BRIDGET BRENNAN:
Well, many economists expect the latest GDP figures due out tomorrow will show the economy is slowing. Let’s bring in the Federal Treasurer, Jim Chalmers, who joins us now from Perth. Good morning to you, Treasurer. It’s early there. Thanks for joining us on News Breakfast.
JIM CHALMERS:
Thanks very much, Bridget. Good to be back.
BRENNAN:
What’s this going to show tomorrow? Just how bad is the situation and how precarious a situation are we facing for the economy?
CHALMERS:
Most economists expect the National Accounts figures which come out tomorrow to show an economy which is soft and subdued. We’re not expecting lots of growth in the June quarter in these numbers that we get tomorrow, we’ll see what they say. But really what we’ve got here is a combination of global economic uncertainty combining with higher interest rates and persistent price pressures. Here in Australia, those things are combining to slow our economy quite substantially, we expect, and we’ll learn more about that tomorrow.
BRENNAN:
Looking at the papers this morning, Treasurer, I think the impression a lot of Australians would get is that you’re in this sort of stoush with the RBA. I mean, you’ve said that interest rate hikes, along with the global outlook, is smashing our economy. Are you, are you all good with the RBA? What’s going on here?
CHALMERS:
Of course, yeah. We’ve got a very good, close working relationship with the Governor of the Reserve bank, someone I’ve got a lot of respect and regard for. And the comments that I made on Sunday night were entirely consistent with things that I’ve been saying for some months actually. They weren’t new comments that I made over the weekend which have been reported extensively since then. And I think it would be a bit strange, frankly, if the Treasurer of Australia couldn’t point to the sorts of things which are slowing our economy. And I think it’s self‑evident from the economic data, whether it’s the global economic uncertainty, the persistent price pressures or these higher interest rates, those things are all combining to slow our economy in quite substantial ways. That’s what economists think. That’s what I think. And I think it’s entirely fine for me to make those points.
We’ve got different responsibilities, the Governor and I, but we’ve got the same objective, and our objective is to get on top of this inflation challenge in our economy without making life harder for people or smashing an economy which is already weak enough. And so those are the points that I’ve been making, really, for some months.
BRENNAN:
The Opposition says you’re dodging responsibility by not taking joint responsibility for the government’s economic decisions, alongside, of course, the RBA’s independent decisions. Is that fair?
CHALMERS:
Of course not. You know, the Opposition, the Liberals and Nationals, they want higher interest rates because they think the more people are hurting, the more it will suit their political objectives. And we should see their commentary in that light. We’re in the third year of a 3‑year parliamentary term and they still don’t have any costed economic policies and they don’t have any economic credibility. They say all kinds of things. They’re not my focus.
My focus is on the cost‑of‑living pressure that people are under right now. My focus is on an economy which is expected to show growth was soft and subdued in that June quarter, and we’ll learn more about that tomorrow. I’m focused on the things that really matter to people and that’s the pressure that they’re under. That’s why we’re rolling out this cost‑of‑living relief. My focus is on the cost of living. Peter Dutton’s focus is on dividing people. And I think that’s what this commentary of the last couple of days has shown again.
BRENNAN:
Are those higher rate rises that we’ve seen over a number of months and just being left flat this year, are they the key driver of people’s economic pain, or the smashed economy, as you put it?
CHALMERS:
I think they’re a driver. They’re not the only driver. We are seeing a lot of volatility around the world that’s impacting our own economy as you would expect it to. These persistent price pressures in our economy which the Governor of the Reserve Bank and the government are addressing. That’s obviously part of the story as well.
But again, I think it’s important that we speak plainly about our economic challenges. And one of the challenges that people have, particularly people with a mortgage, is that interest rates have gone up. That’s put extra pressure on people and it slowed our economy. I think that’s self‑evident. I don’t think that’s an especially controversial point to make. It’s a point that economists and others make most days when they assess our economy. So, I’m acknowledging that.
I’m also outlining for people what we are doing about it. And what we’re doing about it is getting the budget in better nick, delivering 2 surpluses which our opponents could not do in their last term in government. We’re rolling out cost of living relief in the most responsible way. And we’re engaged together with the Reserve Bank in this fight against inflation without smashing an economy which is already weak.
BRENNAN:
Has it slowed enough? Have those decisions taken enough heat out of the economy now that you think it’s time for Australians to get a bit of relief? Because if you look over the ditch, the New Zealand Central Bank has decided to cut rates. Is it time to see a decision made similar to that now in Australia?
CHALMERS:
Well, first of all, you have to be careful with the New Zealand comparison. They’ve got higher interest rates and they’ve got higher unemployment. And so there are slightly different issues at play in New Zealand.
I don’t pre-empt decisions that the independent Reserve Bank takes or may take in the future. I’m focused on my part of this, and my part of this is to ease cost of living pressures with tax cuts and energy bill relief and cheaper medicines and cheaper early childhood education, and by getting wages moving again, that’s my part of this as we get the budget in much better nick. The Reserve Bank Governor has said that the 2 surpluses I’ve delivered are helping in the fight against inflation. So, that’s my focus there.
But again, it shouldn’t be controversial for the Treasurer to say, as I have for some months now, whether it’s the global uncertainty, whether it’s the higher interest rates, whether it’s these persistent price pressures that we’re dealing with and responding to as a government, these are the things which are slowing our economy. And economists expect to see that tomorrow when the National Accounts Data comes out.
BRENNAN:
Treasurer, on another issue, if you wouldn’t mind, you’re in Western Australia. A second teenager died in youth detention just in the last few days. That’s the second teenager in a year. The National Children’s Commissioner has asked your government to form a taskforce, with other Australian Governments around the country, to really look at what’s going on in justice systems. Is this a recommendation you’ll consider given this tragic situation in WA?
CHALMERS:
Obviously, these are the sorts of things that are in the domain of the Attorney‑General, Mark Dreyfus. Obviously, incredibly concerning what we saw in detention over on this side of Australia. And I think in an ongoing way, the Attorney‑General works with state attorneys‑general and others to make sure that the arrangements are as they should be. But I don’t want to sort of frontrun that. Obviously, that will be something that Mark is working through with his state colleagues.
BRENNAN:
Jim Chalmers, thanks for your time.