Holly Stearnes:
Joining me live now is Treasurer Jim Chalmers for his take on this. Treasurer, thanks for your time. How are you feeling about the numbers?
Jim Chalmers:
I think these numbers showed today, Holly, in particular the underlying inflation figures were quite encouraging. We have made over the last couple of years very substantial and now sustained progress in the fight against inflation but we know that people are still under pressure and that’s why the cost of living is still the government’s major focus.
Stearnes:
I mean, I know you hold back on commenting about this, but are you hoping the RBA will look at this favourably here? And will your government take responsibility if there is no interest rate cut?
Chalmers:
I take responsibility today and every day for my part of the fight against inflation. Delivering those 2 surpluses in the first 2 years, getting the deficit down in the third year, providing this cost‑of‑living help in a responsible way but also in a meaningful and substantial way, that’s my job. That’s where I’m focused and where the government continues to be focused. Fighting inflation, helping with the cost of living, getting wages up, rolling out cost‑of‑living help, strengthening Medicare; that’s my job, and that’s my focus and the government’s focus.
And you’re quite right in your question, I don’t predict or pre‑empt decisions taken independently by the Reserve Bank. I don’t give them free advice about decisions that they have ahead of them. They will consider this new data along with all of the other data between their last meeting and the next meeting, and they’ll come to a decision on that independently.
Stearnes:
At the end of the day, you mentioned there, people are struggling. That’s the main focus here. A rate cut is what millions of Australians want and need at the moment. Do you think we will see a rate cut before the election? And if not, you must be pretty consistent about what that means for your government’s chances of winning the next election, right?
Chalmers:
First of all, I don’t think it’s any secret that interest rates are one of the big pressures on household budgets right now, not the only one, but one of the major pressures on household budgets. One of the major reasons why our economy has seen relatively soft growth over the last year or so, whether it’s higher interest rates, cost‑of‑living pressures, international economic uncertainty, all of those things have combined to put pressure on people and slow our national economy as well. But again, I’m not going to make predictions or get outside my lane here when it comes to decisions taken independently by Governor Bullock and her board at the Reserve Bank. I have a very respectful relationship with Governor Bullock and her colleagues. I’m focused on my part of this and Governor Bullock will be focused on her part of this.
You can see in the last hour or so since the inflation data came out that the markets think that today’s data makes an interest rate cut more, not less, likely in the near term. But I don’t get into that kind of commentary, that’s for the markets to evaluate and it’s for the Reserve Bank Governor and her colleagues to decide in the end. I take responsibility for my part of it, and I’m focused on that.
Stearnes:
Okay. The Coalition says that this is too little, too late and that government can beat inflation, but what they shouldn’t be doing is record levels of spending. What do you have to say to that?
Chalmers:
They should tell us what they’re going to cut and what that means for Medicare, what it means for pensions and payments and veterans, what it means for housing. And the reason they haven’t come clean and they don’t have any alternatives when it comes to inflation or the cost of living is because we know that the biggest risk to household budgets in 2025 and beyond is a Coalition government. And we know they’re a risk because we know their record.
When Peter Dutton was the Health Minister, he tried to cut and gut Medicare. We know that Coalition governments go after wages, they say low wages growth is a deliberate design feature of their economic policies. We know that Peter Dutton’s nuclear madness would push electricity prices up, not down, and put extra pressure on household budgets. Peter Dutton and the Coalition would make things worse, not better. The reason they haven’t come up with any alternative costed, credible, or coherent policies is because we know that they’ll do what they’ve done in the past, go after Medicare, go after wages. And we know how insane this nuclear scheme is because it’s the most expensive form of new energy, it wouldn’t come in for a long time, and would slow our economy and push energy prices up, not down.
Stearnes:
Well, the energy costings are of course a key focus of this upcoming election. I mean, Treasurer, it’s hard to ignore this week the government’s unofficial pre‑election campaign blitz splurging money with election promises. Don’t you think the RBA will be watching that spending with close caution, though?
Chalmers:
First of all, the Reserve Bank Governor has said on a number of occasions now that government spending is not the main game when it comes to inflation in our economy. And if anything, the fact that I was able to hand down with Katy Gallagher 2 budget surpluses for the first time in almost 2 decades is actually helping, not harming, the fight against inflation. So, that’s the first point. But secondly, we’ve managed the budget in a very responsible way. We’ve engineered a $200 billion turnaround in the Budget – the biggest nominal turnaround in our history. Those 2 surpluses, the smaller deficit this year, we’ve got debt down by $177 billion, that’s saving us $70 billion in debt interest, I could provide a whole bunch of numbers which show just how responsibly we’ve been managing the budget. And we’ve done that in a way that helps us fight inflation, working with the Reserve Bank, without ignoring the risks to growth, trying to preserve the gains that we’ve made in our jobs market at the same time.
And what we see in these figures today, and what we’ve seen in other economic data, is that we’re not without our economic challenges, people are still under pressure, we acknowledge that and we’re responding to that but we’ve got unemployment with a 3 in front of it. We’ve created a million new jobs, real wages are growing again, inflation’s coming down, the economy’s kept ticking over and growing even as some of the countries with which we compare ourselves have gone backwards and some of them into recession, and we’ve avoided that. And so we’ve made a lot of progress together as Australians. We shouldn’t ignore that. Our opponents will always want to talk that down, they’ll always want to focus on the most divisive way of going about that but we’ve made progress together as Australians. We’ve got more progress to make because people are still under pressure and growth in the economy is not what we need it to be and that’s why our responsible economic management is so important.
Stearnes:
Indeed. I mean, Treasurer, you’ve had a difficult task ahead of you over the past year or so, and as you mentioned, people are struggling. I can’t let you go without quickly asking, when will the PM call the election?
Chalmers:
It’s a matter for the PM to decide. That’s a decision that he takes. Obviously, he’ll have a yak with a few of us before he comes to that final decision but regardless it won’t be far away now, it has to be in the first half of the year. It has to be by May, as you know. When the time comes, he’ll call the election. And when he does, Australians will have a really important choice to make between a Labor government under his leadership, which is helping with the cost of living and building Australia’s future, versus Peter Dutton and the Coalition, who are a risk to household budgets, and they’d take our country backwards.
Whenever the election is, that is the choice that people will confront. And I’m looking forward to getting as much done as we can between now and the PM calling the election. And then I’m looking forward to going right around the country and making the case for a second term for this government so that we can continue to provide that responsible economic management, continue to respond to these cost‑of‑living pressures that people are under, and continue to build a great future for our country.
Stearnes:
Okay. Treasurer Jim Chalmers, you’re a busy man. Thank you for your time today. Really appreciate it.
Chalmers:
Appreciate it, Holly. All the best.