PETER STEFANOVIC:
Australia’s third largest airline, Rex, which specialises in regional travel, has gone into voluntary administration.
We’re being assured though this morning that regional flights will still be maintained in some capacity. The company expanded in the capital city routes after COVID, a decision which now looks as though it backfired.
Joining us live now is the Treasurer, Jim Chalmers. Treasurer, good to see you. Thank you for your time this morning. So, are you considering a bail‑out here at all?
JIM CHALMERS:
Good morning, Pete. Obviously, these are really concerning developments for Rex, for its workers and for its customers.
As you alluded to a moment ago, we’re told that they communicated with their customers last night that the regional routes will continue. That’s really important because we know how absolutely crucial these regional services are to regional communities and regional economies at the same time.
The Prime Minister, the Premier of New South Wales, Minister Catherine King, myself and others have all made it really clear that the priority here has to be continuation of these regional services, and also we want to see the workers looked after, and we know that Minister Catherine King’s been in discussions with the other airlines to make sure where it’s possible to re-employ and redeploy as many of these workers as possible, we want to see that happen.
Now the next thing that happens is a statement from the administrators, from the company. Obviously, we are prepared to play a constructive role, but I don’t want to pre‑empt the nature of that response. Let’s hear from the company in the next instance.
STEFANOVIC:
Okay.
CHALMERS:
If those regional services are continuing, that’s a big priority, and it’s a big relief.
STEFANOVIC:
So, to guarantee Rex’s survival in some form, would you bail it out if it’s needed?
CHALMERS:
Again Pete, I don’t want to sort of pre‑empt the sorts of considerations that we would be taking after we hear from the company. We want to hear from the company next, from its administrators.
We know from developments overnight that those regional services will continue, that’s as we understand it, that’s a big relief.
As the PM, the Premier, the Minister, myself have all said, let’s make sure that those regional communities continue to be serviced in one way or another, ideally by Rex, that would be a big relief, but if there is a government response which is warranted and responsible, then obviously we’ll contemplate that and consider that, but let’s hear from the company next.
STEFANOVIC:
Okay. We’ll wait for that. On to the other story of the day – it’s the CPI figures. Treasurer, are you worried about the quarterly inflation figures that will come out in a few hours’ time?
CHALMERS:
I think most economists expect the inflation figures today to be persistent, sticky and stubborn in unwelcome but unsurprising ways, given all the pressures coming at us from around the world, but also some domestic considerations as well, including some temporary issues around fruit and vegetables and travel costs and the like.
And so, we are anticipating inflation was pretty persistent in that June quarter. Inflation’s come off really quite substantially since we were elected, and when we were elected it was higher than 6 per cent, don’t forget. It’s come off a lot since then, but we haven’t expected it to moderate in a perfectly straight line.
We know from what’s happened around the world that it zigs and zags a bit on the way down, and that’s what a lot of people are expecting to see in one form or another in the inflation figures at 11:30.
STEFANOVIC:
Stubborn and sticky though, it means it’s still not getting over that final hurdle, which is what we need. Does that show that your policies just aren’t helping?
CHALMERS:
No, it doesn’t show that. And if you look at the contributions that we expect to see to this inflation challenge in the June quarter, rent and petrol and insurance, some temporary issues around fruit and vegetables, some temporary issues around travel at the same time, none of those things are about government spending or necessarily about government policy.
What we’re doing is we turned 2 big Liberal deficits into 2 big Labor surpluses. The Reserve Bank Governor has said that those 2 surpluses are helping the fight against inflation.
Similarly, the way that we’ve designed our cost‑of‑living help in a substantial and meaningful way, but also a responsible way to put downward pressure on energy prices, downward pressure on rent, and to provide those tax cuts for every taxpayer in a way that doesn’t add additional pressure on inflation beyond the tax cuts that they replaced.
And so, we’re going about this in the most responsible way that we can. There’s a lot of factors at play here. Our political opponents want to pretend that it’s about government spending. They don’t understand that some billions of dollars in cost‑of‑living relief is not the primary determinant of prices in our economy. Our economy is a $2.6 trillion economy, there’s a lot of factors at play here, and we expect to see that at 11:30.
STEFANOVIC:
Sure. Just despite everything that you’ve just said there, we’re still potentially looking at another rate rise this year, Treasurer. Now we’ve got more businesses that are closing than ever before, some 11,000 a year now. How do you explain to those businesses and those families that you are doing all that you can?
CHALMERS:
I’d say to those businesses, and I’d say to Australians more broadly that we’ve got to get on top of this inflation challenge without smashing the economy, without smashing businesses and without smashing the labour market. That’s our job and it’s also the Reserve Bank’s job –
STEFANOVIC:
– businesses are getting smashed though.
CHALMERS:
We understand that, and that’s why we’re rolling out substantial and meaningful relief in a responsible way; small business relief in addition to cost‑of‑living relief for the broader Australian community.
We know that people are under pressure, we know that higher interest rates have been part of that challenge, and we don’t give free advice to the independent Reserve Bank. They’ll make their considerations across a whole range of issues, not just today’s inflation figures.
My job is to manage the budget responsibly. We’ve been doing that, turning those Liberal deficits into Labor surpluses, to provide that cost‑of‑living relief, whether it’s a tax cut for every taxpayer, energy bill relief for every household, cheaper medicines, rent assistance, and in other ways, to do that in the most responsible way that we can, recognising the pressures that people are under, responding to those pressures, but making sure that we’re part of the solution to persist in inflation rather than part of the problem.
It’s not unusual to see inflation, even though it’s moderated a lot in Australia since we came to office, it’s not unusual to see it zig and zag on the way down. We’ve seen that in other countries around the world, particularly in those countries where inflation peaked much higher than it did in Australia and much earlier than it did in Australia.
And so persistent inflation in today’s figures would be unwelcome, but unsurprising given the pressures that people are under, which are coming at us from around the world, but there is also a domestic element, and we’re responding to that with the way that we are responsibly managing the budget and this cost‑of‑living relief.
STEFANOVIC:
Okay. That is the Federal Treasurer, Jim Chalmers, coming to us from beautiful Brisbane this morning. Thank you, Treasurer.