PATRICIA KARVELAS:
For years, women and advocates including the government's own Women's Economic Equality Taskforce have been crying out for superannuation to be paid on Commonwealth Paid Parental Leave. Today Labor has announced it will finally begin doing that from July next year. Jim Chalmers is the Federal Treasurer, and he joins the program this morning. Treasurer, welcome.
JIM CHALMERS:
Good morning, Patricia.
KARVELAS:
How many women will benefit from this?
CHALMERS:
About 180,000 families a year access paid parental leave, not all of them are on the government PPL scheme, but it will mean tens of thousands of families will benefit from what is a really important change. Now we've made it clear for some time that this is a priority, and today we're making it a reality, and I want to salute the people you referenced in your introduction. Now all of those people who have advocated for this and campaigned for this over a long period of time. I pay tribute to Katy Gallagher and Amanda Rishworth and Stephen Jones and the PM and everyone who put the work into this. We're very, very proud to be making this announcement today as part of Katy's gender equality strategy that she releases at the Press Club today –
KARVELAS:
How many ‑‑ no, I'm sorry, I shouldn't interrupt. Please finish the sentence.
CHALMERS:
Our super system is the envy of the world, but it's not perfect, and one of its imperfections is this gender gap in super, and what we're announcing today will address that, it won't eliminate that gap, but it will help to address it, and that's because we don't want to see women penalised in the superannuation system for the interrupted work patterns associated with having and looking after kids. Now we want a more dignified and more secure retirement for more women, and this announcement today is part of our efforts to ensure that women earn more and keep more, but also retire on more as well.
KARVELAS:
The super will be paid from July 1 next year. That's after the next election. Why?
CHALMERS:
We've got to get the systems right. It's not – you can't just click your fingers and make this work immediately. We've got to get the systems right; we've got to work out the most effective way to pay this benefit, this 12 per cent super guarantee on paid parental leave, and we've got to get it agreed and locked down and funded in the May Budget. And so, what we're doing today is we're announcing the timeframe; as you rightly point out, to start on 1 July next year. We are announcing some of the details, and those details will be finalised and announced in the Budget. But part of that is making sure we've got the systems to pay it properly.
KARVELAS:
And how much will it cost?
CHALMERS:
Again, we'll make that clear on Budget night. You know, today we're –
KARVELAS:
You must know. I mean there's been estimates previously that it will be about $200 million a year; is that about right?
CHALMERS:
I've seen those estimates, and obviously we have our own workings, but we'll make that clear on Budget night. We'll make all of the final details clear in the Budget. But I think it's entirely appropriate that Katy – as part of her gender equality strategy today, and in advance of International Women's Day tomorrow – makes it clear that the government will turn this priority into a reality for all of those Australian families, and particularly for Australian women who need and deserve a bit more security in retirement so that we can help to address this gender gap in super, which is unacceptable to so many of us.
KARVELAS:
Treasurer, let's move to National Accounts. Yesterday the latest National Accounts were released showing the economy has barely grown, increasing by just 0.2 per cent. Deloitte Access Economics Partner, Stephen Smith, says monetary and fiscal policy need now to pivot away from containing inflation to stimulating economic growth. Do you agree with that assessment?
CHALMERS:
First of all, I mean I do accept the growth towards the end of last year in those numbers was quite weak, and you and I had a yack about this from São Paulo in Brazil last week, we anticipated this number being quite weak, and it was. But any growth in these circumstances is welcome. When you've got big economies like Japan and the UK going into recession, you've got all that global economic uncertainty, the impact of all of these rate rises weighing heavily on growth in our economy, then any growth is welcome.
I believe in relation to the commentary that you referred to, I think inflation is still the main game in our economy, but the balance of risks is shifting, and so will our strategy; not in fundamental ways, but in terms of the difficult balances that we strike between cost‑of‑living help and budget repair and investing in growth in the budget. Now we will maintain a primary focus on inflation, but not a sole focus on inflation. As the risks shift in our economy, the balance shifts in our budget strategy as well, and I think people will see that in May.
KARVELAS:
Okay. So, the May Budget will shift, are you saying, to be one – a story of stimulating economic growth; is that what we'll expect? Is it a stimulatory budget we should expect in May?
CHALMERS:
I don't think it will be a fundamental shift. You know, there will still be a focus on inflation, there will still be a premium on what is responsible and affordable, but we can't and won't ignore the way that the economy is slowing. And I think one of the reasons why the first two budgets that we handed down were right for the times is that we were especially focused on the economic conditions that we confront, and we'll do that again in the third budget.
And the economic conditions are shifting. We've got inflation coming off in welcome and encouraging ways, but it's not mission accomplished yet, because people are still under pressure. We've got a slowing economy for the reasons that you and I have talked about on a number of occasions now, and we can't ignore that either. And so our strategy will be the best combination of relief from cost‑of‑living pressures, repair of the budget and reform of the economy so that we can lay the foundations for growth into the future. Inevitably, as the economic conditions change over time, so does the relative importance of each of those parts of our economic strategy.
KARVELAS:
Was the November 2023 interest rate hike by the RBA unnecessary?
CHALMERS:
I'm not going to second‑guess decisions taken by the independent Reserve Bank.
KARVELAS:
Well, they've already made the decision. So, you're not looking forward.
CHALMERS:
No, I'm not going to second‑guess it. You know that I don't engage in running commentary on Reserve Bank decisions past, and I don't pre‑empt decisions that they may or may not take in the future. I know that people will focus on that November interest rate hike in the middle of this quarter, that was relatively weak. But my job is different. My job is to get the budget in better nick, and we are; my job is to roll out cost‑of‑living help, we're doing that ‑‑
KARVELAS:
But did that rate hike put us in a worse position?
CHALMERS:
I'm just not going to take the bait, Patricia. I maintain this position for good reason. The Reserve Bank's got a job to do, it does it independently. It has a lot of opportunities to explain the decisions that it takes, and I have my own opportunities to explain the strategy that we are pursuing. The strategy that we are pursuing is helping inflation to moderate, and that's a good thing. We're working hand‑in‑hand with the Reserve Bank when it comes to getting on top of this inflation challenge in our economy. I'm happy to talk about my part of that, and the Reserve Bank's happy to talk about theirs.
KARVELAS:
Sure. RBA's made claims about home‑grown inflation. Right now, as you assess the economic situation, is there any evidence of home‑grown inflation?
CHALMERS:
We've made it clear on a number of occasions that inflation's got a number of sources, and you know, when inflation was absolutely roaring towards the end of 2022, it was primarily driven by some of these international shocks. The composition of our inflation challenge changes over time, it's got international sources and it's got domestic sources; we've said that on a number of occasions.
Our job is to make sure that our budget is helping in the fight against inflation, and to make sure that we are rolling out all this cost‑of‑living help in ways that takes the edge off cost‑of‑living pressures rather than add to them, and the ABS has made it really clear now on a number of occasions that our efforts on electricity bill relief, cheaper childcare, rent assistance, and in other ways, is helping to push inflation down, and our responsible approach to the budget is helping on that front too.
KARVELAS:
I want to move to another story that's in the Sydney Morning Herald today. Federal ministers are frustrated that key spending proposals are being rejected by what's been described as Anthony Albanese's powerful inner circle – you're in that. Penny Wong and Katy Gallagher have been dubbed as co‑deputy prime ministers. Clearly, there's a lot of tensions going on if someone's sharing this. Is that what's happening? Are there ministers being shut out of decision‑making?
CHALMERS:
No, I don't believe so. The process that we run to put our budgets together isn't new, it isn't unusual. Decisions are taken by ministers, not by public servants. Those decisions are endorsed by meetings of the full Cabinet. I think Anthony runs a very inclusive, very consultative operation, and we run a responsible budget, and that means running a tight ship on spending. It means whittling down hundreds of good ideas into a smaller set of priorities that can be funded, and because there's not a bottomless pit of money, not even all of the good ideas get up, and that's not always popular. But we try to understand where ministers are coming from, we try to understand their goals and their pressures –
KARVELAS:
But are they locked out of the decision‑making? I mean is this a kind of gang‑of‑four situation? That was the description during the Rudd era. Is that what's going on in this government?
CHALMERS:
No, of course not, and I addressed that at the start of my answer. This is collective decision‑making; ministers are involved, decisions are endorsed by the full Cabinet. People have an opportunity to put their ideas forward, and we try to understand where they're coming from, and we try to do our absolute best for ministers in the context of some pretty serious budget constraints. And I think Katy in particular, is very good at ensuring we understand where people are coming from and what they're trying to achieve and what kind of pressures they're on in their own portfolios. But at the end of the day, if the price of being responsible and disciplined with taxpayer money is an occasional story like this, then so be it. I think I'm pretty relaxed about that.
KARVELAS:
Okay. Are you obsessed with delivering a surplus; is that what's going on?
CHALMERS:
I'm obsessed with responsible economic management. I think the foundation of a good government is being responsible with taxpayer dollars, not as an end in itself, but so that we can fund the things that we really value as a government and as a society and as a country. And I think one of the things that we have been very successful at in the first couple of years of this Albanese Government is funding our priorities, running a tight ship, but funding our priorities, all of that built on a really solid foundation of responsible economic management. That's what the Expenditure Review Committee is charged with delivering; that's what we're doing. That doesn't always make us popular. We know that there are more good ideas than can be funded. That's just the reality of a good government. But we do our best for people, we do our best for ministers, and we do our best for the country, and from time to time you get stories like this so be it.
KARVELAS:
Thank you so much for joining us.
CHALMERS:
Appreciate it, Patricia. All the best.