KIERAN GILBERT:
Jim Chalmers is live in the studio. Does this number today, it is softer, obviously, but it's not a recession. As you pointed out, UK, Japan, others have had recessions. Do you feel confident you've got the soft landing?
JIM CHALMERS:
I think it remains to be seen still. We've been relatively confident for some time that the Australian economy will continue to grow, but we've been up‑front with people and said that growth will be quite weak and that's what we've seen today. But even weak growth is welcome growth in these circumstances. As you rightly point out, Japan and the UK went into recession over that period, a lot of other G20 big economies have slowed considerably. On top of that, you've got the impact of those rate rises. So this is, in lots of ways, the inevitable consequence of the global economic uncertainty and higher interest rates here at home. But even slow growth, I think, is significant given the accumulation of challenges.
GILBERT:
And the ABS, in its release, says that people are staying home because of those pressures, those cost‑of‑living pressures. The reality is people are doing it really tough, aren't they?
CHALMERS:
They're doing it tough.
GILBERT:
And that continues to be the case.
CHALMERS:
Absolutely. We don't just acknowledge that; we're doing something about it. Rolling out this cost‑of‑living help, a tax cut for every taxpayer from 1 July, recognises that people are still under the pump. Really the story of these National Accounts today is global uncertainty combined with higher interest rates has had an impact on consumption. On the upside, we've seen some relatively good outcomes on business investment and on exports. The net effect of all of that is an economy which is slowing more or less in expected ways and people still under pressure. So what we will do is make sure that we take the pressures that people are under, the fact that our economy is slowing, the fact that inflation is still the primary challenge we have in our economy, and we'll make sure that we address those things in the Budget in May.
GILBERT:
Yes, so the Budget in May, there's still a bit of room? I know people were reading that the comments you made about saying the tax cuts are the big thing. Obviously they're a significant thing you've announced thus far, but you'd like to do more, wouldn't you, to make it easier for people?
CHALMERS:
Not just me. I think the Prime Minister and I and other ministers have made it clear that if we can do something meaningful, which is responsible and affordable, of course, we will consider that. But we have been up‑front with people and said there's not another $107 billion package like the cost‑of‑living tax cuts waiting to be announced. That will be the centrepiece of the cost‑of‑living relief that rolls out this year. If we can do a little bit more in another area or two, then obviously we'll see if we can afford to do that.
GILBERT:
Our economy continues to be supported by strong mining in the exports sector. What did you make of the Chinese growth target this week and does it – do you retain confidence in terms of mining and our relationship with China in an economic sense, at least for the next little period?
CHALMERS:
I think there are probably three very important things out of the commentary out of China in the last day or so. First of all, they said that they expect weak growth to continue. The soft conditions in China to continue. That's obviously not great news for us. They said, as you say, that they will commit to this growth target. That matters to us, but how they go about meeting that target matters to us as well. And the third important point is that China is investing quite substantially in the energy transformation and if you think about some of our commodities, iron ore that becomes steel, for example, that's very important to the huge investments they're making in things like wind turbines and the like. So there's a lot that matters to us in what the Chinese authorities said this week. As always, we monitor those comments and those policies and initiatives and directions very, very closely.
GILBERT:
Indeed, we do. The soft consumption that we spoke about earlier at the household level, I know you're not going to go into it on interest rates, but RBA meets March 19. At the very least, it's reassuring that they won't be hiking anymore.
CHALMERS:
Again, you know, for all of the usual reasons I'm not going to predict what they might do or what they might consider. I've got my own job to do, and I'm pleased and encouraged with how inflation is moderating in our economy. It's not mission accomplished because people are still under the pump, as we said a moment ago. So we've been doing our bit there, spending restraint, the way we've designed our cost‑of‑living help to make sure we're taking the pressure off inflation rather than adding to it. The Reserve Bank has its own job to do. No doubt they will be very focused on not just these numbers which were released today, but all of that other encouraging data that says inflation has come off quite substantially in our economy since 2022.
GILBERT:
And today, Penny Wong has become the longest serving female cabinet minister in Australian history. She's just gone past Amanda Vanstone on 2,769 days, 7.5 years, and still going. The same day she's copping it from Paul Keating.
CHALMERS:
Good with the bad.
GILBERT:
Every cloud. This is the cloud that continues to show up. Paul Keating having another crack. He doesn't mind criticising your colleague, does he?
CHALMERS:
First of all, I think Penny Wong's terrific, and I'm not surprised that she's put together such a long‑standing record of excellence as a minister in multiple governments now. You know that Paul Keating is a friend of mine and I value that friendship, but I don't agree with him all of the time. It would be strange if I did. He's not right 100 per cent of the time and he's wrong about Penny Wong and he's wrong about Mike Burgess. They are two absolutely outstanding people, and they are doing absolutely outstanding work, and all you will hear from me is full‑throated support of the work that they're doing. I don't think we should undermine or diminish that work.
GILBERT:
Penny Wong, we could talk in terms of the foreign policy impact and the way, you know, at that level, but people, punters, polling shows she has a great deal of respect in the community. Paul Keating doesn't seem to see that.
CHALMERS:
I think that respect is well earned and well deserved, and I see Penny in all of the forums of this government. Penny is on the Expenditure Review Committee, on the National Security Committee. I see her in the Cabinet, I see her out and about in the community. I've just spent a couple of days with her at ASEAN. Penny Wong is right off the top shelf when it comes to ministers, not just in our government, but I think throughout the modern political history of this country and I think she deserves not just our respect, but I think she deserves a lot of the credit for the progress that we've made.
GILBERT:
This is more a foreign policy question, but I will just finish with this because Paul Keating also said this, that your government, that Mr Albanese, in your Labor government, is not on the same page as ASEAN when it comes to dealing with China. Is it out of sync?
CHALMERS:
I think every country in ASEAN, all of the important economies that we've been engaging with the last couple of days, they're realistic about the region. There's a lot of uncertainty in our region and I think the best way to respond to that, best way to make our region more safe, more secure, more peaceful and prosperous is to engage with the ASEAN countries but also with China as well, and I think most objective observers would conclude that we've made some good progress in our relationship with China as well and, again, that's a credit to Penny and Anthony and Richard and Don and the colleagues who work so hard on it.
GILBERT:
Treasurer, thanks for your time.
CHALMERS:
Thanks, Kieran.