KIERAN GILBERT:
Thanks for your company this afternoon. Let’s get straight to Treasurer Jim Chalmers, bit over a week out from your next Budget. Very interesting language. You’re saying you’re not going to go the scorched earth austerity or the free‑for‑all spending; you’re going the middle ground. But what do you say to economists who argue you shouldn’t have an expansionary budget right now given inflation pressures?
JIM CHALMERS:
Good afternoon, Kieran. Thanks for having me back on your show. The Budget will be sensible, and it will be responsible, and it will take a balanced approach to all of these cross currents that we have in the global and domestic economy. And that means making sure that we’re doing what we can to put downward pressure on inflation at the same time as we don’t forget the medium‑term growth challenge in our economy as well. I welcome input from a lot of people who’ve got a lot of opinions. Some people will always be up for that scorched earth austerity, that slash and burn kind of budget. Some people will always be for some kind of free‑for‑all of public spending. What we’ve shown in our first 2 budgets, and what we’ll show again in our third, is there will be a premium on responsible economic management, helping people with the cost of living and investing in the future.
GILBERT:
You referred to the timing quite a bit today and in recent days. Is it all about when the spending happens? Given the inflation pressures are now, the growth challenges will be the latter part of the forward estimates. Is that your thinking?
CHALMERS:
That is a good way to describe it, Kieran. At the front end of the Budget, the primary focus is on fighting inflation when these inflationary pressures are still hanging around a bit higher than we’d like for a bit longer than we’d like, even as they’ve moderated substantially since their peak in 2022. So, at the front end, an emphasis on inflation, a medium‑term emphasis on growth, and that does impact the way that we time and sequence and shape our investments in the Budget. And that’s why some of this commentary that says, you look at one number overall, one aggregate number of spending in the Budget to determine what it’s likely to do when it comes to inflation or growth and the like, it’s a bit more nuanced than that. The quantity of spending does matter, the magnitude does matter, but the quality of the spending, the timing and shape of that spending matters as well. We’ve got a number of challenges to deal with here, primarily inflation. That’s our number one focus but we’ve got some other challenges around growth as well and we can’t ignore them.
GILBERT:
Does the Future Made in Australia initiative, is it consistent with the reality that we face in our economy right now, given what the RBA has got to be thinking about tomorrow?
CHALMERS:
We’ve got a big chance in this country. We can become an indispensable part of the global net‑zero economy. We do that by making ourselves a renewable energy superpower and powering that Future Made in Australia. I’m not satisfied at just being at the very beginning and the very end of supply chains. We want to be in the middle where the value is created, and that’s what our Future Made in Australia is primarily about. There is nothing in our investments which should trouble the Reserve Bank or others who watch these things closely. We’re about a new growth model for the economy over the medium term and the longer term that takes some public investment, but primarily it’s about attracting private investment and we want more investment in our economy so that we can continue to grow with low inflation into the future.
GILBERT:
Some criticism of your fellow Queenslander, Premier Miles, about that energy rebate. Do you share those concerns, or do you see his policy more in, in the context of what your government did in terms of those rebates which took measured inflation down?
CHALMERS:
Yes, I think what Steven Miles has done is to be welcomed and supported enthusiastically. He understands that Queenslanders are under pressure, just as I understand that Australians are under pressure and we can do more than acknowledge that we can actually do something about it. So, I commend him for providing cost‑of‑living relief to the people of Queensland. These cost‑of‑living pressures are still more intense and more acute than we would like, and so it requires governments to do what they responsibly can. The Queensland Labor government is doing that. The Albanese Labor government is doing that as well. And we are working together to take some of the pressure off people who are under the pump.
GILBERT:
We’re expecting another surplus next week. Is it true to say, though, you won’t claim a victory on that front, so to speak; you’ll wait till the final budget outcomes delivered later in the year for that?
CHALMERS:
I’m a pretty cautious fellow, as you know, Kieran, when it comes to these sorts of forecasts. We take a very cautious, very conservative view of the Budget and for good reason. The numbers in the Budget haven’t settled yet. They’ll settle sometime later in the week when everything is added up. We are shooting for that second surplus because we see it as a good demonstration of getting the Budget in much better nick, paying down debt, putting downward pressure on inflation, if we can, with our overall budget strategy. These are all important things. And so if we can land that second surplus, we will. We’ll have a much better sense of it closer to the Budget. And I’ll talk about it at some length in either scenario in the lead up to and on Budget night.
GILBERT:
A couple of quick ones before you go. The RBA, as we mentioned, meets tomorrow. Is there a scenario where it’s actually better for the RBA to move if they’ve got to raise rates at some point, given inflation is sticky, that they maybe hike rates tomorrow, as opposed to being in a situation where they might have to lift it 2 or 3 times later in the year?
CHALMERS:
I’ll leave that to them. I’m doing my job when it comes to putting downward pressure on inflation. I’ll leave their job to them. Michele Bullock will give a press conference after the meeting tomorrow, and no doubt you’ll carry that. On inflation, we are in annual terms ahead of our mid‑year budget update forecast for inflation, we’re actually lower than that. In annual terms, inflation has more than halved since its peak and it’s almost halved since the election. And so we’re making some pretty substantial and welcome progress in the fight against inflation. But as I say, we know that fight’s not over yet because people are still under pressure. And that’s why the Budget will have a primary focus on cost of living and this fight against inflation, which isn’t yet over.
GILBERT:
The ACCC settled a deal with the national carrier Qantas. Are you happy where they landed?
CHALMERS:
I am Kieran, and this is the least that Qantas could do after the way that they misled their customers. They should count themselves lucky, frankly, after this behaviour was uncovered by the ACCC. And I really wanted to congratulate and thank the ACCC and Gina Cass‑Gottlieb for the way that they have pursued Qantas on behalf of these customers who were dudded by this practice. Let’s make sure it never happens again. Let’s make sure that the customers are appropriately compensated, and the company is appropriately punished. They’ve come to this conclusion and to this settlement, I think it’s a really good thing.
GILBERT:
Treasurer, thanks for your time.
CHALMERS:
Thanks, Kieran.