Karl Stefanovic:
Treasurer, good morning to you, thanks for your time this morning.
You said earlier this month the government is playing a role in stamping out antisemitism. Does this look stamped out to you?
Jim Chalmers:
Well first of all, Karl, I agree with you that this is a chilling course of events, deeply troubling, unsettling – and what it shows is that the fears in the Jewish community are not always unfounded when it comes to the potential for these kind of violent acts.
You asked me about the government’s role here – this is precisely why we set up the special teams and the special operations. We know that this threat has been contained, we know that arrests have already been made and this is why we’re working closer than ever with police and other authorities because there’s no place for violence or antisemitism in a country like ours.
Stefanovic:
There is a whole new level though.
Chalmers:
It’s deeply, deeply disturbing, I agree with you. I pay tribute to the police and the authorities for making the arrests, for containing the threat, but we know that we need to be vigilant, that’s why we’re working closer than ever with the police and others.
Stefanovic:
Okay, let’s move on. There’s fresh hope of rate cuts next month, Treasurer. Are we off to an early election or what? Come on.
Chalmers:
That’ll be a matter for the Prime Minister to choose. I’m expecting to hand down a Budget towards the end of March and working towards that. The Prime Minister will make a call on the election date.
My job, my focus is really on getting inflation down and we got some very encouraging news on that front yesterday, at the same time as we get wages up and keep unemployment low.
The Prime Minister will sort out the election date, I’ll keep doing my job until then.
Stefanovic:
What, he hasn’t even – he doesn’t even have a chat to you about it? I mean, go on, put yourselves out of your polling misery.
Chalmers:
He’ll have a chat to a few of us no doubt, but I can’t focus on that decision that the Prime Minister will make – my focus has been on inflation. What we saw yesterday was very welcome and it was really encouraging because we made more substantial and sustained progress on every measurable front when it comes to inflation. We’re encouraged by that not because we think that these cost‑of‑living pressures have disappeared but because they are easing. We’re not getting carried away by it but we know that yesterday’s inflation numbers were better than expected, better than forecast and that’s a good thing.
Stefanovic:
Okay, so here’s the thing. The US Fed cut interest rates a bunch of times before their election. The damage was done and the government got turfed out. Is the damage done for you here?
Chalmers:
What I try and do, Karl, and you would have noticed this on the other occasions where we’ve had a chat about these things, is I try not to attach a political analysis to the decisions that the Reserve Bank will take independently. It’s important that we don’t politicise that.
You asked me about the American experience. The American central bank had a meeting overnight our time and they left rates on hold. Inflation in the US is actually higher than it is in Australia and it’s rising. It’s lower here and it’s falling. I’ll leave the decisions about all of that when it comes to interest rates to the independent Reserve Bank.
Stefanovic:
So you’re not going to be out there saying the Reserve Bank is smashing Australia any time soon?
Chalmers:
I think it’s self‑evident – and I’ve made this point on a number of occasions – that when you think about the pressures on family budgets, interest rates are part of the story, and inflation has been a big part of the story as well and that’s why we’ve worked with the independent Reserve Bank to get on top of this inflation challenge.
We’ve now got inflation in the lower half of the Reserve Bank band, we’ve got underlying inflation in the low threes. Those are good developments but we know that it’s not mission accomplished because people are still under the pump.
Stefanovic:
That’s for sure, and my worry is that the damage has been done to families and small businesses. There’s just no soft landing for them.
Chalmers:
Well, I think overall there have been some encouraging developments when it comes to a soft landing in our economy. Not every country has been able to achieve what Australians are achieving together –
Stefanovic:
Not for families and small businesses though.
Chalmers:
– which is much lower inflation, higher wages and low unemployment. Those 3 things are good for families but we know that people have got a lot of ground to make up in their household budgets – when we came to office people were going backwards already, inflation was a multiple of what it is now, real wages and incomes and living standards were falling. We’ve been working really hard to turn that around and that’s why yesterday’s numbers were so encouraging.
Stefanovic:
Yeah.
Chalmers:
We’re not getting carried away by them but what it shows is our strategy to get inflation down and wages up and keep unemployment low is broadly working but it doesn’t always immediately translate into how people are feeling and faring in the economy around the kitchen table.
Stefanovic:
Traditionally the bank will wait for 2 consecutive quarterly inflation figures inside their parameters. You think suddenly they’ll change course, especially given the rise that we’ve seen in energy prices since December by 80 per cent plus?
Chalmers:
Well, they’ll have a discussion about all of that in the middle of February, and again I’m not going to predict that or pre‑empt that or try and colour in that decision for them.
Quarterly headline inflation has been in the band for a couple of quarters now. In a monthly sense, it’s been there for months. Underlying inflation has come down substantially as well. The difference between what we’ve been able to do here as Australians and what other countries have had to do is we’ve made that progress on inflation without paying for it with much higher unemployment. The Reserve Bank will weigh all of that up when they meet towards the middle of February, they’ll come to a decision independently without free advice from me and they’ll make that announcement then.
Stefanovic:
Good to talk to you Treasurer, thank you.