PATRICIA KARVELAS:
Treasurer Jim Chalmers is our guest this morning. Treasurer, good morning.
JIM CHALMERS:
Good morning, Patricia.
KARVELAS:
Treasurer, is a Budget surplus possible next week given the magnitude of recent commodity‑based revenue upgrades?
CHALMERS:
Certainly there'll be a substantial improvement this year because of a few things, not just commodity prices, but also lower unemployment and stronger wages growth. But the numbers are still bouncing around a bit. There are still a couple of decisions to finalise and we don't print the Budget until the weekend so it's a bit premature. The other thing is even with this quite substantial near‑term improvement in the Budget, the pressures on the Budget in the third and fourth and subsequent years are actually intensifying rather than easing. We've got a structural challenge in the Budget, which isn't dealt with by this temporary improvement.
KARVELAS:
I think that's right in terms of the Budget structure but when you say a substantial near‑term increase, could we even have a one‑off surplus? Is that a possibility next week?
CHALMERS:
I think it's premature still because, as I said before, there's still a bit to finalise. We've got a week to go until the Budget. It doesn't get printed as I said until the weekend.
KARVELAS:
But it's possible, right?
CHALMERS:
Well, it's sort of premature because there's a couple of things still to be determined. But your broader point about whether or not there's an improvement, there is ‑ in the near term ‑ a substantial improvement, but then a deterioration after that. And it is partly because of the prices that we're getting for our exports, but also we are over‑performing when it comes to the unemployment rate and when it comes to the beginnings of wages growth, which is very welcome, and that feeds into a better bottom line in the near term as well.
KARVELAS:
So we're over performing when it comes to unemployment, but there are still a lot of people on JobSeeker. Will you increase JobSeeker for people aged over 55?
CHALMERS:
There'll be responsible cost‑of‑living relief in the Budget, and it will focus on the most vulnerable people. There'll be a number of elements to it. It won't all be limited to one cohort or another, but it will all be made clear in the Budget. There's always speculation in the week before Budget, that happens every time ‑ you and I have been through this a few times ourselves. Some of that speculation turns out to be accurate, some of that turns out to not be accurate. It'll all be clear in a week's time.
KARVELAS:
Okay, there's red hot rage on my text machine that you would be giving a leg up to people over 55 when so many young people, younger than 55, are stuck on that low payment. There are 684,360 people on JobSeeker who are not over 55, will they get help, Treasurer?
CHALMERS:
Let me make a few points about that without pre‑empting what may or may not be in the Budget in a week's time, let me make three points. First of all, the JobSeeker payment already makes a distinction between workers closer to the age pension, older workers, it already pays a different rate at the moment for people over 60. And that's in recognition that it is harder to find a new job at that end of your working life. That's the first point. The second point is related. All of the expert advice, a lot of the analysis, I've heard it on your show, and it's been right, says that the group that's most likely to be long‑term unemployed are people over 55 ‑ that group is dominated by women, the most vulnerable part of the unemployed population in Australia is at the moment women over 55. And so that's another issue that people need to factor in. The third one is that no government can satisfy all of the calls for more spending in the Budget, even from people and from groups whose views we welcome and respect. It's not possible to satisfy all of the calls for more spending in the Budget, but particularly at a time when we've got persistently high inflation and structural deficits. We inherited a trillion dollars in Liberal debt. We've got to clean up the Budget, and we will try and do that in a way that recognises that some people are doing it especially tough, and that's why our cost‑of‑living relief which will be substantial in the Budget will be directed towards the most vulnerable.
KARVELAS:
Okay, that was a really interesting answer. You say that differentiation cuts in at 60 so do you think it's more reasonable that it cuts in at 55?
CHALMERS:
I'm just making the point, Patricia, which I think has been missed, since that speculation aired last night, that the system already makes a distinction between workers of different ages. Fifty‑five and 60 is different though ‑ is that the distinction you think it should be?
CHALMERS:
The reason I'm using 55 is because the reports that we received ‑ the Women's Economic Equality Taskforce and the Economic Inclusion Advisory Committee, which has been in welcome ways discussed quite a lot on your program ‑ says that women over 55 are the most vulnerable group amongst unemployed Australians. We've indicated before that we want to do something to help them in particular, but again, without pre‑empting what's in the Budget in a week's time, there will be a number of elements to our cost‑of‑living relief, not all of them will be determined by age. For example, our energy bill relief plan which will be in the Budget in a week's time is for people on pensions and payments right across the board, not limited by age. So I encourage people to wait and see what's in the Budget, to see how it applies to different people. But the overwhelming priority for the government is to provide this substantial cost‑of‑living relief in a way that prioritises the most vulnerable.
KARVELAS:
Treasurer, just one final question on this, because there's such strong public interest in it. You say not all of the measures will be limited by age. If you look at the despair of young people, and certainly young people feel forgotten in the intergenerational struggle between resources in this country and being able to have a future, they are angry, are you taking a risk Treasurer by targeting the older cohort, and you've explained why, but the older cohort rather than a more generalised approach, which also helps young people?
CHALMERS:
Well, the point that I was just trying to make, Patricia, is that the cost‑of‑living relief which will be in the Budget won't just be limited by age, there will be a number of elements to it and I encourage people, including young people who are doing it tough, I encourage them to look right across the board at the assistance that we will be providing in a week's time and to make a judgement then.
KARVELAS:
On another issue, you've just announced changes to how superannuation will be paid. New rules will mean employers will have to pay their workers' super at every pay cheque. What material difference would that make?
CHALMERS:
I think it's just common sense to pay it with wages. It's a simple change, it'll strengthen the system and it'll boost retirement incomes and the main reason for that is it will make it less likely that people will miss out on the super that they've earned and that they're entitled to. And what we've done with this announcement is we've deliberately given employers and super funds and others a long run up until 2026, so that they can prepare for this change but this will make a meaningful difference because too many people are missing out on the super that they've earned and that they're entitled to and this is part of our effort to try and fix that.
KARVELAS:
The other big announcement from the government today ‑ some pretty significant changes indeed to vaping rules, from stopping the import of non‑prescription vapes, introducing plain pharmaceutical packaging, limits on flavours and bans on single use disposable vapes. There's already a huge black market out there, huge, overwhelming, how quickly do you think you can stop it?
CHALMERS:
First of all, I'm really proud of the work that Mark Butler's doing here, I couldn't be more supportive of it. We have seen this explode, especially amongst kids and that's really troubling, so I think the steps that Mark is announcing today are really important. We can't sit idly by while another generation of Australians gets hooked on nicotine. These things are supposed to help people get off nicotine, not encourage people to get on it. And so this is a substantial package of changes. Mark's been working with the states and territories and others, a relatively substantial investment as well and we want to get cracking on it. Every day that we don't crack down on these things is another day where more Australians are at risk of addiction and in 20 or 30 years' time, we don't want to look back on this period and think we saw this explosion, particularly amongst young people and we didn't do anything about it. So I think today is really, really important. I'm really proud of what Mark's announcing because I think it will make a meaningful difference. We've got to get cracking, we can see this problem growing. I see it in my own community. I think about it as a parent as a lot of people do. We have to do something about it and we are.
KARVELAS:
There's a big health cost to vaping of course and nicotine addiction but how much could this save the health budget in the long term?
CHALMERS:
Well, it remains to be seen, but certainly I think one of the things that's driving Mark's approach and one of the reasons I support it is because we need to prevent some of these diseases which are such a big factor in our society. I see this primarily as health policy. I see this as a worried Australian, a worried parent about how this is tracking but obviously, the healthier we can make our communities, the healthier we can make our economy as well. We do spend a lot of money treating avoidable diseases in this country and one of the reasons, one of the motivations why we need to get on top of vaping is because we don't want another generation of Australians particularly susceptible to the kinds of diseases that come from it.
KARVELAS:
Today Treasurer, the Reserve Bank will make another decision on whether to hold or raise interest rates. What are you anticipating?
CHALMERS:
Obviously, I'm not going to pre‑empt the decision that they'll take shortly, the independent Reserve Bank will make a decision and they'll explain it publicly, they'll make what I think is probably an on balance call today which weighs up all the pressures in the economy. My job, my focus, is the Budget which has got three parts ‑ cost‑of‑living relief which we've been talking about, trying to do that in a responsible way that doesn't add to inflation, but also laying the foundations for future growth and also trying to make our Budget and our economy and our community more resilient to the sorts of global economic uncertainty that we're seeing.
KARVELAS:
Now before the last Budget, you revised the cost of the stage three tax cuts from $243 billion to $254 billion, how much extra are they likely to cost now?
CHALMERS:
I don't have that number for you today but the important thing to remember about that number is another year comes into it in the 10‑year profile and in the forward estimates profile so the number will be bigger. It will be factored into the underlying cash balance in the Budget but it isn't identified in the Budget because it's an old decision which has already been legislated, the Budget itemises the new decisions and our position on that hasn't changed.
KARVELAS:
Okay, but it's a whopping amount of money, you say your position hasn't changed. We've talked about JobSeeker being raised for over 55s which you've explained the rationale for why a group like that might be targeted next week. If you do go down that road and I'm reading it that you are, are you also going to articulate in the Budget a staged approach to lifting JobSeeker?
CHALMERS:
Well again, Patricia I'm not going to pre‑empt the Budget in a week's time. I've tried to do my best to explain ‑
KARVELAS:
You have, and I'm doing my best to find out.
CHALMERS:
I understand but I'm trying to explain the way that we come at this challenge, we do recognise that people are under substantial pressure and I think when you've got the Budget constraints that we do, you try and work out how you can help people the most you can and beginning with the most vulnerable people and that's the approach that's driving us. People will see the fruits of that effort in the Budget in a week's time and I'm not keen to pre‑empt it before then.
KARVELAS:
Okay. Before I let you go. We've all been invited, all Commonwealth nations, to pledge an allegiance to the new monarch. Will you be pledging?
CHALMERS:
Oh, look, I get other opportunities to do that as a Member of Parliament and as a Minister when we're sworn in. I do that respectfully but I'm unlikely to be doing that or tuning in on Saturday night.
KARVELAS:
Okay. Treasurer, thanks for joining us.
CHALMERS:
Thanks, Patricia.