NATALIE BARR:
Joining me now is the Treasurer, Jim Chalmers. Good morning to you.
JIM CHALMERS:
Morning, Nat.
BARR:
So, let’s start with this energy rebate for $300. Can I just get it, bank it and go spend it in Coffs at the Big Banana?
CHALMERS:
It’s a good idea to go to Coffs and visit the Big Banana. But what happens with this energy bill relief is it comes off your bills. And so, if you pay your energy bills quarterly, you’ll get a $75 credit four times over the course of the next financial year. And that will help take some of the sting out of the cost‑of‑living pressures that I know people are under.
BARR:
So, if you’re earning a million dollars, why do you need a $300 power rebate?
CHALMERS:
The energy bill rebate is primarily for people doing it tough. Millions and millions of Australians are under cost‑of‑living pressure, and we’re doing more than just acknowledging that in the Budget. We’re trying to help. And so more help is on the way for millions of people who are under the pump, whether it’s a tax cut for every taxpayer or energy bill relief for every household or some of the other targeted measures around rent and cheaper medicines. Yes, a big priority in this Budget is fighting inflation and helping to ease some of these cost‑of‑living pressures.
BARR:
Yes, but you’re also getting it if you’re earning a million bucks. Why are they getting it?
CHALMERS:
Yes, but that’s not the focus of the energy bill relief. The focus of the energy bill relief –
BARR:
Why are you getting a $300 rebate if you’re earning a million bucks in Australia?
CHALMERS:
Because cost‑of‑living pressures are being felt right around our country and right around our communities and once you go beyond –
BARR:
The million‑dollar people are under pressure?
CHALMERS:
So, once you go beyond providing this energy bill rebate like we did in the last Budget for people who are on pensions and payments, once you go beyond that, you have to design a whole new system because the energy retailers that we use to provide this help, they don’t have income information for people. So, the easiest, most efficient way is to provide this energy bill relief for every household. We’re pleased and proud that we’re able to do that. It’s part of a cost‑of‑living package, which is substantial but responsible.
BARR:
So, it’s basically a computer problem. You can’t sort of track down the people who earn a certain amount?
CHALMERS:
We deliver this relief via energy bills, via the retailers. There’s not a system that allows you to slice and dice that beyond providing it either to people on pensions and payments or more broadly. But we think it is a good thing to provide a tax cut for every taxpayer, energy bill relief for every household, plus help with rent and cheaper medicines and student debt. It’s part of a really comprehensive package, substantial cost‑of‑living relief, but responsible, too.
BARR:
Okay, how are you sure that with the power rebate and the tax cuts in July, the stage 3 tax cuts, that this won’t push up inflation? How sure are you of that?
CHALMERS:
The tax cuts are roughly the same size as the tax cuts they replace, and so they won’t put additional pressure on the inflation forecasts. And when it comes to the energy bill relief and the rent assistance we’re providing to almost a million Australians, that will help take some of the edge off power bills and off rent. And what we saw when we did this in the last Budget, for example, is instead of energy bills going up on average by 15 per cent in the year to March, they went up by 2 per cent. And so, you can see by getting some of the edge off these bills, some of these big pressures that people are under, by putting downward pressure on bills, we put downward pressure on inflation.
BARR:
How do you know those figures are right, though? Because, you know, you’re at odds with the RBA and the Treasury gets figures wrong sometimes, don’t they?
CHALMERS:
First of all, the numbers, I just quoted numbers from the Bureau of Stats, they’ve already happened. We know from experience that energy bill rebates and rent assistance takes some of the edge off inflation, we’ve seen that happen already, in terms of the forecast, obviously, treasuries and reserve banks, they make their best estimate of how they expect the future to play out. We’re not at odds with anyone. Our forecasts just take into consideration the Budget that I handed down last night, the Reserve Bank’s forecasts were from an earlier period where they weren’t able to do that.
BARR:
So, obviously, there’s a lot of opinions on this. One forecaster says today ‘it’s like you’ve dieted for 2 years but crumbled after someone shoved a bucket of KFC under your nose, and now you’re spending too much.’ What do you say to that?
CHALMERS:
That’s not a forecaster, that’s a journalist. And there are lots of opinions about budgets. You know typically at this time of year, people’s opinions are pretty thick on the ground. My job is to just try and take the right decisions for the right reasons. There’ll be lots of commentary, but I have to make things add up. I have to make the right calls for the right reasons and I’m confident in this Budget that we have.
BARR:
Is it an early election budget? Are you giving this money, like the power rebates over the next year getting it for May next year, getting everyone in a good mood?
CHALMERS:
No, that’s not our motivation. The motivation here is understanding that people are doing it tough and that we need to provide substantial cost‑of‑living relief in a responsible way, and that’s what the Budget does.
BARR:
So, will there be a Budget before the next election?
CHALMERS:
That remains to be seen. I’ll certainly be ready to deliver another Budget next year. Our intention, our inclination is to go full term, but that decision is taken by the Prime Minister. And if I need to do a fourth Budget before we go to the people, I’d be happy to do that. I’d be ready to do that, but that’s not a decision that I take on my own.
BARR:
Okay. Treasurer, thank you very much for your time.
CHALMERS:
Appreciate it.