PATRICIA KARVELAS:
The Treasurer, Jim Chalmers, has just returned from the G20 Summit in Bali and joins me now. Treasurer, welcome back to Breakfast.
JIM CHALMERS:
Thanks for having me back, Patricia.
KARVELAS:
This meeting is a huge step following years of diplomatic tension. Not since 2016 have we had leader‑to‑leader meetings like this. What will come out of it? What's Australia's ambition here? What do you consider a win?
CHALMERS:
It is a really important meeting and it's a very welcome opportunity. We seek a more stable relationship with China. It's in our interests, we believe it's in China's interest, certainly in the interests of peace and prosperity and stability and security in the region, for there to be a dialogue between our countries. And you're right to point out that it's been some time since that has occurred and so this is a really welcome opportunity. I was with the Prime Minister yesterday in Indonesia. I know he's looking forward to engaging with President Xi. We don't pretend that we don't have big differences here. There are big differences between our countries and we will speak up for our national interest where that is necessary, but we believe that engagement is important. We give ourselves the best chance of working through some of these issues if we're talking to each other and that's what will happen today.
KARVELAS:
The Prime Minister is likely to bring up trade sanctions, which have cost Australian exporters $20 billion a year. Does this meeting mean they'll start being wound back? Is that what you hope will come out of today's meeting?
CHALMERS:
I'm not going to pre‑empt the outcomes of the meeting but we've made it really clear for some time ‑ I have, Penny Wong, the Prime Minister and others, Trade Minister Don Farrell ‑ that these trade restrictions are obviously not in Australia's interests, not in the interests of our employers and our exporters in particular, and we want to see them lifted. And it would be in the interests of a more stable relationship, if that were to occur. We've made that very clear for some time. Part of stabilising this relationship would ideally mean the removal of those restrictions.
KARVELAS:
China has issued a list of grievances with Australia in the past. If China is expecting Australia to come to the table on some of those ‑ I think the Chinese Premier described it as coming half way, that means Australia has to come half way by that logic ‑ what concessions is Australia willing to make?
CHALMERS:
First of all, we do need to recognise that when we have these big differences with China, one meeting is not going to solve all of them in one hit. As I said, this is about engaging. It's been a long time since this has occurred and so it's an opportunity to open up a dialogue. I don't think anybody pretends that some of the issues that China has raised, certainly some of the issues that we have raised. will be solved overnight. But again, we give ourselves a much better chance where there's engagement and dialogue, and there will be today.
KARVELAS:
Will the Prime Minister bring up the treatment of two Australians who are detained including journalist Cheng Lei and writer Yang Hengjun?
CHALMERS:
We are obviously deeply concerned about the detention of those two people. I think in Ms Cheng's case, she's been detained for over two years now and she hasn't had access to her family. And so we do want to see basic standards of justice apply here ‑ transparency, procedural fairness ‑ and we want them to be treated humanely. I don't want to run through the Prime Minister's talking points on the program this morning. He was asked about this last night when I was with him. He made it very clear that he doesn't intend to pre‑empt the discussions, which I think is wise but again, like the trade restrictions, I think Australia has made its views pretty clear over a longer period of time of time when it comes to the detention of these two people.
KARVELAS:
So in terms of what you're letting us know the meeting is later this afternoon, I think four o'clock Sydney time this afternoon. What is a win for the Australian Government? If you walk out with no tangible outcomes, is that okay? What do you regard as a success today?
CHALMERS:
Our objective here is a more stable relationship, and it has had its ups and downs in recent years and some pretty substantial difficulties. The fact that there hasn't been a leader‑to‑leader meeting for so long is a demonstration of those difficulties and those differences. And so if this meeting helps to stabilise the relationship, if it's conducted in a calm and consistent and considered way, a way that lets us raise the issues that are troubling us but where there's a sense of working together, where there is agreement, where there is common ground, then I think that is a really, really important start. And in terms of what's tangible about that, there's nothing more tangible for our country, for our people, for our employers, for our exporters, for our workers, then a region which is safe and secure and stable, peaceful and prosperous. And that's what this engagement is all about, not just with China, but all of the engagement that the Prime Minister has been doing since he became the Prime Minister, but particularly in the last week or so. This is really important, and we shouldn't diminish or dismiss the significance of the meeting itself ‑ and that's another point that the Prime Minister was making last night.
KARVELAS:
You've just arrived from the summit in Bali, as you say, you were with the Prime Minister yesterday ‑ were the impacts of the Ukraine war, including the chaos in the energy markets one of the biggest issues for discussion? And what kind of impact have those discussions had on your own thinking in relation to an intervention into our market or what might be needed?
CHALMERS:
I think the chaos in energy markets brought about by Russia's war in Ukraine is really the defining challenge in the global economy, pushing up energy prices, pushing up inflation, pushing up interest rates. And the invasion itself hangs over these G20 meetings, makes it very difficult to get outcomes and that's why the Indonesians have done so well, frankly, to keep the show together in what has been a really difficult year. But in my meetings with my economic counterparts, Secretary Yellen from the US, obviously, Sri Mulyani from Indonesia and others, I think what's happening in energy markets is really the primary concern. And what that means for us, it means a couple of things ‑ first of all, in the context of high global inflation and rising interest rates around the world, our responsibility is to put in place a more restrained, more responsible budget ‑ we did that ‑ invest in a more resilient economy ‑ we're doing that too ‑ but also try and rebuild our buffers against this international uncertainty. A lot of my counterparts have a different way of describing the same situation, which is a pretty hostile and high‑risk environment in the global economy. And so we've got to rebuild our buffers at home and that's what the Budget was largely about.
KARVELAS:
You've said a decision on a domestic gas price will be made by the end of the year. Currently, everything's on the table but what specific mechanisms are you now leaning towards, Treasurer?
CHALMERS:
Our first preference is to try and find a regulatory solution here, rather than a tax solution here, I think we've said that in different ways over the course of the last couple of weeks, but there's an important reason to leave all the options on the table and that is, there's a lot of complex interactions here in these markets. And so I'm working closely with Chris Bowen and Madeleine King and Ed Husic and the Prime Minister and others, Don Farrell, to see if we can find a temporary, meaningful, sensible, responsible intervention in this market which recognises that these high prices brought about by a war in Europe have the potential to strangle our local industries and make life harder for Australians. And so, we continue to work on an intervention of that nature. There's a lot of complexity here, as I said, there's a lot of consultation to do so we will work through it methodically and calmly and try and get an outcome as soon as we can.
KARVELAS:
Once a decision is made, how long will it take to implement and how long until it starts to lower prices for households and crucially those businesses that are warning they're going to hit the wall and there'll be job losses?
CHALMERS:
It depends on the final landing point and how it's implemented. Our first port of call here is obviously the code of conduct in the gas market, working closely with the ACCC on that. That's the best example I can give your listeners of the kind of work that we're doing. And so how that's designed and how that's implemented will determine the timing but we're obviously really cognisant of the pressure on industry in particular and the pressure on Australians right around the country and so we're not sitting on our hands here, we're working really quite hard every day, seven days a week to try and get to a good outcome here. We know the urgency, but equally, you don't want to rush into something and get it wrong. So we'll do it in a calm and considered way but we'll do it as urgently as we can.
KARVELAS:
What's your message to Australians who've heard that a few times now and are thinking ‑ are quite frustrated? Feel like it's taking too long?
CHALMERS:
Well, I think Australians in the main understand that we've got –
KARVELAS:
Oh, I think I've lost the Treasurer. It happens. Treasurer, Jim Chalmers –
CHALMERS:
Can you hear me now, Patricia?
KARVELAS:
Oh, you're back. Thank goodness. Yes, you can finish your sentence.
CHALMERS:
I think Australians broadly understand why we've got these high energy prices ‑ they know that there's a war in Europe but that doesn't make it any easier for them and I hope they understand that we are trying to find an outcome here, which takes some of the sting out of these high prices which are expected to get a bit higher in the near term. And our commitment to them is to do what we can, we'll be responsible about it, sensible about it, we'll try and find an outcome here but you can't just click your fingers and make a war in Ukraine go away, you can't just click your fingers and make this inflation go away.
KARVELAS:
You can't click your fingers and do that, everyone accepts that but you can potentially, if I can use the same analogy, click your fingers and stop the "glut of greed" as your Industry Minister describes it from some of the companies, right?
CHALMERS:
Well even then, there's a lot of complexity in these policy areas and I don't want to pretend to your listeners that there's an easy lever to pull. It's actually quite complex. We care about, for example, our commitments as a reliable international supplier, we care about the investments that companies have made in these sectors, we need to balance all of those things and come out with an outcome that takes the sting out of these price rises because we understand the impact that they're having on industry and Australians more broadly.
KARVELAS:
Thank you so much for joining us this morning, Treasurer.
CHALMERS:
Thanks, Patricia.