EMMA REBELLATO:
Well, let’s get more on the government’s mid‑year economic update to be handed down later this morning. Treasurer Jim Chalmers joins us now from Parliament House. Treasurer, thanks for joining us on what is a very busy day for you today.
JIM CHALMERS:
Thanks for having me back.
REBELLATO:
Before we get to the mid‑year Budget update, I just want to quickly ask you about Vanuatu. We’ve heard that Australia is sending over assistance, but do you know about any Australians, if they’ve been injured or hurt in this?
CHALMERS:
Not yet. We are aware, obviously, that a number of lives have been lost. I’m not aware that any of those are Australian lives. But we know that that beautiful part of the world, the people there are doing it really tough right now. And as Australians, we will be there for the people of Vanuatu. We are already deploying search and rescue teams and medical teams. Penny Wong has been in touch with her counterpart as well to see what additional help can be provided. And if there’s more we can do at the request of the government of Vanuatu, we will do that. We will be there for the people of Vanuatu, who are doing it especially tough right now.
REBELLATO:
Treasurer, let’s turn to the mid‑year Budget update. How bad is it?
CHALMERS:
It’s a really responsible set of books which reflects the substantial progress that we’ve made cleaning up the budget since we came to office. The deficit for this year that we’re in right now will actually be a little bit smaller. But even with a bit of slippage in those later years because of spending in areas like Medicare and medicines and pensions, we’ve still seen a pretty stunning $200 billion improvement in the budget since we came to office a couple of years ago.
So what people will see in the mid‑year Budget update is 2 surpluses in our first 2 years, a smaller deficit in our third year. And that means much less debt and much less interest on the debt so that we can make room for our priorities, including Medicare, including cost‑of‑living help and all of the investments we’re making in the future of the economy.
REBELLATO:
Okay. Speaking of cost‑of‑living help, are Australians going to receive any more help coming up?
CHALMERS:
This mid‑year Budget update is not a mini‑budget, it’s not an opportunity to announce a whole slew of new policies. It’s about accounting for and updating the forecasts and the numbers. Our focus is on rolling out the really quite substantial and meaningful but responsible cost‑of‑living help that we’ve already budgeted for and already announced. People are getting those tax cuts, people are getting that energy bill relief, cheaper medicines, cheaper early childhood education, rent assistance, student debt relief, getting wages moving again. That’s all about recognising that people are under the pump and doing something about it but doing something about it in the context of a very, very responsible set of books.
REBELLATO:
We’ve heard there are reports that $5.5 billion has been set aside, it’s been described as an election war chest. So, will some of that go towards helping people coming up in the next few months before the election?
CHALMERS:
First of all, we should acknowledge and understand that that’s a regular, a permanent feature of budgets, there’s always an item for decisions taken but not yet announced. Often that reflects issues, whether there’s negotiation underway or some commercial‑in of confidence elements. It’s not unusual to have some money under that heading. And what we’ll see in the mid‑year Budget update is for us it’s much smaller, for example, than what it was before the last Budget under our predecessors. It shouldn’t be and isn’t an especially controversial figure. Every budget has an element of that. We’ve announced our cost‑of‑living help and we’re rolling it out right now. If we can do more into the future and budget for that in a responsible way, obviously we’ll consider that closer to the next Budget.
REBELLATO:
Treasurer, we’ve been hearing words when it comes to the spending that’s in the Budget, in the mid‑year Budget, things like unavoidable spending, automatic spending. But is this spending just adding to inflation pressures?
CHALMERS:
No, I don’t believe so. If anything, the responsible way that we’ve managed the budget has been part of the reason for the fact that inflation has come off very substantially in our economy. When we came to office inflation was more than double what it is now, and it was rising. It’s less than half of that now and falling. That’s partly because of those 2 surpluses which the Reserve Bank Governor said is helping in the fight against inflation. It’s partly about the way we’ve designed our cost‑of‑living help. So, we’ve been a helpful part, we’ve played a helpful role in the fight against inflation.
And when you think about some of the spending in the Budget update today in areas like Medicare and medicines and pensions and natural disaster relief and supporting veterans, all of these sorts of things are pressures on the budget but they’re also priorities of the government. And when you hear people, including our political opponents, say that there’s too much spending in the Budget, what they really mean is they want to come after some of those things – Medicare, for example, medicines, pension indexation. These are really important ways that we help people. We strengthen Medicare, we help them with the cost of living. It would be crazy to hack into those sorts of things, as proposed by our opponents and by others.
REBELLATO:
Treasurer, you mentioned the word ‘pressure’. We know households are under a lot of pressure at the moment with interest rates, prices going up, but we’ve also seen some figures about businesses – that 12,000 businesses were insolvent this year. That’s worrying, isn’t it?
CHALMERS:
It is. I mean, business conditions are difficult right now, and for the reasons that you rightly identified – cost pressures, higher interest rates, also an element of uncertainty in economies right around the world. I acknowledge that. I don’t dismiss that for one second. But to provide a little bit of perspective to that, one of the reasons why there’s more insolvencies is because the business base is much bigger than in some of the years that it’s being compared with. As a proportion of companies, insolvencies are actually much lower than they were under the Howard government. They’re actually much lower than the pre‑COVID average. And, again, this is a point that the Reserve Bank Governor has made – that insolvencies are actually down as a proportion of companies since the sort of levels that we had become accustomed to before COVID.
So, yes, difficult business conditions. That’s why we’re providing energy bill help and tax breaks in areas like investment in small capital for small businesses. But we need that bit of perspective, too. One of the reasons why there’s more insolvencies is because there’s much more businesses than in earlier years. When you think about it as proportion of companies, it’s actually lower than what we’ve seen under conservative governments and compared with the pre‑COVID average.
REBELLATO:
Treasurer, just finally, I know you are a very proud Queenslander. We’ve had some news this morning that our favourite Queensland family and Bluey are going to make it onto the big screen.
CHALMERS:
Yes.
REBELLATO:
What are your thoughts?
CHALMERS:
I’m pumped about it. I’m so excited about it. Our family is a Bluey family. It feels like we’ve watched every episode of Bluey about 50 times. My kids watch it every evening. And the movie is going to be a huge deal, not just in our house but for families right around Australia. And as a proud Queenslander, I just couldn’t be happier that the movie is on the way and that success story is going to continue. It’s just a marvellous success story for Queensland and for Australia. And it’s wonderful to see they’ll be hitting the big screen and not just the little screens.
REBELLATO:
It is. Treasurer Jim Chalmers, I know it’s a very busy day; thank you very much for joining us on News Breakfast.
CHALMERS:
Thanks for having me back. Merry Christmas.
REBELLATO:
You too.