Karl Stefanovic:
For more, Treasurer Jim Chalmers joins us live in Canberra. Treasurer good morning to you. Thanks for your time this morning. What a shock. The supermarkets are taking Aussies for a ride. What are you going to do that will make any tangible difference?
Jim Chalmers:
Good morning, Karl. Look, I think it’s true that even with inflation coming down really quite substantially in our economy, Australians are still feeling that pressure at the checkout and that’s why we’re cracking down on the supermarkets and the ACCC report which has just been released will help us go about that.
A lot of the recommendations in the report are areas that we’re already acting on. We’re making the Food and Grocery Code mandatory, we’re empowering the ACCC, we’re cracking down on mergers and acquisitions, we’re working to make it easier for new entrants to compete with the 2 big supermarkets in particular. These are all of the things that we’re cracking down on when it comes to the supermarkets.
We don’t want the supermarkets to be treating Australians like mugs. They’re under enough pressure as it is already. A big focus of this government and the Budget that I’ll hand down next week will be the cost of living, and this is part of our effort.
Stefanovic:
But they are treating us like chumps. And they continue to. And I’ve not seen anything that’s going to stop them from doing that.
Chalmers:
What the report makes really clear is that there is market dominance and profits when it comes to the supermarkets –
Stefanovic:
So, what do you do about that?
Chalmers:
Well, what we’re doing is we’re cracking down on the supermarkets in all of the ways that I just ran through. We’ve got about half a dozen different things that we have been doing, supported by the ACCC and what the ACCC report is all about is more scrutiny, more information and more competition, and those are the things that will matter most when it comes to getting a fair deal for farmers and families when it comes to supermarkets.
Stefanovic:
Let’s see what happens. Look, there is a crisis in small business in this country. The latest statistics this morning are disturbing, 18 per cent collapse in income. All at the same time costs have gone through the roof, so much so, some owners are paying themselves less. I suppose you don’t take any blame for that?
Chalmers:
I take responsibility for the decisions that we take in the economy and I embrace the opportunity to support small businesses in the way that we have been – tax breaks for investment and in other ways that we’re supporting small business, including when it comes to our competition policies. Business conditions have been difficult and that’s what makes it so remarkable that we’ve actually seen 25,000 new businesses formed on average each month of this government. You don’t always –
Stefanovic:
How many are you losing, though?
Chalmers:
Well, the number that gets quoted at us a lot is 27,000 over the last almost 3 years but what that ignores is something like 25,000 each month on average created new businesses. Now, that’s not to deny that business conditions aren’t difficult, they are difficult, but costs are coming down in very welcome and encouraging ways. We’re supporting small business not reluctantly but enthusiastically and you can see that in the way that we’ve approached competition policy, tax breaks for investment, energy bill relief and in other ways as well.
Stefanovic:
But the costs are still through the roof. And groceries are up. People blame you for that. Energy bills are up. Tariffs could stoke inflation. What? No blame again?
Chalmers:
Well, Karl, inflation is actually coming off really quite substantially. If you talk about food inflation, when we came to office it was 5.9 per cent –
Stefanovic:
That’s inflation but not cost.
Chalmers:
It’s unusual over any period of time in any healthy economy for prices to come down – that’s deflation. The Reserve Bank targets inflation between 2 and 3 per cent and what we’ve seen with food, groceries have come down from 5.9 to 3 and that shows the progress that we’re making.
As you know, Karl, whenever we speak I do acknowledge that people are still under the pump. That’s why cost of living is one of the primary focuses of the Budget that I’ll hand down next week. There will be more help with the cost of living and what the Budget will show is even though we’ve made that substantial progress on inflation, on employment, on real wages, interest rates have started to be cut, growth is rebounding solidly in our economy, we know there’s more work to do because people are still under pressure, there’s all of this global economic uncertainty. The Budget will be about cost of living, but it will also be about strengthening our economy, making it more resilient in the face of all this volatility we’re seeing around the world, including from the tariffs that you just mentioned.
Stefanovic:
You aren’t just becoming the Ambassador for Excuses, are you?
Chalmers:
Of course not, Karl. I’ve said to you today and I’ve said on a number of occasions, I take responsibility for the decisions that we’ve taken in the economy. I think those decisions have been vindicated by the fact that inflation is coming down, real wages are growing again, they were going backwards when we came to office, unemployment is low, interest rates have started to come down, we’ve got the debt down, growth is rebounding in our economy. These are all welcome and encouraging signs that the Australian economy is turning a corner but we know that people are still under pressure. We know the global environment is uncertain and the Budget will address both of those things.
Stefanovic:
Jim, good to talk to you, always. Thank you.