Charles Croucher:
Welcome to the pre‑budget meeting. Just to ask that question, any line dancing in your Queensland days?
Jim Chalmers:
No, no. Blissfully free.
Croucher:
You’re a bit more hip‑hoppy, weren’t you? We’ve done 4 of these pre‑budget interviews. I’ve asked this question every time, so I’m going to start with it this time. When do things get easier for Australians?
Chalmers:
Certainly in the economy things are getting better. But we know that doesn’t always translate to how people are feeling and faring in the economy.
That’s why when cost‑of‑living pressures are front of mind for so many Australians, they will be front and centre in the Budget that I hand down on Tuesday night.
It will be a Budget primarily focused on helping people with the cost of living but also making our economy more resilient in the face of all of this global economic uncertainty and building Australia’s future.
Croucher:
Resilient? What does that mean?
Chalmers:
It means that the world is an uncertain place.
There’s a lot of unpredictability, a lot of volatility. There’s a new world of uncertainty that we’re seeing unfold right around the globe and for Australia, we’re not immune from that.
Making us more resilient means a Future Made in Australia. It means a Buy Australia Plan. It means making sure that as we get the Budget in better nick and we help with the cost of living, that we’re also investing in the jobs and industries of the future so that as the world changes all around us, we can be beneficiaries of that change, not victims of it.
Croucher:
You mentioned a Buy Australia Plan. This is getting more than just a catch cry or something that the Prime Minister has said in the past. This will be a laid out plan that will encourage Australians to buy Australian. How do you do that when cost is the driving factor? And what does it mean if they do that?
Chalmers:
One of the things that the Prime Minister said in response to the tariffs being levied around the world and on Australia was that one of the things that Australians can do, one of the decisions that Australians can make is to buy more Australian products and more Australian produce.
There will be an opportunity for us to promote that in the Budget. That will be part of the Budget, but more broadly, making the economy more resilient means that Future Made in Australia, means making the most of our industrial opportunities, the energy transformation, human capital and skills and lifelong learning.
That’ll be a big focus of the Budget as well. But primarily we know that cost of living is front of mind for most Australians, it will be front and centre in the Budget. You’ll see that when it comes to bulk billing, cheaper medicines and also extending the electricity bill rebates.
Croucher:
Let’s speak about that. Electricity bill rebates, an extra $150. How does it roll out?
Chalmers:
It rolls out in the second half of the year.
The $300 that rolled out in the course of this financial year has been a really important way that we’ve helped people with the cost of living. This is more hip pocket help for households. It recognises that even as we’ve made all of this progress on inflation together, people are still under pressure and so there’s more help being rolled out on Tuesday night.
Extending these energy bill rebates for another 6 months recognises the pressures people are under and in the most responsible way that we can, helps people with those pressures.
Croucher:
This time last year, I asked you if this was now baked into the Budget, this need for energy bill relief, because when it comes back on, it’s going to be inflationary right? When those subsidies are gone, it will force the price of things up. Is this just now another line item that every Treasurer from now on has to pay?
Chalmers:
Not necessarily.
We keep these cost‑of‑living measures under more or less constant review. This is the third time that we’ve provided energy bill relief, but this time for 6 months rather than 12. That recognises first of all the pressures on the Budget, but also the progress that we are making on inflation.
The Australian economy is turning a corner. We’ve got inflation down, real wages and incomes are up, unemployment’s low, we’ve got the debt down, interest rates have started to come down, growth is rebounding solidly in our economy. But we know that there’s more work to do because people are still under pressure. The global economic environment is uncertain. The Budget is designed to respond to those 2 things.
Croucher:
That all sounds like a really solid election or re‑election pitch, except the OECD say living standards have fallen. Now all those other things should be driving living standards. So, when do they turn around?
Chalmers:
They are. All of those things together are driving a recovery in living standards. Don’t forget, when we came to office, living standards were falling sharply, real wages were falling sharply, inflation and interest rates were going up. Now inflation and interest rates are coming down, incomes and wages are recovering, the tax cuts are flowing in our economy and all of that is rebuilding living standards in our economy.
We recognise that it’s been an especially difficult period under the life of the last 2 governments. And when you recognise that, your choice is whether to do something about it or not.
We’ve been doing something about it, getting wages moving again, tax cuts for every taxpayer, energy bill relief for every household, cheaper medicines, cheaper early childhood education, rent assistance, all of these ways that we’ve been rebuilding living standards. Because we recognise the pressure you’ve identified in your question.
Croucher:
David Littleproud was on the programme 10 minutes ago and he said he’d probably support these. This energy bill subsidy. But he said it is a last desperate roll of the dice from a government who’s lost control of energy prices. Is that right?
Chalmers:
Of course not. Energy prices in the last year to December went down by 25 per cent.
Croucher:
A lot of that was subsidy.
Chalmers:
Not all of it, but prices would have gone down even without the subsidies.
Croucher:
So, why is there still a need for subsidies?
Chalmers:
Because people are still under pressure, for all of the reasons that you and I have been talking about today and we’ve talked about on other occasions.
But I say this about the Liberals and Nationals. They say they’ll probably support this cost‑of‑living relief. They haven’t supported the first 2 rounds of cost‑of‑living relief. They didn’t want the tax cuts to flow to every Australian taxpayer. They have opposed at almost every turn our cost‑of‑living help. That’s important for the election contest, because when Australians are doing it tough, the Labor government is helping with the cost of living.
All they’ve got are these secret cuts that they won’t come clean on. And that’s the difference between Labor and Liberal. Our Budget’s about the cost‑of‑living. Their approach is about secret cuts. This is the week that they need to come clean on what those secret cuts mean for Medicare and pensions and payments and all of the other things that Australians rely on.
Croucher:
I want to move on to debt. It goes through a trillion dollars in the next couple of years. That’s been forecast for a while now. Are we at the stage now where any hope of turning surplus budgets is pretty much over?
Chalmers:
Not necessarily. We’ve delivered 2 surplus budgets. We took those enormous deficits that we inherited from the Liberal Party and we turned them into Labor surpluses. Even the deficit for this year is going to be substantially smaller than what was expected when we came to office 3 years ago. So, we’re making good progress. We’ve actually helped engineer the biggest ever positive turnaround in the budget in a single parliamentary term. That means $170 billion or so less Liberal debt. That means we save on interest costs.
We’ve been able to manage the budget responsibly at the same time as we roll out cost‑of‑living help and invest in the future and that’s what you see on Tuesday night as well.
Croucher:
The next part of that is the next 10 years are all in deficit. So, we start going backwards and some of that money saved is still going backwards. So, how do we turn that around? It needs something bigger. Is that part of a second term agenda, a third term agenda? When do you look at that and say we can realistically get back into surplus and avoid that huge interest bill that’s coming down the pipeline?
Chalmers:
It requires the same combination of responsible economic management that we have been deploying, finding savings and there’ll be more savings in the Budget. Banking upward revision to revenue, most of that, we’ve seen that in the course of our time in office. Making sure that where we are making investments, we’re doing them in the most responsible way that we can. That’s what people can expect to see.
Croucher:
I want to be really quick on some, some overseas beef tariffs could be the next thing coming from Donald Trump. Do we have a plan B?
Chalmers:
It remains to be seen the nature and the magnitude of the tariffs that the Americans have flagged for early in April. We don’t take any outcome for granted. We work around the clock to make Australia’s case in that context. But we don’t pretend anything other than this is a new world of uncertainty.
Croucher:
And you can’t control him. What he can control is here. So, is there a plan B?
Chalmers:
What we’re seeing with these escalating trade tensions is casting a shadow over the global economy and over our own economy and our budget.
Our plan A is about making our economy more resilient. What we’re seeing with all this uncertainty actually vindicates and validates the approach that we’ve taken – help people in the near term get the budget in much better nick and invest in making our economy more resilient. A Future Made in Australia, for example, investing in our industries and our jobs, our resources sector in areas like critical minerals.
These are all of the most important things that we can do, and we are doing in the Budget in the face of all of this unpredictability around the world.
Croucher:
Last question on jobs, you mentioned it then. In our first interview we spoke about this collection of Australians that even though there were jobs available, that the unemployment rate was low, still weren’t out there and still weren’t working. You said it was a passion of yours. It’s something that, you know, the region you grew up in dedicates that. Same with me. How are we going with that?
Chalmers:
One of the things I’m proudest of is that we’ve got labour force participation, which is a measure of how many people that we can attract into work, that’s been at or around record highs during our time in office. I’m really proud of that. It’s one of a number of ways that we’ve made very substantial progress together as Australians.
The stronger the labour market can be, the way that we can reward people by making sure that they can earn more and keep more of what they earn with the tax cuts. All of that is playing a very helpful role in our economy. This makes us exceptional around the world. Most other countries, they’ve got inflation down, but they’ve paid for that progress with much higher unemployment. Our unemployment rate, on average, over the life of this government has been the lowest of any government in 50 years. That means more people in work. It means we can address this intergenerational disadvantage that you and I care so much about.
Croucher:
I can hear the Liberals in my ears screaming, it’s lower. It’s now higher than when they left office at 3.9.
Chalmers:
Average unemployment, much lower under this government than under our predecessors. In fact, any government of the last 50 years.
Croucher:
Jim Chalmers, best of luck on Tuesday. Appreciate your time.
Chalmers:
Thanks so much Charles.