LISA MILLAR, HOST:
It’s a very big day for the economy, a big day with a possible decision on Reserve Bank interest rates. Let’s bring in the Treasurer Jim Chalmers, who is in Canberra. Good morning to you, Treasurer.
JIM CHALMERS, TREASURER:
Good morning, Lisa.
MILLAR:
Let’s start with the floods in New South Wales. That state just seems to keep taking a knock, doesn’t it?
CHALMERS:
It does, Lisa. In the worst of the conditions you see the best of Australians, though, don’t you? I was watching that cross you did to Nigel a moment ago, talking about people helping each other out. My message – a bit like Murray Watt’s message earlier today – is the federal government will be there for people in New South Wales. We will stand with them, we will support them, and we will continue to work with the Perrottet Government in New South Wales to make sure that people have what they need to get through yet another difficult period ‑ remembering that a lot of the people impacted by these floods have already had the worst of it, the worst of the weather, quite recently. People are doing it incredibly tough. The Albanese Government will support you and be there for you when you need us.
MILLAR:
The National Farmers Federation says this area takes in possibly about a billion dollars’ worth of produce. So, there’s the expectation that this flood will again have an impact on inflation. We’re seeing the Reserve Bank today, possibly half a percentage point as much. It’s getting even tougher for Australians.
CHALMERS:
It is. With vegetable prices already going through the roof, our expectation is that this flooding will make that even more difficult for people. The expectation across the board is that interest rates will go up again today. We don’t pre‑empt decisions of the independent Reserve Bank, but everybody is anticipating another rate rise today. What that means is an even bigger proportion of people’s family budgets will be eaten up by mortgage repayments at the same time as they’ve had to find room for the essentials of life – whether it’s fruit and vegetables and groceries, whether it’s petrol prices, whether it’s the pressure on building costs from all of these difficulties in our supply chains, labour shortages. Unfortunately, we’ve got a very difficult combination of circumstances – natural disasters, inflation, rising interest rates ‑ and our job as the new government, is to try and build an economy and a Budget which is as resilient as the Australian people prove themselves to be again and again.
MILLAR:
There’s a real shortage of skilled workers. This is an issue for so many places around Australia. Is the government doing all that it can at the moment to try and fill those gaps?
CHALMERS:
Yes, Lisa. This is a big part of the story that we’ve got with inflation in our economy – rising prices for building materials is part of it, but also labour shortages and the prices of some of those essentials that we’ve been talking about. Brendan O’Connor, our minister, has been talking about the best mix of training, of getting people back into work via child care reforms, but also a sensible migration program. Because we need to come at this big challenge from a whole range of angles. There’s not one switch that we can flick to fix these labour shortages and these skill shortages, which are right around our economy and right around our country.
This is one of the key issues that I want to see discussed at the Jobs Summit, which we will be convening before long in a couple of months’ time. What we want to do, is we want to bring the country together around these big challenges that we’ve got – whether it’s labour shortages, whether it’s inflation, whether it’s a decade now of wage stagnation and people falling further and further behind. These are the key issues, and we want to find the common ground here. Too often when it comes to labour shortages, there’s the wrong assumption that there’s only one fix or another and that people can’t get around a table and work out how we deal with it. That’s what we intend to do at the Jobs Summit.
There’s more common ground on these issues than people commonly assume. If we can get the labour shortages dealt with ‑ or at least begin to address them ‑ if we can build a more resilient Budget and a more resilient economy, then we can get to the other side of these really difficult circumstances and we can have that better future. But first, we have to navigate some pretty choppy waters – whether it’s natural disasters, whether it’s the issues in the economy, the issues around the world. All of these things are combining to make life harder for Australians, and we need to work together to deal with them over time.
MILLAR:
Just finally, Jim Chalmers, to clarify ‑ because you did say that you expected food prices to go up again because of this natural disaster. The National Farmers Federation is saying that as well. What impact is this latest disaster going to have on your Budget planning?
CHALMERS:
It’s a bit early to tell, Lisa. Clearly, there’ll be an impact on the Budget from the disaster funding arrangements which kick in at times like this, and we don’t propose to nickel and dime that. People will get the help that they need to get through an incredibly tough period. That will have an impact on the Budget – we acknowledge that – as will, of course, some of the other broader economic consequences of these natural disasters. It's a bit early to tell exactly ‑ to a dollar figure ‑ what this will cost the economy and what this will cost Australians. Hopefully, before long, I can begin to quantify that, so that people know what the cost and consequences are. But primarily ‑ and most importantly ‑ the human costs and the human consequences of what people are going through in New South Wales are foremost in our mind. Of course, there are Budget and economic impacts on that, but they are secondary to making sure that we are there to support people when they need us.
MILLAR:
Jim Chalmers, thanks for your time this morning.
CHALMERS:
Thank you, Lisa.