JIM CHALMERS, TREASURER:
Good morning everyone. The economy is growing, but so are our challenges. Right now, the most pressing challenge in our economy is spiking energy prices. We've got increasing prices for gas, for liquid fuels and for electricity. That's putting a lot of pressure on our industries, on our households, on employers and on ordinary Australians everywhere. We need to be upfront with people about the challenges in our economy. Yes, we have strong demand and we've got a tight labour market. But we've also got high and rising inflation leading to higher interest rates, we've got falling real wages, and our ability to deal with these challenges is constrained by the fact that we've inherited a trillion dollars in debt in a Budget heaving with Liberal rorts and waste.
We will work hard to address these challenges that we've inherited from the former Government. We want to be upfront and blunt with people about the nature of these challenges, and our ability to work together to address them. There are a number of causes for this energy crisis in our economy and in our country, but sitting over the top of all of these near term challenges is that we've had almost a decade now in this country of energy policy chaos. These are the costs and consequences of almost a decade of a former Government which had twenty-two different energy policies, a range of different energy ministers, and didn't take the steps that we needed them to take when it came to improving transmission, getting cleaner and cheaper energy into the system, or injecting some certainty in the market so that we can get the investment that we need.
The best thing that this new Labor Government can do over the medium term, is to inject that certainty and get that investment flowing in cleaner and cheaper energy, so that we can deal with these issues in a sustainable way. In the near term, of course I'll be engaging with Chris Bowen, and Madeleine King, and our team, with the providers, and with the industries most impacted by this spike in energy prices. We will do what we can, but we need to be upfront with people about the nature of this challenge. It has been building now for the best part of a decade, and there are no quick fixes when it comes to giving people the relief that they need in this part of the cost of living crisis.
JOURNALIST:
Treasurer, just at the end of the ABC interview there, you touched on your relationship with Indonesia. Penny Wong at the moment is in the Pacific. Will you engage with your Pacific counterparts? And what can we do, through either the Budget or conversations with the Pacific counterparts, to try and counter Chinese influence and investment in the region?
CHALMERS:
First of all, to pay tribute to Penny Wong and the important work that she's doing in the Pacific and the important progress that she has already made in that key portfolio. All of us in our own portfolios, in our own ways, can make a contribution to strengthening our relationships and our partnerships with friends in our neighbourhood. I'm proud to have been involved in some of the policy development around climate change, around Development Assistance, and in other ways. Our Government is very focused on the Pacific, on our own neighbourhood. You've seen that already and you can expect to see more of that.
JOURNALIST:
Can you please outline what some of those cooperation mechanisms are in your portfolio?
CHALMERS:
Part of the job for us, and for Katy Gallagher as well, is to responsibly fund some of the investments that we need to make in the region, but also be heavily engaged in climate change policy. I will be doing my own engagement internationally as is appropriate for the Treasurer. That begins with Indonesian friends who are hosting the G20 this year. I've already had a conversation with Sri Mulyani - my colleague and counterpart in Indonesia, a great friend of Australia - and there will be more engagement as well. The first week of my treasurership was about engaging with state and territory treasurers, peak business groups and unions, and also the major regulators and the Treasury. I have moved on now to engaging with international counterparts and part of that will be Pacific friends.
JOURNALIST:
If you find in your discussions with Treasury and others, the Budget's in a more parlous state than you thought, would you be prepared to perhaps amend or even break some of the funding promises you've made, on the basis that the Budget won't be able to afford them?
CHALMERS:
I will implement our commitments that we took to the Australian people. What we'd like to do with the hard work that's already begun - going through the Budget line by line, and our audit of rorts and waste conducted with Minister Gallagher's Department and mine - is to find more effective ways to invest taxpayer dollars. We've got a problem in the Budget not just with the quantity of debt that we're inheriting, but also the quality of spending. For too long now in this country, Budgets have been determined exclusively by the political dividend and not the economic dividend. That's what we want to change as a first step. So, if and when we find ways to trim spending and to crack down on Liberal rorts and waste, that will principally be to fund our priorities in a stronger, broader, more-inclusive economy - in areas like cleaner and cheaper energy, and child care, and training, and a future made in Australia - the commitments we took to the Australian people.
JOURNALIST:
Just quickly Treasurer. The submission to the Fair Work Commission about the minimum wage, will that have a number on it, that 5.1 per cent that matches inflation?
CHALMERS:
It's a source of considerable collective pride in the Albanese cabinet, that the first act of that cabinet has been to agree a submission to the Fair Work Commission about the minimum wage. What that submission will show, it will acknowledge that headline inflation is 5.1 per cent and it will recommend to the Commission that the pay rise keep up with that. That's the process that we've flagged for some time now. The cabinet has had a good discussion about that. I hope to be able to get the ball rolling on that submission, certainly in the next day or two, because we're up against it timewise. The process has already begun. Australia's low paid workers need and deserve a decent pay rise in this cost of living crisis, and that's what the cabinet has been very focused on. That's what Anthony Albanese, and Tony Burke and myself have been working hard on. That submission will go in very, very soon. It will recognise, and it will recommend, that Australia's low paid workers don't go backwards in the context of inflation at 5.1 per cent.
JOURNALIST:
Is an extension to the fuel excise cut one of the things you're contemplating for cost of living relief in the October Budget?
CHALMERS:
The October Budget will hand down a cost of living package, which includes our commitments on cheaper child care, cheaper medicines, cleaner and cheaper energy and to get real wages moving again. Cost of living will be central to the October Budget. We have said previously, and I'm prepared to say again now, it will be difficult to find the billions of dollars necessary to extend the petrol price relief when it runs out in September. The former Government legislated that relief to end in September, I said to you before the election, and after the election, that we would find it very difficult to extend that. Obviously, we consider the conditions at the time, but I think Australian should consider it unlikely.
JOURNALIST:
Has that measure failed, given petrol prices are back over $2 a litre?
CHALMERS:
Petrol prices are 22 cents a litre cheaper than they would otherwise be. We've seen some really quite extreme turbulence in petrol prices over the last few months, but the consistent factor since the Budget and since the measures that the former Government put in place that we supported, is that petrol would be 22 cents a litre more expensive were it not for those steps taken that we supported. But we need to be upfront about it. Those measures end in September, unless they are extended by our Government. It's not cheap to do it, we can't extend all of these measures forever, but our October Budget will have a cost of living emphasis in all of the areas that I've identified and that will give genuine, tangible relief to Australian working families - not just for a few months, but in a sustainable way permanently.
JOURNALIST:
Will Australian working families have to wait until that Budget in October to get any sense of cost of living relief, considering that these issues are biting incredibly hard now?
CHALMERS:
I think we've been really clear already, for some months. We anticipated this cost of living crisis. You think about our policy agenda that we took to the Australian people that they supported - it was focused very heavily on the fact we've got high and rising inflation leading to higher interest rates, we've got falling real wages, and we need to be responsible about how we address these challenges. The best way to do that in the medium term after these current cost of living measures run out, is in areas like cheaper medicine, and cheaper child care, and cheaper energy bills, and getting real wages moving again. Those have been our priorities before now. It gives us no joy that the cost of living crisis that we've inherited from the former Government is even more challenging than they anticipated. That's the reality that we're dealing with. There's no point tiptoeing around it or mincing words. These are very difficult times for Australians and for Australian industry, and we need to be upfront about that. We've got some things going our way, but we've got some extreme challenges in the economy. The economy is growing, but so are there challenges that we are dealing with, and we want to work together with people to responsibly address them.
JOURNALIST:
In the short term, Australians will have to wait four months until the October Budget then for those measures?
CHALMERS:
Well, it's self-evident that there are some cost of living measures agreed by the major parties in the aftermath of the last Budget, which are still in the system and they are providing some relief. But what we need to focus on as a new Government is the cost of living relief that comes in after the former Government's cost of living relief runs out. I've identified what our priorities are there. Clearly, if there are ways that we can provide additional support, responsibly in a cost effective way, of course, any government would consider that in the lead up to a Budget. Our Budget is in October, not May, because the challenges that we've inherited are so serious that we can't wait until May to implement our Economic Plan, our cost of living plan, and our plan to get real wages moving again.
JOURNALIST:
Will you consider retrospective help? Like, gas bills are going up now. Your Budget's in October. Will you consider some sort of rebate?
CHALMERS:
Obviously, I'm not going to constrain our choices and our deliberations with the cabinet, but I want to be upfront with people. When it comes to those kinds of cash payments, they are expensive. We've inherited a trillion dollars of debt, at least, from our predecessors. So we need to be responsible. There's not room in the Budget to do everything that we would like to do immediately, we need to weigh up our priorities. What we need to do in the near term, first of all, is acknowledge the problems in our economy. We've got some things going for us, but we've got a lot of things working against us. We want to engage Australians in a big national conversation about these challenges, and work together to address them. There are not, typically, quick fixes. Many of these challenges have been developing for the best part of a decade, and we need to acknowledge that as well.
JOURNALIST:
Sorry, just one more on the gas trigger. You mentioned it's not going to come in immediately. For dummies, how long will it take to come in and how much help can it deliver?
CHALMERS:
Well, the point that I've made about the gas trigger is this. First of all, I don't want to pre-empt discussions and deliberations with Chris Bowen, and Madeleine King, and with industry, about what would be a relatively dramatic and unusual step. I also want Australians to understand that if there was an easy, quick way to fix the serious challenges we have with energy prices right now, a government would have reached for it already. There are a number of factors that any responsible government would need to weigh up before they pulled the trigger, and even if they did so, there's a range of processes associated with that. I just want to be upfront with people about that too, because there is a temptation to think that with something called a trigger, if you pull it, it will immediately fix all of these challenges in the energy markets. It goes beyond gas, petrol prices, electricity prices - these are the costs and consequences now of almost a decade of the former Government stuffing around with energy policy. Australians and their employers are paying the price for that now. Thanks very much.