they don’t need supermarkets taking them for a ride. That’s why as we come at these cost‑of‑living challenges from every conceivable angle, a big part of our effort is cracking down on the supermarkets, making sure that they are as competitive and fair as they can be because Australians are already under enough cost‑of‑living pressure as it is over here.
JOURNALIST:
Great. Treasurer, with the economic turbulence, obviously with Trump’s election, does that mean the government can assume now that interest rates won’t be cut until the next election?
CHALMERS:
I don’t predict or pre‑empt decisions taken independently by the Reserve Bank. I focus on my job and I take responsibility for our role in helping to ensure that inflation has more than halved on our watch. Inflation had a 6 in front of it when we came to the office, now it has a 2 in front of it. Inflation is back in the Reserve Bank’s target band for the first time since 2021. So, the fight against inflation isn’t over yet but we have made a heap of progress. We know that Australians are still under pressure, that’s why the supermarkets inquiry is so important, it’s why our cost‑of‑living relief is so important as well.
JOURNALIST:
Great. If China goes into a downturn because of their trade war with the US, do you think Australia will see a similar impact?
CHALMERS:
We won’t be immune from the consequences of any trade war that happens in our region or around the world but we are well placed, we are well prepared, and we do have a lot at stake. We’re well placed and well prepared but we’ve done the work because we know in an economy like ours, half of which is exposed to trade, that we have a lot at stake when it comes to new policies pursued not just by the American administration but right around the world. We need to make sure they work for us, not against us. We are confident but not complacent that we can make all of this churn in the change work for Australians, not against them. That will require us to continue to engage in economic policy and foreign policy, recognising that those 2 things are indistinguishable.
JOURNALIST:
Economist Warwick McKibbin says if Trump does as he promises on deporting illegal migrants and terrorists, the effect on Australia’s GDP could be up to $10 billion a year. Does that accord with your account?
CHALMERS:
There are a range of estimates out there whether they’re from our Treasury or from the private sector, or from academic economists like Dr McKibbin. What we do know is that the indirect impacts on countries like Australia which are trade‑exposed could be relatively significant even as the direct impacts are perhaps relatively mild – those are the conclusions of our own Treasury modelling. There are a lot of other views and analyses which are consistent with that and Warwick’s is part of that.
JOURNALIST:
[inaudible]
Does the election of Donald Trump and the changes he intends to make after his inauguration, does that mean that our federal election is necessary closer to mid‑year, so that the campaign has some [inaudible]?
CHALMERS:
The timing of the election will be a matter for the Prime Minister. He said it will be in the first half of next year. I’m working hard on a Budget to hand that down in March with my colleague Katy Gallagher but the timing of the election is up to the Prime Minister.
My focus is on the cost of living. My focus is on making sure that we are well placed and well prepared for what’s happening around the world. The global economy is an uncertain place, it’s full of vulnerability and volatility and not just because of policy and political uncertainty out of the United States, it’s a feature, unfortunately, of the world more broadly. We play the cards that we’re dealt. We put a lot of work into that. We’re confident but not complacent that we can make this world of churn and change work for us, not against us.
Thanks very much. Appreciate it.