Charles Croucher:
Thank you for joining us.
Jim Chalmers:
Thanks very much, Charles.
Croucher:
The surprise element of the Budget, a tax cut for every Australians, but not until 2026. It’s a surprise, isn’t it?
Chalmers:
No, of course not. We’re topping up a tax cut for every single Australian taxpayer, and we’re doing that twice. Now, in isolation, these tax cuts are relatively modest, we acknowledge that. In combination with the tax cuts which are rolling out right now and all of the other cost‑of‑living relief in this Budget, the cost‑of‑living relief is meaningful and substantial but also responsible in the context of these pretty serious budget constraints that we have.
Croucher:
Was there any temptation to make it this July?
Chalmers:
Of course, we considered all of the different options, but we want to make sure that we’re doing this in the most responsible way that we can.
We want to make sure it’s consistent with inflation coming back sustainably with the Reserve Bank’s target band so that we’re part of the solution to these cost‑of‑living pressures rather than part of the problem.
Croucher:
The biggest relief that anyone could get right now is interest rate cuts, particularly if there are forecasts of multiple interest rate cuts this year. Is there anything in this Budget that you think either increases the chances of that happening or decreases the chances of that happening?
Chalmers:
First of all, I don’t speak for the independent Reserve Bank. They’ll take their decisions –
Croucher:
That has to be a factor, though, doesn’t it?
Chalmers:
They’ll take their decisions in the usual way. I have briefed the Governor of the Reserve Bank. I do that before every Budget, every budget update, and I’ve done it on this occasion running through the key measures, including the tax cuts and some of the other key measures.
One of the most encouraging things about this Budget is that the Treasury forecast actually brings forward inflation coming back into much more manageable levels in a much more sustainable way 6 months earlier than they anticipated in the last budget update. That’s a really good thing because it shows inflation is coming down, wages are going up, unemployment’s low, growth’s rebounding in our economy. We’ve got the debt down and interest rates have started to cut as well.
Croucher:
Sounds to me like an inflation dragon we spoke about 2 years ago has been slayed. If so, is there now the biggest [indistinct] the debt demon that’s going to see us go through a trillion dollars of debt next year? The interest payments alone are $18 billion this year, $27 billion by the end of the next term. How do we slay that debt?
Chalmers:
First of all, on the inflation part of the story, Australians together have made very meaningful, very substantial progress in the fight against inflation, that’s a good thing. When it comes to debt, the government has also made a lot of progress in that regard. Debt this year is actually $177 billion lower than what we inherited when we came to government. That’s saving Australians about $60 billion in debt interest. Debt interest is a feature of the Budget. There is more work to do to get that debt down to lower levels. But we have made a lot of progress together, and that’s a good thing.
Croucher:
It’s lower, but it’s not low. How do you get it to the place where we’re back in the balance budget?
Chalmers:
First of all, it’s low by international standards. In fact, incredibly low compared with the rest of the world. When we came to office, there was a trillion dollars of Liberal debt. We didn’t think we had enough to show for that. We’ve been working away to get that debt down, but there is more work to do. I acknowledge in your question.
Croucher:
Is that something you’d do in a second term?
Chalmers:
Budget repair is an ongoing task of every responsible government. The fact that there’s $2 billion of savings even in this Budget on the eve of elections shows that we’re very serious about budget repair. We have made a lot of progress, but there’s more work to do.
Croucher:
A serious question, what comes first? An Australian‑made nuclear submarine, an Australian‑made nuclear power plant or the Australian‑made surplus budget?
Chalmers:
We’ve already delivered 2 surplus budgets, the first time that’s happened in almost 2 decades. When we came to office, there was a deficit every year. We turned 2 of those into Labor surpluses and even the deficit this year is much smaller than what we inherited.
Again, that’s about the progress that we’re making, but it needs ongoing diligence. That’s why there’s savings in the Budget. It’s why we’ve made almost $100 billion in savings over the life of this government. That’s why we’ve banked most of the upward provisions to revenue, because we’re managing the budget the most responsible way we can.
Croucher:
Okay, let’s go to households. Because there are the energy subsidies, we know about Medicare, the cheaper medicine – we’ve heard about that. One of the provisions in tonight’s speech was to eliminate non‑compete clauses deals. Bigger deal?
Chalmers:
It’s a huge deal. There are millions of Australians caught up unnecessarily in these so‑called non‑compete clauses.
Croucher:
Who are we talking about?
Chalmers:
We’re talking about hairdressers and yoga teachers and people who work in small businesses around Australia. It beggars belief that so many Australians are caught up in these things and so we want to abolish them for millions of Australians, for most workers, and that will make it easier for people to find and move to higher paying opportunities. So it ticks every box. It’s economic reform. It makes our economy more competitive and more productive, and it also boosts wages in our economy, and that’s what brings the tax cuts and non‑compete reforms together.
It’s all about Australians earning more and keeping more of what they earn so that they can deal with these cost‑of‑living pressures and provide for the people they love.
Croucher:
The second part of that is nationalising the registration of sparkies. How does that help build more homes? Because that is another thing that really has to be immediate.
Chalmers:
It’s a really important reform as well. We know if we’re going to build all these homes that we need, we need to build capacity, we need more construction workers, we’re incentivising that. We need to cut red tape for people in the electrical trade. So, if you’re working on the Tweed and you want to do a job in Coolangatta, you shouldn’t have to have 2 different licences. So, we’ll create a national regime.
The Productivity Commission says if you do that across a range of industries, it’ll mean about $10 billion more economic activity. So, cut red tape, make it easier for tradies, in this case electrical trades and hopefully, the beginning of doing this in other industries too.
Croucher:
Yeah, feasibly that could go to more industries. Is that on the agenda?
Chalmers:
Definitely, yeah. And we want to work through that, make it easier for people, including after natural disasters. You want to make it easier for people to go more freely into other towns and other cities, maybe in other states, to help rebuild local communities. It’s front of mind for us right now in south-east Queensland and northern NSW. We want to make that easier.
Croucher:
How much harder does Donald Trump make your job?
Chalmers:
Look, there’s a lot of international uncertainty, and that’s not the only part of it. New policies coming out of the new administration in the US is not the only part of the economic uncertainty we’re dealing with. It’s a big part of it, a big and substantial part of it. We’re very concerned about escalating trade tensions, but the Chinese economy is slowing. We’ve got a war in Eastern Europe, we’ve got a ceasefire collapsing in the Middle East. All of this is creating a lot of uncertainty. So, global economic uncertainty is casting a shadow over our own budget. It makes it all the more remarkable that, in that context, the Australian economy is turning a corner, and for that, the Australian people get the credit.
Croucher:
Final question – investing $30.1 million in that synagogue in Victoria, why is that important?
Chalmers:
It’s really important to us for that community after that just outrageous, atrocious arson attack on the synagogue that we help rebuild it. And we’re doing that because we recognise our responsibility to communities. I spoke with Josh Burns, the member for Macnamara, about this yesterday, and we’re making that money available because it’s very important that we rebuild that synagogue as an enduring symbol of social cohesion in this country, the fact that you should be able to worship however you want in a wonderful country.
Croucher:
Treasurer, thank you.
Chalmers:
Thanks, Charles.