Kieran Gilbert:
Welcome back to Budget night live here on Sky News. Joining me is the Treasurer, Jim Chalmers. Just having handed down your fourth Budget, the Coalition has said it’s not going to support your tax cuts. I’ll read a little of the statement from Angus Taylor, he says ‘Labor’s cruel hoax tax changes fail to restore the standard of living you’ve lost after 3 years of Labor. The Coalition will not support these tax changes that do nothing to address the collapse in the living standards under Labor.’
What’s your reaction?
Jim Chalmers:
Well, it proves once and for all that the Coalition don’t support cost‑of‑living relief for Australians doing it tough. This is the approach they took when we introduced a tax cut for every Australian taxpayer from July last year. Peter Dutton got so angry about it that he called for an election over it. They have opposed our cost‑of‑living relief at almost every turn and true to form, they’re doing it again. And what this means is that if Peter Dutton and the Coalition win the election, Australians will be worse off.
Gilbert:
What if Peter Dutton goes further than you on Thursday? Budget reply.
Chalmers:
Well, let’s see it. I mean, they’ve been in opposition now for almost 3, 4 years and they’re yet to come clean on a single costed, coherent or credible economic policy. All we know now is that they want every Australian taxpayer to be worse off as a consequence of their decision. If they win the election, they are telling the Australian people that Australians will get less help with the cost of living at a time when they need these topped‑up tax cuts in combination with all of the cost‑of‑living relief that I detailed tonight.
Gilbert:
But they could potentially go further than you, if they did, how would you respond if they give more generous tax relief?
Chalmers:
They’re yet to come clean on any economic policies so I’m reluctant to engage in hypotheticals. Who knows? The most important task for Peter Dutton and Angus Taylor this week is to come clean on how they’ll fund $600 billion worth of nuclear reactors, what that means for Medicare and pensions and payments.
What this really sets up in the context of the election campaign, which will be on us before long, is that it’s a choice between Labor under Anthony Albanese helping with the cost of living and giving every Australian taxpayer a tax cut, or Peter Dutton, whose secret cuts would make Australians worse off.
Gilbert:
And were these tax cuts your idea?
Chalmers:
I’ve been enthusiastically trying to work out a way to top up the tax cuts which are already flowing. I know that in isolation these tax cuts are relatively modest, but in combination, 3 tax cuts will provide an average tax cut of about $50 a week. It’s in addition to the other cost‑of‑living relief that we are providing despite the opposition of Peter Dutton. What this makes really clear is that if Peter Dutton had his way, Australians will be thousands of dollars worse off by now, and they’ll be worse off still if he wins and that statement that Angus Taylor has put out tonight proves that. This will be a cost‑of‑living election. Labor’s got tax cuts for every Australian taxpayer. The Coalition under Peter Dutton opposed that. That means Australians will be worse off if they win.
Gilbert:
You say it’s modest. Do your tax cuts, though, risk being mocked? The Liberal Party and Angus Taylor are saying 70 cents in a year’s time is not going to help address the financial stress families are under.
Chalmers:
Well, they’re proposing –
Gilbert:
Are you at risk of having the tax cuts being mocked? As you know, the sandwich and milkshake tax cuts were all those years ago.
Chalmers:
First of all, the Coalition is currently proposing less than that amount of help. Secondly, what these new tax cuts do in the Budget tonight is they top up the tax cuts which are already flowing. So, we’ve now given 3 tax cuts to every Australian taxpayer. In combination, it means, on average, about $50 bucks a week. Even the new parts are about $10 bucks a week. We understand that’s modest. We’re doing as much as we responsibly can. The Coalition would do even less, and that means Australians would be worse off.
Gilbert:
What’s in the Budget for business?
Chalmers:
There’s a number of measures there. Whether it’s the Innovation Fund for Future Made in Australia, whether it’s the steps we’re taking in small business, whether it’s unfair practices, energy bill relief for small businesses, some of the other steps that we’re taking there. What it recognises is the private sector is taking its rightful place as the main driver of growth in an economy which is turning the corner, we want to enable and support that. That’s what we’re doing with our production tax credits, our investments in green metals and our support for small business.
Gilbert:
Internationally, countries are cutting the company tax rate. Given the volatility, the uncertainty, shouldn’t we be looking at that sort of thing?
Chalmers:
We’ve found other ways to make our economy and our private sector more resilient in the face of these external economic shocks coming at us from around the world. The 2 big pressures on the budget and on the economy are cost‑of‑living pressures, even though we’ve made a lot of progress on inflation and this global economic uncertainty.
The best insurance policy against that uncertainty is to rebuild household budgets with cost‑of‑living help, higher wages and tax cuts, and to make our business sector and our economy more resilient by investing in a future made in Australia.
Gilbert:
Looking at the years ahead, the structural balance of the Budget in deficit for as far as the eye can see for 10 years until we see some sort of balance in the structural underlying budget. Are you comfortable with that? Do you think that’s good enough?
Chalmers:
We know that budget repair is an ongoing task. We’ve made a heap of progress improving the structural position of the Budget and finding savings and engineering the biggest ever nominal improvement in a budget in a single parliamentary term. But we know that the hard work of budget repair is ongoing. We know that there’s more work to do. We’re pleased with the progress that has been made. But we know that there are structural issues in the Budget that need to be chipped away at over time.
Gilbert:
What happens though, if the worst does eventuate on the trade wars and so on. Is that part of your thinking here as you deliver this Budget, tonight?
Chalmers:
It’s a huge influence on our thinking. You know, that’s why our approach is to try and make our economy –
Gilbert:
Because all these numbers could be not worth the paper they’re written on by, you know, next week.
Chalmers:
Forecasting the economy and budget projections are difficult at the best of times. These are uncertain times, as I acknowledged in my speech and on a number of occasions today. But we believe that what is remarkable about the progress that Australians have made together is our economy’s turned a corner while the global economy is taking a turn for the worse. That’s a big influence on our thinking. That’s why we put a premium on what’s responsible and on economic resilience. And that drives a lot of the measures you’ve heard about tonight.
Gilbert:
Treasury talking about inflation potentially back in the target band. They’re forecasting back by the 6 months earlier than previously thought. Does that give you some sort of glimmer of hope of a tax cut before the election? Sorry, a rate cut before the election?
Chalmers:
First of all, as you know, we’ve been doing this a long time, Kieran. You know that I don’t give free advice to the Independent Reserve Bank. They’ll make their decision.
Gilbert:
But that’s encouraging, isn’t it? The inflation number?
Chalmers:
It’s certainly encouraging that Treasury expect us to be sustainably back in the band 6 months earlier than they anticipated. That is a very encouraging thing. It’s not just inflation on its own, that’s one of the most important things. But inflation is down, wages are up, unemployment’s low, we’ve got the debt down, interest rates have started to come down and growth is rebounding solidly in our economy.
That’s why I finished the Budget speech tonight with a note of optimism. I believe that Australia is well placed and well prepared to deal with what’s coming at us from around the world. And that’s because of the progress that we’ve made together in our economy and in our budget over the last year.
Gilbert:
That quote you used, the plan at the core of this Budget is about more than putting the worst behind us, it’s about seeing and seizing the best of what’s ahead of us. Is that basically the pitch you’re going to make to the Australian people, that tomorrow is better than today? That’s essentially the election argument, isn’t it?
Chalmers:
Absolutely. The election is about the progress we’ve made to here despite Peter Dutton’s opposition. It’s about the plan from here that I laid out in the Budget tonight. And it’s also about the substantial and dangerous risk that Peter Dutton poses, whether it’s taking tax cuts away from every Australian taxpayer, whether it’s this nuclear insanity which will cost $600 billion, which you’ll have to find by cutting Medicare again, just like he did when he was the Health Minister. He poses a big risk. The election campaign is about progress, it’s about the plan and it’s about risk of the alternative.
Gilbert:
And if you win the election, whether as Treasurer or as Prime Minister in the next term, do you see scope for major generational structural reform?
Chalmers:
We have –
Gilbert:
Do you have the ticker to do that, to deliver that?
Chalmers:
I’m ambitious about economic reform. You see it tonight in the abolition of non‑compete clauses, for example, a big economic reform with a wages boost as a dividend. I’m enthusiastic about economic reform. The energy transformation is a big part of that. We’ve done a lot of competition policy reform. We’ve done a lot of reform in our economy and the tax system as well. The hard yards of economic reform are ongoing. We’ve done a lot in the first term, more than is recognised by a lot of the commentators up and down this hallway, but we’ve done a lot of reform and people can expect more of that if we get the great privilege of being re‑elected.
Gilbert:
Treasurer, Jim Chalmers, on the fourth Budget of his term. Thanks for your time.
Chalmers:
Thanks, Kieran.