[Excerpt]
JIM CHALMERS:
I’m worried that the Opposition Leader went to a reception for our Olympic athletes and took the opportunity there to be as divisive, characteristically divisive as he could be.
KAREN MIDDLETON:
Are you saying you think he did that deliberately?
CHALMERS:
Of course he did, of course he did.
MIDDLETON:
What makes you say that?
CHALMERS:
Because that’s his form, and I think people have observed that over a long period of time; he’s a very divisive character, and we’ve seen that this week in disappointing ways.
[End of excerpt]
MIDDLETON:
Hi, I am Karen Middleton, Guardian Australia’s Political Editor, coming to you from the lands of the Ngunnawal and Ngambri peoples.
Today on Australian Politics, my guest is Treasurer, Jim Chalmers. Parliament’s back after the winter break, and he and his colleagues have had 5 weeks to hear directly from Australians just how much pressure they’re under.
We’ll discuss why inflation is still so persistently high, whether the government and Reserve Bank are pulling in the same direction, and if more help could be forthcoming. And we’ll talk about the tone of political debate and whether the government’s living up to expectations.
Hello Treasurer, welcome back to the podcast.
CHALMERS:
Thanks for having me back on, Karen.
MIDDLETON:
Now, you’re here primarily to talk about inflation, which is what everybody cares about.
CHALMERS:
I’m here to talk about whatever you want to talk about.
MIDDLETON:
Well, but, well, inflation is what everybody cares about right at the moment, right?
CHALMERS:
Yes, yes.
MIDDLETON:
So it’s been described as ‘sticky’, that’s the word everybody is using.
CHALMERS:
Mmm.
MIDDLETON:
Why is everything still costing so much?
CHALMERS:
Yeah, it is a bit too sticky, a bit too stubborn, a bit too persistent, whatever word that you want to use to describe it, it’s come off really substantially in the last couple of years. It’s less than half its peak, it had a 6 in front of it when we came to office, now it’s got a 3 in front of it, but we have acknowledged repeatedly and for some time that we need it to moderate further and faster.
The reasons why we’ve had this inflation that’s changed a bit over time. Petrol has been part of it, partly because of what’s happening in the Middle East, there have been some international factors, some domestic factors, everybody knows rents are too high, they’d be even higher without our rent assistance, but they’re still too high, insurance, there was some seasonal issues with fruit and vegetables.
So, the composition of this challenge has changed over time, it’s come off substantially over the last couple of years, but we don’t pretend that we’ve got inflation beaten yet.
MIDDLETON:
Now the Governor of the Reserve Bank and the statement on monetary policy that came out earlier this month both emphasised public spending, that’s government spending, both at the state and federal level, as being a contributor, along with household spending to keeping inflation high, putting pressure on inflation.
You’ve argued that it isn’t fair to blame public spending. Can you explain the discrepancy there?
CHALMERS:
The point I’m making is that the amount of spending in the budget is not the primary determinant of prices in our economy. If you think about one year of government spending, for example, there’s about $10 billion net additional government spending in a $2.6 trillion economy, and that gives your listeners a bit of a sense that obviously budget spending isn’t the primary determinant of prices in the economy.
Also, it matters the composition of that spending. If you think about some of the spending in the Budget, a lot of it is investment in health – for example, PBS medicines, and some of it is our cost‑of‑living relief.
We already know from the Bureau of Statistics that the way that we’ve designed our cost‑of‑living relief gets energy bills down a little bit, gets rent down a little bit, early childhood education fees and the like.
So the overall level of spending is not the primary determinant. Even if it was, the composition of that spending matters as well, and we’ve been really responsible and really restrained and that’s been deliberate. That’s why the Reserve Bank Governor has said on earlier occasions, even the fact that we’ve turned a couple of big deficits into a couple of big surpluses is helping, not hampering the fight against inflation.
MIDDLETON:
And she’s acknowledged that governments have a job to do in delivering services, and services cost money. But surely the bank factors in the standard degree of services spending that a government has.
So, isn’t she really pointing to extra spending there, unexpected extra spending that’s caused the bank to revise its forecasts?
CHALMERS:
Well, I think the Reserve Bank in putting together the new forecasts, they revised their forecasts for public demand, which is what we are talking about.
To put that in a bit of perspective: what they’re forecasting for the June quarter of this year is about 4 per cent growth, average annual public final demand growth was 4.7 per cent during the Coalition’s period in office.
Even if you want to focus on that demand number, it is lower than the average under our predecessors. It has been growing at about 3.2 per cent since the election, which again is lower than the average we saw under the former government.
So again, I think some perspective is warranted here – it’s important, and as the Reserve Bank Governor has said, governments have a different role to play here.
We both engaged in the fight against inflation, we have exactly the same objective, but we’ve got different responsibilities. Part of my responsibilities is to fund Medicare, to roll out cost‑of‑living help in a responsible way, to provide the services and the infrastructure that people need, and also to make sure that as we fight this inflation, which everybody acknowledges is too persistent in our economy, we need to fight that inflation without smashing the economy or smashing the jobs market.
And that’s why this week’s jobs figures were important too, because they showed that even though the economy is cooling really quite considerably, it’s slowing down really quite a lot. We’re still creating tens of thousands of new jobs, and that’s a good thing.
MIDDLETON:
So you’re not concerned that unemployment has ticked up slightly this week, fractionally?
CHALMERS:
I did acknowledge, even in the course of Question time this week, that the unemployment rate was about 3.5 per cent in the middle of last year, now it’s 4.2 per cent. It did tick up.
And in 11 of the last 12 months, we’ve seen a decline in job ads, and that’s often an indicator that the labour market is softening, and we’ve been pretty upfront and said we expect the unemployment rate to raise.
But one of the really quite remarkable things about our labour market is we’ve got record workforce participation, and so that means, even as the unemployment rate is ticking up, we’re creating tens of thousands of new jobs.
We’ve actually, under the life of this government, created almost a million new jobs, which is a record for a parliamentary term ever. And what that tells us is we can continue in this fight against inflation; we’re making progress in that fight, but we can do that in a way that doesn’t completely smash the labour market, the jobs market.
We are seeing some softening around the edges, but we are seeing new jobs created at the same time, and that’s a good thing.
MIDDLETON:
You talked about the considerations that the government has versus the Reserve Bank. And that’s true; the Reserve Bank’s absolute focus is on inflation, and the Governor keeps on emphasising that. The government not only has to deliver services, but it wants to get re‑elected. So you have a different imperative.
How do you manage the political imperative and then the relationship with the Reserve, which is an independent body, when you’re obviously wanting to not only, on the black and white numbers, bring inflation down, but make people’s lives more broadly better?
CHALMERS:
I can recall the last time we were having this conversation, and you didn’t like it when I said it, but I meant it, I believe that if you get the economics right the politics will take care of themselves.
And I genuinely don’t see the conversation that’s happening about the Reserve Bank and the government and this fight against inflation – I genuinely don’t see it as a contest between the economics and the politics.
What I’m seeing here is a Reserve Bank and a government very focused on the fight against inflation – the same objective, different responsibilities. The Reserve Bank is asked to care about unemployment as well; that’s part of their mandate.
And so we’ve got the same objectives, but we’ve got different responsibilities, and for me the best way for me to discharge my responsibilities is to design this cost‑of‑living relief in a way that’s helpful rather than harmful in the fight against inflation. It’s also to get the budget in much better nick, really quite an extraordinary consolidation in the budget the last couple of years.
That’s my contribution to the fight against inflation, and in that regard, I think we’re both making an economic contribution. It’s not a contest between the economics and the politics.
I think if we continue to provide this responsible economic management, then people will recognise that when they consider, whenever we go to the people.
MIDDLETON:
Well, you have had 3 months, I think it’s about 3 months since we spoke to you last, I think we spoke to you in the context of the budget. What is your sense of the state of the economy? How are you describing it now you’ve had more recently 5 weeks to get out and talk to people –
CHALMERS:
Yeah.
MIDDLETON:
What’s the feedback you’re getting from the public about how the economy’s going and how they’re feeling?
CHALMERS:
Well, the economy’s soft and people are under pressure, and there’s no use beating around the bush on that.
We’ve seen a lot of indicators of that the economy barely grew in the most recent national accounts. Household savings ratio was down, retail has been very soft, discretionary spending has been almost non‑existent, and that’s because we’ve got this combination of the higher interest rates which are already in the system combined with global economic uncertainty.
This week we got some quite weak data out of China, for example, and so people are feeling that in communities right around Australia, and we acknowledge that.
Our best contribution here is to provide those tax cuts for every taxpayer, energy bill relief for every household, cheaper medicines, pay rises, cheaper early childhood education, to do that in the most responsible way we can, and to do that at the same time as we get the budget in much better nick.
And I think at a time when people are under pressure, and when interest rate rises and inflation are a big part of that story, and we are taking those challenges as seriously as we can.
MIDDLETON:
You mentioned the global – the landscape – and of course there’s a lot going on that’s contributing to our inflation problem, and it’s common across a number of countries, but there are some differences; there are some things that make Australia unique. So, it’s not right to say that it’s all to do with the uncertain global outlook, is it?
CHALMERS:
I’ve acknowledged – I think I did a moment ago – there are some international factors and there are some domestic factors as well. If I didn’t recognise that a moment ago, I certainly meant to.
But if you look at what’s happening with inflation around the world, inflation went up this week in Europe, it went down a little bit in the US, New Zealand had an interest rate cut, but they’ve got higher interest rates still, they’ve got higher unemployment.
There are some differences between countries, but as the Reserve Bank Governor and Deputy Governor have said, and as I’ve said publicly as well, the shape of our inflation challenge is pretty similar.
The difference is really that we peaked a bit lower and later than a lot of these countries that we compare ourselves with, but the overall trajectory of it, zigging and zagging a little bit towards the – when you get closer to the target range, that’s been a pretty common feature; we’ve seen it in Canada, the US and elsewhere.
MIDDLETON:
One of the things that did strike me when Michele Bullock was talking to journalists after announcing the Reserve Bank’s decision was the emphasis she keeps putting on uncertainty, like on the precarious nature of the forecasts, on uncertainty, she talked particularly about the uncertainty of monetary policy and managing monetary policy.
And it does seem that there’s, you could argue, a greater certainty in some respects in managing the policy you have control of, fiscal policy, than in managing monetary policy. Is that fair, and does that mean the government could do more than it’s doing now?
CHALMERS:
I think we’re doing the most we can, cognisant of the big economic pressures. Our job is to get on top of inflation without smashing the economy, and without smashing the jobs market, if we can avoid it.
I think the way we’ve been repairing the budget, the way we’ve been rolling out this substantial cost‑of‑living relief in the most responsible way, I think we have broadly got that balance right.
You would recall that for most of this year, including before and after the last Budget, we were talking about global economic uncertainty, a bit like the Governor is now. And I believe, you’d expect me to say this, but I think that that position we took about the balance of risks, primarily inflation, but being cognisant of international uncertainty and the pressures on growth and the pressures on people, I think that approach has been justified.
And especially when you saw the kind of madness on global markets in the last couple of weeks as well. They’ve recovered most of those losses now, but a jobs number that came in just a little bit softer in the US sent the whole place mad, combined with what’s happening in the Middle East, what’s happening in Japan –
MIDDLETON:
And the Governor was trying to hose down that as well –
CHALMERS:
Yeah.
MIDDLETON:
Saying it was one number.
CHALMERS:
But it shows that there’s real jumpiness. Right around the world, there’s a lot of uncertainty, there’s a lot of risk.
Our job is to help Australians navigate that risk, to build our buffers against that global economic uncertainty, but also in the medium term and the longer term work out the way that the world is changing and make sure that our people are beneficiaries, not victims of all of that change, and that’s where the Future Made in Australia agenda and all the rest of it comes in.
So in the near term, helping people with the pressures that they’re under, designing that in the right way, and in the medium term and the longer term, making sure that we’re creating good jobs and good opportunities in a world of churn and change.
MIDDLETON:
One of the things that is different in Australia than in some comparable economies is goods inflation, and particularly the cost of new dwelling construction – everything seems to come back to housing here at the moment.
I know you’ve got 2 housing bills stuck in the Parliament, and you’re going to say, ‘If only those bills would pass everything would be better’. But what are you going to do if those bills don’t pass; how are you going to address this housing problem, which is directly related to inflation?
CHALMERS:
Yeah, well, we haven’t got all of our eggs in one basket, but those 2 bills are really important. If we’re genuine about wanting to build more homes, to help renters, and to make it easier for people to get a toe‑hold in the market, then we need those bills to pass.
It’s a source of considerable disappointment and frustration that the Greens would prefer to vote with the Liberals against more homes, because they want to play politics with housing and homelessness. That is a source of considerable disappointment and frustration.
But those 2 bills aren’t the only things we’re doing in housing. We’ve got a whole range of policies, $32 billion worth of investment, an ambitious target, which will be difficult to hit, but we can do it if everybody plays their part.
We’ve got a new Housing Minister now. I pay tribute to Julie Collins, who did a wonderful job, and now I work closely with Clare O’Neil; we’ve had a long conversation this week about the sorts of things that we need to do to get this housing built.
It is one of our defining economic challenges right now. I think about the energy transformation, I think about housing supply as really the 2 big issues in addition to cost of living and inflation that we’ve been talking about. And so, there’s no shortage of commitment or willingness or dedication or, frankly, Commonwealth investment, but we need to get all of it right; everybody needs to do their bit, including the Senate.
MIDDLETON:
Well, you’ve had a conversation. What are the other things you need to try?
CHALMERS:
Look, I’m not going to front‑run the kind of thinking that Clare’s doing. Clare O’Neil is an absolutely outstanding Minister, and I think that she will lend her considerable intellect to this task, building on the great work that Julie did, and there’s few areas where we’ve had such a huge investment.
Obviously, you can’t just click your fingers and build 1.2 million homes overnight; we’ve got a five‑year target. The pipeline is not in the condition that we need it to be, and so we’ve got to turn that around, and I believe that working closely with Clare and the Prime Minister, the Cabinet, I believe that we can do it, but it will require not just us doing our bit, but states, local government, the industry, the investment community, and so that’s why we’re showing this leadership that we are.
MIDDLETON:
On the point of a timeline, and back to the issue of the imperatives that you face versus the Reserve, and the Reserve Bank is now saying they don’t think that they’ll get inflation back into the top of the target band until the end of next year, so we’re not looking like we’re going to see – well, the Governor has said we’re not going to see a rate cut before the end of this year.
How frustrating is that for a government that has to consider an electoral timetable as well, and would be maybe hoping that you would start to see rates come down a bit sooner than that?
CHALMERS:
First of all, I think it’s important for people to understand that the Reserve Bank’s new forecasts actually bring forward their expectation of getting inflation back into the target range. They thought it would be 3.8 at the end of this year, now they say 3, then they thought it would be 3.2 by the middle of next year and they say now 2.8.
I don’t want to avalanche your listeners with numbers and I don’t want to read out a spreadsheet, but it is important to understand that they had lowered their near‑term expectations for inflation in a good way, but obviously they have a view about the persistence of inflation as well.
They treat some of the issues in our inflation forecasts the same way that Treasury does, our energy bill rebates, and all that kind of stuff, and I think some of the commentary about that has not been especially honest. I’m not accusing you of that, but some of your counterparts –
MIDDLETON:
In what way?
CHALMERS:
Well, people want to assume, when the Reserve Bank says, ‘We will factor the energy bill rebates this way when it comes to headline, this way when it comes to underlying, we’ll treat it differently,’ that’s how the Treasury does too.
The methodology is not different, and people want to pretend that it is in some way or another.
The other thing, now that I’m running through some of the commentary that your listeners might hear, people talk a lot about, ‘Oh, these energy bill rebates are artificially lowering inflation’.
There’s nothing artificial about helping people with their energy bills. We know energy bills are a big part of the pressures people are under, and we’re taking some of the edge off that.
And what the Bureau of Statistics has been able to show is that whether it’s energy, early childhood, rent assistance, inflation which is too high would be even higher if our political opponents had had their way and we weren’t providing this cost‑of‑living help.
MIDDLETON:
I think the Governor said that the energy bill relief wasn’t going to make a big impact on inflation, but I guess you could extrapolate from that that the energy bill relief isn’t very much. Is that fair? I mean, I know you don’t like it being called sort of artificial or a token effort, but it hasn’t, it hasn’t – it can’t alleviate the huge problem people are facing with power bills, can it?
CHALMERS:
Oh, look, we don’t pretend that the cost‑of‑living pressures disappear with our cost‑of‑living help, but we do know from the ABS, independently – not a political opinion, a fact – we do know that we’ve taken some of the edge of some of these prices.
But also when it comes to the Reserve Bank, I mean before the Budget, they thought that inflation at the end of this calendar year would be 3.8 per cent. After the Budget, they now think it’s 3.0. And I’m just trying to give your listeners a sense that even the Reserve Bank’s forecasts have come down substantially because of the efforts that we’re making in the Budget.
MIDDLETON:
And I’m quoting Michele Bullock a lot here, but I want to go back to what she said about this sort of uncertainty, and her warnings, her caveats on everything –
– and she says she’s hoping that things will be back – that inflation will be back in the target range late next year, but that lots of things can go wrong on either side.
From your perspective, as the Treasurer, what do you most worry about going wrong?
CHALMERS:
First of all, I think it is important, whether you’re the Governor of the Reserve Bank or the Treasurer of Australia, that you acknowledge that forecasting is always difficult, there’s always an element of uncertainty, but particularly right now, things are particularly volatile and uncertain for all of the reasons that you and I have discussed and that the Governor ran through.
So we do acknowledge that, both of us acknowledge that, and I think it’s really great, frankly, that the Governor of the Reserve Bank acknowledges that uncertainty and that risk to the forecasts.
From my point of view, obviously the big risks are a broader regional conflict in the Middle East; we’ve seen volatility in the global oil price, which people feel at the bowser here in Australia; that’s a potential risk.
We got numbers this week out of China which were really quite soft, and so the iron ore price has come off quite substantially. And so, there are a number of these global risks, largely geopolitical risks, Russia, Ukraine, the Middle East, closer to home, and these risks play out a bit in our economy, and I think those were some of the risks that the Governor was acknowledging too in welcome ways.
MIDDLETON:
And in terms of the fact that she’s saying no rate relief until the end of the year and people are feeling the pinch so much in their household spending, and we’re seeing that starting to show in household spending pulling back, what’s the argument for more direct relief from the government between now and the end of the year? You’ve got a MYEFO – Mid‑Year Economic and Fiscal Outlook statement coming.
Is that an opportunity for some more direct relief?
CHALMERS:
Well, the direct relief’s rolling out right now, and it hasn’t all rolled out yet. The tax cuts are obviously in everyone’s pay packets, each pay packet, from the beginning of July. That’s a good thing. So that’s rolling out.
More is on the way, obviously each pay packet, the energy bill relief is spread out over the course of the year. The rent assistance comes in September. So there’s more help on the way, and that’s important, that’s deliberate, to roll that out, so that it doesn’t all hit the economy at once, but it provides relief over the course of this year, and in some cases beyond that as well.
When it comes to the guidance that the Governor provided about the future trajectory of rates, I think this is one of the areas where it’s really important that I don’t second guess the kinds of things the Governor says about that. I didn’t do that when Governor Lowe gave some forward guidance, I don’t intend to do that now that Governor Bullock has given an indication about what the next 6 months look like from their point of view.
She’s also acknowledged the uncertainty in the economy, and as I said before, I think that’s a good thing.
MIDDLETON:
There has been a bit of speculation about tension and a divergence of views. How much tension is there given the imperatives you have versus the ones that she has?
CHALMERS:
Well, absolutely none on a personal level, absolutely none. I’m incredibly proud of the appointment that we made of Governor Bullock. I work with her really closely, informally and formally, we speak frequently, and so at that level, absolutely no problems whatsoever.
And I think when it comes to providing different perspectives on one element or another of the economy, I think that’s healthy too. As I said before, we’re as one when it comes to the fight against inflation, we’ve got the same objective but different responsibilities.
I think Governor Bullock, to her credit, acknowledged those different responsibilities in that speech that she gave in her old stomping ground at Armidale in New South Wales. That was, from my point of view, welcome that she recognised and acknowledged we’ve got different responsibilities but same objectives.
And really, all this comes down to is an assessment of whether we could say that the economy’s running too hot. I believe there’s substantial softness and weakness in the economy more broadly, broadly in aggregate, and some of the other commentary around that. But I genuinely, genuinely, don’t see it as a big problem.
The alternative to me providing a view on how hot or cold the economy is and the role of public spending – the Australian people don’t pay me to wait for a Reserve Bank statement and read it out verbatim, they pay me to make good decisions for the right reasons, and also to apply our own thinking and analysis to the situation, and I think that’s healthy.
MIDDLETON:
We spoke before about you being back in parliament after a 5 week break, and there’s a backlog of legislation.
CHALMERS:
Sure is.
MIDDLETON:
We talked about the housing bills, and you mentioned Future Made in Australia. That’s not through yet either.
CHALMERS:
No.
MIDDLETON:
I mean how much does this hamper your economic agenda, and I come back to the question I’m not sure I got an answer to, what do you do if they dig in, the Coalition and the Greens, who are working together, it seems, on a number of these things, or at least have found common ground in opposing your legislation; what are you going to do if you can’t get these measures through, given how important you said the Future Made in Australia in particular and the housing bills are?
CHALMERS:
Well, it is increasingly difficult to work out where the Liberals and Nationals end and where the Greens begin on some of these issues: Future Made in Australia, renewable energy superpower, housing, all of these things that the Greens pretend to care about, that they are teaming up with the Liberals in unhelpful and destructive ways and for political reasons. That, as I said before, is frustrating and disappointing, but not especially surprising.
I’ve got about a dozen Treasury bills in the Parliament right now, and I’ve got another dozen to introduce before we go to the people, if I can. There is a lot of legislative activity, there’s a lot of economic reform we want to get through the Parliament, and our preference, obviously, is to keep working to pass it.
We’re in negotiations and discussions with the crossbenchers and the other parties in the Senate, as you’d expect us to be, and our expectation and our objective is to pass as much as we can.
But it would be a tragedy if this alliance between the Liberals and Nationals and Greens prevents us building more homes, prevents us realising our renewable energy superpower ambitions so that we can be the big beneficiaries of the global net zero transformation.
We’ve got a big chance as Australians to be the biggest beneficiaries of the way that the global economy is changing, particularly when it comes to net zero, and we would be mad to sacrifice that opportunity on the altar of Green and Liberal and National political opportunism.
MIDDLETON:
Stepping outside the parliament, there’s a bit of a sense, if you look at the opinion polls, and anecdotally talking to people, of disappointment in the government.
Now I know that happens to governments when they get sort of two‑thirds of the way through their term, but there does seem to be quite a distinct sense of that. What’s your response to the suggestion that this government has not lived up to expectations?
CHALMERS:
Well, first of all, I take very seriously the feedback that we get. I try to be as engaged as I can in my own local community, but around Australia, I don’t want to be one of those Treasurers who just locks himself away in Canberra and doesn’t talk with real people about real issues, and so obviously I’m aware that people are under a lot of pressure, and sometimes that has a political element.
And one of the ways I’m trying to be different to my most recent predecessors is to acknowledge the pain that a lot of people are under, but to do more than acknowledge that, and respond to it in meaningful ways and responsible ways, and we’ve talked about the cost‑of‑living help as the main part of that.
And I think in these circumstances, where people are under a lot of pressure, sometimes you see that play out, but when I’m asked from time to time about opinion polls, the point that I make, genuinely, is we don’t need opinion polls to know that people are under pressure.
We’re doing the best that we can for people in the most responsible way that we can, and we’re trying to be upfront with people about the issues we grapple with.
One of the things I – one of the reasons I love coming on this podcast is because we have an opportunity to convey to your listeners the sorts of things we’re grappling with.
We don’t pretend that government has every answer to every solution, and we can fix every problem overnight, but we are trying to make the right decisions for the right reasons, and founded on, the genuine pressures that people feel and the aspirations they have for their loved ones.
MIDDLETON:
I mean there’s a sense though of broken promises, and that was one of the things Labor really prided itself in, that it wasn’t going to break promises. There’s a sense that that’s happened. Why is that happening? The Makarrata is now not going ahead, there was, if not a direct promise, then an expectation in the wake of the death of Peta Murphy that you would do something significant on gambling ads, and there was an expectation of a total ban; you’re walking away from that.
You can understand, can’t you, that people are critical and disappointed?
CHALMERS:
Oh, I do understand, I think I’ve acknowledged on this podcast, perhaps under your predecessor, that one of the good things about being on the progressive side of politics is that the people who support you and believe in you often want you to go further and faster, and I think that’s a good thing for people to keep the pressure up.
From my point of view in my portfolio, the big change that we made, which wasn’t perfectly consistent with the approach we took to the last election, was to rewrite the Stage 3 tax cuts, and I am so pleased that we did.
I think in hindsight, people recognise that was the right call, and I think what that tells us is that you build trust by taking the right decisions for the right reasons; you be prepared to front up and explain them, and you also acknowledge, as I did at the start of this answer, that there are good people who want us to go further and faster on the issues that you talked about, and some of the issues in my portfolio.
I welcome that. I don’t dismiss that. I welcome it, and I try to explain why we sequence our priorities the way that we do, what are our pressures and constraints, and why we’re doing the best we can for people.
MIDDLETON:
On the gambling ad thing, one of the arguments that’s been put is the pressure that commercial media are under, and that they need assistance, and that this is a strong source of revenue for them and the News Media Bargaining Code brings this question into focus again as well. There’s been proposals this week directly, I think from the Greens and others, for a tech tax or something like that, that might assist in that. What’s your response to that as the Treasurer?
CHALMERS:
Well, I’ve been a big supporter of the global action that’s being taken on multinational tax, and there are these 2 parts of the OECD’s work that we’ve been supportive of, there’s one element of it that we’re reluctant on because we already have higher standards than the rest of the world, and so we don’t want to do anything that waters down our standards, and that work has an element which is relevant to the big global tech multinationals.
Our first preference and priority has been to play a meaningful role in getting that right. A lot of countries around the world, because there hasn’t been that progress that they’d like to see, a lot of other countries around the world are working out how they do digital services tax differently.
Obviously, we’re aware of those developments, but most of our effort so far has been in trying to get that agreement, that OECD agreement, which is taking a bit longer than we hoped.
MIDDLETON:
But is that a maybe on a tech tax?
CHALMERS:
We’re monitoring what’s happening around the world, and that’s very relevant to us, because our first preference has been for some years that we do this OECD piece of work.
There’s some problems with that; there have been some delays with that. That’s still our priority and our preference, but we are aware of and monitoring and engaging with other countries who are doing it in a different way, because it may in the end be relevant to us.
MIDDLETON:
So, you just don’t want to get out in front of that process.
CHALMERS:
Yeah. I mean that’s the long and the short of it. I think Canada, the UK, other countries are doing digital services taxes, and that’s because they haven’t been prepared to wait for this global progress, which is taking longer than any of us would like.
We’re very cognisant of that, we’re monitoring that very closely, we’re doing all kinds of thinking about what that might mean for Australia. But almost all of the work that we’ve put in to this point has been on Plan A, which has been the OECD work.
MIDDLETON:
I know you haven’t got much longer, so I just want to, I suppose finish, by asking you now that you’re back in Parliament, what do you make of the political atmosphere at the moment of the nature of political debate?
We’ve watched the debate in the United States and the nature of that. We’re getting really close to an election here; we’re within a year of a federal election. What’s your take on the tone of debate, the focus of it and whether you think it’s living up to people’s expectations?
CHALMERS:
I’m really worried about it.
MIDDLETON:
In what way?
CHALMERS:
Well, in the specific I’m worried about this, some of the issues that Mike Burgess, from an ASIO point of view, has raised about the way that the heat’s come up in the community, and we want to make sure as politicians that we are trying to temp down that kind of angst rather than add to it, and I don’t really want to make a big partisan point about that.
There are elements of the current political debate, including this week in the parliament, which I think have added to that sense of divisiveness and division in unhelpful ways.
MIDDLETON:
You’re talking about the emphasis the Coalition’s taken on visas for people from Gaza and suggesting –
CHALMERS:
Yeah.
MIDDLETON:
– there’s a security risk, and that the system is not adequate.
CHALMERS:
Well, I’m worried that – I’m worried that the Opposition Leader went to a reception for our Olympic athletes and took the opportunity there to be as divisive, characteristically divisive as he could be.
MIDDLETON:
Are you saying you think he did that deliberately?
CHALMERS:
Of course he did, of course he did.
MIDDLETON:
What makes you say that?
CHALMERS:
Because that’s his form. That’s his form. And I think people have observed that over a long period of time; he’s a very divisive character, and we’ve seen that this week in disappointing ways, particularly at a time when you’ve got the ASIO Director‑General out there saying we have to be careful about feeding and fuelling this division in our community, and Peter Dutton unfortunately hasn’t got that memo.
But I think more broadly – think about the last few months, a presidential candidate getting shot at at a rally, in the last few years, a couple of UK representatives have lost their lives.
It was keeping me up, and I’m very grateful to The Guardian, because sometimes when I’m really grappling with something and I can’t sleep about it, I try and write about it, and The Guardian – and I’m grateful for this, and I can give it a plug now – a few Saturdays ago, with thanks to your editor, ran a piece from me about this, and if people missed it, please check it out.
I feel like we’re at this point in our democracy where we can see what’s happening around the world, and we can choose, do we want to replicate that, or we want to reject what’s happening around the world, with all this political division and divisiveness.
We can choose whether we reject it or whether we embrace it, and whether we become a sort of an island of decency in a sea of political violence and political division.
And every time that we’ve chosen the high road as a country, I feel like it’s paid dividends for us, and here’s a chance for us to do that now. We know what the warnings are, we know what it looks like around the world when it goes wrong. We’ve got a chance here, and I think Anthony Albanese has said this far more eloquently than I can, but I tried to set out in that piece, we’ve got a chance here to reject divisive politics rather than embrace it, and we should take that opportunity.
MIDDLETON:
But when election time comes around, there’s always partisanship, and in the lead‑up to it. It’s a feature of democracy, it’s a feature of our democracy. How do you as a government broadly respond to, if indeed you think this is unnecessarily provocative and divisive –
CHALMERS:
Yes.
MIDDLETON:
– how do you respond to it in a way that obviously meets your objective of trying to get yourself re‑elected?
CHALMERS:
Yeah. So, I’ll tell you the difference, and I say this acknowledging that I am a blunt‑speaking enthusiastic participant in Question time, for example, explaining the differences in policies and the difference in approach between the 2 major parties.
MIDDLETON:
Well, you’ve had a crack at the Greens a few times here too.
CHALMERS:
Yeah, and the Greens, right. But this is what I think is the difference. I’m explaining the difference between political parties. What I think the worst version of this is when you’re trying to create division in our broader society.
I think to his great credit, if you think about Anthony Albanese’s qualities, and you’ve written a biography of him, you’re probably the established expert on his MO, he’s been an enthusiastic participant in the political process, and that’s been covered as well, but he likes the idea that we get more done together than we do apart.
MIDDLETON:
He’s been pretty strident in his criticisms of his opponents too.
CHALMERS:
But again, I think there’s a difference here. I think that the political contest should be robust, should be rigorous, it should be enthusiastic, people expect that of us, to work out the best way forward, and sometimes the best way forward is to tease out the differences; the difference between that approach, which I’m part of, I’m acknowledging that, I’m not a shrinking violet when it comes to politics, but I don’t go out of my way to divide the community, which is what I think Peter Dutton does.
MIDDLETON:
Interesting observations. We’ll see how it plays out between and the election. We may hear from you here again. Treasurer, thanks for being with us on the Australian Politics Podcast.
CHALMERS:
Thanks so much for having me back, Karen.