Peter Stefanovic:
Treasurer, thanks so much more joining us on a very busy morning for you. You’ve literally been rolling up the sleeves. The storm looks like a nasty one. What’s your mind‑set this hour?
Jim Chalmers:
I think like a lot of people in southeast Queensland and northern New South Wales it’s an anxious wait as we wait for the cyclone to cross over. We’re now expecting that to be more like Friday during the day rather than overnight Thursday–Friday, and so people should make the most of this time that we have to prepare.
There’s something like 4.5 million people potentially in harm’s way, that’s about 1.8 million homes and we’re expecting billions of dollars of damage. We’ve had a bit of notice, and we need to make sure that people are making the most of that. Clean up the yard, bring the bins in, fill up the bathtub, make sure your MyGov log‑ins are all sorted, make sure you know how to make an insurance claim. Do all of that sort of preparation because when this thing hits you’ll be pleased if you took all the precautionary steps that are being recommended by the experts.
Stefanovic:
You mentioned there billions, I mean there are some estimations that this damage bill could be $2 billion. I mean how do you get to that estimate, and is that right?
Chalmers:
There’ll be a lot of estimates about that. It wouldn’t surprise me if it was north of that in terms of the damages bill. And so, I spoke to the CEOs of the major insurers last night to check in to make sure that they had the processes that they need to process a lot of claims. They’ve been doing a lot of work around the clock.
Remembering a lot of the workers at the insurance companies are also from our neighbourhoods and from the southeast corner or northern New South Wales, and so the insurance companies are putting together a big team of people to process a lot of claims. They expect that the damages bill will run into the billions.
Obviously, there’ll be a cost to government as well but primarily, or exclusively, our focus is on the human cost of the next couple of days, and also the aftermath, the difficult weeks and months which will follow.
Stefanovic:
Unless thing is a fizzer, Treasurer, would it be a mistake to call the election this weekend?
Chalmers:
Pete, I say the same thing to you that I’ve said to everyone else that’s asked that question. I understand there’s a lot of interest in that, but I hope you understand and I hope your viewers understand that I haven’t been thinking about that. There’s a lot of political commentary about it but my focus is on my local community here in Logan, the southeast corner and northern New South Wales more broadly, making sure that people are prepared, speaking with the insurance companies and others to make sure that everything is going as well as it can in difficult circumstances.
So that’s been the focus. I’ve also, obviously, had the National Accounts out yesterday which showed the Australian economy’s turned a corner. So I’ve been focussed on those sorts of things rather than election timing and I think that’s where our focus is most appropriately kept.
Stefanovic:
Right. But if there is no election called this weekend you’ve presumably got a Budget ready to go?
Chalmers:
I’ve said countless times, probably hundreds of times, that Katy Gallagher and I and the Expenditure Review Committee and the Cabinet have been working towards a Budget towards the end of March.
We’ve been having meetings for hours and hours on end in the Cabinet room to put that Budget together. So if that Budget is necessary, that’s certainly been our expectation, we’ll be ready to hand it down on the 25th.
Stefanovic:
So like you pointed out, the economy swung upwards for the last quarter, a slight improvement to GDP. That’s good at one level. The other though is that most households and businesses aren’t feeling that at all.
Chalmers:
Well, it was a solid rebound in growth, twice as much growth in the December quarter than the quarter before. It does show the Australian economy’s turned a corner and in a very encouraging way because the private sector is beginning to take its rightful place as the main driver of growth in our economy.
And so there was a lot that was encouraging about those numbers, but you’re right to point out that that doesn’t always translate into how people are feeling and faring in the economy. I’ve acknowledged that, but more than acknowledged that, we’re responding to that.
Our cost‑of‑living help which Peter Dutton opposed, is a really important part of that. Making sure that we’re helping people with the cost of living where we can, because we recognise that even as some of the national aggregate data starts to come good, people are still under pressure, there’s a lot of global economic uncertainty, there’s a lot of uncertainty coming from this heavy weather.
And so what we’ve built together as Australians is a really good foundation to deal with all of that uncertainty. And that’s because we’ve got inflation down and wages up, unemployment’s low, we’ve got the Liberal debt down, interest rates have started to come down, and now growth is rebounding solidly as well, and all 6 of those things are good developments.
Stefanovic:
Okay. Just a final point here, Treasurer, I know you’re busy but look, your counterparts in the US, they now want us to increase our defence spending to 3 per cent of GDP. Will you commit to that?
Chalmers:
I won’t be committing to that today, Pete, for obvious reasons, but I would point out that defence spending in Australia is rising very substantially. We found an extra $50 billion to 2033 to invest in our Defence forces, our capability, and part of the rationale for that is so that we can better work with our partners and allies like the US.
So we’ve made a very substantial increase in defence spending from what we inherited to what we now expect. Tens of billions of extra dollars going into defence –
Stefanovic:
– sure, but according to the US it’s still not enough –
Chalmers:
– and that’s important for its own reasons –
Stefanovic:
– I mean if we’re over, just over 2 per cent, you’ve got to almost a full per cent, so that’s tens of billions of dollars more.
Chalmers:
First of all, it’s not unusual for the new administration to call on their partners and other countries around the world to increase their defence spending. That was a feature of the first Trump Presidency and it’s obviously now a feature of the second Trump Presidency. That’s not unusual. It’s not a surprise that they want people investing more.
Australia’s already investing more in defence, we’re lifting defence investment quite substantially in the context of a tight budget. We’ve been able to increase defence spending at the same time as we deliver those surpluses and engineer that $200 billion improvement in our budget overall.
We’ll continue to engage with the Americans on defence and on all kinds of other matters, but our spending is already lifting quite substantially.
Stefanovic:
Okay. We will leave that there then, Treasurer. Appreciate that, thank you. On a busy morning, again thanks for your time.