GARY ADSHEAD:
The federal Treasurer, Jim Chalmers, it was he who handed down his third Budget last night, and he joins me on the line. Thanks very much for your time, Treasurer.
JIM CHALMERS:
Thanks for your time.
ADSHEAD:
I know that you’ve been asked a lot about this, but I don’t know, it seems a bit obscene to be giving the wealthiest people in the nation right now $300 in energy bill rebates given that, you know, we all know that there’s a real cost‑of‑living crisis for many more.
CHALMERS:
Well, they’re not our primary focus. Our primary focus here is the millions of people in middle Australia who are doing it tough, and that’s why the Budget has a huge focus, a big emphasis on providing cost‑of‑living relief which is substantial but responsible.
We wanted to ensure that in addition to a tax cut for every taxpayer that we provide energy bill relief to every household, because we know that people are doing it tough right up and down the income scale, and we want to help.
And so it’s part of a big cost‑of‑living package, the tax cuts and the energy bill relief, but there’s also more targeted relief when it comes to helping people with rent, helping people with their medicine costs.
ADSHEAD:
You don’t really think that, you know, billionaires are doing it tough up the income scale though, do you?
CHALMERS:
They’re not the focus here. But once you start paying this energy bill relief beyond people on pensions and payments, which is how we did it last time, once you start providing it more broadly, the energy retailers, and they are who we work through in order to provide this relief, they don’t have information about people’s incomes.
You’d have to design a whole new system, it would take time and money to do that, in order to draw another line between who gets some of the assistance and who doesn’t. Overwhelmingly this energy bill relief is for people doing it tough, and we recognise that a lot of people are under the pump and that’s why the Budget ensures that more help is on the way.
ADSHEAD:
Is it in some way an admission that when you promised to bring down people’s electricity bills, et cetera, by $275 when you were elected that you haven’t done it, so here’s 300 bucks?
CHALMERS:
That number you’re citing was a forecast in 2021 about an outcome in 2025 and we’ve found a way to help people with their energy bills in 2024 immediately, in the very next financial year from July. And that’s because we recognise that among the many cost‑of‑living pressures that people are under, electricity’s one of them, and what we know from the last time that we provided this kind of help is that on average around Australia, instead of energy bills going up about 15 per cent, according to the ABS, they went up about 2 per cent, and that shows that we can help people by taking some of the sting out of their energy bills, and that will help with inflation.
ADSHEAD:
So, a lot of commentators are clearly talking about this being a gamble on your part to bring down inflation, and therefore, perhaps see interest rate cuts. Was that like front and centre of what you were thinking as you were sitting with Treasury designing this Budget?
CHALMERS:
The primary motivation was to try and give people help without adding to inflation, but as part of that, is making sure the way we design our cost‑of‑living policies is pushing inflation down rather than pushing it up.
That was really the primary motivation. I don’t see it in political terms, I know right around Australia people are under a lot of pressure, and that’s why we’ve got this substantial but responsible cost‑of‑living package in the Budget, and really one of the centre pieces of the Budget is to try and alleviate some of that pressure where we can. That’s our motivation.
ADSHEAD:
And confident that it will have the impact that it’s predicted to have on inflation, and accepting of the fact that if it doesn’t, is there a Plan B?
CHALMERS:
I am confident, partly because when we provided this help before, we saw that it pushed inflation down. Don’t forget, inflation’s come down, it had a 6 in front of it when we arrived in office a couple of years ago, it’s now got a 3 in front of it. So inflation’s come off a bit, but we need it to come off further, because people are still under pressure.
But what we saw in the last Budget as a consequence of our energy bill relief and our rent assistance is that we were able to put downward pressure on inflation, and that’s what we’d like to do again.
ADSHEAD:
Disappointed that you didn’t provide any more funding for people on JobSeeker, there’s a lot of criticism around that from the social services agencies.
CHALMERS:
I understand that, and I’ve heard that, of course. We increased JobSeeker by $40 a fortnight in the last Budget, and we understand that people would like us to have done that again or to have done more than that again.
We have found other ways to help people who are especially vulnerable, whether it’s the energy bill rebates, whether it’s the permanent increase to Commonwealth Rent Assistance, help with medicines or in other ways.
We know we’ve got a responsibility to the most vulnerable in our society, and that’s why we are providing such substantial assistance with these cost‑of‑living pressures in addition to the permanent increase to JobSeeker that we had in the last Budget.
ADSHEAD:
Now this is dangerous ground for someone in Western Australia to talk about, but clearly, Chris Richardson, I know, has been highly critical of the top‑up sort of system now around GST. He says that it was industrial scale seat buying for Western Australia.
Now the predictions are going from sort of $40 billion over the next 10 years in top‑ups to $52 billion, so it’s expanded. Is that sustainable, seriously?
CHALMERS:
We found room in the Budget to do that. We wanted to make sure, and we want to make sure that WA gets a fair go in the GST carve‑up, and that’s why we’ve committed to the floor that WA is a big beneficiary of, and we said to the other states when we extended the no worse off guarantee for another 3 years that we are prepared to top them up.
There’s a Productivity Commission review in a couple of years’ time. But our commitment to WA is really clear, we want to make sure that you get a fair deal out of the GST. We know that so much wealth and prosperity for our whole country is created out west, and we want to back you in.
ADSHEAD:
Does it rankle you that we’re sitting on sort of surpluses over the next 4 years, up to $10 billion, Treasurer?
CHALMERS:
Rita Saffioti is a great Treasurer, and she’s doing a terrific job out there, and from time to time I envy the WA budget position, but we’re doing okay too. We’ve helped engineer a pretty stunning turnaround in our budget in the 2 years that we’ve been in office, and we will continue to manage the budget in the most responsible way we can.
ADSHEAD:
How do you explain then that we sort of go from this $9.3 billion surplus in this one and then we fall off a cliff into deficit quite considerably; what do you say about that?
CHALMERS:
Two things about that. First of all, that deficit next year, when we came to office, was going to be $47 billion and now it’s $28 billion. So we’ve made a $19 billion improvement to that.
ADSHEAD:
But 42 the next year, isn’t it, $42 billion in 25–26, the deficit.
CHALMERS:
But all of these deficits that you’re talking about, we got them down over the course of the first 2 years. Those deficits are smaller than what they were when we came to office. So that’s the first point.
The second point is, in terms of the spending next year, a heap of that is extending health programs, which shouldn’t end. Some of them are cancer and palliative care and those kinds of programs; some of them are funding things like myGov, which remarkably the government before us had funding terminating for, and the rest of it is our cost‑of‑living package.
So, a combination of unavoidable spending and the cost‑of‑living package means that the budget next year has to carry that. But it carries that in the context of a deficit which is much smaller than what we inherited.
ADSHEAD:
The Prime Minister didn’t really rule out the chance of an early election off this Budget this morning, he sort of danced around it a bit. Will you rule out an early election?
CHALMERS:
Well, the funny thing about that is he’s just actually walked in to my office to say g’day and to check in.
ADSHEAD:
So can you just ask him, in case he didn’t the right question last time.
CHALMERS:
Hey Albo, they want to know from 6PR when’s the election going to be? But he’s just wandered in to say g’day.
He said: when do you want it?
ADSHEAD:
I reckon after May is good. All right. Well, there you go.
CHALMERS:
I’m assuming that we go full term, and I’ll be ready to go for a fourth Budget, and it will be another responsible budget. I’ll be ready and raring to go to hand down the Budget whenever my Prime Minister tells me to.
ADSHEAD:
All right. Good stuff. Okay. Thanks very much for joining us this morning, both of you.
CHALMERS:
Okay, all the best.