KIERAN GILBERT:
Welcome back to the program. Joining me live in the studio now is the Treasurer, Jim Chalmers.
Treasurer, thanks for your time. You've announced this change to the PRRT for gas ‑ basically LNG. You've consulted with the industry, are you expecting them to cop it or push back on this?
JIM CHALMERS:
Look, we've consulted the industry as people would expect, and they can speak for themselves. But I think that there is a broad recognition that if there is to be a change, this is the one that best balances the need to get more revenues sooner, to fund our cost‑of‑living package and other priorities in the Budget at the same time as we recognise we want to protect investment and supply and our international relationships ‑ we've been very cognizant of that throughout. We have wanted to get a fairer return for Australians sooner. That's an important objective, but we've balanced that against the other objectives too.
GILBERT:
You know, the Greens, David Pocock, they're going to say it's too small, given the massive profits that the gas companies are making, what do you say to them?
CHALMERS:
Well, I'd encourage the Parliament to support this. I mean, this is $2.4 billion in the forward estimates which wouldn't be there were it not for the announcement that we're making today. And so, I hope that the Parliament could find a way to support it. Voting against this in the Parliament would be voting for lower taxes for these offshore LNG projects and I don't think those crossbenchers want that outcome.
GILBERT:
Could you have gone harder, though?
CHALMERS:
I think inevitably –
GILBERT:
They're making massive profits aren't they?
CHALMERS:
Well, inevitably when you're making a decision of this type there are some people who say you should go harder and some people who think you shouldn't make the change at all. I think we've struck a good balance here and the impact of that, the outcome of that means Australians will get a fairer return on their resources sooner. It can help us fund the cost‑of‑living package and other priorities but it balances all of the other considerations too.
GILBERT:
Sussan Ley said this morning on this program, when you intervene, you distort the market. It doesn't sound that promising at this stage but I would imagine the industry would want you to work with the Coalition and get a deal as opposed to work with the Greens.
CHALMERS:
The Greens well, I suspect that is their position, but they can speak for themselves. I mean, I think everybody's got an interest in concluding the outcomes of this review – that was begun by my predecessor – bedding it down, legislating it and moving on, and I suspect that will be the industry's position and certainly the government's position. I hope it's the Parliament's position too.
GILBERT:
It's shaping up as the first surplus since '07, '08. Do you believe this will end once and for all a Coalition argument that Labor can't manage the Budget?
CHALMERS:
Well, that argument’s always been rubbish. And the fact that the last government left behind a trillion dollars in Liberal debt and almost nothing to show for it, I think, is evidence of their own failures to manage the Budget.
GILBERT:
But this would be symbolic, wouldn't it? Well, this Budget symbolic surplus.
CHALMERS:
Well, it'll be made clear on Tuesday night what the Budget position is. It is already clear that you wouldn't even be asking me these questions were it not for the responsible approach that we've taken to the Budget over the course of two Budgets now ‑ banking most of the upward revision to revenue. You're asking me about a surplus because of that approach. Our predecessors used to spend most of that upward revision to revenue, and that's the difference.
GILBERT:
I'm also asking him because I know this is unfinished business for you, because you worked very closely with the Treasurer of the time who wasn't able to deliver what he said he was going to in terms of, like, those surpluses, there was the GFC, we all know the history. It's unfinished business for you as well.
CHALMERS:
We're all aware of the history, we're all aware of the reasons for that. My focus really is to try and get the Budget in as good a nick as we can. There will be a substantial improvement in the near term, but it gets difficult after that as the pressures intensify rather than ease. There's a misconception out there that says that most of the upward revision in revenue is from commodity prices. It's actually only about a fifth of that. The much bigger contribution to the improvement is a stronger labour market and the beginnings of welcome wages growth. That will make a bigger contribution, about 40 per cent to the upgrade but it will improve in the near term, but the pressures intensify after that.
GILBERT:
So, given that, should the Coalition get some of the credit, given the low unemployment they left you? Should they get some of the credit for the surplus.
CHALMERS:
No. A big part of the improvement is because we've got wages moving again after a decade of deliberate wage suppression and stagnation. And so, Australians are not just working more, they're also earning more. And that is a welcome development from our point of view. And it's also helping the Budget.
GILBERT:
It's helping the Budget. Is it going to see you authorise a broader increase in JobSeeker? There have been some references to over 55. Andrew Clennell, my colleague, reporting this morning that it's going to be across the board.
CHALMERS:
This will be a responsible Budget for Australians who are doing it tough and central to that, probably the centrepiece of the Budget will be a cost‑of‑living package which is broader than what has been speculated on which prioritises the most vulnerable people and which applies to more than one age cohort. We've already announced cheaper medicines, cheaper early childhood education, help with energy bills, and there will be other elements to it as well.
GILBERT:
So, the JobSeeker, you said it's more than one age cohort, obviously young people trying to get in there, you don't want them to become entrenched unemployed, do you?
CHALMERS:
People will have to tune in to your coverage on Tuesday night to see all of the Budget in its entirety. Inevitably, there's speculation about what's in and what's not in. It's not always right. Sometimes it's right, sometimes it's not. We'll do what we can for people. It will be a much broader package than what has been speculated on so far, and it will help the most vulnerable people.
GILBERT:
It's broader, but you've got to balance that, don't you, with inflation. So, have you made the necessary cuts to balance the increase in the payments? Because as much as we all want people who are doing it tough to get more support, all those dollars are going to be spent. Every single one of those dollars will be spent. So, you got to pull money out elsewhere.
CHALMERS:
I don't see them as competing objectives. I think if you clean up the mess in the Budget and you put the Budget on a more sustainable footing, you can afford to do the things that we want to do for people, and particularly the most vulnerable. There will be substantial savings in the Budget, there will be substantial spending restraint in the Budget once again, and there'll be modest but meaningful tax changes as well. And all of those three things will work together to make the Budget more sustainable than it would be. And from that foundation, we can afford to help people through difficult times, but also invest in economic growth and set the country up for the future.
GILBERT:
How significant is that improvement in the forecast for real wages? They're going to outpace inflation, aren't they, within a year or so?
CHALMERS. Yes, so, the forecast for real wages growth has come forward. We were expecting originally real wages growth in the middle of next year. Now we expect it at the start of next year, and that's because inflation is moderating at the same time as we're getting this wages growth, which is very welcome. A key part of our approach to the economy is to get wages moving again and so people can expect to see in the Budget an improved outlook for wages.
GILBERT:
And on energy prices, you're going to have a support package, are we talking compensation into the sort of several hundreds of dollars for households?
CHALMERS:
About five and a half million households and around a million small businesses will be eligible for some energy bill relief worth several hundred dollars. And it depends where you live in the country and what the price pressures are. And it also depends how much the states and territories have kicked in, because they've been kicking in half, so it'll be different around the country. We've struck eight different deals with different jurisdictions around the country. But we hope and we expect that it will take some of the sting out of these price rises, which are putting pressure on families and households and small businesses.
GILBERT:
The Daily Telegraph, the Sunday Tele reporting today that you're going to increase the passenger movement charge, currently $60 for anyone, tourist citizens leaving the country. The tourism industry is blowing up already. Is that a plan?
CHALMERS:
A couple of things about that. First of all, the tourism industry is doing better than anticipated. A big part of, for example, the improvement that we'll see in our export numbers will be about tourism and that's a good thing. We're big supporters of the tourism industry. I'm not going to pre‑empt anything that may or may not be in the Budget on Tuesday. There's obviously a series of difficult decisions that we have to take to get the Budget on a more sustainable footing, but people have to wait for Tuesday to find out.
GILBERT:
You've spoken regularly about the need to, as part of your reform, focus on cleaner and renewable energy. The National Net Zero Authority, is that about ensuring heavy industry communities, say, like the Hunter, like the Illawarra, are not left behind in a transition?
CHALMERS:
Yeah, absolutely. But more than that, it's about these communities grabbing the immense industrial and economic opportunities of the clean energy transformation. I think one of the things that will really determine our growth prospects into the future is whether we get this transformation right, whether we get more cleaner and cheaper energy into the system. And so, the Net Zero Authority, all of these other policies and initiatives and investments that we're making, really what that says to Australians is our success in the defining decade ahead will be partly determined by our ability to manage and maximise this big shift in the energy mix. A big part of what I talk about on Tuesday night will be how we get this right in the context of other countries making big investments as well.
GILBERT:
Labor is making some changes to the way you're making your government payments to community organisations, government services. Are you going to change the indexing of those? Why is that so important? Have these organisations ‑ are they having to put off staff because of the high inflation rate? Is that happening?
CHALMERS:
Absolutely. Like a lot of Australians and a lot of Australian organisations, community organisations are really under the pump. And what this means is we're going to make it easier for community organisations and service providers to pay their bills and pay their workers so they can continue the incredibly important work they do right around this country.
GILBERT:
Now, just a few ones before you go. The eminent economist Ross Garnaut says rate rises are driving inflation, in part due to market dominance and other factors like, say, in energy, there's an oligopoly or in rent. When you lift rates, tenants have to pay more in rent so it's actually driving inflation as well. It's ‘self‑fulfilling’ is Ross Garnaut's argument. Does the RBA need to think differently about rate rises?
CHALMERS:
Obviously they factor in all of the different views that are put to them when they come to their decisions independently. But you've got to look right across the economy at the impact of rate rises and overwhelmingly, the impact is to pull money out of the economy. There are sectors where we need more competition and we need more dynamism and those sectors are often the areas where government policy is most directed as well ‑ energy bill relief, help in the housing market to build more build‑to‑rent properties, for example. That's why they are focused too.
GILBERT:
Okay, so the government intervention helps sort of balance that out. King Charles, Prime Minister pledged allegiance. Do you think that was the right call? He said he didn't want to cause any dramas.
CHALMERS:
Of course it was. This was an important day and it's obviously crucial that the Prime Minister attend and pledge allegiance. I think that's what people expect.
GILBERT:
And you're obviously ready for Tuesday. You've been doing a bit of running lately, I see. On Friday you ran 25 ks at 4.50am.
CHALMERS:
Very slowly.
GILBERT:
Andrew Leigh for our viewers who might know, Andrew Leigh, your colleague is an accomplished marathon runner. Are you trying to take him on?
CHALMERS:
All of Andrew's records are safe. So that your viewers know, Andrew Leigh runs like a gazelle. I run a bit more like a wombat.
GILBERT:
You run a long way, Treasurer. All the best Tuesday. I appreciate your time.