Hamish Macdonald:
Are you finding the cost of living getting any better this year, or are things as tight as they ever have been? The federal Treasurer, Jim Chalmers, is pointing some good news on inflation this morning. The latest quarterly figure show petrol, furniture, games, toys all down – the biggest price fall, though, seems to be electricity down almost 16 per cent, that’s due largely to those household energy rebates.
So what I want to hear from you this morning is, are you noticing any of this? How’s the bank statement looking at the end of the month? 1300 222 702 is the number. Let me know what you’re thinking about this. And perhaps the big question is, might these numbers point to a cut in your mortgage rates anytime soon? Jim Chalmers is here, good morning.
Jim Chalmers:
Good morning Hamish, thanks for having me on your show.
Macdonald:
We haven’t been getting a lot of good news on the cost‑of‑living front for some time. Have you got any good news for us this morning?
Chalmers:
Well, tomorrow we’ll get a big update on the inflation numbers in our economy. And first of all, I want to acknowledge that even at the same time as we are making as a country very substantial, very now sustained progress on the fight against inflation, we know that people are still under pressure. I suspect when people call into the program after the interview, they will convey that to you as they convey that to us, and we take that very seriously – but in aggregate, in the in the national economic data, what we have seen over the last couple of years is a quite remarkable moderation in inflation. Remember, when we came to office, inflation was higher than 6 per cent and rising. It’s now got a 2 in front of it.
So we’ll get that update tomorrow. It will remind us of that substantial progress that we’ve made on inflation. Any number with a 2 in front of it will show that inflation has more than half since this government came to office. Any number with a 2 in front of it in the headline number will show that it’s within the Reserve Bank’s target band. Any progress on underlying inflation would be welcome as well. But we know that it doesn’t always immediately translate into how people are feeling and faring in the economy. We know that people are still battling to make ends meet.
Macdonald:
How do you explain that? Because obviously that’s what I hear from Sydney listeners. It’s obviously what people come and talk to you about; the sense that maybe the statistics, maybe the trend lines, are pointing to things getting better, but that it doesn’t necessarily feel that way. How do you explain that?
Chalmers:
Because the fight against inflation isn’t over. You know, it’s not mission accomplished, even if we get very encouraging numbers tomorrow, as we have been getting encouraging inflation numbers for some months now, you know, we would recognise that it’s not, it’s not mission accomplished – because people are still dealing with stresses and strains in their household budget.
But what’s happened over the last 2 and a half years since this government’s come to office, is inflation’s come down very substantially, but what we’ve been able to do, unlike a lot of other countries, is we’ve been able to do that at the same time as we’ve got wages up, we’ve kept unemployment very low, we’ve got the budget into better condition. Even though we recognise those pressures are still there, we shouldn’t diminish what Australians have achieved together over the course of the last couple of years. Not every country has been able to do what we’ve been able to do, to get inflation down and wages up and unemployment low, all at the same time.
I think it’s possible to do, as we do, to recognise those pressures are still there. It’s still very important that we’re rolling out those tax cuts, the energy bill relief that you referred to, and all the cost‑of‑living help that Peter Dutton opposed. That’s still important that we roll it out because people are under pressure. But we should recognise at the same time that we’ve made substantial and sustained progress in the fight against inflation and those new numbers tomorrow will reflect that.
Macdonald:
Now, I know you don’t speculate on the Reserve Bank will or won’t do when it meets, but a lot of people are very focused on that February meeting. People here in Sydney are really feeling it with home loan repayments. Do you think this year will be a better year?
Chalmers:
Well, I do acknowledge – especially in Sydney, but not just in Sydney – that interest rates, which started going up before the election, have gone up a number of times. They are one of the causes of this cost‑of‑living pressure that people are enduring and trying to deal with. So I do recognise that. You’re right, that I don’t make commentary or predictions or try and give free advice to the independent Reserve Bank. I focus on my job, which is doing what we can to fight inflation and roll that cost‑of‑living relief in a responsible way, keep unemployment low, get wages growing, all of those things that we’ve been talking about this morning. I leave the predictions or the commentary about rates decisions to others, to the independent Reserve Bank, primarily, and also to all of the other commentators who are interested in this at the moment.
Macdonald:
Sure, but this is really a question about what might unfold around those things this year. I mean, you must think about all the time. As most Sydneysiders with mortgages would as well.
Chalmers:
I do, and in the broad, in the main, I think that there are real reasons for people to be confident about 2025 – acknowledging that the last few years have been especially difficult for people, I think there is good cause for confidence, not complacency, about our economy in 2025 for a couple of reasons.
First of all, we are making progress on inflation. We have got those real wages growing. We have kept the jobs market in really quite extraordinary condition. So all of those things will flow through into some of the other indicators, we expect growth in our economy to pick up a little bit, not a lot, a little bit, and that will be a good thing – but primarily the reason why people can be more confident about 2025 than 2024 is we’re seeing some of the fruits of our collective efforts. If you look at that most recent data we got from the national accounts – which is the big report card on our economy – growth was weak in our economy, but the combination of real wages growing again, inflation coming down and the tax cuts rolling out, means that we are starting to make up some of the ground that’s been lost over the last few years when it comes to living standards. And so that does give me a bit more confidence, not getting carried away about 2025 – there’s still a lot of global economic uncertainty, for example. But we are more confident about 2025 than we have been about the last couple of years.
Macdonald:
I read a piece, you’ve written an op‑ed in News Limited publications in the last few days. And you say every taxpayer is better off as a result of the decision you took 12 months ago, that’s obviously referring to changes you made to the stage 3 tax cuts. You say not just some, and those benefits will be even bigger from July this year. It seems to me that this is going to be a central question at the election, because Peter Dutton is saying are you better off after a term of the Albanese government? It’s pretty obvious a lot of people don’t necessarily feel better off. So the question is, would we all be better off if you’re re‑elected. It sounds like you’re making an argument to say we would be. Why is that?
Chalmers:
Well, the point I’m referring to in that piece I wrote for the media is that as we get wages growing, the tax cuts get bigger as well. I see those 2 things really as of a piece. You know, we’re all about making sure people can earn more and keep more of what they earn, getting wages growing, giving every Australian taxpayer a tax cut, getting inflation down, keeping unemployment low. These are our objectives, and these are the things that we have been achieving as a government, recognising that a lot of the pressures are still there.
Now, you asked me about the choice at the election. I think one of the most important things for people to understand as we get nearer and nearer to this election is that if Peter Dutton had his way, not every taxpayer would’ve got a tax cut. No households would’ve got energy bill relief. They like lower wages, he went after Medicare when he was the Health Minister. The biggest risk to household budgets, and I think to the economy more broadly in 2025, is Peter Dutton and a Coalition government. And we know that they are a risk to household budgets because we know their record on some of these things: Medicare, wages, cost‑of‑living relief and the like.
Macdonald:
Just on that, though – you’re taking a pretty big swing there, the opposition says that they would tame the budget more, this would get our economy moving better, and we’d all benefit from that. So some of these pressures would reside. How do you answer that?
Chalmers:
Well, they have 2 economic policies, Hamish. One is taxpayer funded long lunches for bosses, and the other one is to push up electricity prices with this nuclear insanity that they’re pushing. Those are the 2 economic policies that they have announced. They say there’s hundreds of billions too much spending in the Budget, but they won’t come clean on what the cuts would be if they came to office. We know that after many cared last time, so it’s within our rights to point out. But the key question here really is the cost of living in this election campaign. People would have been worse off by thousands of dollars over the last couple of years if Peter Dutton had have his way, and they’ll be worse off still if he wins the election. And that is part of the choice that people will weigh up as we get closer and closer to election day this year.
Macdonald:
I’m talking to the federal Treasurer Jim Chalmers, I should make it clear we have been talking to Peter Dutton about joining the program to speak to you here in Sydney as well. We hope that will happen very soon.
Jim Chalmers, a text from Jeff asking this: Hamish, ask Jim what’s caused the deep per capita recession we’re in? Why they run immigration at unheard of levels during a housing crisis?
Chalmers:
Well Jeff, a couple of things about your question – I appreciate you texting in. First of all, on migration, we saw a big recovery in the numbers after COVID, but we’re managing that level down to more normal levels, and we expect to see the fruits of that over the next year or 2. So that’s part of your question. When it comes to the per capita measure of growth in our economy, growth in our economy is remarkably weak, we have acknowledged that – but unlike a lot of other countries around the world, we’ve actually managed to keep the economy growing.
The UK has had a recession, New Zealand is in recession right now, most of the OECD countries have had a negative quarter of growth. We’ve been able to avoid that, but growth is weak in the economy, and we see that reflected in the per capita measure. If you take a step back – Jeff and Hamish and all your listeners – acknowledging the pressures that people are under, acknowledging growth in our economy is week. We have a combination of things in our economy which a lot of other countries would like. We’ve kept the economy ticking over. We’ve got inflation down, we’ve got wages up, we’ve kept unemployment low, we’ve delivered 2 budget surpluses, we’ve got the Liberal debt down, and that means we’re paying less interest on it. All of these things are good things. We don’t pretend the job is finished – obviously it’s not because people are still under pressure and we know we’ve got more work to do, but the biggest risk to this progress would be a Dutton Coalition government who would make people worse off, not better off.
Macdonald:
For all of that, that list you rattle off about what you say are your achievements, many Australians are not that happy with you. You know, the polls – I don’t want to get into poll arguments – pointing to many Australians considering Peter Dutton as Prime Minister. Clearly, the shift is afoot in terms of polling. Why are you not getting credit for it, then?
Do you acknowledge that perhaps Australians are feeling quite so positive and optimistic as you paint it?
Chalmers:
I think I’ve acknowledged that probably half a dozen times in the course of this conversation, Hamish – that people are under pressure, I think you see that reflected in opinion polls. Obviously I notice these opinion polls, I don’t obsess over them – the numbers I’m focused on are the numbers in the economy, but I think I’ve acknowledged numerous times today that people are still under pressure and we see that reflected in the polls.
Macdonald:
A question about something slightly related to this: Donald Trump’s established something called a DOGE – a Department of Government Efficiency – that will be led in part by Elon Musk. Peter reshuffled his shadow cabinet and we now have a SMOGE – I think is the abbreviation – a Shadow Minister for Government Efficiency. Now we can see how that worked out for Trump’s opponent. What are you going to do to counter this idea?
Chalmers:
What do you mean you can see how this worked out –
Macdonald:
– Trump’s opponent. Kamala Harris. She didn’t win. So the question is, how are we going to –
Chalmers:
Oh, okay, you’re saying that was decisive in the American election, okay. I think a couple of things about that. I saw that reshuffle that Peter Dutton made on the weekend. I don’t think it’s much of a vote of confidence in Shadow Finance Minister or Shadow Treasurer that he thought it necessary to make that appointment. And I’d also point out that this Labor government, as part of delivering those 2 surpluses and a $200 billion positive turnaround in the Budget and getting the debt down, one of the big reasons for that is this government has found $92 billion worth of savings across 3 Budgets and updates. And what that’s shown is we can find the necessary savings to get the budget in much better nick without making these sorts of announcements that Peter Dutton made.
I compare that $92 billion in savings to the last Budget of the Coalition government before we came office, which had zero savings in it. What we’ve shown, is we can have all the fancy titles that they like, but we’ve got a Finance Minister in Katy Gallagher and a cabinet for whom responsible economic management is really the defining feature of how we go about managing the budget. We found those savings without finding it necessary to have these kinds of titles that Peter Dutton gave to one of his colleagues on the weekend.
Macdonald:
I want to ask you about the position the government’s ended up in on gambling advertising, it seems, a lot of listeners pretty upset about this. We heard from Mary‑Lynne yesterday on the question of gambling ads, and whether she’d vote for your government again.
[Excerpt]
Listener:
Well, I can’t actually see myself going voting for either side at the moment. I think I’m going independent this time, well and truly – but one of my main criticisms is that Albanese came in, was going to do something about the gambling ads. As soon as he was in, he became wishy‑washy about the gambling ads, and there’s been absolutely nothing done about the gambling ads. All through the tennis, all through TV, day and night, we’re up to our eyeballs in gambling ads, and neither side is doing anything about this. And I think it’s just completely a reflection of the lack of action by the government.
[End of excerpt]
Macdonald:
That was Mary‑Lynne speaking to us yesterday.
Now, I’ve been reading in the papers that the Prime Minister had met with the bosses at the TV networks, the sporting codes, just a fortnight before essentially ditching the plans that you had in place. Did you get rumbled by these big executives on this?
Chalmers:
No, of course not. But I do want to acknowledge that there are a lot of people like Mary‑Lynne who want us to go further and faster when it comes to gambling advertising. But where I differ respectfully with Mary‑Lynne’s comments is when I point out that we have actually done a lot when it comes to gambling reform. You know, we introduced Betstop, we introduced the warnings, we banned credit cards from online gambling – and we’ll continue to work through the recommendations of the Murphy inquiry into online gambling, and we are doing a lot of consultation.
We know that there are a range of views in the community, including Mary‑Lynne’s, but I don’t agree, respectfully, that nothing has happened. We have done probably more to crack down on the harms of online gambling, particularly for young people, than any government before. We acknowledge people want us to do more than that, but we haven’t done nothing.
Macdonald:
I want to play a bit of music that I think we familiar to you.
[Tupac’s Changes plays]
Now, I think you write the budget to this track. Is that correct?
Chalmers:
I listen to it a lot, Hamish. I wasn’t expecting Tupac on Sydney morning radio today, but it’s a real favourite of mine. It’s a very regular feature of my playlist.
Macdonald:
So what are you listening to while you write this year’s Budget?
Chalmers:
I find that my musical tastes are mellowing over time, and so I listen to a lot of very chilled electronic music now. I still listen to Tupac from time to time, usually on a running playlist rather than a working playlist.
Macdonald:
Alright. Treasurer Jim Chalmers, thank you for your time, we appreciate it.
Chalmers:
Appreciate your time Hamish, all the best.