KENNY HEATLEY:
Joining me live from Canberra is Treasurer Jim Chalmers. Thanks for your time this morning, Treasurer. Quite the shock to households just ahead of your Budget next week.
JIM CHALMERS:
Good morning, Kenny. It certainly surprised the predictions of the market, the market didn't get it right yesterday - that happens from time to time. More importantly than that, I think it was a pretty blunt and pretty brutal reminder of the pressures in our economy right now, particularly this inflation challenge that your viewers are feeling every day in these cost‑of‑living pressures. And that's why that will be a key focus of the Budget that I hand down in less than a week's time.
HEATLEY:
There's talk of a surprise surplus, but there's significant household financial stress out there. At what point does a surplus become less of a priority for you?
CHALMERS:
Look, we recognise that a lot of Australians are under the pump and when interest rates go up it makes it even harder for people who are already under significant pressure. My job in the Budget is to show enough restraint that we can get the budget onto a more sustainable footing at the same time as we provide this cost‑of‑living relief for people who are doing it tough. So, there will be substantial cost‑of‑living relief in the Budget. It will have more than one element, it will be focused on the most vulnerable Australians and it will all be made clear on Tuesday night. But people already know there will be some help to take some of the sting out of these electricity bills that people are dealing with. There is a substantial plan to make medicines cheaper, to make child care cheaper. These are all important ways that the Government can responsibly help people through this difficult period right now with these cost‑of‑living pressures.
HEATLEY:
Yeah, there's $9 billion in extra relief over four years compared to the previous Coalition government, including those latest child care subsidy changes. But you say that you can't do anything in the Budget that would add to the problem of inflation, but you are. You are proceeding with stage three tax cuts that would add discretionary spending from inner‑city people who can afford it. That's going to be $254 billion into the economy over ten years. Is now the time, now that we know what the RBA is doing - is now the time to reassess that decision on stage three tax cuts?
CHALMERS:
Kenny, our position on stage three tax cuts hasn't changed and it's important to remember that they don't come in for more than a year now. And so, making that kind of decision on those stage three tax cuts wouldn't have any impact on the inflationary environment that we are dealing with right now. Our focus in this Budget is to work through all of the pressures in our economy in a methodical and responsible way. That means a decent cost‑of‑living package focused on the most vulnerable, delivered in the most responsible way, cognisant of these inflationary pressures in our economy. But it also means - and a key part of the Budget which I hope is not overlooked - is investing in growing the economy the right way, by investing in energy and technology and our industries, so that we can grow our economy the right way into the future. That will be an important focus of the Budget as well.
HEATLEY:
The RBA wants to see unemployment go up to around about four and a half per cent, so they're hoping that unemployment rises. Is that why you won't increase JobSeeker for those under the age of 55?
CHALMERS:
Well, a couple of things about that. The Reserve Bank and the Treasury, frankly, and any economist that you would interview on your program would say that they expect the Australian economy to slow as a consequence of these rate rises, which began before the election, in combination with all of this global uncertainty which is slowing the global economy as well. So, everybody expects the Australian economy to slow and the forecast in the Budget next Tuesday night will show that as well. So, we need to strike a careful balance here, provide cost‑of‑living help in a way that doesn't add substantially to inflation, but also make sure we're investing in the drivers of growth. And those are the priorities in the Budget that I will hand down, and people will be able to judge that on Tuesday night.
HEATLEY:
Despite the historically low unemployment rate, there's more people on JobSeeker and youth allowance than just before the pandemic. Businesses are crying out for workers across the country and yet with the current system, they don't seem to want to. So, does that indicate that there is a real problem in the system or is it still a hangover from COVID?
CHALMERS:
I think we should be careful about the assumptions that underpin that question. We think that there is more work to be done to try and get people who want to work into good, secure, well‑paid jobs, particularly in communities where long‑term unemployment has been a feature for too long. And so what you'll see in the Budget, in addition to cost‑of‑living help, in addition to doing what we can on those cost‑of‑living pressures, will be our efforts - our combined efforts, to get people into work if they want to work, including in communities where there has been for too long entrenched disadvantage. That will be a feature of the Budget as well. And in addition to that, we've got an Employment White Paper that comes out later in the year. We've got colleagues working on the job agency system to make sure that if people want to work, they can grab the opportunities of an economy that's got unemployment currently running at three and a half per cent
HEATLEY:
Treasurer Jim Chalmers, thanks for your time this morning.
CHALMERS:
Thanks, Kenny.