MARK RILEY:
Treasurer, thanks for joining us on Weekend Sunrise.
JIM CHALMERS:
Thanks, Mark.
RILEY:
Are we going to see a revenue windfall in this Budget? And if so, where is it coming from?
CHALMERS:
There will be a substantial improvement in the Budget in the near term before some of these other pressures intensify rather than ease. And people think that it's mostly commodity prices which are feeding the upgrade to revenue, but commodity prices are only contributing about a fifth of it. Much, much bigger than that, twice as much of that is improvements in the labour market and particularly the fruits of our efforts to get wages moving again.
RILEY:
And how big is the number?
CHALMERS:
Well, you’ll have to see on Tuesday night. People will have to tune into Channel Seven coverage on the night ‑
RILEY:
They always say that.
CHALMERS:
But you'll see a substantial improvement. And the most important thing about that is the government's efforts to let most of that revenue upgrade flow through to the bottom line so that we can put the Budget on a much more sustainable footing.
RILEY:
Okay, and the unemployment rate then, is that going to be lower than projected? Are there going to be more jobs created?
CHALMERS:
There will be. The unemployment rate is forecast to be a bit better than what we thought in October. The wages outcomes are expected to be a bit stronger as well. We're expecting real wages growth sooner at the start of next year ‑
RILEY:
Sooner than 2023?
CHALMERS:
At the start of next year rather than at the middle of next year. And that is feeding through to the improved Budget position as well because people are working more and earning more.
RILEY:
Okay. And 200,000 more jobs than predicted?
CHALMERS:
Many more jobs than were predicted. One of the things that we've got going for us in this uncertain global environment is unemployment at 3.5 per cent, the welcome beginnings of wages growth, as well as the prices that we're getting for our exports on world markets.
RILEY:
And increasing the tax on offshore gas projects?
CHALMERS:
This is an important way to ensure that Australians get a fairer return on their resources sooner. This is all about making sure that we can get more revenue into the Budget to fund our cost‑of‑living package, but to do it in a way which is cognisant of investment and supply and our international relationships at the same time. We're expecting $2.4 billion over the forward estimates, about twice of that over the decade.
RILEY:
So, does that mean, in your words, that the gas industry will now be paying its fair share of tax?
CHALMERS:
Well, they'll be paying a fairer share. This is $2.4 billion that the Australian people wouldn't see were it not for the changes that we're announcing today.
RILEY:
What about inflation? Will you be predicting inflation lower than expected?
CHALMERS:
We do expect that the inflation number will be a little bit better in the coming years, but don't forget it's been a little bit higher, a little bit more persistent ‑ higher than we'd like, for longer than we'd like. And so there will be an element of swings and roundabouts in the inflation figure. But what the Budget is intended to do and what it is designed and calibrated to do is to take the pressure off these cost‑of‑living pressures rather than add to them.
RILEY:
And the energy relief package that was agreed in October, so that's going to cost the Budget 1.5 billion ‑ or it was going to. Is that number still relevant?
CHALMERS:
It is the right number still. But don't forget, the states and territories are also kicking in one and a half billion dollars, so it will be roughly $3 billion. And it will mean that Australians right around the country will be able to take some of the sting out of these higher energy prices, particularly if you're on pensions or payments or you're a small business.
RILEY:
Do you agree with Anthony Albanese that the Gillard government's decision to cut the parenting payment was wrong and lacked respect?
CHALMERS:
I don't want to pre‑empt the announcements that we might be making in the next couple of days, but obviously if there's an opportunity to do better there, we will.
RILEY:
The next couple of days? So, maybe before the Budget?
CHALMERS:
Well, certainly by Budget night, the cost‑of‑living package in the Budget will be much broader than what's been speculated on. This will be a responsible Budget for Australians doing it tough and that means some responsible cost‑of‑living assistance at the same time as we lay the foundations for future growth and we get the Budget on a much more sustainable footing.
RILEY:
The last Labor Treasurer to return a surplus was Paul Keating in 1989. Will you be the next?
CHALMERS:
People will have to see on Tuesday night. Certainly, there's been a big improvement in the Budget, but as I said before, it gets better in the near term and then some of these pressures, structural pressures intensify rather than ease about that. You wouldn't even be asking me this question were it not for the very responsible approach we've taken in our first two Budgets to make sure that when there is an upward revision to revenue, that we bank most of it to the bottom line so that we can avoid some of this debt. And from that foundation of responsible economic management, we can help people through difficult times and we can set Australia up for the future.
RILEY:
Treasurer, good luck on Tuesday night and thanks for joining us this morning.
CHALMERS:
Thanks very much, Mark. Thanks.