GREG JENNETT:
Treasurer, welcome back to Afternoon Briefing. A big relief, a welcome reprieve, we just heard you say of the Reserve Bank's decision in Question Time. It does say some further tightening of monetary policy may be required to ensure that inflation returns to target in a reasonable timeframe ‑ reasonable timeframe is mentioned multiple times. What is that?
JIM CHALMERS:
First of all, I think a lot of Australians will breathe a sigh of relief after today's welcome reprieve from the Reserve Bank. And they made it clear in their statement, as you rightly say, that they will monitor now the developments in the economy and make decisions in the future in the usual way. We want to get on top of this inflation challenge together and the independent Reserve Bank's got their job to do, I've got my job to do, and we've seen some welcome progress. Partly as a consequence of our responsible economic management, our biggest priority is getting billions of dollars of cost‑of‑living relief out the door without adding to inflation. We've got a bigger surplus to take the pressure off inflation, and we're investing in the supply side issues in the economy. And we've seen some welcome progress on inflation, but we've still got a way to go yet. Inflation is still too high and too many Australians are still under the pump.
JENNETT:
Does this language suggest that the Board might be growing impatient about waiting until ‑ I think, it's late 2025 ‑ before inflation would fall back comfortably within the two to three per cent band? Do you think it is impatient ‑ that that is too long ‑ it's not a reasonable timeframe?
CHALMERS:
Well, it's for them to determine what they consider to be reasonable. One of the things that stood out for me from the statement today, which I read out in the Parliament earlier this afternoon, was the Reserve Bank Board saying that they consider that some of the recent data we've been getting about our economy ‑ whether it's softer retail figures or moderating inflation ‑ that's consistent with inflation getting back down towards the target band. And obviously, how quickly or slowly we can do that is an important question. But from our point of view, in the Treasury forecasts, they expect it to get within the target band next financial year. Everyone would like that to be sooner but we need to address this inflation challenge without crunching the economy. That's the challenge not just for the Bank, but for the government as well.
JENNETT:
How do you think the risks of recession have dissipated? Is that evident now, in at least the statements of the Reserve Bank Board?
CHALMERS:
I think the Reserve Bank and the Treasury still expect our economy to continue to grow, but for it to grow quite slowly. And I've been upfront with your viewers before, and with all of my public commentary really around Budget time, and since. We expect the combination of significant global economic uncertainty combined with higher interest rates and price pressures to quite significantly slow our economy, but we still expect it to grow.
JENNETT:
All right, on the roughly 850,000 borrowers who needed to face or would face the cliff of moving from fixed to variable rates this year, how many have done so? I think Angus Taylor, in a question, suggested there might be 150,000 remaining. Is that true? And do we need all to climb the cliff in order for the inflation strategy to be complete?
CHALMERS:
The numbers that I use, when I think about these people who are coming off a fixed rate mortgages on to a variable rate ‑ obviously, they are under substantial pressure when the variable rate is much higher ‑ is I think about it in per centage terms. The peak in people coming off fixed on to variable was ‑ last quarter ‑ we think, something like 19.4 per cent last quarter. This quarter, we expect 17.3 per cent, in the most recent data. Still a big number, but smaller than what it was last quarter. There was a bulge in people coming off fixed on to variable in the middle of the year, and we're starting to move beyond that. But still, a lot of people are under pressure, because they're moving into these different types of loans, and we understand and acknowledge that.
JENNETT:
So, in that sense, at least numerically, the number of borrowers ‑ that peak has passed on this journey?
CHALMERS:
We think about it in terms of loans, rather than people. Some people have got more than one loan, but certainly when it comes to the number of loans, it peaked last quarter ‑ still a lot of people in that position. And what the banks would tell people, if they asked this question, if they're under this extreme pressure because rates have been higher, or they're moving on to variable rates, talk to the bank as soon as possible to see if some accommodation can be made.
JENNETT:
A couple of other areas to cover off away from rates and inflation. Petroleum Resource Rent Tax, you've had the Greens and Senate crossbenchers write with an alternative proposal, I think, to you. Have you entertained this alternative which would be doubling the revenue involved and will you?
CHALMERS:
No, we intend to legislate the proposal that we costed and put in the Budget in May, and that's because it's the best way in our view to get more revenue sooner to pay for Medicare and bulk billing and cost of living relief in the Budget, but in a way that is responsible and methodical and considered and, and in a way, which recognises we've got some international obligations here, we want to make sure that we can ensure supply in the industry, we want to protect jobs in the industry, it has a role to play in the net zero transformation. And so we think we've struck the best balance in the proposal that we put in the Budget, and that's the one we intend to legislate.
JENNETT:
But you only get to do that with the members in the Senate. What have you done to negotiate this so far with the Coalition so that you're not confronted with these sorts of escalating demands?
CHALMERS:
The pressure is on the Coalition now. They are able to choose now, do they vote with the Greens or do they vote with Labor on our proposal.
JENNETT:
Are you prepared to make concessions around the speed and ease of approvals on gas projects to facilitate that?
CHALMERS:
I think we have the best possible package to put before the Senate. And I hope and expect it to be passed there. The Coalition has the opportunity to do the right thing here. Now in saying this, clearly, we respect contributions made across the parliament, including in the Senate. But on this occasion, we put a lot of work into this. Treasury spent some years coming to this advice and coming to these conclusions. We've thought about it, we've done it in a really methodical way and the outcome of that should be the passage of this legislation.
JENNETT:
Have you spoken to Angus Taylor about it?
CHALMERS:
We've offered briefings and the like, and we remain obviously willing to do that. I'd happily talk to him about it. My understanding is that they intend to support it but until that happens in the Senate, obviously, that's up for grabs
JENNETT:
I think there were a couple of conditions that they outlined publicly. The government hammered questions during Question Time on Robodebt and Scott Morrison in particular. What's the objective here? Is it your view and the collective view of the government that the Member for Cook's useful time has been outlived in this parliament?
CHALMERS:
Well, the point that I thought Bill Shorten and Anthony Albanese made really well today is that Scott Morrison is not the victim here. We're talking about hundreds of thousands of victims, who are Australians, often the most vulnerable Australians, who were knowingly treated shabbily and illegally. And I actually think the most outrageous thing that's happened in the last 24 hours on this front is Peter Dutton defending it on the 730 program on this network.
JENNETT:
Should he go, should he leave the parliament?
CHALMERS:
That is a matter for him but Peter Dutton needs to recognise and acknowledge this is not just a Scott Morrison problem. This is an LNP problem. This is how the LNP govern in a wasteful and incompetent way, and on this occasion, in an illegal way. This is not just a Scott Morrison problem. When he leaves the parliament, the Robodebt stench won't leave the LNP.
JENNETT:
We'll follow that up when we can with Opposition members. A quick final one, which I acknowledge is unusual to put to a Treasurer: the grotesque allegations of child abuse. Many offences alleged to have occurred at a childcare centre, some around Brisbane. An arrest was made in southwest Brisbane. As a local representative, do you have any reason to believe that families in your part of the world have been affected?
CHALMERS:
These are horrifying allegations, absolutely horrifying, and I think the work of the AFP should be applauded here; the really quite remarkable men and women of the AFP who have pursued this matter, and seen these allegations come to light. It's not for me to talk about the specifics of this case, I'll leave that the AFP. I don't want to get in the way of the legal processes that happen now, but I will say that all of the families who have been impacted or from centres who have been impacted, my understanding is that they've been notified. So they will know if their kids have been at risk in relation to these alleged offenses. But really, to the families involved, I can only imagine how horrific it is, I've got little kids myself, and to the AFP we say thanks.
JENNETT:
It's shocking and a remarkable piece of police investigative work. Treasurer, thanks so much for joining us again on Afternoon Briefing.