ASHLEIGH RAPER:
Good evening, Treasurer.
JIM CHALMERS:
Thanks very much, Ashleigh.
RAPER:
Do you intend for the energy relief to be a one‑off, one‑time discount? And will it get subtracted before someone gets the bill?
CHALMERS:
Yes. This is energy bill relief from July for the next financial year and if you pay your energy bills quarterly, you’ll get a quarterly credit of $75 four times to make up the $300 in energy bill relief. This is all about trying to help people take some of the edge off these bills which are putting such pressure on people right around Australia.
RAPER:
You say it will reduce inflation by half a percentage point, but we know that cost‑of‑living pressures are impacting people very differently. For some, this will be just an extra $300 to play with. So, how is it not inflationary?
CHALMERS:
Well, first of all, there are 2 ways we’re providing cost‑of‑living relief. The cost‑of‑living relief is substantial, but it’s responsible. Some of it is broad – a tax cut for every taxpayer, energy bill relief for every household. Some of it is more targeted – rent, medicines, student debt. And we’ve struck a responsible balance here. And what we’ve been able to do is to put downward pressure on those bills, particularly energy and rent, which will put downward pressure on inflation. And the advice that we have is that we’re able to do that without adding to inflationary pressures elsewhere in the economy.
RAPER:
But why not be more targeted so that you could have given extra help to people not just in energy, but in other areas for those who are doing it exceptionally tough?
CHALMERS:
Well, there is more help for people who are doing it toughest, for example, the rent assistance is targeted to almost a million people who receive Commonwealth Rent Assistance. So, some elements of the package are targeted to the most vulnerable people but there are a couple of elements which are intentionally broad. A tax cut for every taxpayer, 13.6 million Australian taxpayers, an average tax cut of about $36 a week in combination with energy bill relief for every household – that’s the broad bit but there are targeted bits too.
RAPER:
You’re forecasting a surplus, but you’re also doing a lot of spending and kicking that problem down the road. Isn’t this a budget that just makes you look good in the short term?
CHALMERS:
We’ve made really substantial progress in terms of fixing the Budget. We’ve made a couple of hundred billion dollars in budget improvements. This would be the second surplus in almost 20 years – the first time there’s been a back‑to‑back surplus in almost 2 decades and so that’s important too – that takes pressure off inflation and it gets the Budget in much better nick, not as an end in itself that surplus, but because it helps us make room for cost‑of‑living relief and to invest in the future. We know that there’s always more work to do to get the Budget in better nick, so that we can afford to fund those other priorities.
RAPER:
Will the true test of this Budget be if inflation does in fact come down and interest rates get cut?
CHALMERS:
We’ve made no secret of our objective here which is to try and put downward pressure on inflation, not upward pressure on inflation. The inflation fight is still the most important thing that we can be focused on in the near term to try and get that inflation down. When we arrived in government, inflation had a 6 in front of it and now has a 3 in front of it. But we need it to moderate further and faster because people are still under pressure and that’s why a big focus of this Budget, the overwhelmingly primary focus of this Budget in the near term is to help people with the cost of living.
RAPER:
In the Budget it forecasts interest rates being cut by mid next year. Do you hope that they come down earlier?
CHALMERS:
Look, I try not to give free advice to the independent Reserve Bank. The Treasury, when they put the forecast together, they just rely on a survey of market economists. They don’t make their own judgments about that, they rely on what the market thinks, and that’s what they’ve done. Again, I don’t think of this primarily in terms of future movements in interest rates, that’s the Governor’s job and the Reserve Bank board’s. My job – and I take responsibility for my part of this – is to make sure I’m being responsible with spending on providing cost‑of‑living help because those 2 things together are going to put downward pressure on inflation so that the government is part of the solution to these cost‑of‑living pressures, not part of the problem.
RAPER:
Treasurer, thank you.
CHALMERS:
Thanks very much, Ashleigh.