Kieran Gilbert:
Let’s bring in live the Treasurer, Jim Chalmers here in the studio. This is not ideal. The Prime Minister has gone to the G7. He wants to get that face‑to‑face time with Donald Trump. It’s not happening.
Jim Chalmers:
Well, I think when you see the perilous moment in the Middle East and what it means for the world, it’s not especially surprising. It’s understandable that President Trump has left the meeting early. This was always a chance of happening given what’s happening around the world and particularly in the Middle East.
Prime Minister Albanese has had 3 conversations with President Trump in recent months. We’ll continue to engage in the usual way, but I don’t think it’s especially surprising. I do think it’s understandable given events that are unfolding in a really dangerous part of the world.
Gilbert:
I get that. But it’s also frustrating given the Prime Minister’s travelled to Canada and just wants to at least put a, you know, in casual parlons, put a face to a name or a phone call. Because he’s had a few phone calls, but he hasn’t met him face to face.
Chalmers:
They have had 3 discussions and there are other good reasons to be in Canada for the G7 meeting with Prime Minister Carney and others. Really important opportunity to speak up for and stand up for Australia’s interests in the world. Obviously, we are looking forward to a meeting between the leaders of Australia and the United States.
But again, I don’t think it’s especially surprising given the deteriorating situation in the Middle East that President Trump wants to get back to the White House. This was always a prospect of happening, it’s understandable, it’s not especially surprising, and there’ll be other opportunities to engage.
Gilbert:
Given the conflict in the Middle East, have you been briefed on the potential impact for oil and prices at the bowser here?
Chalmers:
Yes, I get briefed every day on the consequences of what’s happening in the Middle East. It’s a perilous moment for the Middle East but also a perilous moment for the global economy. The starkest way that we see the impacts of what’s happening is with the oil price. If you think about last Friday, the oil price jumped almost 11 per cent between 10 and 11 per cent in a single day. It dropped down a little bit.
It spiked again a little bit this morning. It’s around the middle $70. It has been quite low before last week and it spiked, as I said, on Friday and a little bit again today. Now, this has big implications for the global economy, has implications for inflation, but also for global growth at a time when the global environment is already very uncertain because of the –
Gilbert:
I think we’ll see that sustained increase here at the bowser.
Chalmers:
Well, we’ll see volatility. It’s hard to imagine that any day to day movement in markets will be permanent. We’re seeing mostly volatility in the oil price. We’re seeing the gold price shoot up because that’s where people invest when times are uncertain. And so what that means for us is the potential of higher petrol prices, usually takes a couple of weeks before the international barrel price reaches the bowser price in the suburbs and towns of Australia. But we do have genuine concerns, particularly around if the situation deteriorates further in the Middle East.
Obviously, the access that people have to those sea lanes, really important. Sea lanes in and around the Middle East are very important but there is the prospect of upward pressure on petrol prices. There is the price prospect of downward pressure on global growth at a time when these escalating trade tensions and other uncertainty in the world is already weighing pretty heavily on global growth.
Gilbert:
So, it hits global growth and as we said, the petrol price, you haven’t been convinced about reducing the excise because it can get blown out by these fluctuations even in a week, a day, potentially. Is that still your inclination, that you wouldn’t seek to provide support on the basis of a fuel excise reduction? Is that your sort of starting point?
Chalmers:
Yes, we haven’t changed our position on the fuel excise. It is important to remember – I think your question goes to this – we’ve already seen a lot of volatility in petrol prices. In some parts of Australia, people – must have been 12 months ago, 18 months ago – were paying $2.40 at the bowser in lots of places, that got down to $1.50, $1.60. And so there’s been this extraordinary volatility in petrol prices because there’s been volatility in the global oil price as well. We’re providing cost‑of‑living help in other ways, we think that makes more sense.
Gilbert:
The other thing is sovereignty on energy is important. And I know that you and the Prime Minister, Chris Bowen and others have spoken about that. In that context, you feel inclined to knock back the bid to that takeover bid for Santos, given the energy sovereignty is so important.
Chalmers:
Well, that particular proposal’s got a long way to run yet, obviously it has the potential to be a very substantial transaction, tens of billions of dollars associated with that in a sensitive part of our economy.
Gilbert:
So, it’s a long way from getting the tip.
Chalmers:
Well, as I understand it, unless it’s happened today, I’m not sure that the application’s gone in. From a Foreign Investment Review Board point of view, transactions this big go through a number of stages. And I will listen to the advice of the Foreign Investment Review Board, but I won’t pre‑empt that advice. There are good reasons not to do that.
I do understand it’s a big transaction in a sensitive area and I’ll weigh up all of the arguments and I’ll listen to the FIRB. But I can’t get engaged in a kind of a running commentary about the sorts of issues that we’re factoring in. Obviously, the national economic interest is the primary lens through which the Foreign Investment Review Board makes its advice to me when I get that advice, obviously the national economic interest.
Gilbert:
But we have to consider a national security interest too, don’t we?
Chalmers:
We’ve made it clear over a long period of time that those considerations of security, economic security and national security are very closely intertwined and so the Foreign Investment Review Board weighs all of that up. They weigh up all of the considerations, all of the viewpoints, they provide advice to me in a very professional, very considered and methodical way. And I don’t want to pre‑empt the advice that they may provide to me in time if this transaction proceeds to.
Gilbert:
That stage onto another takeover bid. It hasn’t had as much focus in the last few days, but the Korean company Hanwha Ocean has put in a bid with FIRB as well. They acquired a 9.9 stake in Austal, the Australian shipbuilder, in March 2025. They’ve submitted an application to FIRB. Now they want to increase their position to 19.9 per cent.
Yeah, Austal, for many of our viewers might not be aware, but it’s a pretty key part in terms of our military building capacity. In fact, it’s part of the Virginia class supply chain in the US. Are you inclined again not to, to allow that sort of takeover even though Korea is an ally?
Chalmers:
That proposal is a bit more advanced than the Santos one you asked me about a moment ago but the statutory deadline for that is still not until I think the first week of September, so we are considering that one. The Foreign Investment Review Board is compiling its advice to me on that one. Once again, not going to pre‑empt that advice or the decision that I have to take on that one.
But obviously another significant one, obviously another sensitive one and I will come at that decision in the same methodical, considered, consultative way that we come at all of these big decisions on foreign investment.
Gilbert:
Yes. So, even though the process is further advanced, you don’t want to give us a sense of where that’s going yet?
Chalmers:
No, and I don’t do that, not just in sensitive areas like defence or energy, I’ve been very careful the whole time I’ve been Treasurer. Part of taking the advice of the Foreign Investment Review Board seriously is to not pre‑empt that advice, not to engage in a running commentary around it. These are big transactions, these are meaningful transactions, and I’ll consider them in a really methodical way. And that begins with the advice from the FIRB –
Gilbert:
– and the national interest, which is reassuring because obviously those in the CEO positions and elsewhere – I mean – they’ve got priorities for the business but you’re taking that national interest lens on the National Press Club tomorrow. Your address, it’s the first big sort of set piece speech. Productivity is at the centre of it, is that right? Tomorrow?
Chalmers:
Absolutely. It’s a bit unusual that we’ve got the Prime Minister and the Treasurer at the Press Club 8 days apart, but it’s deliberate because what I want to do tomorrow is to really pick up some of the threads of the Prime Minister’s terrific speech last week. I do want to talk about productivity. Productivity is our primary focus in the economy, but not our sole focus.
The speech will be about productivity, budget sustainability and resilience in the face of all of this global turbulence and it will provide some more details on the roundtable that I’ll be convening in the second half of August in the Cabinet Room here in Parliament House. And we come to this opportunity.
Gilbert:
It’s in the Cabinet Room? Yeah. So, that’s not going to be a bigger event. I’m not sure whether that had been announced yet, but if it’s in the Cabinet Room, that’s quite a more intimate setting for this summit. So, it’s very targeted, then?
Chalmers:
Exactly right. Deliberately so. This will be a smallish gathering, very targeted agenda. Productivity, budget sustainability and resilience. There’ll be 20 to 25 people in the room at any one point, grappling with these really important issues. This is a genuine attempt to build consensus around our biggest economic challenges. We come to this with an open door and with an open mind.
And even for people who won’t be in the Cabinet Room for the roundtable itself, we will be providing other opportunities for people to make a contribution. We want to genuinely try and build this consensus. We know that the problems in our economy are well understood despite all this progress that we’ve made together. This is our opportunity to test the appetite for reform in our economy and to see if we can find some common ground.
Gilbert:
So, there’s no predetermined agenda. I know you’ve copped flak on this front for the Jobs and Skills Summit, saying, oh, they’ve just gone ahead with the union agenda. That’s been the claim.
Chalmers:
Well, I don’t accept that characterisation, but I do give the same assurance publicly to all of your viewers that I give privately to all the groups that we are considering and that is we do have an open mind, we do have an open door. This is a genuine attempt to see if we can make progress together. We’ve made a lot of progress too here. Together we are well placed and well prepared for all of this global economic uncertainty. But we need to do, I think –
Gilbert:
You said, the defence spend, where there’s demand on Australia to up to 3.5 per cent. Can we do that?
Chalmers:
There will always be a constituency of people who want us to spend more on defence. Frankly, there’s also a constituency of people who want us to spend much less. We have made room in the budget for substantial increased new investment in defence – an extra $11 billion over the forward estimates in the Budget, an extra $57, $58 billion over the next decade. That is a very substantial increase.
We’ve made room for it because we recognise the need for that. We know that the international security environment is as uncertain as ever and that’s why we’re making these big new investments.
Gilbert:
And just finally, then, on the reform thing, you’re leaning into that, that you are happy to be ambitious and you want to have a crack. You’ve got 94 seats. It’s a lot. I know that the Prime Minister’s cautious about overstepping your mandate, but it’s also a time when clearly there needs to be.
Chalmer:
I think the Prime Minister made a really important point last week in his speech when he said our focus is on delivering what we took to the election. But we also have an obligation to work out what comes next and that’s what this is all about. We are an ambitious government, have an ambitious agenda already, including on productivity. This is about seeing what the next steps can be and seeing if we can take those steps together.
Gilbert:
Treasurer. Thanks. Appreciate it.