Denham Hitchcock:
Jim Chalmers joins us from Canberra tonight. Treasurer, thanks for your time. Gee, you must have been happy when you got that news.
Jim Chalmers:
It was a pretty welcome decision by the Reserve Bank because it means more money in the pockets of millions of Australians who are still under pressure. It also means 3 interest rate cuts in the space of 6 months. The lowest interest rates in more than 2 years now. We know we’ve got more work to do, but it’s a really good bit of recognition of the progress that we’ve made getting inflation down, the progress we’ve made in our economy, and this is the interest rate relief that people really need and deserve.
Hitchcock:
Treasurer, do you concede, though, that for those with a mortgage of around $700,000, as you referenced earlier today, it’s a saving of a little more than $100. That doesn’t go very far, does it?
Chalmers:
It’s about 110 bucks a month if you owe $700,000. But you put that with the other 2 rate cuts as well, about $330, about $4,000 in a year. And so, I think that this will be meaningful help. I think it will be well received. Not because one interest rate cut or even 3 interest rate cuts solves every problem in household budgets or in the national economy, but it will certainly help.
Hitchcock:
Does it make for the 2 years, though, that we’ve just gone backwards? Does it make up for that? A few good months?
Chalmers:
Not on its own, but when you combine it with, we’ve got inflation down, we’ve got real wages growing again, living standards are recovering, interest rates are coming down. We are making progress in our economy, and I think the decision taken by the Reserve Bank is really a demonstration of that progress that Australians have made together. The government doesn’t pretend, no Australian pretends, that all of our challenges are suddenly solved after 3 rate cuts in 6 months. But certainly, very helpful, very welcome development.
Amelia Brace:
Treasurer, you mentioned wages. No worker is actually going to feel better off until we address productivity. And the RBA actually revised down its expectations today from 1 per cent to just 0.7 per cent. That’s shocking.
Chalmers:
We’ve got a productivity challenge in our economy. We’ve been really upfront about that. It’s not a new challenge. It’s actually been in our economy for the last couple of decades. The worst decade for productivity growth was actually the last decade, in the last 50 or 60 years or so. So, we’ve got a big challenge there, and that’s why the government is focused on turning this around over time. It’s a problem that exists around the world. It’s a problem that’s existed in our economy for 2 decades, as I say. So, it’ll take a bit of time to turn it around, but it is increasingly the government’s main focus. And because we’ve made this progress on inflation and interest rates and real wages growing again, it means we can spend a bigger proportion of our time on some of these big persistent structural issues like productivity.
Brace:
Well, speaking of which, next week you will have the Productivity Roundtable, but you’ve already ruled out changes to the GST and pretty much every other form of meaningful tax reform. So, what’s the point of having a roundtable if there’s nothing actually on the table?
Chalmers:
Well, tax is an important part of our considerations, but not the only part. The focus there is on making our economy more productive, making it more resilient in the face of all this global economic uncertainty, and also making the budget more sustainable. And so, I think tax reform will be part of the proposals that people put to us, but it’s not the only focus of the roundtable. The roundtable’s primary focus is on getting productivity up. Because as you rightly said in your question before, Amelia, if we make our economy more productive, we can lift living standards, we can make workers and families better off, and that’s our objective.
Hitchcock:
Treasurer, another important topic at the moment that we want to ask you about is Gaza and the move by Australia to recognise the state of Palestine. For a largely symbolic gesture, was it worth the risk of upsetting both sides, as we now clearly have done?
Chalmers:
Denham, I don’t think I would agree with the way that you’ve characterised all that. There is really welcome progress and momentum behind the recognition of Palestine as part of a really important step towards a two‑state solution in that part of the world. What we’re trying to do here is to ensure that families, whether they’re in Israel or Palestine, can raise their kids in peace. And for too long, that hasn’t been the reality on the ground in Gaza and in the Middle East, in parts of the Middle East more broadly. And so, this is an important part, Australia making its contribution to that global momentum, to that global progress. Obviously, we need to see the hostages released. We need to make sure that Hamas is absolutely no part of a future government of Palestine. We need to keep the Palestinian Authority up to the mark on the commitments that they’ve made. There’s a lot of hard work still to happen. But this is more than symbolic, it’s important progress towards that two‑state solution, which is all about families raising their kids in peace.
Brace:
Treasurer, Opposition Leader Sussan Ley today claimed she would revoke recognition if the Coalition win the next election. We clearly no longer have bipartisanship on this issue, do we?
Chalmers:
It’s disappointing but not especially surprising that our political opponents don’t want to be constructive about this. As I said before, there is global progress, global momentum. A lot of our friends in the world are taking this really important step, and we’re part of it. And it would be better if our political opponents were more constructive. Unfortunately, I think they’ve learned almost nothing from the last few years, and from the last election. It would be better if they’re more constructive. It’s disappointing but not surprising that they’re not prepared to play that constructive role.
Hitchcock:
Well, Treasurer, big day for you today and at least some good news on the interest rates. We appreciate you coming on the program.
Chalmers:
Thanks for having me on.