KARL STEFANOVIC:
Treasurer, good morning to you. We shan’t gloat about Origin last night, shall we?
JIM CHALMERS:
Oh, we shall.
STEFANOVIC:
We’ll do it later; we’ll do it later. First up, some worrying signs in the economy. Are we heading into recession?
CHALMERS:
That’s not our expectation, Karl, we think the economy will continue to grow but quite softly. Those figures that we saw yesterday were very weak, the economy barely grew in the first 3 months of the year. We knew it was going to be weak, and that was the case.
And I think it rings true for a lot of your viewers too, Karl. People know that the economy’s soft and they are under pressure, and that’s why the Budget was really important. The Budget is all about fighting inflation but also providing help for people when the economy’s soft.
STEFANOVIC:
In per person terms, the economy, hasn’t it been in recession for 15 months? And haven’t you only avoided an official recession due to the high levels of immigration?
CHALMERS:
When growth is this weak, Karl, there’s a whole range of factors you can point to in the absence of which growth would be even weaker. You know, the growth figure for the first 3 months of the year was 0.1 per cent, and so any contribution to that growth is welcome.
But what we’ve seen over the last 12 months or so is the impact of these rate rises that are in the system. The rate rises began before the election and continued after, and you know – we’ve spoken about it before – that’s putting people under a lot of pressure, and it’s slowing the economy as well. There are some other factors too.
And so really, from our point of view, the most important thing to do is to fight this inflation without smashing the economy and to provide this cost‑of‑living help in the most responsible way, and that’s what we’re doing.
STEFANOVIC:
The economy is flatlining, growth is almost off a cliff, inflation is sticky, people and businesses are struggling, and we just don’t know what the hell is going to happen in the next 6 months. There is no certainty for families.
CHALMERS:
It’s an uncertain time, Karl, I acknowledge that; I’ve acknowledged that before. But more than acknowledge that, we’re responding to that. Next month every Australian taxpayer will get a tax cut, every household will get energy bill relief, there’s a wage rise for people on awards, there’s help with cheaper medicines, there’s help with rent and student debt, and that’s because we do more than acknowledge or empathise with people about this soft economy and these cost‑of‑living pressures, we’re actually doing something about it, and the Budget’s really important in that respect.
STEFANOVIC:
But the RBA Governor, Michelle Bullock, says she won’t hesitate to raise rates again. That’s the last thing mortgage holders need. That’s with tax cuts on the way as well. Do you care about mortgage holders?
CHALMERS:
Of course I do. She actually said that – she made the case in both directions – she said that they were on a narrow path right now with interest rates. If the economy was a bit weaker, they’d respond one way, if it was a bit stronger, they’d respond the other way.
She gave actually quite a broad‑ranging contribution yesterday, an excellent one, frankly, explaining to people her thinking, and it was more than just that part of her contribution that you mentioned.
STEFANOVIC:
She also said your energy rebates won’t tame inflation; she saw right through that tricky little rate cut buy‑off.
CHALMERS:
Well, again, she sees it the same way that we do. The point that the Governor made yesterday was that they will factor in the energy rebates in the same way that we did in the Budget. That shouldn’t be a news flash, that’s a good thing. She said that she sees them the say way that we do.
That’s going to provide some cost‑of‑living help for people in the second half of this year when they really, really need it, and it will take some of the edge off inflation as well.
STEFANOVIC:
Let’s see what happens. The PM and the Opposition Leader teamed up to bounce the Greens yesterday, they were like BFFs yesterday. You guys want to be careful though, they’re going to gobble you up, the Greens, in the inner cities at the next election, aren’t they?
CHALMERS:
The politics will take care of themselves, Karl. The most important thing here is that people are safe and secure. And that means that we’ve got a responsibility to try and calm the divisions and fears that people have in our society, not try and inflame those divisions, and unfortunately the Greens have been sprung doing that, and others have been sprung doing that as well.
We’ve got a responsibility here, an obligation here not to amplify the misinformation and disinformation that’s out there, but to correct it, to try and calm people who are feeling edgy for good reason, rather than try and play on those divisions in a political sense.
STEFANOVIC:
All right. We’ve got to go. One word to sum up the Origin last night.
CHALMERS:
Beautiful. Every day’s a good day to be a Queenslander, Karl, but especially the morning after Origin.
STEFANOVIC:
It doesn’t get any better. Thanks Treasurer.
CHALMERS:
See you, Karl.