KATHLEEN HAYS:
What is the message here, particularly when it comes to Australia? Ahead of this meeting, you seemed ready to raise these very issues pointedly for what it means for Australia. What have you heard here? What do you take away?
JIM CHALMERS:
I think now is the time for some blunt talk about prospects for the global economy, and the truth is that the global economy is treading a narrower and more perilous path right now. I think that's recognised really right across the board around the G20 and by other participants in these discussions. Australia enters this difficult period from a position of relative strength but we won't be spared a global downturn. We're putting a Budget together that I'll hand down in less than two weeks now and it's absolutely crucial that we can factor in the real‑time thinking of economic decision makers around the world and that's why the last couple of days have been so valuable to us.
HAYS:
What's the most worrisome message you heard here?
CHALMERS:
I think everybody is worried about inflation and that's why we've got this quite blunt and brutal tightening of monetary policy around the world and that risks a hard landing frankly in some countries around the world. I think that's the most confronting reality that we face. It comes to us courtesy of the war in Ukraine, of course, but other issues around supply chains and the aftermath of the worst part of the pandemic. All of these challenges have come together at once. And again, I'm relatively optimistic about Australia's medium‑term prospects, but in the near term, we're going to have to navigate some pretty tricky territory.
HAYS:
What does the soaring dollar mean for you right now? Down about 12 cents recently and it's certainly, at least in part of it, it's got to be these aggressive Fed rate hikes. It's put the dollar very strong, and in addition to that looking over your shoulder whatever's going on in Australia, you see a global economy that is slowing down.
CHALMERS:
Certainly what's happening with the US Fed is putting pressure on our dollar at home, and we've got the Australian dollar down in the low to mid 60 cents, which is quite low by recent standards. So that's obviously something that we're monitoring because that makes our imports more expensive so that's a challenge. But I think more broadly, the issues that the US Fed is confronting - and I had a good conversation with Chairman Powell yesterday about this - the issues that the Americans are facing are pretty common around the world. We've all got some combination of high and rising inflation. We've all got rising interest rates in one way or another. And so the challenge for us is to build our defences, build our buffers against that global uncertainty. The best defence against this global uncertainty is responsible budgeting and responsible economic management at home, and so that's our focus.