Matt Shirvington:
Treasurer Jim Chalmers joins us this morning. Good to have you with us. The Reserve Bank is saying to you, please stop spending. How do you heed that warning?
Jim Chalmers:
This will be a really responsible budget which takes the inflation challenge seriously because we know that people are under pressure. The Governor was asked yesterday about a hypothetical scenario where a heap more stimulus was pumped into the economy and what the Reserve Bank would think about that. That hypothetical doesn’t reflect the reality of the Budget, which is all about winding back spending where we can responsibly do that. That’s because we understand that even though budgets aren’t the primary driver of prices in our economy – interest rates didn’t go up yesterday because of government spending – we can play a helpful role in the fight against inflation and that’s what the Budget will be all about.
Natalie Barr:
She was warning you, wasn’t she? Did you feel the warning?
Chalmers:
Governor Bullock was asked about what would happen if the government pumped a heap of extra money into the economy. We don’t intend to do that. We intend to responsibly, carefully wind back spending in the budget and that’s because we understand that there’s inflationary pressures in our economy. They are made worse by a major war in the Middle East, which is pushing out petrol prices at the bowser and beyond that as well.
We understand what this inflationary environment means for a lot of people who are doing it tough. In this Budget, what people will see is a very, very responsible budget that takes the inflation challenge seriously, recognises that people are under pressure and manages the public finances in the most responsible way that we can.
Shirvington:
Let’s talk about some of that reported spending, whether it’s true or not. If you do give every Australian worker $200 to $300, which is being reported at the moment, a minimum of $3 billion goes onto that inflation fire. That means higher interest rates, right? Are you prepared to put mortgage holders through that sort of pain again?
Chalmers:
First of all, as you rightly pointed out in your question Shirvo, it’s best to wait to see what’s in the Budget. There’s always speculation in the lead up to the Budget. Sometimes that speculation is right and sometimes that speculation is wrong –
Shirvington:
Is it right now?
Chalmers:
Well, I’m not going to add to that speculation. People don’t have long to wait until they see the Budget. It’s only 6 days from now and we’ll release all of the detail then. What we have said is this is already a tax cutting government and our opponents didn’t support those tax cuts but we’re delivering them anyway. Another tax cut on 1 July, one in July next year. We’ve got the petrol tax cut as well. We’ve got the instant deduction which provides a bit of extra tax relief too. This is a tax cutting government. We’re providing these tax cuts for workers because we know that that’s one responsible way to help people with the cost of living.
Barr:
So, you are doing that tax cut. If you do that tax cut, whatever you call it, if you give people $200 or $300 in their pocket, will you admit that that will increase inflation?
Chalmers:
Nat, I’m talking about the tax cuts that we are already providing, that we have already budgeted for.
Barr:
If you do these reported ones, would that increase inflation?
Chalmers:
I’m not going to add to the speculation about these things, Nat. People will see the Budget on Tuesday night. You shouldn’t assume every element of the budget speculation is necessarily correct.
Barr:
But if you did it?
Chalmers:
Well, this is the hypothetical that was put to the Governor. Now what matters is your spending across the board over the 4 years of the Budget. We’ve already made it clear that we will save more than we spend over the Budget’s horizon.
Barr:
So, you’re not ruling it out?
Chalmers:
Nat, no treasurer comes on and announces the entire Budget on Sunrise on the Wednesday morning before the Budget.
Barr:
There are leaks in the lead up to every budget. What are you talking about?
Chalmers:
Yes, and I’m not going to add to that speculation. Sometimes it’s right, sometimes it’s wrong. People will see on Tuesday night. But overwhelmingly, what any objective observer would conclude from the Budget on Tuesday night is that it’s one of the most responsible budgets we’ve seen in a very long time. We will be saving more than we spend and that’s because we do take this inflation challenge seriously. The rates decision yesterday was not about government spending. It wasn’t referenced in the statement that was released by the Reserve Bank Board. But we can play a helpful role and that’s what we intend to do.
Shirvington:
I’m not going to ask you about negative gearing because it sounds like we’re going to have to wait for the Budget on that one too. Personally though, how does it feel like when you see front pages of the paper like this ‘Home Wreckers’, ‘Jim Chalmers’, ‘Dr No,’ all of that. I mean, you’ve got a tough job, a tough balance here. Do you take that personally?
Chalmers:
I think you’ll get the usual commentary from the usual places. I’ve found it’s most useful to focus on the objective analysis of the economy, the objective commentary. The job of those outlets is to try and make people angry and sell more papers because of that anger. They’ve got a different job to me. My job is to focus on managing the economy as responsibly as I can handing down this Budget. I try not to focus too much on those kinds of headlines and frankly I don’t think the Australian people do either. Like most Australians, I’ve got more important things to worry about than what the front pages of the papers say.
Barr:
Okay Treasurer, thank you for your time.