James Glenday:
We’re joined now by the Treasurer, Jim Chalmers.
Good morning, Treasurer. Welcome back to News Breakfast.
Jim Chalmers:
Thanks very much, James.
Glenday:
We’ll get to the economy in a moment, but I just wanted to take you back to the time of your last Budget, when there was all sorts of speculation about a minority parliament. Could you have possibly imagined that just a couple of short months on, that the Coalition would have been beaten so badly that they split in 2 and that 2 of your major enemies, Adam Bandt and Peter Dutton, would have been booted from the federal parliament?
Chalmers:
I think it’s fair to say, James, that the outcome in the election exceeded even our most optimistic expectations. I think we’ve made that clear in different ways. But we were confident, in the context of all of this global economic uncertainty, that Australians would go for the stable, methodical, considered, responsible economic leadership of the Prime Minister and his Labor government.
When it comes to the Coalition, obviously what we’re seeing in the former Coalition parties is a mess but it’s not our focus. We’re focused on providing that responsible economic management, which has seen inflation come down, wages go up, unemployment stay low, and now 2 interest rate cuts in the space of 3 months. These are good and welcome developments, but we’re focused on the work that we have to do to keep that progress going.
Glenday:
Did you turn on the TV yesterday and watch this split unfold in real time? Surely you must have had some interest, even if it’s not your focus.
Chalmers:
I saw some of the duelling press conferences, that the former Coalition leaders were conducting. But again, yesterday was a really big day in the economy. We got good news in our economy yesterday, that second interest rate cut in the space of 3 months, providing welcome relief for millions of Australians, and so that was the focus yesterday.
I caught up with the Finance Minister to talk about the year ahead, planning out how we roll out our election commitments and legislate and fund them. And so the focus was on the economy yesterday. But of course, the quite shambolic breakup of the Liberals and Nationals was ever‑present yesterday but we tried to maintain our focus elsewhere.
Glenday:
Yeah, I imagine some people would have been watching with great delight. Just given the chaos you’re seeing in your opponents, is the biggest threat to the future of a Labor government essentially hubris and being too confident?
Chalmers:
Well, there’s no sign of that. We are very grateful for the support that was shown us in the last election. We approach the coming term with humility. We’ve got some big challenges to address together with Australians – building more homes and rolling out more renewables, making our economy more productive, finishing the fight against inflation, getting wages growing again, helping people with the cost of living. This is the focus of this Labor government. Even with the mess that the former Coalition parties are in, we maintain a focus on the things that really matter to Australians, while our opponents focus inwardly on themselves.
Glenday:
Let’s go to that interest rate cut yesterday, you mentioned it, the RBA had a bit to say as well about the current situation of the Australian economy. Do you agree that Trump’s trade war still has the potential to plunge Australia into a recession?
Chalmers:
It’s not the expectation of the Reserve Bank or the Treasury in their forecasts that the Australian economy will go backwards. In fact, the revised Reserve Bank forecast that they released yesterday have growth stronger next year than this year, and so do our own Treasury forecasts. And so our expectation is that our economy will continue to grow and that growth will strengthen next year. But these –
Glenday:
– sorry to interrupt, Treasurer. I mean, but they’re concerned enough that they’ve taken a look at this and said, hey, this is the downside effect potentially if Donald Trump doubles down on tariffs at some point.
Chalmers:
Governor Bullock was asked a question in a press conference about the very worst‑case scenarios if these escalating trade tensions get well out of hand. The point that I’ve been making yesterday and today, and the point that was made by the Reserve Bank in their Statement yesterday and in the Governor’s press conference is – of course – global economic uncertainty is a big factor in the world’s economy, but also in our own economy.
And that’s why it’s so important that we’ve made this progress together as Australians. Not many countries can say that they’ve made this progress on inflation without seeing unemployment rise significantly, creating lots of new jobs, real wages are growing again, we’ve got the debt down, growth is rebounding in our economy, and now we have these 2 interest rate cuts in the space of 3 months.
Not every country has all of those things happening at once. And so what that means is we are well placed and well prepared for this global economic uncertainty, which is coming from decisions taken in Washington D.C. but also from a slowing Chinese economy and conflict in other parts of the world.
Glenday:
Just briefly, Treasurer, before I let you go, it’s been a couple of weeks. Your team’s sworn in. What’s your top priority in terms of legislation when parliament returns?
Chalmers:
The Prime Minister has made it really clear that cutting student debt is a big priority for us in the new parliament. We want to provide that cost‑of‑living relief to students and also that debt relief and so that’ll be a big priority.
We’ll put our heads together with the colleagues and work out all of the legislation that needs to be passed to give effect to the commitments that we took to the Australian people in the election, but cutting student debt will be a big and prominent part of that.
Glenday:
All right, Jim Chalmers, we appreciate your time this morning.
Chalmers:
Thanks, James.