Patricia Karvelas:
Treasurer, welcome to Afternoon Briefing.
Jim Chalmers:
Thanks very much, Patricia.
Karvelas:
New wages data out today, the public sector wages are accelerating and they’re significantly outpacing pay rises in the private sector. Wages are generally holding steady, though. Is that a concern to you, the fact that there’s such a big disconnect?
Chalmers:
First of all, I’d say it’s incredibly encouraging news that we’ve now had 2 consecutive years of annual real wages growth. Eight quarters in a row of real wages growth, remembering that real wages were falling substantially when we came to office. So that’s overwhelmingly a good thing.
When it comes to the public versus private break‑up, since we’ve been elected private sector wages growth has outstripped public sector wages growth. In this quarter there’s more than the usual amount of state agreements represented. But overwhelmingly the story of this Albanese Labor government has been the return of substantial and sustained real wages growth, overwhelmingly led by the private sector over the course of the time that we’ve been in office, and that’s a good thing. And it reflects, as well, the strength of the labour market.
We’ve made this progress on inflation together while keeping unemployment low, creating 1.2 million jobs, and 4 in every 5 of those jobs created have been in the private sector. So those are all very welcome developments, including this real wages growth we’re seeing today.
Karvelas:
But will it change the RBA’s view that tightness remains in the labour market which, of course, has huge implications for whether we see any more rate cuts.
Chalmers:
As you know, I don’t speak for the independent Reserve Bank. But real wages growth under this Labor government is now a feature of our economy, and that’s a good thing. One of Labor’s reasons for being is to make sure that people are earning more, working more, keeping more of what they earn, more people in jobs. And we’ve been ticking all of those boxes. Those are good developments. And this real wages growth that we’re seeing is not accidental, it’s deliberate.
And what we’ve been able to do and one of the reasons why the Reserve Bank has had the confidence to cut interest rates 3 times this year is we’ve been able to get inflation down over the course of the last few years – about half what we inherited – we’ve been able to do that while keeping unemployment low, getting real wages growth again in our economy. Those are all good things.
Karvelas:
I want to talk about the Australian share market. It suffered its second biggest drop this year on Tuesday, investors erased – what – $60 billion in value. Does this concern you?
Chalmers:
We’ve seen an extraordinary amount of volatility and unpredictability in global markets, including global share markets. We’ve seen pretty substantial fluctuations over the course of this year, and we’re seeing them again. I think it reflects the choppiness that we’re seeing in the global economy. The global economy is defined really by this volatility, this unpredictability, this uncertainty. And it’s driving people’s decisions in share markets.
It’s influencing the real economy as well and it’s one of the primary influences on our own economic plan here in Australia. Our economic plan to make our economy more productive, to help people with the cost of living, to repair the budget over time, all of these things are even more important when you see the global economic uncertainty playing out on share markets, but not just on share markets.
Karvelas:
Big story, Treasurer, is the cuts we’re seeing at the CSIRO. You are the Treasurer. Budgets are about decisions. Do you think the CSIRO needs more funding?
Chalmers:
First of all, I think on a day like today we need to recognise and understand that it’s a difficult day for a lot of people who work at a wonderful organisation – the CSIRO. And so primarily our thoughts are with people who’ve got some bad news to contend with. What’s happened in the CSIRO budget is we’ve continued to provide substantial funding, a stable source of funding for the CSIRO, but their operating costs have been outstripping their revenue for some time now.
And so, they’ve indicated, as I understand it, that they will have another look at their priorities. They’ll have another look at their facilities. But this is a decision taken by the board independent of government. We always try and fund the sciences the best we can. We’re big believers and big supporters of the CSIRO –
Karvelas:
– yeah, but they have to make decisions –
Chalmers:
We acknowledge that this is a difficult day for a lot of people who work there.
Karvelas:
Yeah, it’s not just about feelings, though – it’s about national priorities. I spoke to Ed Husic. We’re going to play that interview a little later. He was the Industry Minister. He says if we can spend lots of money on a PNG rugby team, we can spend more money on the CSIRO and science. Shouldn’t the government be doing that?
Chalmers:
He’s entitled to his view. As he knows as a former Industry Minister, someone I worked with relatively closely, we provide very substantial funding to the CSIRO. We understand that whether it’s Ed or other people there will always be a constituency to fund the CSIRO more. I am a big believer in the CSIRO. I think it has an important role to play in not just our science base but our industrial base more broadly as well. That’s why we do provide substantial funding. And we understand that people would like us to provide more.
The next step is for the board who’ve taken this decision to have another look at their priorities and their facilities. As I understand it, they’ll work with Minister Ayres on these difficult questions around funding. And we’ll continue to engage with Tim and with –
Karvelas:
– okay, but you’ve got MYEFO coming up, is that something you’re engaged with as well? I mean, because it is a very big concern that we are spending essentially less on science by default because of the costs of making that science, of the research itself.
Chalmers:
Of course I’m engaged in the MYEFO, and we’ve been having discussions with the Industry Minister and with other ministers about the competing spending priorities that we have. The MYEFO won’t be, or the mid‑year budget update won’t be a mini budget. People shouldn’t expect there to be lots of new initiatives.
But, of course, we’re grappling with pressures in the industry portfolio and pressures in other portfolios as well. There are upward revisions in spending in some of these really important areas. And, as always, we’ve got to weigh up all of those pressures with all of the suggestions which are made to us from time to time.
But I don’t think – an argument that says we haven’t been funding industry enthusiastically – we have. The CSIRO has had a stable funding base for some time. We know that people would like that to be more. But the next step as I understand it – I don’t work directly with the CSIRO, I work with the Industry Minister – the next step, as I understand it, is for them to reconsider the way that they go about their work to see how we can continue to fund great science which leads to wonderful industrial outcomes.
Karvelas:
I’ve got to ask you, Treasurer. The EPBC Act – that’s the environment laws for our viewers who, you know, don’t like acronyms as much as me – that’s on the agenda for next week. It seems like a really obvious question: are you committed to definitely passing that next week and striking a deal?
Chalmers:
Unfortunately, Patricia, it’s not entirely in our hands. If it was up to us, we would pass it next week. It’s in the hands of the Senate. And we don’t have the numbers on our own in the Senate. But we will work very hard to pass these important reforms. This is all about a better outcome for our environment and our economy. It’s about making sure that we get a stronger regime which is more efficient and quicker, which safeguards our environment at the same time as we make it more transparent.
And so, there’s a lot of support I think in the broader community for us to reform these environmental laws. We need to see that passed in the Senate. And we’ll do what we can to pass these changes in the Senate. You might recall that out of the reform roundtable that I hosted a couple of months ago one of the decisions that we took then is instead of trying to legislate this in 2026 we’re trying to legislate it in 2025 for good reasons, good environmental and good economic reasons. And that’s our intention. But unfortunately, we don’t have the numbers in the Senate. We are in the hands of the colleagues there and we’re engaged in negotiations, as you’d expect.
Karvelas:
So, I’m just going to ask – you’re in Perth, this is a big issue. In fact, I would argue WA held up the reforms in the last parliament. The Business Council says penalties under your laws should be watered down, they should be clearly delineated, that companies shouldn’t be accidentally getting exposed to heavy fines. Is that the sort of change that you think should be made and that the Coalition should be, you know, doing a deal in relation to that with you?
Chalmers:
We’ve put our proposal forward. And as I said, we’ll have these discussions in good faith. I don’t really want to kind of front run those discussions that are being led so ably by Murray Watt. But I can tell you being in Perth and engaging with the business community right around Australia, it’s really important that we get this good outcome for the environment and the economy simultaneously. There’s a lot of appetite to see this bedded down as soon as we can.
And so, the overwhelming message that I’ve been picking up here in Perth is that people want to see the proposals that we put forward passed so that we can bed the changes down and move on in the interests of our environment and in the interests of our economy. That’s our intention. But on the specifics of the back and forth with the Coalition on one side and the Greens on the other, I’ll leave you in Murray’s capable hands.
Karvelas:
Who would you prefer to do you do a deal with, though?
Chalmers:
Look, I think it would be good if the major governing parties were able to get to an outcome here. But to be frank with you, Patricia, we’ll do what’s necessary to see these changes bedded down. It’s time for the Coalition to be responsible about it. It’s time for the Greens to get behind it as well.
We’ve put a lot work into this. Murray and the Cabinet more broadly have put so much work into making sure that we get the right set of arrangements and put them before the Senate. That’s what we’ve done. This is the primary business, I think, of the Senate next week – to get this done. I call on the Coalition and the Greens to do the right and responsible thing, which reflects all of the work that we’ve put into it.
Karvelas:
I have to ask you: you say it would be better if the governing parties did the deal. Why? Like, some people might hear that and think, well, why?
Chalmers:
So that it’s enduring. I think the best way to make sure that changes are properly bedded down is to try and attract the broadest spectrum of support that would give us the biggest amount, the most amount of numbers in the Senate. But, again, I mean, Murray is in conversation and discussions with players to the left and to the right of us in the Senate.
I’ve learned not to kind of predict what might happen in the Senate. I don’t speak fluent Senate like some of my colleagues do. And so we’re in their hands. But, ideally this would be supported unanimously in the Senate. That would be the best outcome. But we live in the real world of political negotiations, and they’re in Murray’s capable hands.
Karvelas:
They are. Just finally, Treasurer, some reports have put the potential cost of this COP conference at $2 billion. Now, I mean, you don’t have a lot of money to spare at the moment. I mean, that’s the case when it comes to the CSIRO. So, the CSIRO needs money, energy rebates could cost, which you’re considering. Why should you spend so much money on this conference?
Chalmers:
First of all, I’ve seen those sorts of cost estimates. They’re not my cost estimates necessarily. But on your broader point, I understand that there is – when you’ve got very substantial fiscal constraints or budget constraints then people have different views about what the priorities should be in that context. I think when it comes to the COP, there are good reasons why we put our hand up for the COP. I think there are good reasons, frankly why the overwhelming number of our peers support our bid.
But from our point of view and from the point of view of this global movement, I think it’s also important that we don’t let this drag on for too long. We’re trying to find a way through here. We’re trying to find the best way through. We don’t want that to drag on forever. We’ve put our best foot forward. We’ve put a good case. The world is overwhelmingly supporting us, but we need to resolve this one way or another sooner rather than later –
Karvelas:
– yeah so don’t we need to walk away soon? Like, just walk away, right?
Chalmers:
I wouldn’t put it that way. We’re trying to get the best outcome here for the planet and for the global economy. And regardless of where it is held, we’ll continue to play a leadership role in that. Good economic reasons and good environmental reasons why we are prepared to play a leading role in the world as the global economy shifts and transforms to net zero.
We’ve put our foot forward, we’ve made the case, we’ve been overwhelmingly supported. There are obvious obstacles. We’re trying to find a way through. And my personal point of view is that it would not be good for climate change action, for those of us who want to see climate change action, to let this drag on forever.
Karvelas:
Thank you so much for joining us, Treasurer.
Chalmers:
Thanks, Patricia. All the best.