LISA MILLAR:
The Treasurer, Jim Chalmers, joins us now from Canberra.
JIM CHALMERS:
Good morning Lisa.
MILLAR:
I'm sure there are a lot of people watching you this morning seeing that, while your Budget may be a little healthier, theirs at home is not, and they are struggling and wondering what yesterday was all about for them.
CHALMERS:
A couple of things about that, Lisa. First of all, one of the best ways that we can get on top of this inflation challenge which is punishing families right around Australia is to get the budget in much better shape. By running a tight ship when it comes to the budget, we make sure that we're putting that downward pressure on inflation, and that's really important. But the other thing is we recognise that people are doing it especially tough, and that's why we're rolling out on tens of billions of dollars in cost-of-living help, and that's designed to put downward pressure on inflation as well. So we do more than recognise the pressures that people are under, we are acting on that, and part of that is making sure that we get the budget in as good as nick as possible so that we're not adding to these inflationary pressures in our economy.
MILLAR:
The commentary yesterday was varied. I noticed Deloitte said that "we talk about Australia as a lucky country, actually this Treasurer has been very lucky," because there are a lot of things that have gone your way, with what you're seeing now is a likely surplus in 2024?
CHALMERS:
First of all, we're still forecasting a very small deficit for this year, but we are in striking distance of a second surplus. The surplus we delivered last year was the first in 15 years, and that's helping to take some of the pressure off inflation, and that's really important. When it comes to the budget position, we have had a recovery in revenue in the budget, but what really matters is the decisions that you take once you understand that. And what we've been able to do, and I pay tribute to Katy Gallagher and my colleagues, what we've been able to do is we've been able to provide cost-of-living relief, invest in the future of the country, but also bank almost all of these upward revisions to revenue to get the budget in better shape. And so there are decisions, often difficult decisions, $10 billion of savings, decisions about whether to spend or save upwards revisions to revenue – those are difficult decisions. And so I know a lot of the commentators want to pretend that this is all out of our hands, but the Government has been deliberately disciplined, we have been responsible economic managers, and as a consequence of that we have helped engineer an historic turnaround in the budget at the same time as we give cost of living assistance and invest in the future.
MILLAR:
The bracket creep certainly has seen the tax take increase as well. People are going to start arcing up about that.
CHALMERS:
Well, that is a function of our Government's ability to get wages moving again after a decade of wage stagnation, and the fact that more people are working. The income tax take goes up when more people are working and when more people are earning more, and both of those things have been the case under this Albanese Labor government. 620,000 jobs have been created, which is a record for a first term government, and we're only halfway through. We'll get more numbers on unemployment later today, and we've got wages growing at 4 per cent, which is the highest for something like a decade and a half. And so when you get that wages growth which is welcome, when you get that employment growth which is welcome, the income tax take goes up as well.
MILLAR:
The tax is possibly going to go up on fuel efficient vehicles with the change in this definition, the automotive industry saying that regular families could be hit if they want to get a hybrid, or a plug in hybrid. Are they going to? Are we going to see the family minivan that might be a hybrid suddenly cost a whole lot more?
CHALMERS:
Look, respectfully, I'd say that there's been a bit of an overreaction there. This is a very, very modest change, and what it reflects is the fact that the definition of a low emissions vehicle hasn't changed since 2008 despite all the technological progress that has been made in that 15 years. And so what we've done here is we've modernised the definition of fuel efficient vehicles, fuel efficient vehicles get the higher threshold when it comes to the luxury car tax. This will incentivise more people getting genuinely low emissions vehicles, and that's a good thing. And it makes a very minor difference, a minor difference to the budget, and a minor difference as well to the proportion of people who would be subject to the luxury car tax. But most of all, and I think people would understand this, there's been a lot of change in electric vehicles in the last 15 years, but the definition of a low emissions vehicle hasn't evolved. So we've updated that. That will make a modest – a minor even – difference to the way that we tax these kinds of vehicles.
MILLAR:
Just on another matter, the story today that the US is requesting an Australian Naval vessel, a warship to head to the Red Sea. Has that request been made? Are we going to oblige?
CHALMERS:
First of all, it's important to recognise we already make a contribution to maritime security in that part of the world – often dangerous part of the world – and when we get these kinds of requests from time to time, the usual practice would be for the Defence Minister to consider that and to recognise to colleagues whether we, you know, how we respond to that request. As I understand it, there has been a request made. We'll consider it in the usual way, but we're already making a contribution to maritime security in that part of the world.
MILLAR:
Simon Birmingham was on the program half an hour ago from Jerusalem where he's leading a delegation, including members of your own party who were there, but they say it should be the Prime Minister on the ground. Will he go to Israel?
CHALMERS:
Oh, look, it's not for me to suggest where the Prime Minister goes. He's got, obviously, a bunch of commitments here and around the world, and he will manage those commitments in the usual way. We've sent a couple of really great colleagues on that delegation in Josh Burns and Michelle Ananda Rajah, they're good people, and they are part of that bipartisan delegation.
MILLAR:
Yeah, and Josh Burns in fact completely disagrees with the Australian Government's decision to support the UN resolution calling for a ceasefire. So is there a split there?
CHALMERS:
Look, I wouldn't see it that way necessarily. The position that we took in the UN and the position that the Prime Minister took in that really important joint statement with the Prime Ministers of Canada and New Zealand was consistent with the position that has been put by Penny Wong and others in recent weeks. We do support an immediate humanitarian ceasefire, and we support the work that goes into a more sustainable ceasefire, and that's been our position for a little while now. We've made that view clear. Penny Wong and others have made that view clear.
MILLAR:
Jim Chalmers, thanks for your time this morning.
CHALMERS:
Appreciate it, Lisa. All the best.