PETER STEFANOVIC:
Treasurer, good to see you. Thanks for your time. Fuel excise – the cuts to it will end this week. How much is that going to sting motorists and businesses?
JIM CHALMERS:
Good morning, Pete. We're not pretending that it will be an easy change for motorists to deal with around Australia. We've tried to be up‑front with people before the election, during the election and after the election that a Budget which is heaving with a trillion dollars in Liberal Party debt can't afford to sustain something that costs $3 billion every six months. What we've said to people all along is that the petrol excise relief will come off on Wednesday night as was legislated by our predecessors. That's just the fact of it. We know that many people would prefer that to be otherwise but we just can't afford to continue that relief indefinitely.
STEFANOVIC:
Did you ever think about extending the cuts?
CHALMERS:
Not seriously, Pete. Obviously people put that to us and typically you listen when people have got views of that nature of course but the cost is prohibitive here. The other thing that people need to recognise ‑ and I know that prices have been bouncing around a lot in the last few weeks. I filled up at $1.49 yesterday in southeast Queensland, but I know that for some people, it's been higher than that. It's still substantially off the peak that we saw earlier in the year so even when the petrol excise comes back on in full, we still expect prices to be below what they were at their peak a few months ago. And the other thing to remember is ‑ and the ACCC is watching the servos and suppliers when it comes to this fact ‑ is that there's a lot of fuel in tanks underground already, which was purchased at a lower price. So the ACCC will be keeping an eye on the service stations to make sure that they're not unnecessarily taking advantage of this increase in the excise on Wednesday night.
STEFANOVIC:
That's a handy price you got in Queensland. I drove past a servo earlier this morning Treasurer ‑ it's about $2 in the northern parts of Sydney at the moment so it's going to get a little more expensive for motorists down here. Just on the cheaper medicines and cheaper child care policies, they won't come into effect until next year. They are some of your long‑term plans. But do people just have to suck it up until then?
CHALMERS:
I don't see July as necessarily long term ‑ that's the beginning of the next financial year. That's a responsible way to fund what will be a game changing investment in Australian families and particularly Australian parents. We've got labour and skill shortages in our economy. That's one of the reasons why we've got this inflation problem at the same time as people are dealing with these cost‑of‑living pressures. So cheaper childcare is cost of living relief with an economic dividend. We will bring it in on July 1 and when we do, it will be a game changing investment. The biggest new budget investment in the Budget in October will be cheaper childcare for Australian parents.
STEFANOVIC:
My point being that it's going to take time before you see the effects on the economy ‑ positive effects on the economy. I know that it's just around the corner before it's implemented but it's going to take time for you to see the effects of that right.
CHALMERS:
We've just come into office, Pete, and I think most people would agree that if there was some easy switch that you could flick to make all of these cost‑of‑living pressures disappear then somebody would have flicked it already. Our job is to provide responsible cost‑of‑living relief in a way that doesn't put upward pressure on inflation and make the job of the independent Reserve Bank even harder when it comes to dealing with this inflation that we have in the economy right now. And so what we're doing, whether it's childcare, whether it's cheaper TAFE fees, cheaper and cleaner energy, cheaper medicines, a responsible increase to the minimum wage ‑ all of these things together are about providing cost‑of‑living relief in a responsible way, in a measured way, which makes life a bit easier for people without being counterproductive and forcing the Reserve Bank's hand.
STEFANOVIC:
Soaring global interest rates are going to add more than $120 billion to long‑term interest rates or interest bills that's only going to increase pressure on you to make cuts. Where are you looking at, at the moment?
CHALMERS:
This is one of the fastest growing areas of spending in the Commonwealth budget. When interest rates go up, the cost of servicing the debt that we inherited from our predecessors goes up as well. And so we need to find tens of billions of dollars over time to make up for the fact that all of this debt is more expensive to service. We've said for some time ‑ and Katy Gallagher and I have been working really for some months on this task ‑ is we need to find areas to responsibly trim spending in areas where it's been wasteful in the past for too long, and to redirect that investment into more productive areas like childcare and energy and skills and all of those areas which will provide responsible cost‑of‑living relief with an economic dividend.
STEFANOVIC:
Jim Chalmers, we are out of time but appreciate your time. Thank you.