NATALIE BARR:
The man in charge of our nation's economic future is the Treasurer, Jim Chalmers, and he joins me now. Good morning to you.
JIM CHALMERS:
Morning Nat.
BARR:
Now the rate decision has been called cruel, it has been called unnecessary. Do you agree?
CHALMERS:
It certainly makes life harder for a lot of Australians who are already under the pump, and it's a pretty blunt, pretty brutal reminder of the pressures that we're seeing in our economy right now, particularly these inflationary pressures. And that's why the Budget that I hand down in less than a week's time will be focused on cost of living. There will be a package of cost‑of‑living measures in the Budget. It will be delivered in the most responsible way so that it doesn't add substantially to this inflation challenge that we've got.
BARR:
But on the interest rate decision, economists say the Reserve Bank is pushing this country towards recession, it is playing recession roulette. Do you agree with that?
CHALMERS:
I wouldn't use those words Nat, and as you know, talking to yourself over a period of time and with Kochie, I try not to second guess the decisions taken independently by the Reserve Bank, I've got my own job to do. And my job is to provide this cost‑of‑living relief in the most responsible way, to show restraint where I can in the Budget so that I'm not making the job of the independent Reserve Bank harder. And part of that as well means investing in the drivers of growth in our economy so that we can grow without adding to these inflationary pressures, and you'll see that in the Budget too.
BARR:
So the RBA has its job and they're calling it sticky inflation. It's not going down. We were in St. Albans in Melbourne today, and people are saying `we're not spending much’. People who have mortgages, they're slammed. People who are renting ‑ it's starting to filter through ‑ and they're slammed. So who is spending? And have you got another way to solve our inflation problem?
CHALMERS:
A couple of things about that. I do recognise and the Government does recognise that Australians are under substantial cost‑of‑living pressure right now, and that's why that's the number one priority in the Budget. Secondly, when it comes to dealing with these pressures, it has a number of sources. Some of this inflation comes at us from around the world and it's felt around the kitchen table. For example, energy prices are up because of the war in Ukraine but there are also issues closer to home, including in our supply chains. That's why we're making substantial investments in making our supply chains more resilient because that's part of the challenge as well, but also to try and give a bit of help where we can in a responsible and measured and methodical way so that people can get through this difficult period with a bit of help from their government, but not blowing the Budget so that we're adding to these inflationary pressures.
BARR:
You've got a big problem though, haven't you, because Australia's core inflation is now higher than other G7 countries ‑ it's higher than Britain, it's higher than the US. So we have to do more, what are you going to do?
CHALMERS:
Well, a couple of things about that. I mean, inflation peaked at the end of last year. The worst quarter for inflation was actually the March quarter last year before the election. But it is too high, it is unacceptably high, and it will be higher than we'd like for longer than we'd like. And that really is a key determinant of the budget strategy that people will see on Tuesday night: investing in our supply chains to make them more resilient, giving people some help with the cost of living without adding substantially to inflation, and helping people through a difficult period. Because this inflation, as I say, is unacceptably high and will be higher than we'd like for longer than we'd like. And that's why the Budget is focused on the implications of this inflation challenge for people right around Australia dealing with these cost‑of‑living pressures.
BARR:
So what is your cost‑of‑living plan then? How are you going to help people without spiking inflation?
CHALMERS:
You'll see the full plan on Tuesday night when I release the Budget, but we've already made it clear that we will make medicines substantially cheaper. We will provide help for people with their electricity bills to take some of the sting out of these price rises. We will provide assistance when it comes to some other areas that are important for people to deal with these cost‑of‑living pressures. It will be a plan that has multiple elements. We've already pointed to childcare being cheaper, medicines being cheaper, giving people a bit of help with electricity bills. These are all important components of what you'll see on Tuesday night.
BARR:
Okay, JobSeeker because you did tell Kochie a few months ago that increasing JobSeeker won't spike inflation.
CHALMERS:
Well, people will have to wait and see on Tuesday night but clearly when we provide this cost‑of‑living relief and we need to do it in a way that doesn't blow the Budget. The best place to start is the most vulnerable Australians. I think that's very clear and it's consistent with our Labor values as well that we do that. People will see on Tuesday night what we're proposing to do there and I encourage them to tune in and to judge the entire cost‑of‑living package on its merits.
BARR:
Okay, Jim Chalmers, we thank you for your time today.