Peter Stefanovic:
Well, the government has shaken up the election campaign with a late plot twist. A tax cut for all. That’s one side of the ledger. The other is record debt and deficits for the next decade.
Joining us live from Canberra now is the Treasurer, Jim Chalmers. Treasurer, good to see you this morning. Thank you so much for your time. A cup of coffee for all, is that how much a vote costs in 2025?
Jim Chalmers:
We’re topping up the tax cuts because this is one of the effective ways that we can help with the cost of living, but not the only way. The Budget has got cost‑of‑living help across the board. Tax cuts for every taxpayer, energy rebates, cheaper medicines, cutting student debt, strengthening Medicare. This is all about recognising that we’ve made a lot of progress together as Australians on inflation, but people are still under pressure and the Budget is designed to alleviate some of that pressure. Now, in isolation, these tax cuts are relatively modest, but in combination, the 3 rounds of tax cuts mean that the average tax cut is about $50 a week. That’s to help people with the cost of living.
Stefanovic:
Was it also an attempt at deflection, though? A hope that folks will think about the small tax cut and not the increases to energy bills and insurance premiums?
Chalmers:
We don’t see it that way. What we’re doing here is we’re topping up the tax cuts in a responsible way so that every Australian taxpayer gets a tax cut. You’ve asked me a couple of political questions now and so let me tell you what it means for the political contest as we get closer to the election. The election’s going to be a very simple choice now between Labor cutting taxes to help with the cost of living versus Peter Dutton, who has got secret cuts which will make Australians worse off. Peter Dutton wants to cut everything except people’s income taxes and that will be a key issue in the election.
Stefanovic:
That’s the line this morning?
Chalmers:
That’s the reality after Angus Taylor’s brain explosion last night on tax. At a time where people need and deserve some extra cost‑of‑living help, and they’re getting it from Labor, it beggars belief, frankly, that after all the Coalition’s bleating about lower taxes, they want taxes to be higher, they want Australians to be worse off. That’s the consequence of Angus Taylor’s brain explosion last night.
Stefanovic:
How is this debt going to be paid down, though? NDIS is a massive weight. Interest payments on a trillion dollars in debt. With short term cash handouts, aren’t you adding to long term problems for our kids?
Chalmers:
Pete, we’ve actually got the debt down in the budget this year. It’s $177 billion lower than when we came into office, that’s too easily dismissed.
Stefanovic:
It’s still going to top a trillion next year though.
Chalmers:
It was going to be already a trillion by now, under our predecessors. That’s what we inherited – and we’ve got the debt down and that means we’re saving Australians debt, interest costs. You asked me about the NDIS and some of these structural issues, the Budget last night showed that we are making really good progress getting spending on the NDIS to more sustainable levels. What we’ve done in aged care and NDIS and interest costs is making a structural difference to the budget. I think questions like that one really does ignore and dismiss and diminish the fact that we have engineered the biggest improvement in the budget in a single parliamentary term ever in dollar terms. We have got the Liberal debt down. That is saving Australians in debt interest. We’ve been able to do that in a way that makes room for strengthening Medicare, providing cost‑of‑living help and building Australia’s future.
Stefanovic:
On inflation, will this hurt our chances at all of getting another rate cut this year? That would help more than a cup of coffee.
Chalmers:
First of all, I’m not going to give free advice to the Independent Reserve Bank. Obviously, I spoke with the Reserve Bank Governor before I announced the Budget. I ran her through the key initiatives in the Budget as I have done on earlier occasions as well. But they’ll take that decision independently. What the Budget says about inflation is the Treasury now expects inflation to be sustainably lower sooner. They’ve brought forward their forecast for when inflation is sustainably within the Reserve Bank’s target band. That’s a very good thing. The Budget we handed down last night with all of this cost‑of‑living help is consistent with inflation coming down faster and sooner.
Stefanovic:
Okay. What if there is another global shock or another pandemic? Given that debt and deficit that we’ve talked about, how much more runway is there?
Chalmers:
That’s another reason why it’s so important that we’ve got the debt down and we have delivered those 2 surpluses, and we have got the deficit for this year smaller. We are making progress in all 4 of our budgets in repairing the budget. One of the big influences on the Budget is all this global economic uncertainty and especially these escalating trade tensions which are casting a dark shadow over the global economy and our economy and the budget as well. The best insurance policy against that uncertainty is to rebuild wages and incomes, which we’re doing with cost‑of‑living help and wages growth, but also to make our economy more resilient, investing in a future made in Australia, making our economy more competitive with economic reform. That’s what we saw in the Budget too.
Stefanovic:
So if you win the election, and experts and business groups have pointed out to challenging decisions that need to be made down the track, if you win, is your next Budget going to have to be slash and burn?
Chalmers:
We’ve rejected the slash and burn approach which is recommended from time to time because that would have put Australia into recession. What we found is a way to deliver savings to the budget, get the debt down, bank upward revisions to revenue, manage the budget in the most responsible way without slashing and burning in the Budget, which would have sent the economy backwards. We’re unusual in the world, that we haven’t had any negative quarters of growth. Growth is actually rebounding solidly in our economy right now. The so‑called soft landing that we’ve been planning for and preparing for is now looking increasingly likely. That’s because we’ve got inflation down. We’ve kept unemployment low, we’ve got wages growing, growth is rebounding solidly, we’ve got debt down, interest rates have started to be cut. That’s why we say the Australian economy is turning a corner. We don’t want to interrupt that progress with Peter Dutton’s secret cuts which will make people worse off.
Stefanovic:
All right, Peter Dutton joining us next, actually. The Treasurer, Jim Chalmers. Thank you. Appreciate it. We’ll chat again soon.