MARK RILEY:
What will families look at in this Budget on Tuesday night and say, wow, that’s really going to help me?
JIM CHALMERS:
Well, the big job of the Budget is to ease cost of living pressures at the same time as we invest in the future. It will be a responsible Budget, it will be all about cost‑of‑living and inflation, but also making sure that we’re investing in the kind of good, secure, well‑paid jobs that we’ll need in the years to come as well.
It’ll be a budget for mums and middle Australia, a budget for families, and pensioners, and students, and young people, which recognises the pressures that people are under.
RILEY:
Ok, it is Mother’s Day. So, a budget for mums in what regard?
CHALMERS:
Well, big shout out first of all to Laura and Carol and Barbara. One of the things that people can expect to see in the Budget is a really substantial investment in superannuation for people on paid parental leave. The Budget will have $1.1 billion investment to pay super when mums and dads are on government funded paid parental leave, then it’s about $623 million a year ongoing after that. This is a commitment that we’ve made to the mums and the dads of Australia to make it a bit easier for people to make that choice to have more kids if they want to.
RILEY:
Terrific. Energy bill relief, I know you were looking at options just to see whether there might be other ways of getting better bang for your buck.
CHALMERS:
Oh, we have found, I think, some really good ways to provide some of that cost‑of‑living help. The foundation stone of that is a tax cut for every Australian taxpayer. All 13.6 million Australian taxpayers will get a tax cut to help with the cost of living. The average tax cut will be about $36 a week but on top of that we have found a couple of other ways, important ways, to take some of the sting out of these cost‑of‑living pressures.
RILEY:
And so you don’t want to do that in a way that adds to inflation. So, we’re talking about money upfront, we’re talking about longer term structural changes.
CHALMERS:
Well, it’s a combination of things, whether it’s more competition for our supermarkets, whether it’s taking some of the edge off some of the bills that people have right now. What we’ve shown in the past and what we’ll show again on Tuesday is our Budget will put downward pressure on inflation, not upward pressure on inflation and part of that is the way that we’ve designed our cost‑of‑living help.
RILEY:
Can you say whether that energy bill relief will continue.
CHALMERS:
We understand the pressures that people are under, whether it’s energy or rent or groceries. We want to provide that tax cut, we want to provide that extra relief on top of that and we’ve been able to do that in the most responsible way.
RILEY:
So, you mentioned the tax cuts are stage 3 revamped a couple of times. So, for people on average incomes that’ll almost double their tax cut to about $1,670. What about people on fixed incomes? What sort of relief can they expect?
CHALMERS:
We’re very conscious that the tax cuts will benefit every taxpayer but there are people on pensions and payments and fixed incomes which will receive some help as well. We’re not going to leave them out, we’re not going to leave them behind – there will be help for them too.
RILEY:
There have been some pretty big health announcements leading up to this Budget. Another one today on the urgent care clinics – another 29 – big dollars involved in that. We had the extension of longer consults, so gynaecological consults, women suffering from endometriosis and other things. Really good measures. What’s the total health spend in this Budget?
CHALMERS:
We’re looking at another $8.5 billion in health spending in Medicare and other health measures. Almost $3 billion of that is strengthening Medicare which you know is a huge priority of this government. And $227 million of that is to build these urgent care clinics which have been so incredibly successful, making it easier for people to see a bulk billing doctor when they need to. A lot of kids have benefited from that and a lot of after hours care as well. And what that shows, Mark, is that the Budget is focused on responsibility and cost of living and a future made in Australia but there are also big investments in health and the care economy. There are big investments in housing and there will be big investments in skills and universities as well.
RILEY:
And the Budget will predict that jobs growth has been above the projections but also that unemployment will rise before inflation comes under control. How many Australians are going to lose their job over the next year?
CHALMERS:
The Budget will show that we’ll continue to create jobs over the course of the next year, the unemployment rate will tick up a little bit towards the middle 4s, about 4 and a half per cent at the same time as we are creating jobs in that period. We’ve created 780,000 jobs on our watch – that’s a record for a first term government, that’s something that we’re very proud of, that jobs growth will continue even as the labour market continues to soften a little bit.
RILEY:
So, will your Budget take pressure off the Reserve Bank of Australia? Will it allow them greater reason to cut interest rates?
CHALMERS:
Certainly we’ve got a laser focus on inflation and that is the thing that the Reserve Bank cares most about when they take their decisions independently. And so we’ve made sure whether it’s the restraint we’ve shown in terms of real spending growth in the Budget, whether it’s the savings that we have found, whether it’s the way we’ve designed our cost‑of‑living measures, these are all about making sure that we’re putting downward pressure on inflation not upward pressure on inflation, particularly at the front end of the Budget where these inflationary pressures are most acute.
RILEY:
When would you like to see interest rates come down?
CHALMERS:
As you know, Mark – this is not our first rodeo, you and I – you know that I don’t make commentary about future movements in rates. I’ve got my own job to do. Governor Bullock and her board have got difficult decisions to make, I focus on my job getting inflation down, easing cost‑of‑living pressures and investing in the future.
RILEY:
There’s a bit of goldilocks about this Budget, isn’t there? You’ve got to spend enough to give people cost of living relief and to keep growth ticking along but not so much that you do that, that you put pressure on inflation and interest rates. It’s got to get it just right.
CHALMERS:
Yes, it’s a good way to see it – I think a lot about balance. We need to put downward pressure on inflation, we need to engage in this inflation fight because it’s not finished yet but we need to do that in a way that doesn’t smash the economy and that’s why I’ve said a couple of times in the course of the last few days, it won’t be a slash and burn Budget because people are doing it tough and the economy’s soft. We can win this fight against inflation by showing restraint and getting the Budget in better nick and easing some of these cost‑of‑living pressures and we can do that without smashing the economy at the same time.
RILEY:
So, you returned a surplus, a $22 billion surplus in the last Budget. You projected about a $14 billion deficit in this one. The speculation is all about another surplus. Are we looking at something, perhaps in the single digits, something below about $10 billion?
CHALMERS:
People will see on Budget night where the Budget has landed for this year but a lot of people ask me about the surplus and they ask why it’s important. It’s not an end in itself. A surplus is really about getting the show in much better nick so that we can fund our priorities – cost of living, future made in Australia, health and Medicare, housing, skills, and universities and so we have put a lot of effort into getting the Budget in much better nick – that surplus we handed down last year was the first in 15 years – they’ve been rare in recent times. If we’re able to land one on Tuesday it would be the first back‑to‑back surplus in almost 2 decades.
RILEY:
You’re telling me you don’t know yet?
CHALMERS:
I’m telling you you’ll see it all on Tuesday night.
RILEY:
Always hear that answer. So this doesn’t seem to be a pre‑election Budget. One more before the next election maybe one brought forward in the first part of next year?
CHALMERS:
Well that’s entirely in the hands of my friend Anthony, he will determine whether or not there’s another Budget. I’ll be ready and raring to go if we need to do another Budget, but this Budget is genuinely not about the political cycle, it’s about the economic cycle and it’s about the pressures that people are under and it’s about the opportunities of the future. I think governments get themselves in all kinds of strife if they try and be too clever with the political cycle when it comes to these decisions. We’ve made good economic decisions, we’ve had the people front and centre and I believe if you can get the economics right, the politics will take care of itself.
RILEY:
Well Treasurer, good luck with this Budget and thanks for speaking to Weekend Sunrise.
CHALMERS:
Thanks very much Mark.