MADELEINE MORRIS:
Analysis indicates wages are growing at their fastest rate in nearly a decade at 3.1 per cent overall. That is still well behind the inflation rate of 7.3 per cent though. We're joined now by the Treasurer, Jim Chalmers. Treasurer, good to have you, thanks very much for joining News Breakfast. Now, this rate is the fastest in a decade, as you say, that's what your new analysis indicates. How long is that trajectory going to continue?
JIM CHALMERS:
Good morning, Madeleine. We're very pleased that we're seeing the beginnings of wages growth in our economy after the best part of a decade of wage stagnation. Wages growing at over 3 per cent at the moment in the most recent data compared to an average of about 2.3 per cent over the last decade. That is a welcome development. We expect wages to continue to grow, but as you rightly pointed out, we've got this inflation challenge in our economy and so people are still doing it tough. But one of the most important things that we can do - when people are under cost‑of‑living pressure - is to do whatever we can to get wages moving again. We're pleased we're seeing the beginnings of that. It is a consequence, partly of the minimum wage rise that we supported enthusiastically, and we've also got other ways that we're seeking to get wages moving in our economy. It's important for Australians when they work hard, they can provide for their loved ones and get ahead - when we get that wages growth, which has been missing for too long.
MORRIS:
Inflation is at 7.3 per cent. Do you want wages to get up to that rate?
CHALMERS:
We want inflation to come down. The expectation of the Treasury and everybody who forecasts these kinds of things is for inflation to moderate throughout the course of the year, but it will be higher than we'd like for longer than we'd like. But we've got an inflation problem in our economy not because wages growth has been too strong but because we've got a war in Ukraine pushing up energy prices and we've had a pandemic which has been messing with supply chains and some other factors which are pushing up prices in our economy. We want people to be able to afford the basic costs of living. That means being able to earn enough to provide for loved ones and get ahead. And that's why this wages growth - which we're beginning to see in our economy under this Albanese Labor Government - is so important.
MORRIS:
So when will they match? When will inflation and wages growth be the same? Or is that just not going to happen this year?
CHALMERS:
In our current forecasts provided by the Treasury, the expectation is that we will see real wages growth next year, but that relies on some quite unpredictable forecasts when it comes to inflation. The wages growth that we're seeing in the economy is something that we hope we can sustain, and obviously inflation will moderate over time. So to the extent that we can do something meaningful on both sides of that equation, we'll get that real wages growth in our economy. One of the reasons why we've intervened in the energy market, for example, is because that's a big part of our inflation problem. We're trying to take some of the sting out of those price rises. But when inflation comes down and we get this strong and sustainable wages growth in our economy, then we'll get real wages growth for the first time in a while.
MORRIS:
You talk about the energy market there. The ACCC has warned that it will punish gas producers if they don't start coming to the ballpark and actually putting new supply on. They say that they don't have all the information that they need yet about that gas price cap that you actually imposed at the end of last year. Does that explanation wash with you that they don't know how it's going to work?
CHALMERS:
If there's an appetite for more guidance from the ACCC then that guidance will be provided before long. We do need to remember that this gas price cap - which is a substantial intervention in the market to try and take some of the edge off these forecast price rises to the ultimate benefit of Australian families and pensioners and industries and small businesses - that only came in a few weeks ago. Inevitably over the Christmas period as businesses try and negotiate new deals, obviously that won't just happen immediately. There will be some issues as we implement this gas price cap and the ACCC will provide the kind of guidance which some players in the market have been seeking.
MORRIS:
But did you bring it in too quickly I suppose is the key question there. It was such a huge rush. Parliament was recalled to be able to do it. Now they're saying they don't actually know how it's going to work in practice. Should you have waited and rolled it out in perhaps a slightly more measured way?
CHALMERS:
We took our time to consider the various options that we had to try and moderate some of these price increases for energy in our economy. We said around budget time in October that we were looking for regulatory option here. By December, we passed that through the Parliament, the price cap and the ongoing reasonable pricing regime. And I'm working with my state and territory colleagues on electricity bill relief at the same time. These are all important, considered measures that we're putting in place, which recognise the pressure that families, pensioners and businesses are under. Now, inevitably, when you're imposing a price cap on an important part of the economy - these gas companies are doing incredibly well on international markets, they would prefer that there wasn't a price cap obviously, but we need to do what's right by the whole economy and that's what we're doing. It's only been around for a couple of weeks, inevitably, there will be an appetite for more guidance, and that guidance will be provided by the ACCC.
MORRIS:
Okay, just briefly and finally on to another matter, does Australia have any responsibility to intervene in the case of Majid Kazemi, who is an Iranian man and has Australian relatives, who has been sentenced to death in Iran? Some of the other parties are saying that we do.
CHALMERS:
That's obviously something that we will discuss with the relevant ministers at our end. I don't have an update on that case for your viewers but obviously what's happening in Iran is incredibly troubling, not just to the Iranian diaspora here in Australia, but I think to the broader Australian community. We will do what we often do when it comes to these sorts of cases, which is explore our options and work through them in a considered way. And if we've got an update to provide, we'll do that through a relevant minister.
MORRIS:
Okay. Treasurer Jim Chalmers, thanks for your time this morning.