DAVID KOCH:
Joining me now is the man who needs to keep inflation coming down ‑ Federal Treasurer Jim Chalmers. Treasurer, not to put too much pressure on you but you've got to say the trend is looking quite good, isn't it?
JIM CHALMERS:
It definitely is Kochie. I think it's an unfortunate sign of the times that an inflation number with a 6 in front of it is seen as encouraging news but it was seen as encouraging news yesterday. And that's because we're pretty sure now that inflation peaked at the end of last year, and it's moderating. We'd like to see it moderate a bit quicker. It'll be higher than we'd like for longer than we'd like but it is coming off and that's a welcome development.
KOCH:
Look, just 6 weeks away from the Federal Budget, every man and his dog is coming to you for a handout at the moment, more money. How do you balance that budget to guarantee that you're not going to pour more petrol on the inflation fire?
CHALMERS:
That's an absolutely key consideration. And we meet ‑ it's called the Expenditure Review Committee ‑ and we meet for hours towards the end of March and the beginning of April to try and get this balance right frankly. Because we do want to help people with these cost‑of‑living pressures. This is the primary influence on our thinking leading up to the Budget but we've got to do that in a really responsible way, a really methodical way because you don't want it to be counterproductive. You don't want to spray so much cash around that it makes the inflation challenge worse. You're looking for targeted ways to make life a little bit easier for people, to take some of the edge off these cost‑of‑living pressures but without blowing the budget.
KOCH:
It will be a tough Budget?
CHALMERS:
There'll be tough elements to it and because what we need to do is we need to show restraint, it needs to be responsible, and we need to make sure that we're getting value for money for every dollar that we spend. And that means inevitably trimming spending in some areas so that we can afford to provide some cost‑of‑living relief, fix our broken supply chains, and some of the other priorities in our economy.
KOCH:
How do you explain to unions that you can't go for a 7 per cent minimum wage increase because inflation is coming down? Inflation could be 2 or 3 per cent in October, and a 7 per cent increase in the minimum wage would just fuel inflation, you'll have a wage spiral that the Reserve Bank is warning against. Have you explained that you can't deliver that?
CHALMERS:
Some elements of your question Kochie I respectfully disagree with. I think we do need to get wages moving in a responsible way, but in a meaningful way as well ‑ that's one of our highest economic priorities and it's just common sense I think to begin with the lowest paid Australians who have missed out for a really long time.
KOCH:
But 7 per cent?
CHALMERS:
I think that if you made a list of all of the things that are giving us this inflation challenge in our economy, low paid workers getting paid too much wouldn't be on that list. We've got an inflation challenge because of the war in Ukraine and busted supply chains which have been ignored for a decade here in Australia, making people more vulnerable to these international shocks. We don't have a wage price spiral ‑ there's no indication that we might have one. And we think making sure that particularly the low paid can earn enough to support their loved ones is an important way for people to deal with these cost-of-living pressures, not a contributing factor to them.
KOCH:
So you'd agree with a 7 per cent minimum wage increase?
CHALMERS:
We'll make our own submission. The unions make a submission, and the government makes its own submission. We don't nominate a number, a specific number in that, but we've made it very clear for some time, we don't want to see the lowest paid Australians go backwards and so our submission will be consistent with our values and with our objectives, and our objective is to get wages moving.
KOCH:
Your Treasury boss who works for you is on the Reserve Bank Board. Are you telling him to keep rates on pause? Would that be your recommendation to the Reserve Bank Board?
CHALMERS:
I don't give any direction to the Treasury Secretary. He represents the Treasury on the Reserve Bank Board and that board and the Governor of the Reserve Bank, as you know, take these decisions independently. I've been very careful the whole time I've been Treasurer, not to give free advice, not to second guess or pre‑empt decisions taken independently. Clearly, they will weigh up the data that has come out this week. Inflation is moderating. We've got that flat retail sales figure earlier in the week. There's some global uncertainty. They will weigh all that up. They'll balance that against the inflation challenge that we still have in our economy and they'll come to a decision independently.
KOCH:
All right, I know you've got another commitment. We'll let you go. Treasurer. Thanks for joining us.