MONIQUE WRIGHT:
Treasurer Jim Chalmers joins us now live in Canberra. Good morning to you, Treasurer, thanks so much for being with us.
JIM CHALMERS:
Thanks, Mon.
WRIGHT:
So when do we find out about what this $5.5 billion war chest will be spent on?
CHALMERS:
We’ll put the budget update out at 10:30 but in every budget and in every budget update under governments of both political persuasions there’s an item called ‘decisions taken but not yet announced’. That’s about things which aren’t ready to be put out yet. Maybe there’s a negotiation under way or there’s some element of commercial in confidence or something like that.
But the decisions taken not announced line in the budget update today will actually be much smaller than what we saw under our predecessors in the last update before an election and so it won’t stand out as a particularly unusual number to have there.
WRIGHT:
Yeah, it’s a lot of money though, isn’t it? Is it just to help you win the next election?
CHALMERS:
Oh no, of course not, it’s a lot of money but it’s not a lot of money in the context of hundreds of billions of dollars of investment. The most important things that people will notice today in the budget update is extra spending in areas like Medicare and medicines and pensions and what people will see with the mid‑year budget update is a really responsible set of books which reflects the substantial progress that we’ve made cleaning up the budget since we came to office.
The deficit for this year will actually be a little bit smaller than was expected at Budget time, and even with some slippage in some of those later years, the budget’s about $200 billion stronger than what we inherited.
WRIGHT:
Yeah.
CHALMERS:
So what that means is 2 surpluses in our first 2 years, a smaller deficit in our third year, which means much less debt and much less interest on that debt.
WRIGHT:
Sure. But we’re looking at an additional $25 billion on spending. Every time that you spend big like this, Treasurer, inflation stays. Aren’t you concerned about that? I get that it’s a balance, we all get that, however it doesn’t seem to be working. Inflation remains sticky.
CHALMERS:
Well I don’t agree with you, Mon. Inflation has come down really substantially.
WRIGHT:
Sure, but it’s still really high, and as we always talk about, you know, people are doing it really tough. But it goes further than that, than just giving people hand outs, and sure that’s part of it, but honestly every time you spend the inflation stays.
CHALMERS:
Not quite right, Mon. Inflation’s come down from 7.8 to 2.8, so it’s come down substantially. We are helping people who are doing it tough because we acknowledge that people are under the pump. This would be the worst time to hack into spending in areas like Medicare or cost‑of‑living help or pension indexation and those things are some of the main drivers of the spending that you’re seeing in the budget.
But also the Reserve Bank Governor herself has said that public spending is not the main game when it comes to our inflation challenge. We have made a lot of progress on inflation, we’ve got a bit further to travel, but the budget position is a very responsible budget position. The fact that we’ve delivered those surpluses and a smaller deficit this year, that’s about taking pressure off inflation. It’s one of the reasons why we’ve made such substantial progress on inflation since we were elected. Remember when we came to office inflation was much higher and it was rising?
WRIGHT:
Yep.
CHALMERS:
It’s now much lower and it’s falling, and that’s a good thing.
WRIGHT:
Yeah, it was just after COVID. Australian businesses collapsing – this is making headlines today – collapsing at record numbers at the moment. Why do you think that this is so? Twelve thousand this year alone businesses that have closed. Why is that happening?
CHALMERS:
First of all, we acknowledge that business conditions are difficult, that’s why in our budgets we’ve been providing help with energy bills that our opponents didn’t support, it’s why we’ve been providing tax breaks for small businesses to invest in the sort of capital and kit that they need to be successful, because we acknowledge that those business conditions are tough.
But as a proportion of businesses, the amount of insolvencies in our economy is actually much lower than the pre‑COVID average. It’s actually lower than it was under John Howard. And again, this is a point that the Reserve Bank Governor has made. As a proportion of companies, insolvencies are actually lower than we have been accustomed to. But in saying that, that’s not to dismiss the very real pressures that people are under, it’s just to provide a bit of additional perspective.
WRIGHT:
Yeah, okay. Well, Treasurer, we know you’ve got a big day, but before we let you go I’ve got to ask you about this. Some of your fellow parliamentarians have voiced their outrage over the sale of gingerbread people biscuits now on sale at Parliament House cafeterias. Are you on the side of a unisex biscuit or do you prefer it gendered?
CHALMERS:
Geez, those blokes are on to the big issues, aren’t they? I’m focused on inflation, the cost of living, the budget, they’re focused on gingerbread men in the cafe. I’m not really a gingerbread man kind of guy.
WRIGHT:
Really?
CHALMERS:
I’ve been smashing the Christmas M&Ms unfortunately, I’m not really into the gingerbread. I’ll let them focus on that stuff, I’ll focus on the bigger, more important things in the budget.
WRIGHT:
Okay, well if you’re wanting to get healthy I note they’re vegan. Thanks very much, Treasurer. Good luck today.
CHALMERS:
Thanks so much.