KIERAN GILBERT:
Let's go live back to Ipswich. Joining me is the Treasurer, Jim Chalmers. Thanks for your time. We've got a lot to talk about, including the announcement that you and the Prime Minister made there at the Rheinmetall facility. But I want to start with your reaction to the tragic news out of the Middle East, the death of 44‑year‑old Australian aid worker, Zomi Frankcom. What's your reaction to that confirmation today?
JIM CHALMERS:
Kieran, every single life lost in that dangerous part of the world is a tragedy, but we really think today of the aid workers who put themselves in harm's way to do a dangerous job in a dangerous place at a really dangerous time. And so our hearts go out to her family and her loved ones, and her colleagues. We thank all of the aid workers from right around the world who put themselves in harm's way in order to feed and protect people who are caught up in this conflict through no fault of their own.
GILBERT:
Yes, terribly sad news on that front. The Prime Minister says that the government wants full accountability. We will see. I mean the government has also called in the Ambassador for an explanation. As you said at the outset though, this remains a terribly dangerous war zone right now.
CHALMERS:
It really is, Kieran, and you know, aid workers who go to these places, unarmed, with the best of intentions, really just trying to feed and look after people who are sheltering from danger, these are really special people, and to lose one in these circumstances is heartbreaking. I'm sure everybody who's watching that part of the world is concerned about the loss of every innocent life. All of our hearts go out to her family, her loved ones and her colleagues.
GILBERT:
Yes, indeed. Well said. Now to this important announcement today. A billion‑dollar deal done with Germany out of Ipswich. It's a really significant manufacturing facility. I'm wondering if you can reflect for our viewers on, obviously, it's economically important, but it is also in terms of our sovereign capacity – say supply chains are cut at some point into the future – this is also a very important sovereign capacity for us to have onshore, isn't it?
CHALMERS:
Absolutely, Kieran, and really the lines between national security and economic security were once blurred – they're now more or less non‑existent. We see national security, economic security and prosperity really as all parts of the same equation. And this is really about secure, well‑paid manufacturing jobs in southeast Queensland, and it's all about a Future Made in Australia. And the Prime Minister coming here with local members like Shayne Neumann and Milton Dick are really as a demonstration in our belief, in our faith that Australian workers, and especially in this case Queensland workers, will have an absolutely central role to play in a Future Made in Australia.
And the Budget that I hand down in six weeks' time, one of the big emphases in the Budget will be Defence industry and manufacturing jobs and a Future Made in Australia because this is how we secure our prosperity into the future at the same time as we are attending to our national security needs and concerns.
GILBERT:
Do you have to also have a lot of government intervention and propping up industries in the context of the recent announcement with the SunShot program, that solar initiative in the Hunter that was announced, there was some reaction suggesting that we can't compete with the likes of China. What do you say, as you stand at that facility in Queensland today, to those who argue that in terms of manufacturing we just don't have the labour that's cheap enough to be competitive internationally in terms of manufacturing?
CHALMERS:
I think big workshops like this show that that's not true. Of course, we can compete, and we will compete by taking the high road: good, secure, well‑paid jobs, being better at adapting and adopting technology, relying on great partnerships and relationships and engagement around the world. I mean this is how we build prosperity into the future. And a Future Made in Australia is more than just a kind of a passing press release. This is in lots of ways the Prime Minister's reason for being. This is something that he believes in deeply, as we all do. But investing in industry or co‑investing in industry is not what it might have been 40 or 50 years ago. It's not what it might have been in the 80s or 90s. The geopolitical situation is different, our economic circumstances are different, global and domestic, and we need to make sure that we are investing in the future of our people and our communities and our workers and our economy in the kinds of ways that we are talking about today, because we won't deliver another generation of prosperity exactly the same way that we delivered the last generation of prosperity.
The big emphasis needs to be on investment and how we get capital flowing in our economy. That will overwhelmingly be the task of the private sector, but it requires some co‑investment from government, it requires leadership from the Prime Minister right down, and multiple levels of government. We've got all of those things, and we've given ourselves, I think, a very, very good chance to own the future, and a big part of the future will be manufacturing jobs, employing the kinds of workers that we met today.
GILBERT:
You spoke today about the growth in jobs under the Labor government, that it's a record for the number of jobs created on average per day over the first couple of years of a new government. I want to ask you though what do you say to the argument that a lot of that is driven by the surge in migration?
CHALMERS:
A couple of things about that, Kieran. No government has ever created more than 1,000 jobs a day on average like this Albanese Government has. Now this is more than 1,000 opportunities created every single day that we're in office for people to work hard and get ahead and provide for their loved ones. And this is our reason for being; creating good, secure, well‑paid jobs, so that more people are working, more people are earning more, and via our tax cuts more people are keeping more of what they earn. This is our reason for being, and that's why these secure, well‑paid manufacturing jobs we're talking about today are so important.
And what we're talking about here is well over 1,000 jobs on average a day. Our predecessors were creating on average about half of that. So, there's not a little bit in it, there's a lot in it, something like double our predecessors. Now if you look at some of the other factors, to respond more specifically to your question, whether it's employment to population ratio, whether it's participation, whether it's the unemployment rate, all of these things are at or near record levels, record positive levels, and all of them are better than what we inherited from our predecessors. And so, if there was only a few jobs a day in it, I think that criticism that you've repeated there, or that critique would carry some water, but we're talking about double the amount of jobs per day on average.
That is a very good thing, because as I said before, we want more people working; 790,000 jobs created on our watch. We want wages growing, real wages are growing again, inflation is moderating, and for all of these reasons, we know that people are under the pump, but we're easing some of the pressure that people are under because a good, secure, well‑paid job is one of the best ways that we can ensure people can provide for their loved ones amidst these cost‑of‑living pressures that people are under.
GILBERT:
We spoke about your upcoming budget. It's not that far away. And you probably, more than anyone, keep an eye on the iron ore price. That has a flow‑on effect to the budget bottom line. It's now fallen below US$100 a tonne, down from over US$130 a tonne in January. It does have a big impact, doesn't it, in terms of what sort of surplus, if any, you can deliver. It looks like you will get there, but how concerned are you by that declining number?
CHALMERS:
Quite concerned. Yes, there's no use pretending it doesn't have an impact on the budget bottom line. We recognise and acknowledge, and we're grateful for the important contribution that the resources sector makes, not just to the Budget but to the economy more broadly, and to our national security as well. And so, it is concerning to see the iron ore price a bit lower than we have been used to. When I looked on Thursday it was US$91 a tonne, as you rightly point out it was US$130 a tonne at the start of the year, so it's fallen by about a third just this calendar year alone. Obviously, that will flow through to the Budget.
We're still expecting some revenue upgrades, but they will be nowhere near the sort of magnitude that we saw in the first couple of budgets. There's always a premium on responsible economic management, but I think particularly with this one, which is probably a bit harder to land than the first two, because we're not getting the same kind of revenue upgrades, the balance of risks in the real economy has shifted and is shifting, and so we will spend the bulk of the next six weeks making sure that we strike all the right appropriate balances, we deliver a responsible budget which is still focused primarily on inflation but recognises we've got a growth challenge as well.
GILBERT:
As you know, and I'm sure people raise this with you every day of the week, the cost of living is such a massive issue right now, will continue to be all the way to the next election. You sort of flagged the energy price relief, yes, that's coming. What about rental assistance? Can people expect more of that? I know you had some in the last budget. Will there be more assistance for those renters?
CHALMERS:
Some of those decisions are yet to be taken, Kieran, and we've got six weeks until Katy Gallagher and I hand down the Budget, but we've probably got about four weeks or so of decision‑making time still available to us. The centrepiece of the cost‑of‑living relief in the Budget will be the tax cuts for every taxpayer and a bigger tax cut for 84 per cent of Australian taxpayers to help them with the cost of living. We've said before we are prepared to consider some of these other cost‑of‑living measures if we can afford to do it in a responsible and in a meaningful way.
But whatever else we might be able to do in the cost of living won't prevent those tax cuts being the biggest part of what we're doing to ease the pressure that we acknowledge people are under, but more than acknowledge that, we're doing something about it. We've got a whole raft of things already in the system in addition to those tax cuts. Rent assistance, as you said a moment ago, is one of them, electricity bill relief is another, cheaper early childhood education, cheaper medicines. We're doing a whole bunch of things, some of them are permanent and ongoing, some of them require decisions from budget to budget and we'll take the time over the next few weeks to make sure we get those decisions right.
GILBERT:
A lot of people will hear about those RBA minutes and be quite relieved that they didn't consider hiking rates at the most recent meeting. Are we beyond the worst of it? I know you don't speculate on where they go to next, but you clearly were quite relieved to hear that as well out of those RBA minutes today.
CHALMERS:
Let me put it this way, Kieran: I mean this is the first time since the Morrison government that the Reserve Bank has said that they didn't consider increasing interest rates at their last meeting. So that is significant, as is the fact that by the time the Board next meets it will be six months without an interest rate hike, and that will allow a lot of people with a mortgage to catch their breath.
One of the reasons why people are so substantially under the pump is because we had those interest rate rises which began under our predecessors and continued after. We recognise that, and so I think there will be a lot of interest in these Reserve Bank minutes today. I don't speculate on the future movement of rates. I don't second guess decisions that they've already taken. My job is to focus on what I can influence. We've got this combination of cost‑of‑living relief, budget repair and economic reform, which is helping to put downward pressure on inflation. It's inflation that the Reserve Bank is most focused on, and that is moderating quite substantially since its peaks in 2022. That's a good thing. They will make their decisions based on that, based on consumption, based on growth in the economy and some of these other indicators.
GILBERT:
Treasurer, thanks for your time, as always appreciate it.