2 August 2022

Interview with Charles Croucher, Today Show, Channel 9


Subjects: Reserve Bank Governor, interest rates, fuel excise


There are growing calls this morning for the boss of the Reserve Bank to step down over misleading families. These experts predict a fourth consecutive rate hike is all but inevitable later today. The Treasurer Jim Chalmers joins us now from Canberra. Treasurer, great to have you on this morning, does the Governor of the RBA, still have your support?


Of course, Charles. This isn't about any one individual. This is about a difficult day for Australians with a mortgage, another difficult day I think everybody is bracing for the interest rate rise that the Governor and the Reserve Bank Board has flagged. These decisions are taken independently by the Reserve Bank, by its Board and by its Governor. People are expecting this outcome today. But it won't make it any easier. My job is not to take pot shots at the governor, my job is to do what we can in the government to alleviate some of these inflationary pressures that we're seeing in the economy. And that's what our focus is.


His job is to steer the central bank through the economic headwinds we're in at the moment. He said last year that the [INAUDIBLE] interest rates would rise until 2024. Now, there are people who would have budgeted for just that in good faith in applying for home loans that are now wondering how on earth they repay their mortgage. Can you understand the frustration?


I think people are doing it really tough. They've got high and rising inflation and falling real wages and their interest rates are going up. And so clearly, there will be an element of frustration in the community about those circumstances. The Reserve Bank Governor himself has explained some of the comments that he's made in the past. I think he's been pretty upfront in saying that the economic conditions changed faster than they anticipated. That's his job to explain the decisions of the independent Reserve Bank. The government doesn't make those decisions - we've got our own job to do, which is not just not making life harder for the bank as they try and get a handle on this inflation in our economy, but also to do what we can to influence what we can influence. And that's on the supply side of the economy in the jargon, which what that really means is to try and make the economy grow faster without adding to these inflationary pressures. And that's what our economic plan is all about.


You mentioned people are doing it tough, you mentioned your economic plan. Does the cut to the fuel excise last beyond September to help out those people?


I've been really upfront with people Charles for some time now - before the election, during the election and after the election - and pointed out that extending that would cost some billions of dollars and the Budget can't afford that. We've inherited a Budget which is absolutely heaving with a trillion dollars in Liberal Party debt. And when interest rates are rising, it actually costs more and more to service that debt. The fastest-growing area of government spending in the Budget is actually servicing the debt that we've inherited because as interest rates rise, it becomes more expensive to pay that back. So every dollar borrowed, whether it's by our predecessors or by the new government costs more to pay back and we need to be conscious about that. We need to be responsible about that and upfront about that. And that's what we're being.


A whole lot on your plate, Treasurer. We appreciate your time.


Thanks Charles.