Amanda Copp:
Jim Chalmers, thank you so much for joining us on the show.
Jim Chalmers:
Thanks very much, Amanda, for having me on the podcast.
Copp:
Now we’ve had a pretty horrific week here in Canberra. Have you yourself experienced threats or threats of attacks since your time in politics?
Chalmers:
Absolutely. And the frequency of those kinds of threats has escalated pretty dramatically in recent times. Our politics is becoming more dangerous. The rhetoric’s becoming more violent and the threats are becoming more frequent and I think all of us are working through that in one way or another.
The problem is the more available you are as a local member of parliament or as a politician more broadly, the more vulnerable you are. That’s one of the challenges that we’re all trying to work through in the aftermath of this senseless violence against Helen Haines.
Copp:
What about when it comes to funding? There was some money allocated for security of politicians in the most recent Budget. Do you think that there’s going to be any kind of consideration of additional funding in that space?
Chalmers:
This is clearly a devastating event. We’ll reflect on it. People will put views to us, and we’ll listen to those views, obviously very respectfully.
Copp:
Now, just to come back to some issues that you’ve been dealing with yourself. You’ve just come back from several meetings overseas in the last couple of weeks. I want to talk about bond yields, which I’m sure will turn a lot of people off, but I’m hoping that they stick with us.
Bond yields at the moment are spiking globally. How much of an impact is that having here in Australia?
Chalmers:
Well, higher bond yields – for your listeners who might not think about this all of the time – is really just a reflection of the amount of risk in the global economy, and we have seen bond yields come up a lot. And bond yields are going up really for a whole bunch of related reasons.
Firstly, higher global oil prices mean higher inflation around the world. That’s feeding through to people expecting the major advanced economies to see more interest rate increases.
There’s concerns about other countries’ level of debt. There’s all this competition for capital being brought about by the hyperscalers and the AI boom. And it’s against the backdrop of all of this accelerating change across energy, technology, demography, industry, geopolitics and the like.
And so for us, what it means is when we refinance the debt that we inherited – when we came to office, overwhelmingly that trillion dollars of debt in our budget, I think about two‑thirds of it racked up by the Coalition – when that rolls off. When that debt matures, we have to refinance it at higher borrowing costs, and so that does put pressure on our budget as well. It’s one of the big pressures on the budget that we are working our way through as we get closer to handing down the mid‑year budget update towards the end of the year.
Copp:
How much are we talking? Are we talking billions?
Chalmers:
Oh, definitely billions. How many billions remains to be seen. The global economy’s a pretty dangerous place right now and we see that reflected in bond yields and in other ways as well.
Copp:
How do you think the job of Treasurer has changed over time?
Chalmers:
I think there’s a much bigger focus now on the international part of the job than there might have been a few decades ago. You’ve seen this, you know, economic diplomacy is a big part of the work that we do.
The fact that in the last 2 weeks I’ve had to go to speak to investors in Tokyo, Bangkok and Hong Kong. You know, investors who manage trillions of dollars in capital. I think that’s become a bigger part of the job.
Clearly, the way you go about it as well. I mean, no Treasurer was on podcasts not that long ago. So the nature of the job in terms of the day‑to‑day way that you explain where the economy’s at and how the government is responding and the government’s policy agenda, the way you do that has changed.
But also, I think the international element has become a bigger and bigger part of the job too.
Copp:
Are there any parts of the economy that keep you up at night?
Chalmers:
The pressures on people right now are very substantial and obviously that keeps me awake at night. The fact that people are under substantial pressure. And there’s a number of reasons for that, some of them are outside our control, and some of them we have some influence over. You know, providing some cost‑of‑living help, managing the budget in a responsible way. Those are the things that we can do, but in lots of ways we’re hostage as well to decisions taken in DC or Tehran or in Eastern Europe about 2 wars which are pushing up inflation around the world and weighing on growth around the world.
So there’s lots about the economy right now which keeps me awake at night. The challenges and the complexities are very substantial. Often we’re kind of forced into this black‑or‑white view about the performance of the economy. No shortage of challenges in our economy and they’re our focus, but we’ve got a lot of advantages too.
Copp:
Do you think that the way that your opponent’s speak about the economy is accurate in terms of the level of negativity?
Chalmers:
No, I think their goal here is to turn their talking down the economy and all of their endless negativity into a self‑fulfilling prophecy. You know, they desperately want confidence to be low. They desperately want inflation to be high because they see political opportunity in that.
You know, when I first started being involved in economic policy and politics more broadly – you’ve asked me about some of the changes over time – I think one of the big changes is that it people used to take a very dim view of those who went out of their way to talk down the Australian economy. But that is effectively what our political opponents are doing. They want to capitalise on the legitimate pressures that people are under without doing anything about them. They would prefer the pressures on people to be worse, not better, because they see that really as the only path back to office. And it would be much better broadly if they took a more responsible approach.
Copp:
Given that you’ve been in this role for a bit over 4 years now, do you think that you’ve gotten anything wrong, do you think there’s anything you would have done differently?
Chalmers:
I think obviously when you’re doing a senior job in difficult times, you do the best that you can. I’m reluctant to kind of go through 4 and a half years and give you a sense of what I think we’ve done perfectly and where we could have done better. But I do acknowledge –
Copp:
Can you give us one example?
Chalmers:
Well in the spirit of humility I do acknowledge that from time to time you can explain things better, you can consult more. I’ve acknowledged that in other ways on other occasions.
Nobody in our political system is or should be beyond criticism. I take responsibility for the decisions I’ve taken and the way that I’ve explained them in the last 4 and a half years. We can always do better, me included.
Copp:
What about when it comes to productivity? Productivity growth has been a real problem for a long period of time. Who do you think is doing something wrong to slow it down so much?
Chalmers:
I don’t know if I’d put it in exactly those terms. I mean I agree with you that it’s a long‑standing challenge. In fact, a challenge we’ve had for a couple of decades now, and a challenge which is pretty common around the world. It will take us time to turn it around.
But no government’s taken more seriously the productivity challenge in the last couple of decades than we did in the last Budget. That big broad productivity package. It hasn’t got a lot of attention because of the more contentious elements of the tax reform plan.
But the productivity package in the Budget is a big effort at turning this around over time. Not because we think you can flick one or 2 switches and all of a sudden the productivity challenge we’ve had in our economy for 2 decades goes away, but because we recognise that the best way to turn this around over time is to operate on a number of fronts simultaneously, and that’s what we are doing.
Copp:
And just finally, what do you think the issue is that prompts the most tension between yourself and the Prime Minister?
Chalmers:
Well, I wouldn’t really describe our relationship that way. I mean we work together really closely.
Copp:
I mean surely there’s some tension though, there always is between Prime Ministers and Treasurers.
Chalmers:
I wouldn’t describe it that way. Sometimes we bring different perspectives, but that’s healthy. You know, some days we speak multiple times a day about some of these really important issues.
And so I wouldn’t characterise it the way that you have. There have been times where we’ve brought different perspectives, and we’ve worked out the best way forward together. And I think that’s not just appropriate, I think that’s better than the alternative, which is to pretend that everyone’s got an identical view about every single issue.
Copp:
All right, well perhaps then a bit of a defuser question to finish us off. Have you got a favourite colleague or a favourite person to work with from the other side?
Chalmers:
Look, I mean locally, I mean there was a – I work quite closely with the former Member for Forde locally. He’s been replaced by my wonderful colleague Rowan Holzberger. But, you know, I enjoyed working with Bert van Manen when he was the Member for Forde. Yeah, I didn’t have a horrible relationship with Josh Frydenberg when he was the Treasurer.
So, from time to time I think there is the opportunity to acknowledge where people are coming from on the other side of politics. I’m not sure that I have a favourite. But I think in the nature of our politics, and particularly the nature of Question Time that kind of hotly‑contested part of our politics I think doesn’t always reflect the personal respect that we can often have with members of the other team.
Copp:
Jim Chalmers, thank you so much for joining me today.
Chalmers:
Thanks.