Ashleigh Raper:
Good evening.
If you’re an average income earner with your new tax cuts, when they’re fully implemented, it would mean an extra $10 in your pocket. Do you concede that that isn’t going to go – it’s not going to go very far?
Jim Chalmers:
These are 2 more tax cuts for every Australian taxpayer. We understand in isolation that they are relatively modest, but in combination with the tax cuts which are rolling out right now and all of the other cost‑of‑living relief that we’re providing in this Budget, it’s all about helping people with the cost of living, making sure they can earn more and keep more of what they earn, but also making sure we do it in the most responsible way.
There’ll always be an appetite to do more. There’ll always be enthusiasm to provide more tax relief, but we have to do what we can afford.
Raper:
Why are you making people wait until mid‑next year for this tax cut?
Chalmers:
Well, first of all, some of the tax cuts are rolling out right now. They began in July. And there’s other cost‑of‑living relief rolling out between now and the next round of tax cuts. But again, we have to make sure we’re doing it the most responsible way that we can. We need to make sure that it’s consistent with getting inflation much lower in a sustainable way. We balance all of those considerations and we do the best we can by people.
Raper:
Isn’t Australia overdue for bigger tax reform and is that something you’d be keen to do if you win a second term?
Chalmers:
In combination, what we’ve done in July and what we’re doing again on another couple of occasions is proper tax reform. In this case, we’re cutting tax rates. We’ve also lifted thresholds in the July tax reforms and that will have an economic benefit. So, we’ll help people with the cost of living, ensure they can earn more and keep more of what they earn, but it will also have an economic benefit. It will encourage more people into work and that’s what makes it an important economic reform.
Raper:
Now, the numbers aren’t good in this Budget. Debt blowing out to a trillion dollars, $42 billion deficit next year, then deficits for a decade. But you think that you can get the budget back in balance by 2035–36. There’s a lot to happen between now and then. How confident are you in that forecast?
Chalmers:
I understand that and it’s a forecast. It does have the budget coming back to balance, but taking some time to get there.
I do challenge your description of the Budget. Debt is actually down $177 billion this year, saving Australians about $60 billion in debt interest. When we came to office, there were only deficits. We turned 2 of them into surpluses and even the deficit this year is much smaller. We’re managing the budget in a very responsible way.
We’ve helped engineer, actually, the biggest ever improvement in the budget in a single parliamentary term. But we know that there’s more work to do to make sure we’re continuing to manage the budget in a responsible way at the same time as we’re providing this cost‑of‑living relief, strengthening Medicare and building Australia’s future.
Raper:
Now, recent government policies and policies that you will take to the election have contributed to the deficit. Outside of COVID, you are now the biggest spending Treasurer per percentage of GDP since the mid‑80s. How do you justify the spending?
Chalmers:
There’s a couple of things that are important here. First of all, at the height of COVID spending as a share of the economy was about a third, we got it down below a quarter and it’s now settling a little bit higher than that.
Part of that recognises our responsibilities in the care economy, as Australia’s population ages, making sure that we pay aged care workers appropriately and also early educators appropriately. That’s part of the reason for this, but also making sure that we fund that unavoidable spending and making sure that we strengthen Medicare, invest in helping people with the cost of living, doing that in a responsible way.
Spending as a share of the economy is much lower now than it was a few years ago under our predecessors. We’ve got it down, but we’re also meeting and discharging our responsibilities to people in the care economy and more broadly.
Raper:
The election’s coming. How are you going to sell this Budget to voters?
Chalmers:
This is a responsible Budget which helps with the cost of living, strengthens Medicare and builds Australia’s future. It recognises that Australia’s made a lot of progress to this point. The economy has genuinely turned a corner and what matters now is how we build on that progress and build on that momentum, and that’s what the economic plan in the Budget is all about.
It does set up a pretty simple choice at the election. Cost‑of‑living help and building Australia’s future under Labor or Peter Dutton’s secret cuts, which will make people worse off. There’s a reason he hasn’t come clean on his cuts and that’s because when he cuts, Australians will pay, and that’s the contrast that is set up this week.
We’ve got a plan. We’re helping people with the cost of living. He opposed our cost‑of‑living help. He’ll make people worse off into the future as well, and that’s why he’s not coming clean on his secret cuts.
Journalist:
Treasurer, thank you.
Chalmers:
Thanks, Ash.