JAMES FINDLAY:
Prime Minister Anthony Albanese has already informally kicked off his party’s campaign, starting a tour of key battlegrounds in Queensland, will be heading to the Northern Territory and WA soon, we hear. And with the RBA preparing to release new inflation figures very soon, it’s clear that the cost of living will be a defining issue.
If you’ve got questions for the federal Treasurer, Jim Chalmers, give us a call now. Federal Treasurer, Jim Chalmers, a very good afternoon to you.
JIM CHALMERS:
Good afternoon to you, James, how are you doing?
FINDLAY:
Yeah, good thanks, thanks for asking. Look, a big infrastructure announcement today in Queensland, with $7.2 billion for the Bruce Highway, but with this holiday period a lot of people are talking about the cost of living. What can you do to bring that down?
CHALMERS:
A couple of things about that. First of all, it was a big announcement today, one of Australia’s least safe roads, but one of Australia’s most important roads, the Bruce Highway in my home state of Queensland – a big new investment there, so I appreciate you acknowledging that at the start.
The cost of living still is the biggest issue in the economy and in communities right around Australia, and that’s why it’s so important that the Labor government has provided the tax cuts, the energy bill relief, cheaper medicines, cheaper early childhood education, fee‑free TAFE, rent assistance, getting wages moving again, all of these ways that we’re not just acknowledging that people are doing it tough but actually responding to it, trying to take some of the edge off these cost‑of‑living pressures, which we know are still hanging around.
FINDLAY:
Announcing all those things that are having an impact on people’s wallets is obviously good, but is it enough though when people are still feeling like they’re really trying hard to make ends meet?
CHALMERS:
It’s important that the cost‑of‑living help that we provide is as responsible as it can be, and we’ve been really responsible with the budget: a couple of Budget surpluses, we’ve tried to make sure we’ve got the budget in much better nick, it’s about $200 billion better than when we came to office 2 and a half years ago, so we try to balance that important task, which is repairing the budget at the same time as we’re rolling out all that cost‑of‑living help.
You said rightly in your introduction that there’s new inflation numbers out on Wednesday, and what we expect them to show is those monthly figures, they bounce around a bit, they don’t always go down in a straight direction. Really anything with a 2 in front of it shows that inflation has come off really substantially when we came to office. When we came to office inflation was more than 6 per cent, now it’s in that 2 to 3 per cent target band that the Reserve Bank has, and that’s really an indication that, yes, there are still cost‑of‑living pressures, yes, we know people are still juggling those pressures in their household budgets, but inflation has come off really substantially since we were elected.
FINDLAY:
Yeah, the headline inflation rate is what the RBA look at though, and that still has a 3 in front of it. We might see a 2 in front of it, what, on Wednesday? I know you don’t have a crystal ball, Dr Chalmers?
CHALMERS:
Look, I don’t make predictions about it. Most economists think that the headline rate will be between 2 and 3 and the underlying rate, the other important measure, might come down a little bit.
But overall, if you look at the direction of travel in the quarterly figures and in the monthly figures, what you can see is in 2022 inflation was much higher, multiples of what it is now – it’s come down substantially, but we know that people are still under pressure, and that’s why our cost‑of‑living help’s so important.
You mentioned at the start it is an election year. There’s no point pretending otherwise, and it’s important to remember that most of this, if not all of this cost‑of‑living help that’s rolling out at the moment was actually opposed by Peter Dutton and the Liberal and National Parties, and so people would be doing it even tougher if the Liberals had their way.
FINDLAY:
Well, that’s a bit of rhetorical fancy question – statement, but we’re not sure what the Opposition would do in parliament, but thanks for making that –
CHALMERS:
No, we know what they will do, James, because they voted against the energy bill relief, they called for an election over the tax cuts, and so we do know they opposed it. We also know, if you want to look forward, which I would rather do too, if you think about the sorts of things that Peter Dutton has been known for: he came after Medicare when he was the Health Minister, he’s got this crazy nuclear scheme which would push up electricity prices, the Liberals are typically worse for wages.
There are a whole bunch of reasons why this election, overall it’s about a choice, Labor building Australia’s future versus going backwards under the other guys, and the reasons why we say that people will go backwards under Peter Dutton is because he’s come after Medicare before, he’s pushed down wages before and he’s got this madness which is the nuclear scheme, which is the most expensive form of electricity and would push prices up.
FINDLAY:
Let’s focus on what you’ve done and planning to do. You have mentioned cost‑of‑living pressures and relief that you’ve made over the past year, the big one being electricity bill relief. Is it likely that we might see more of that before the election?
CHALMERS:
Well, we’re still rolling out the energy bill relief that we budgeted for in the last Budget, so that’s the focus. It’s not the only big cost‑of‑living living help either. It was about this time last year that we were working through our options to try and give everybody a tax cut as well. I think those 2 together are the 2 most important ones, the tax cuts and the energy bill relief.
What I’d say to your question about future energy bill relief is that we always try and do what we can and within the constraints of a responsible budget to provide help where we can, and if we’re able to provide more assistance in one way or another when it comes to cost of living in future budgets, obviously we’ll try and do that.
But the focus right now is the energy bill relief we’ve already budgeted for, the tax cuts that every taxpayer’s getting and all of the other things I ran through before around rent, early childhood education, medicines, fee‑free TAFE, and also really importantly, getting wages growing again in our economy so that people can meet these cost‑of‑living pressures.
FINDLAY:
You’re on ABC Radio. I’m James Findlay, with you is the federal Treasurer Jim Chalmers. If you’ve got a question for him, give us a call now, 1300 800 222.
Thank you for your texts, questions that are coming in, but it’s really better if we speak to you on the phone. 1300 800 222 is the number to call.
I want to quickly take a look at – the Australian dollar has been dropping, and I assume because, you know, you’re the Treasurer, and also your focus previously to this has been finance and the economy –
CHALMERS:
Sure.
FINDLAY:
– and economics, the Australian dollar has been falling more and more over the past, what, year. There’s a chance that it might drop even lower, it’s just, what, just above 60 US cents at the moment. That dropping even more over the next year is going to put pressure on households as well, particularly for things that are exported from the US.
Is there anything that the government or the Reserve Bank can do to step in to make sure that the dollar doesn’t drop lower than 60 US cents, or is that something that the government’s willing to see happen?
CHALMERS:
It’s not something – we don’t target as a government the exchange rate, and there’s a couple of really important observations I make about the dollar being a bit lower than usual, it’s been bouncing around kind of 62 cents or so in the last few weeks.
It’s usually a reflection of at least one, sometimes 2 things. The first thing is a lot of times when the Chinese economy is weak our dollar comes down, and that’s because international investors in currency see our economy as very closed related, of course, to the Chinese economy, and so when China is weak, often our dollar comes down.
And the other thing is because it’s a comparison between the Australian dollar and the American dollar, sometimes when there are expectations of changes in interest rates in the US, that impacts us as well.
And so one of the reasons why it’s difficult and not necessarily desirable for governments like ours to target the exchange rate or try and influence it is because usually the bigger part of that exchange rate is what’s happening overseas, particularly in those 2 big economies, China and the US.
FINDLAY:
Okay. Let’s head to the phones. Joe has given us a bell, 1300 800 222, Joe’s in Bendigo in Victoria. Joe, what’s your question for the Treasurer?
LISTENER:
Yes, I was just wondering if the government dropped the excise on cigarettes and alcohol and fuel, if that wouldn’t ease the inflation, the burden of inflation on people, and also actually help for the crime involving cigarettes and probably the developing crime in alcohol, and also bring down the cost of fuel so people can actually travel a bit further to work and afford to go away and so on. Also reducing the excise on alcohol would be advantageous for the alcohol or the hotel and restaurant industry. Does that sound something like a good idea?
FINDLAY:
Okay. We’ll put that to the Treasurer. Jim Chalmers?
CHALMERS:
Thanks Joe, I was down your way with your local member Lisa Chesters, opening an Urgent Care Clinic, I think in December or November in Bendigo, great part of Victoria, of course.
Look, those sorts of ideas are put to us from time to time, Joe, about beer excise and fuel excise, and they’ve been done before when it comes to fuel.
Really what we try and work out is what’s the best way to deliver that cost‑of‑living help, and we think it’s electricity bills, tax cuts so people keep more of what they earn. But those other ideas are put to us from time to time, we listen respectfully, but it’s not the path we’ve chosen to go down. We think we can get better bang for buck, and provide more help to more people not by cutting taxes on beer necessarily, but by providing those tax cuts in other ways.
And so understand where you’re coming from, have heard those ideas before, but not something that we’ve been proposing to do.
FINDLAY:
Okay, thanks for your call Joe. That’s Joe in Bendigo. 1800 800 222 is the number to call. You’re on ABC Radio, I’m James Findlay, and with you is the federal Treasurer, Jim Chalmers, taking your questions.
One question’s come in here from, no name. Please include your name too. We’re having some housekeeping here when it comes to the text messaging. Include your name and town or suburb when you’re texting too. You ask: ‘When will the federal government fully fund the state schools as per promises after the Gonski report?’ Is there any more funding for schools there, Treasurer?
CHALMERS:
Important question. There has been a big offer made to the state governments, and some of them have signed on and some of them are yet to sign on, but my colleague, Jason Clare’s been negotiating with them. From memory, it was about $16 billion we were proposing to provide to state schools right around Australia.
We hope to be able to finalise the deal with the states to try and get more investment flowing into our state schools, that would be a great thing for education and for students in particular. And so hopefully we can get those deals done. From memory about half of those deals with the states and territories have been done but we’ve got a bit more work to do.
FINDLAY:
Okay. Let’s head to Franz who’s in Surry Hills. Good afternoon to you, Franz, your question for the Treasurer. Hello Franz?
LISTENER:
I work in the international education industry, and there’s a lot of talk about the numbers of international students being reduced over this period. What is the plan for the incoming government to do something about those not either being reduced or being increased?
FINDLAY:
A little bit out of your wheelhouse – out of finance and Treasury, but do you know –
CHALMERS:
That’s an important question, and it is something I work again pretty closely with Jason Clare on. So what Franz is referring to is our efforts to make sure that even though international students continue to grow, that they grow at more manageable levels so that we can manage the overall migration intake, which has been a bit higher post‑COVID, and we want to help manage it to more normal levels.
We really support, enthusiastically support, the international education sector, it’s a really big earner for Australia, very important export industry for us, top 4 or 5 I think from memory, and we want it to continue to be that. But we’ve got to make sure that we can sustain the numbers, and so we’re managing that growth.
Not everybody in the sector loves that, we understand that, but we’ve got to try and take the right decisions in the national interest, and that means continuing to welcome students, but to welcome them at a rate that we can sustain.
FINDLAY:
Okay. Thanks for your question, Franz. Look, speaking of – well, actually, no, I just want to look at internationally for a moment, Treasurer, Elon Musk is being accused by the German government of interfering there in the upcoming election which is happening in May with comments supporting the right wing party of the AfD Party. He’s also, Musk has also said that right wing reform UK leader Nigel Farage should step down, you know, making comments about UK politics there.
Are you worried about political interference that Elon Musk might have with our upcoming election in Australia?
CHALMERS:
Elon Musk has got very strong views, often quite right‑wing views, and he’s got an enormous platform that he owns that he can express them. That’s not unprecedented, whether it’s media like X or traditional sources of media, it’s not unprecedented that people with big megaphones have tried to influence politics and influence elections.
That’s just the reality unfortunately. We try not to focus on what would make Elon Musk happy or unhappy. We try to focus on what’s right for Australia and particularly for Australians, and I think you can get too caught up in the kind of back‑and‑forth on social media. We just try and make the right decisions for the right reasons. Sometimes people like Elon Musk will like them, sometimes they won’t like them. But I think it’s a bit of a fool’s errand to try and kind of continuously please these guys. He will have views about international politics, he will express them. That’s his job. That’s his prerogative. Our job is to keep taking the right economic decisions, in particular for the benefit of the Australian people, not for the benefit of someone who lives half a world away.
FINDLAY:
Okay and just finally, Treasurer, I know it’s been asked several times, but I know some people are wanting to know when the election will be.
CHALMERS:
I thought that’s where you were headed on that James!
FINDLAY:
I’m not going to ask you what the date is, but it maybe the date of when the election will be called maybe.
CHALMERS:
I was with Prime Minister Albanese in Gympie today in regional Queensland, and he said he won’t call it this weekend, so you can stand down this weekend. As you rightly identified in your introduction, the election has to be by May, so one way or the other will be on us before long. And when that’s called and when that’s held is up to the Prime Minister. I just keep doing my job until that occurs.
FINDLAY:
Well, I really appreciate your time this afternoon, Treasurer.