PATRICIA KARVELAS:
Jim Chalmers is the Treasurer and he's my guest this morning. Treasurer, welcome back to the program.
JIM CHALMERS:
Thanks very much, Patricia.
KARVELAS:
The ABS will reveal the latest wages data. What are you expecting?
CHALMERS:
Some really important data out later today on wages, and as you rightly point out, most economists are expecting real wages to grow in the June quarter for the first time in something like three years. It remains to be seen, of course, I'm not going to get into predicting the number that we'll see at 11.30 because they can jump around a bit, and we're expecting real wages growth on an annual basis from the start of next year. But what we're seeing in our economy, what we already know, is that inflation is moderating in welcome ways and wages are growing, and both of those developments are good things. Getting wages moving again is absolutely central to what the Albanese Labor Government is trying to do. It's central to our economic plan after a decade of deliberate wage stagnation, and that's because we know if we're going to get on top of these cost-of-living pressures, which are absolutely smashing people right around Australia, we need to make sure that people can earn enough to provide for their loved ones and get ahead.
KARVELAS:
Before the election last year, you promised Australians would get a real wage rise under your government. So when can workers expect that?
CHALMERS:
On a quarterly basis, we might be getting it in the June quarter, we might have got it in the June quarter, depending on whether these predictions from economists come true in a few hours’ time. On an annual basis, the Budget expects real wages growth from the beginning of next year – that's come forward a bit, we're actually progressing a bit better than we thought six or 12 months ago when it comes to wages growth in our economy. We're doing that, at the same time as inflation is moderating in the economy, and that's because the source of inflation in our economy isn't that people – particularly on low pay – are earning too much. Inflation is coming at us from all kinds of other directions. And so getting wages moving again is part of the solution to these cost-of-living pressures, not part of the problem. We are making welcome progress. We are seeing wages growing again after a decade of deliberate wage stagnation, and that's a good thing.
KARVELAS:
On Friday, the outgoing Reserve Bank Governor Philip Lowe said again that if productivity doesn't pick up, inflation will struggle to return to the Bank's target range. What measures are you implementing now to boost productivity? He says that's the missing part.
CHALMERS:
I agree with Governor Lowe that our economy is not productive enough and it hasn't been productive enough for some time. The 10 years to 2020 were the least productive out of the last 60 years when it comes to our economy and that's obviously a huge challenge that we've inherited. And we need a new approach to boosting productivity in our economy. From our point of view – the energy transformation, skilling people up to adapt and adopt technology, making particularly our care economy more productive – these are our priorities. And when I release the Intergenerational Report next week, people will see that productivity is a big focus of that Intergenerational Report.
KARVELAS:
Okay, Treasurer, you just mentioned something I hadn't heard before – you're releasing the Intergenerational Report next week. When and what can we expect to be in it?
CHALMERS:
I'll be releasing the Intergenerational Report on Thursday, the 24th of August at the National Press Club. And what we'll be able to demonstrate when we release that really important document is that our highest priority, which is rolling out this cost-of-living assistance for people doing it tough, doesn't prevent us from focusing on the big picture at the same time. And so what the Intergenerational Report will do is it will shine a light on the big forces which are shaping our economy and our budget and our society over the next 40 years – whether it's the shift from globalisation to fragmentation from hydrocarbons to renewables, from IT to AI, from younger to older, and what that means for our industries, particularly our care economy. Really the starting point of that IGR is that Australians can own the future if we manage and maximise the big shifts underway and make the most of this defining decade that we're in right now. There are vast intergenerational opportunities available to us if we de-risk our supply chains and broaden and deepen our industrial base, and land the energy transformation, and adapt and adopt technology, and invest in the capabilities of our people as the best way to make our economy more productive. These are the sorts of things that the IGR will shine a light on, and we'll be able to focus on this bigger, long term, future picture of our economy and our society, at the same time as we roll out billions of dollars in cost-of-living help, which is our highest priority because people are doing it tough.
KARVELAS:
Okay, so while releasing that report, as you say, next Thursday at the National Press Club, will you outline reform priorities that you will need to deliver as a consequence of the kind of trends that you're observing?
CHALMERS:
I'll be doing that in my speech to the National Press Club. But what we've tried to do in the IGR itself, is to make it largely depoliticised, heavily factual, lots of forecasts from the Treasury, about how we are expecting our economy and our budget and our society to evolve over the next 40 years. So the document itself is about the forces, the shifts underway in our economy, and the speech that I'll give at the same time will be about how we plan to manage and maximise these big shifts. Our big objective here, Patricia, has to be – how do we make more Australians beneficiaries, not victims, of the big shifts and transitions which are underway in our economy and in our society. And we do that by making our economy more productive and more dynamic and more competitive but also by making sure that as we do create opportunities in our economy – as our economy changes and we position ourselves to take advantage of that – that more people feel the benefits of that and there are more opportunities created for more people in more parts of the country.
KARVELAS:
Treasurer, tomorrow National Cabinet will convene a talk about housing. Before the end of the last financial year, you gave the states and territories $2 billion to be spent immediately on social and affordable housing. Are you willing to put more money on the table now, and what strings will you potentially attach to it?
CHALMERS:
Well, first of all, Patricia, I'm pleased that you recognise that we are investing billions and billions of dollars in building more homes at the same time as we give the biggest increase in Commonwealth Rent Assistance in 30 years, to try and take some of the edge off these pressures that renters in particular are feeling in the housing market. We want to work with states not against them, on the biggest challenges in our economy, and there's probably no bigger challenge than housing and how that relates to the cost of living. And so this will be a really important opportunity, I think, when National Cabinet meets tomorrow in Brisbane, to discuss progress on housing and planning and to calibrate our plans to boost supply and affordability in particular. We have said all along, that we're in the cart for doing whatever we can, in conjunction with the states and territories but also with local governments, to try and get more homes built in this country. That's the motivation behind the Housing Australia Future Fund that's held up in the Senate. It's the motivation behind -
KARVELAS:
But with respect, you haven't answered my question about whether you're willing to put more on the table that deals with clearly a crisis here – but it just kind of deals with the edge of that crisis, doesn't it? You need to do more than this?
CHALMERS:
Well, first of all, I don't accept that what we have announced already is some kind of tinkering around the edges. We're talking about enormous investments already and I've run through some of the areas where that's the case. And you asked me – were we prepared to do more, working with the states and territories – and I said, we are always prepared to sit down with the states and territories and also the local governments to work out if there are ways that we can do more, to build more homes in this country. We recognise that a shortage of housing is pushing up rents, it's making it harder for people to make ends meet – that's what drives so much of what we're doing in this space. And tomorrow will be an opportunity -
KARVELAS:
Would you support something like a 12 month limit on rent hikes?
CHALMERS:
Well, first of all, I'm not going to front run or pre-empt the discussion –
KARVELAS:
But is that the national approach that should be taken?
CHALMERS:
We've made our view clear in the lead up to now, that we think that there are other ways we can make a difference here. Whether it's the $2 billion you mentioned, whether it's the Housing Australia Future Fund, whether it's some of the other developments on renters rights that the Prime Minister has shown some leadership on at National Cabinet before – and will do so again. We're in the cart for anything which makes sense, which is affordable and methodical and considered. And we've shown a willingness already with the billions of dollars that we're investing, we're prepared to play our part, we're prepared to work with the states and territories, not against them, because we recognise that this is one of the biggest challenges in our economy and in our communities.
KARVELAS:
Treasurer, just briefly, the Opposition Leader Peter Dutton, has come out against the Prime Minister's proposal for a public holiday if the Matildas win – although, no jinxing here – they put out a statement. Do you support the public holiday?
CHALMERS:
I think if the Matildas win the World Cup, the least we can do is give people the opportunity to recover from what will be a big night. I wish them all the best, it's been really quite phenomenal seeing the way that the whole country has been absorbed by this. I've been a little bit surprised, frankly, at the kind of spoilsport attitude adopted by the Coalition, by Peter Dutton and David Littleproud and others. The whole country has gotten behind the Matildas and if they win the World Cup, I think this option should definitely be on the table.
KARVELAS:
Treasurer, thanks for joining us this morning.
CHALMERS:
Thanks, Patricia.