JIM CHALMERS:
Over the government's first year and a bit in office, we've shown that we can be responsible with the budget at the same time as we help people doing it tough. I think for too long in this country, people have pretended that it's a choice between responsible economic management and doing the right thing by our people, particularly those who are doing it the toughest. And what we've shown over two budgets, and over 14 months, is that the Albanese Labor Government is managing the budget responsibly at the same time as we are providing substantial cost‑of‑living help for people who are under the pump. In that way, responsible economic management and compassion are complementary, and not at odds. The much stronger budget position that we've built in the near term is a much stronger foundation to help people and to invest in their future. Now, the budget is still in a structurally very difficult position. We do have pressures on the budget which are intensifying rather than easing. And our focus is on rolling out the substantial cost‑of‑living help that we have already announced and already budgeted for in our first two budgets: assistance to make medicines cheaper, to make it cheaper and easier to see the doctor, to take some of the sting out of these high electricity prices, providing the biggest increase in Commonwealth Rent Assistance in 30 years, cheaper early childhood education. All of these policies are good for the economy and good for people who are doing it tough, and we are focused on rolling out their cost‑of‑living relief. But a stronger budget position does get our budget in much better nick and that gives us the flexibility should we need to do more at some point down the track. Now that's not our focus right now, our focus is on rolling out cost‑of‑living relief, which we have already announced and getting the budget into a much stronger position despite all of the pressures on it. But a much bigger, much better budget position is the foundation for us to invest in the future and to do what we can to help people who are under the pump. Now this is textbook fiscal policy. Textbook fiscal policy says at a time of substantial global uncertainty you repair the budget, you rebuild your buffers in the budget, you prioritise the people who are doing the toughest, and you make sure that we can face this time of substantial global economic uncertainty from a much stronger position than we would have if we had continued the approach to the budget taken by our predecessors. So this is textbook fiscal policy.
Now we have received support today from an unlikely place. We welcome the support now of the Opposition to the Albanese Labor Government's approach to responsible economic management. The Shadow Finance Minister has said today she is supporting the approach that we are taking to repairing the budget that we inherited from the Liberal and National parties. She has backed in the approach that we're taking ‑ this is very welcome and it's very overdue. But we welcome the Opposition support for the approach that the government is taking to the budget. This is textbook fiscal policy. The Opposition has conceded that today, admitted that today that the Albanese Labor Government is getting things right.
Now there's always a premium on responsible economic management, but particularly when the global economic situation is as tricky as it is right now. The global economy is treading a perilous path. There are recessions in Europe, in New Zealand and elsewhere. There are a lot of people watching closely developments in China. The American economy has been very resilient, but not without its share of risks as well. All of this will have implications for us. We're already seeing the slowing of our economy as a consequence of higher interest rates here and around the world and difficult global economic conditions as well. And we expect, the Treasury expects and the Reserve Bank expects the economy to slow considerably in the months ahead as well. And that's why the G20 meeting in India next week will be such an important opportunity to confer with my counterparts in the big economies, but also to take the temperature of the global economy at this particularly uncertain time. I'll be traveling to India with Governor Lowe. He and I will work closely together to represent Australia's interests in that forum, and also to make our contribution to the big global conversation about how we safeguard our economies from inflation and some of the other difficult pressures that we are all confronting in one form or another around the world. Now, what happens overseas has big consequences here for us here in Australia, and there are opportunities as well. And the approach that we've taken as a government is that we are always better engaging with the world on these big economic challenges that we confront together.
Now, the trade deal with the European Union is a huge opportunity for Australia and we are committed to doing what we can to get a deal done. This is a big market for our exporters, for our farmers and our workers. We want a good deal here but it can't be a deal at any cost. We want the right deal for Australia, not just any deal at any cost. And I want to commend the Trade Minister, Don Farrell, for his tireless work on the country's behalf and in our national interest as well, doing what he can to secure the right deal for our exporters, our workers and our farmers as well. If it takes a bit longer to strike a deal, which is in Australia's national interest, then so be it. Our job is to make sure that we can strike the kind of deal, which is in our national interest and that means a deal which is good for our exporters, our workers and our farmers as well. It's a big market, it's a big opportunity, we need to get it right. If it takes a little bit longer to do that, then so be it from our point of view.
Soon, I'll be taking to Cabinet my recommendation for the appointment of the Governor of the Reserve Bank. I don't want to front‑run or pre‑empt the timing or the nature of that conversation with my colleagues. This is a decision for the Cabinet to take on my recommendation and I take the role of the Cabinet and the opinions of my colleagues very seriously. This is one of the biggest appointments that the government will make. It's a big job and it's a big call. I'm approaching it in a methodical and measured and considered and consultative way, which befits the magnitude of the decision that the government will take about the Governor of the Reserve Bank. I have, as I said this morning had preliminary discussions with the Opposition about this appointment. I'm grateful to the Shadow Treasurer for the opportunity to have a preliminary conversation about this appointment. And if he would like to have another conversation about it, then I'm obviously open to that as well. I'm not obligated to consult with the Opposition on the appointment of the Reserve Bank Governor ‑ not under the existing arrangements and not under the arrangements proposed by the Reserve Bank Review. But I want to be consistent with the spirit of the RBA Review and that's why I have provided an opportunity for the Opposition to feed in their views. I will take them seriously. We've had one preliminary conversation and I'm up for another one if Angus or his colleagues would like to have one. We will appoint someone who has the necessary experience and expertise and who can help bed down the recommendations of that really important Reserve Bank Review ‑ because whether it's the Reserve Bank Review or the appointment of the Governor, our interest here is in ensuring we get the best possible central bank to take the country forward at a really uncertain time for the global economy, in particular, and at a time when people are under the pump. The government's economic plan is all about helping people with the cost‑of‑living pressures without making these inflationary challenges worse. The Reserve Bank Governor has already said that our budget is taking the edge off inflation rather than adding to it ‑ that's really important, that's why it's so important that we've taken a responsible approach to managing the budget and why we welcome the Opposition’s support for our approach today.
JOURNALIST:
Treasurer, should the government be doing more to take the pressure off the Reserve Bank and the cash rate in fighting inflation? It seems to be that it's quite a bumpy and uneven impact out there with the people of Australia.
CHALMERS:
Well, obviously when interest rates go up, they make life harder for Australians with a mortgage and we've not pretended at any point otherwise. It does make it harder when interest rates go up for people to find extra money in their household budgets to pay the mortgage and that's why the primary focus of the government is addressing this inflation challenge that we have in our economy and we're doing that in a number of ways which represent textbook fiscal policy. We're providing cost‑of‑living help without adding to inflation, we're showing spending restraint in the budget which would be unrecognisable to our predecessors, banking these big upward revisions in revenue, we've got a large surplus in the budget which has not come at the expense of helping people but which is in addition to helping people, we've got modest and meaningful tax reform, we found $40 billion worth' of savings over two budgets to make sure that we can get the budget in better nick and in the conditions that we confront – uncertain global situation, cost‑of‑living pressures biting around the world and at home – the most important thing you can do is show the restraint that we're showing, get the budget in better nick and help people where we can. For too long, that's been seen as a choice between either managing the budget responsibly or helping people, the Albanese Government's shown that we can do both.
JOURNALIST:
Just on that, a follow up ‑ you've got the big four bank CEOs speaking in Canberra today and tomorrow, they're being asked all kinds of questions. In your opinion, are they too profitable? Because in six months alone, the big four brought in $16 billion – what are your thoughts?
CHALMERS:
Well, my interest here is in making sure that the banks do the right thing by people and where I think that's especially important in the context of interest rates which have been going up since before the election is to make sure that they are as swift passing on interest rate increases to savers as they have been to borrowers. I think that's one of the most important ways that the banks can show that they're doing the right thing by people. No doubt that will be one of the things that my colleagues on the committee will discuss with the bank CEOs as well. Beyond that, I've had conversations with the bank CEOs to make sure that as interest rate rises are making it harder for people to repay their mortgage, that the banks are available to discuss the options with people who are pushed to the brink by these interest rate rises. And I would say to any Australians who feel like their ability to repay their mortgage is at serious risk when interest rates go up, to talk to their bank as soon as possible ‑ I've made sure in my conversations with the CEOs that there are the appropriate provisions in place for banks to be accommodating where they can to help people through what is a difficult time.
JOURNALIST:
The CEO of ANZ today said that their mortgage holders are performing remarkably well, even some of those with a new mortgage. Is this the experience that you've heard and seen so far? And what does this mean in terms of people really struggling?
CHALMERS:
I'll leave it to the bank CEOs to explain the impact of rate rises on their own loan books, that's appropriate and in these committee hearings, it's an important feature, I think, that they explain the impact on their own loan books. I think the impact on the economy and the impact on Australians is pretty clear. We are seeing a slowdown in our economy as a consequence of higher interest rates and a difficult global situation – we saw that in the National Accounts, we've seen it with consumption, household saving, some of the retail figures, some of the construction figures have shown the economy has already begun to slow and that people are doing it tough. Our job as a government is not to second guess the comments that the bank makes about their own loan books, not to second guess decisions taken independently by the Reserve Bank and its board but to focus on our role. Our role is responsible economic management and cost‑of‑living relief and that's what we're focused on.
JOURNALIST:
You said your focus is rolling out those policies and you listed quite a few of them before but you have previously hinted at more cost‑of‑living relief. What else is possible in the next few months?
CHALMERS:
Our focus is on rolling out the substantial cost‑of‑living relief that we committed to over the course of the last two budgets and some of that cost‑of‑living relief is rolling out right now. Cheaper early childhood education began this month, the electricity bill rebates are for winter bills that people are racking up right now and there are a number of other measures – Commonwealth's Rent Assistance before long – all of these measures are designed to roll out in the coming months and they will provide help for people to take some of the edge off these cost‑of‑living pressures. We are not currently working up a new package of cost‑of‑living measures. The point that I have made repeatedly, including last night and in today's papers is getting the budget in much better nick gives us the flexibility down the track should we decide to do more, but at the moment, our focus is on rolling out what we've already committed to in getting the budget in much better nick and we've been able to do both of those things simultaneously and we welcome the Opposition's support for that approach.
JOURNALIST:
But you're not ruling it out are you by the end of this year? You're talking today about flexibility so can you rule out more support for households by the year's end?
CHALMERS:
Well, I don't think any government rules out some additional assistance at some future point in some future budget. I don't think it would be necessary nor responsible for me to say that there will never be at any future point any additional cost‑of‑living help. What we try and do in the budgets is respond to the economic conditions as we find them and make sure that our budget strategy is closely aligned with the economic conditions. That's what we've done the last two budgets and that's what we'll do in every budget that I have a roll in and so, if it turns out at some future point that we want to turn our mind to other measures in subsequent budgets, then obviously that's an option that's open to us.
JOURNALIST:
Treasurer, you said that you are going to be traveling to the G20 with Dr Lowe. Is that a problem given the significant uncertainty about his position to introduce him to other members of major economies despite the fact he may not be Australia's central banker come September?
CHALMERS:
Well, first of all, he needs no introduction on the global stage, he has been making a substantial contribution in the global central banking community for some time and we work really closely together here in Australia but also overseas. We have a very, very effective working partnership – he's someone I've known for a long time and when we attend these meetings – and we've already been to a handful of these together ‑ we are a very effective partnership when it comes to representing Australia's interests but also in making a broader contribution to the way that the world tackles together these economic challenges. And so, I don't in any way see that as an issue. Governor Lowe will make a professional, considered contribution on the world stage as he has been doing for some time and we will work very closely together in pushing Australia's interests and also making that contribution that is valued at these forums from an Australian point of view.
JOURNALIST:
You said you're going to make your recommendation to Cabinet soon, have you made a decision who the next RBA Governor will be?
CHALMERS:
I've made it really clear that I don't want to front run or pre‑empt either the timing of that Cabinet discussion or my recommendation, I want to show respect to my colleagues and to the people who are being speculated about to make sure that we do this in the most methodical and measured and considered and consultative way and that's been my focus. I have been consulting for some time, I've been consulting relatively widely but at the end of the day, this comes down to a recommendation to Cabinet and a decision taken by my Cabinet colleagues including the Prime Minister and I don't really want to pre‑empt that or front run that. People know the sorts of issues that we are considering, they know the respect that I have for Governor Lowe, they know the sorts of things that will factor in to this decision that the Cabinet will take collectively before long.
JOURNALIST:
What are the benefits of a more detailed measure of wellbeing in a framework?
CHALMERS:
What we want to do with Australia's first ever national wellbeing framework is not replace the existing ways that we measure our economy – GDP, unemployment, wages, inflation and the like – but to add to them and to try and change the way that we think about and talk about the purpose of a prosperous national economy. And I think for too long we've seen the economy in very limited and very narrow ways and what I would like to do – I've made this clear in a number of different ways – is to more closely align what we want for our economy with what we want for our society. I think that's a pretty uncontroversial approach – the wellbeing framework is part of that and what we'll be able to do is to release our first national wellbeing framework at the same time as we maintain a priority focus on the cost‑of‑living pressures that people are confronting right now, the difficult global economic conditions that we confront right now and the way that our economic plan responds to that at the same time as we invest in the future.
JOURNALIST:
You talked about a noticeable economic slowdown in Australia, we've had 400 basis points of cash rate increase, and today Shayne Elliott says he expects another 50 basis points. Is it your view that we have gone too far ‑ some economists say that we are heading for a recession?
CHALMERS:
Oh look, I'll leave it to those economists to make their views known. The Treasury forecasts are that the economy will slow considerably but continue to grow in the months ahead. It's already clear, I think, that those interest rate rises are having an impact on the economy combined with the pressures coming at us from around the world but felt around the kitchen table. I don't second guess or pre‑empt decisions taken independently by the Reserve Bank when it comes to interest rates. I think it's an observable fact that they are already having an impact on our economy. It's one of the reasons why people are doing it tough and why it's so important that our approach – which has been backed in by the Opposition today – includes that responsible economic management, that cost‑of‑living relief that takes the edge off inflation rather than adding to it. This is textbook fiscal policy in the circumstances that we confront. I'm focused on the job that I have to do. The Governor and the Reserve Bank board will make their own decisions independent of the government and that's as it should be. I cherish the independence of the Reserve Bank. The Reserve Bank review and the appointment of a Governor is not about undermining the independence of the Reserve Bank. It's about enhancing it. I've made that clear on a number of occasions. Thanks very much.