CHARLES CROUCHER:
Treasurer, happy Mother’s Day. Thanks for joining us here on Nine.
JIM CHALMERS:
Thanks, Charles. Happy Mother’s Day to Laura and Carol and Barbara and all the mums, but also people who might be missing their mum today.
CROUCHER:
Treasurer, this is the third time we’ve done this pre‑Budget interview, and at the risk of becoming predictable, yes, I’m going to ask the same question first again. When does this all get easier?
CHALMERS:
There’s some difficult choices in the Budget, and that’s because we’re dealing with this inflation challenge. All of your viewers are under cost‑of‑living pressure in one way or another, and so the primary focus of the Budget is that cost‑of‑living pressure, trying to ease it where we can. But we’re also conscious that the economy is not especially strong right now, and so there are some fine balances to strike – there are in every budget, as you allude to in your question. But we’re pretty confident we’ve got the Budget right. It’s a responsible budget, it eases cost‑of‑living pressures, and it invests in the future.
CROUCHER:
So, when do people at home notice it getting easier?
CHALMERS:
What they’ll see on Tuesday night is that there’s a tax cut for every taxpayer. That’s the foundation of the cost‑of‑living help in the Budget, but it doesn’t end there. There is other cost‑of‑living help as well, which recognises that people are under the pump, and we want to do what we can to help. And we found a way to do that which puts downward pressure on inflation rather than upward pressure on inflation. So, the Budget will be part of the solution to inflation rather than part of the problem.
CROUCHER:
I’d love to know what those details are. I’m guessing you’re keeping some of that for Tuesday, but last year was around $14.6 billion worth of cost‑of‑living release. Is there that kind of money coming again? And can we afford, can the economy afford that kind of money again?
CHALMERS:
First of all, the tax cuts are about $107 billion over the forward estimates.
CROUCHER:
That’s already factored in.
CHALMER:
That’s obviously a big part of the story, but there’ll be billions of dollars in extra assistance. Obviously, we can’t overdo it because of the pressures that are there in the economy, but we have found a way to help people, we have found a way to invest in the future, and we have found a way to fight inflation without smashing the economy. We don’t want to have a smash‑and‑grab budget when people are hurting and the economy is soft. And so, we have struck the right balance. Cost‑of‑living help is the primary objective.
CROUCHER:
You mentioned inflation. I’m reminded of a Ronald Reagan quote. He called it ‘as violent as a mugger, as frightening as an armed robber, and as deadly as a hitman’. You’ve caught the dragon. This has been the biggest challenge fundamentally the whole time. Are you confident what you are doing on Tuesday is enough, that the Reserve Bank will see that this will fight inflation and we don’t have another round of interest rate rises? Because in terms of cost of living, that is the number one driver of cost of living, is those interest rates.
CHALMERS:
The Reserve Bank will take its decisions independently. I don’t pre‑empt or predict or front run the sorts of considerations that they have, but obviously the inflation is the most important part of that story. Inflation has come off really substantially since 2022. It’s more than halved since 2022. And we’re actually ahead of our forecast that we had in the mid‑year update, and we’ll update those forecasts in the Budget as well. So, we’re making progress in the fight against inflation, but we know it’s not mission accomplished because people are still doing it tough. And that’s why the Budget is focused on inflation and cost of living.
CROUCHER:
Six months ago, it seemed like we were winning that fight. Have we let it get off the canvas?
CHALMERS:
No, I don’t think so. As I said, it’s actually better now than what we were expecting in December last year, but not good enough. Everybody wants inflation to moderate further and faster. That’s why it’s a big focus of the Budget at the same time as we make big investments in a Future Made in Australia, in our health system, Medicare and the care economy, in housing, in universities and skills.
CROUCHER:
Let’s touch on some of those things. We’ll get to the Future Made in Australia. That is the centrepiece, I guess, of what the government will do in a second term and what the plan is long term. But some of the new things we’re learning today, it is Mother’s Day, the government is putting superannuation into paid parental leave. That is a long overdue policy that will bring tens of thousands of dollars at retirement for women who are so often left behind. How much is that going to cost the Budget? We don’t know that yet.
CHALMERS:
It’s a big investment. It’ll be $1.1 billion in the Budget, and then when it’s up and running, it’ll be more than $600 million a year after that. But it’s a really important investment. When mums or dads go on the government paid parental leave system, they shouldn’t be missing out on superannuation. And so, we are stepping in, $1.1 billion in the budget, $600 plus million dollars a year when it’s fully up and running. And that’s because we recognise that when people are making difficult choices about whether to have kids, we need to support them with paid parental leave, which we’ve extended, super on paid parental leave, billions of dollars for early childhood education. All of these things are about helping people make that choice if they want to.
CROUCHER:
A quarter of a billion dollars for 29 new Medicare Urgent Care Clinics has been announced today by yourself and Mark Butler. Where will they go, first of all?
CHALMERS:
That’ll be determined, but there’ll be another 29 of them. These have been spectacularly successful, particularly for people with kids and particularly people looking for care outside of hours. Medicare bulk billed urgent clinics, so we’ll build 29 more of them. This will be part of a huge investment in the Budget in Medicare. Almost 3 billion in strengthening Medicare, $8.5 billion investment in health overall. And that’s because we recognise that healthcare and bulk billing is a big part of the cost‑of‑living challenge, and so we want to make life a bit easier for people and that’s why we’re making this investment.
CROUCHER:
The other big challenge is finding the staff for them. Where do you do that?
CHALMERS:
This is a big challenge. We need to train more people for these opportunities, whether it’s in the care economy. And we’ll make a multi‑billion‑dollar provision in the Budget for better wages in the care economy. Early childhood and aged care, Future Made in Australia, clean energy jobs. So, there’s a big emphasis on the Budget, responding to the Universities Accord, investing in skills, because we need to build our human capital base if we’re going to take the full opportunity, take the full benefits from these opportunities that are before us.
CROUCHER:
There was billions yesterday for housing. This is all adding to what is a large amount of spending. But when will we see results for that housing?
CHALMERS:
We’re looking to build 1.2 million homes over the 5 years from July. That’s a really ambitious target, but it’s an achievable target. It requires us all to work together and that’s why we are making billions of dollars in new investments in housing. Thirty-two billion in housing since we came to office, because this is a huge priority. We want to build more homes for Australians. We want to make it easier to build and rent and buy so that we can take pressure off this housing market. Rent is one of the big challenges that we have when it comes to inflation. That’s why we provided that help with rent assistance in the last budget. It’s why we need to build many more homes in our communities.
CROUCHER:
So, that’s all spent. We’ve seen the end of live cattle trade will happen. That was announced yesterday. Where does that money come from? Where do we find the new industries that can drive all the revenue that we need for all that spending you’ve just announced?
CHALMERS:
The Budget will be all about broadening and deepening our industrial base, but particularly when it comes to this golden opportunity that we have in the global net zero economy. We want to become a renewable energy superpower. We want to make the most of these vast industrial and economic opportunities that come from the way that the world is changing. And we want people and our industries, our workers, our businesses and investors to be the big beneficiaries of that. And that’s what a Future Made in Australia is all about, grabbing those opportunities, whether it’s in energy or industry or resources or with our skills base or our attractiveness as an investment opportunity. And so, what you’ll see on Tuesday night, a whole range of measures not to replace private investment in these important parts of our industrial base, but to incentivise and attract it.
CROUCHER:
And so again, just to go back to that fundamental question at the start, given all that planning, all that’s going on this direction and sort of long‑term strategies, when does it get easier for people sitting at home right now that are worried about bills?
CHALMERS:
The Budget will make things a little bit easier for people, whether it’s a tax cut or other cost‑of‑living help. And so that’s because we want to do what we can responsibly to ease those pressures. There’ll be spending restraint, but there’ll be cost‑of‑living relief at the same time as we renew our industrial base.
CROUCHER:
Treasurer, we appreciate your time this morning.
CHALMERS:
Thanks very much.