Anna Henderson:
Treasurer, thanks for joining us.
Firstly, whether you’re a millionaire or whether you’re on a low income, you’re getting an energy bill rebate and a tax cut. Some people are seeing that as an election bribe. When you could have helped people who are struggling more, why didn’t you?
Jim Chalmers:
We are helping people who are struggling with the cost of living with energy bill rebates, tax cuts for every taxpayer, cheaper medicines, cheaper early childhood education. We’re strengthening Medicare because more bulk billing means less pressure on families.
We are helping around the board when it comes to the tax cuts. We are topping up the tax cuts that go to every Australian taxpayer and they will disproportionately benefit people on the lowest incomes, the people that we’re really trying to encourage in the workforce.
Henderson:
When you think about what the Australian Council of Social Services said this week, they’ve talked about people who haven’t eaten red meat for 2 years, who aren’t buying sanitary pads, selling their cars. Why does a millionaire get a tax cut if there’s no change to Jobseeker?
Chalmers:
First of all, we changed Jobseeker in an earlier Budget. I do acknowledge, respectfully, that ACOSS and others would like us to see more of that. Of course, I understand –
Henderson:
– And your own economic advisory group?
Chalmers:
We’ve acted on a number of recommendations on our Economic Inclusion Advisory Committee. We acknowledge that there’s always an appetite to do more on Social Security and to do more on tax. We’re upfront about that.
The difference between tax and social security: social security is indexed, and the tax system is not. We’re returning some of this bracket creep in this Budget. But in earlier budgets we have increased in a permanent way working age payments.
Henderson:
So, you would like to have done more?
Chalmers:
I think in every budget. Every Treasurer would like to do more, but we’ve got to make it add up. We’ve got to make sure that it’s responsible and affordable, but also meaningful. And providing cost‑of‑living help is really one of the defining motivations of this Budget and strengthening Medicare and building Australia’s future.
You’ve got to make sure that you can afford what you promised, this is affordable. And when you look right across the board at the cost‑of‑living help, there’s a lot of help for people doing it tough and that’s important.
Henderson:
You did bring up indexation there. In a second term, would you seriously consider Ken Henry’s suggestion of indexing the tax brackets?
Chalmers:
That suggestion is not just Ken. We hear it from time to time. Most of the OECD doesn’t index the tax brackets. But we’ve heard from the crossbench and Ken and others that they would like us to do that. I’ve got to make it add up. I’ve got to make the budget add up. I’ve got to make sure it’s responsible.
There are elements which are not indexed, whether it’s a tax system or in other ways, the Social Security system is. Whether it’s been indexation, in tax or in other areas, we’ve done our best to provide tax relief. We’ve now done 3 different tax cuts for every Australian taxpayer and that strikes me as the best way to find the most effective balance.
Henderson:
The petroleum resource rent tax is delivering an upward revision of $750 million extra dollars for one of the biggest industries in the country. How is that acceptable?
Chalmers:
That it’s going up?
Henderson:
By that much, given the earnings in that sector?
Chalmers:
I’ve reformed the PRRT because Australians do deserve to get a better return for those resources. You know, I reformed the PRRT in an earlier Budget and that’s –
Henderson:
Do you need to go further?
Chalmers:
– one of the reasons. It’s one of the reasons why it’s collecting more tax in this Budget. We’re not proposing to go further, but we have made that important change and that’s a good thing because it helps us to pay for things that our society really values, like strengthening medical or professional, providing cost of any help.
Henderson:
How frustrated are you to see the downward revisions in the tax take from tobacco excise? Does that mean the policy is not working?
Chalmers:
There are 2 reasons that we get less excise when it comes to tobacco. One’s a good reason, one’s a bad reason. The good reason is more people giving up. The bad reason is more people avoiding it. There’s a big new investment in the Budget for compliance and for enforcement. We do know that there’s an issue here. We do know that there’s a big problem here and we’re acting on it.
Henderson:
Just in terms of the social cohesion funding $178 million across different religious groups, trying to bring them together. What does it say about the nature of social cohesion, the fractures in our community that this is needed?
Chalmers:
This is a time of great challenge to our society, to our communities, to communities of faith and more broadly as well. What we’ve shown is a real willingness to invest in social cohesion.
We want to make sure that the people who try and divide our society and divide our communities don’t succeed. From time to time, that requires the government to step up to provide the sort of funding that we’re providing in the Budget, and I’m proud to be doing that.
Henderson:
Does Australia need to prepare to take over from USAID in the Pacific, and how much would that cost the budget?
Chalmers:
First of all, when we came to office, foreign aid, I think, was about in the middle‑$4 billions each year, next year it will be about $5 billion. So, a responsible step up in foreign aid. From memory, the amount of that that goes to the Indo‑Pacific, I think, is 40 per cent, so the biggest ever proportion.
That’s because we do have responsibilities in our region. In my own portfolio, I’ve spent a heap of time and done a heap of work making sure that we build Pacific banking services so that we can strengthen the Pacific economy. We do have responsibilities there and we are discharging them.
Henderson:
Do you think that Australia might have to pick up a significant amount of what the US might walk away from?
Chalmers:
We’re already stepping up, is the point that I’m making. But we need to do that within the context of our other budget constraints and our other priorities.
Henderson:
Some aid money is shifting into the Pacific, but as a result, there’s a deferral – a part of the payments for a programme to fight HIV, malaria and TB. Couldn’t Australia do both?
Chalmers:
I’d have to look into the details of what you’re asking me about. My job is to make sure that we can fund and afford foreign aid. I’m a big believer in foreign aid. I believe it’s a force for good, including in areas like healthcare in the region and in other parts of the world as well.
I’d have to look into specifics of that, but we try and strike all of the right balances in our foreign aid budget to make sure that we are good citizens of the world and that we’re making a contribution in our local area too.
Henderson:
Given what’s looming with the Trump tariffs and the April 2 deadline, can you update us about any further discussions you’ve had, whether or not some of the reporting over the weekend has suggested Australia might dodge some of the implications of this and what it would mean if this was to happen during the election campaign?
Chalmers:
I think all of the outcomes are still in play and we don’t take any specific outcome for granted, and we wouldn’t pre‑empt the decisions taken by the US administration. We will always speak up for and stand up for Australia’s interests. We are engaging as much as we can with our counterparts in the US to make our case, and we will play with the cards that were dealt when we know what they are.
Henderson:
Will there be major revisions to the document you’ve just handed down in that scenario?
Chalmers:
I think the document or the Budget already takes into consideration all of this global economic uncertainty. It is casting a dark shadow over our budget and over the global economy more broadly. We’re upfront about that. It’s one of the big 2 pressures on the Budget; global and domestic cost‑of‑living pressures, and so we’re responding to that.
Making our economy more resilient is really the best insurance policy for that. The Budget document talks a lot about risks in the global environment. That’s why it’s so important that we’ve made this progress together in our economy. Our economy is performing better than most in the world, and that makes us well‑prepared and well‑placed to deal with whatever might come of this.
Henderson:
Challenging in an election campaign, though.
Chalmers:
I think governing a great country like this is challenging always. You’re always trying to make sure that we’re dealing with global uncertainty, that we’re helping our people with the cost of living and strengthening Medicare and doing all of these sorts of things. What we’ve tried to do in the Budget is to take the right economic decisions for the right economic reasons. The politics will take care of themselves.
Henderson:
How do you get to Donald Trump? How do you convince him, to stick with the existing way that tariffs are treated?
Chalmers:
We’re engaging as much as we can in all kinds of different ways. My colleagues, Don Farrell, Penny Wong and others have been doing a lot of engaging. I went to DC, as you know, to speak with my 2 counterparts, and that’s because we will always, as I said, speak up for and stand up for Australia’s interests.
We take no outcome for granted. We know that this decision is relatively imminent and so we’ve been making the case, but we will deal with whatever happens. We’re not uniquely impacted by these tariffs, but we do have a lot of skin in the game as an economy that relies heavily on trade, so we’ll keep engaging where we can.
Henderson:
Treasurer, thank you for your time.
Chalmers:
Thanks so much again.