RAFAEL EPSTEIN:
Jim Chalmers is the Treasurer of Australia, part of Anthony Albanese's Government. Good afternoon, thanks for joining us.
JIM CHALMERS:
Thanks Raf, I've got to be up‑front with your listeners, there's no reference to Melbourne cinemas of years gone by in the Intergenerational Report.
EPSTEIN:
No wonder.
CHALMERS:
There's heaps of other interesting stuff.
EPSTEIN:
Does it talk about Melbourne cinemas 30 years from now?
CHALMERS:
No, big omission.
EPSTEIN:
Okay. I've had a look at bits of it because its big. Give me the elevator pitch. You've just managed to grab someone who's listening, they have literally stepped into the elevator with you, you've got 30 seconds. Why is the Intergenerational Report important? Why do you do it?
CHALMERS:
Okay. We do it because we're capable of dealing with the pressures that we face right now, particularly cost‑of‑living pressures, at the same time as we work out the big changes we think will happen in our economy and in our society in the coming decades. And if we understand those pressures and opportunities and challenges, it gives us the best chance to do something about them. Whether it's the technology revolution you mentioned, or the energy transformation, or the workers that we'll need to care for people as they get older and live longer and healthier lives, the Intergenerational Report gives us a really considered way to come at all of that. And as you said in your introduction, rightly, my motivation here is to try and get these big trends and transitions in our economy and our society and make them work for us, not against us.
EPSTEIN:
Is this government brave enough to actually do the things we need to do?
CHALMERS:
And what I tried to say in the Press Club Address today, Raf, is there's one thing to inform people about these changes, but equally important is the reform part of it, and we've got a big agenda. It's not always recognised but the big agenda we've got on the energy transformation, on the workforce issues, making it easier for people, training people to adapt and adopt technology, changing the way capital flows in our economy ‑ so we're investing in things that will be of mutual benefit to us into the future, all of these sorts of things that we're doing are really important.
EPSTEIN:
Are you sure they're big enough? They are incremental, aren't they?
CHALMERS:
I wouldn't describe them like that. I think if you look back on this period, if you fast forward a couple of decades and look back on the 2020s, I think people will see, ideally, that we engaged in this big energy transformation, a cleaner, cheaper, more reliable, increasingly renewable energy, that we made the right investments in places like housing, which we're trying to do, as you know, and that we built the kind of workforce which recognised the vast opportunities of the technological revolution, artificial intelligence and the like. I think that's a big, full agenda, and I think it will pay off into the future.
EPSTEIN:
Can we go through a few of the issues, I guess, raised by the Intergenerational Report. Long term, you're going to be taxing income more and more, and everything else companies and people who own stuff, you're taxing less and companies less and less, and taxing income more and more. Do you think that's fair?
CHALMERS:
Well, I think we shouldn't assume over a 40 year period that there are no more changes to tax. We've got an agenda for tax right now, which is basically multinationals, the offshore gas industry, high balance super, and some of the issues around compliance, and that is improving the budget. But over the course of the next 40 years governments of, I think, both political persuasions will find ways to return some of this bracket creep, but what the Intergenerational Report does and what it's done under our predecessors is to basically make an assumption about the total tax take, and when you recognise that some of these taxes will decline over time, we'll collect less fuel excise, for example, because more people will drive EVs
EPSTEIN:
Sure.
CHALMERS:
I hope that we'll collect much less excise on cigarettes because I hope more and more people give it away, and so the tax base will change.
EPSTEIN:
That's all the money you're not collecting. I guess my question is, whatever you have announced so far, some changes on gas companies that you want the Greens to support, changes on superannuation that will go through, none of that stuff is more than a few percentage points of revenue. You said before that you think the government is brave enough. Is that stuff that you've done on tax, is that actually substantial? It doesn't look substantial in terms of the amount of revenue you get.
CHALMERS:
Oh, it's substantial, and it's billions of dollars a year, and when it comes to the PRRT
EPSTEIN:
A couple of percentage points, isn’t it? of revenue?
CHALMERS:
Well, it's not ‑ I don't think these are small amounts of revenue. You might have a different view about that, but I think we're talking about meaningful tax changes, but also we've got to recognise to get the budget in better nick, when we've made some good progress there, but also to fund the kind of services that our people need and deserve in the future, particularly aged care and healthcare and Medicare, the NDIS, etcetera, then we need to get the budget into a better position, and tax isn't the only way you do that. A couple of things that we've demonstrated a willingness to engage in, the spending restraint has made a big difference, the savings elsewhere in the budget, $40 billion over two budgets, this does shift the needle. You know, one of the reasons why the budget in the new term is in much better nick than what we inherited is because we have worked across all three of those fronts, restraint, taxes and savings, and we recognise the pressures on the budget are intensifying rather than easing, because of the growth in spending in some of those areas, and so there's always more work to do.
EPSTEIN:
Treasurer Jim Chalmers is with you. He has released the Intergenerational Report today, which is trying to work out what's going to happen in this country over the next 40 years and how governments and how you and I can actually deal with it. Treasurer, something that comes up again and again and again, and we talk a lot about housing, we talk a lot about transport, we're going to have a lot more people in this country. The Intergenerational Report talks about an Australia of more than 40 million people. People are never asked, or they feel like they are never asked if they actually want to live in a country with 40 million people. Does the Federal Government need to ask voters if they are okay with those sort of numbers?
CHALMERS:
I think what we need to do is to demonstrate that we can deal with this kind of growth, but also as a starting point, we need to understand that our population growth is actually expected to slow; the growth in our population in the coming decades will be slower than the population growth in recent decades, and that's sometimes lost. A great country like ours where people are having kids and people want to come here, it is growing, but it's growing slower than what it has in the past. That's the first point. Second point is, if you believe in migration, as I do, and in the benefits, social and economic, then you need to make sure that you bring people with you, and that means making sure that we don't use migration as a substitute for training local workers, and that we build the housing and the infrastructure that people need, and I really firmly believe that the story of the future of our economy will be written in lots of ways in these big growth corridors around our major cities, and to the west of Melbourne, for example.
EPSTEIN:
Do you think you are bringing people with you. I mean I get texts it doesn't matter what we're talking about, there's people saying, "How come no one asks me if I'm okay with the population increase”.
CHALMERS:
Well, it's contentious. Well, I understand it's contentious, and we like it when people have views, frankly; it's good if people are engaged and have views, and there's no unanimity across any of these issues, and so we take seriously the feedback that we get, and when people do put to us that they think we could do more to make sure we're investing in housing or investing in infrastructure, or we're doing the training right, all of these sorts of things, making sure we've got good cohesive communities, that's seriously we take it seriously, and one of our responsibilities is to make sure that we can give people that kind of reassurance.
EPSTEIN:
There's some amazing numbers, Treasurer, on how many more people there will be living over the age of 100. Do you want to live to be more than 100 years old?
CHALMERS:
I can't see it happening, Raf, to be honest.
EPSTEIN:
But do want to?
CHALMERS:
I've never thought of it that way. I guess so, but mostly because I want to see ‑ I want to have as much time as I can with my kids when I'm older, and their kids ideally. So I think so as long as you're healthy, people want to live long and healthy lives, and one of the big stories out of the Intergenerational Report is the pick‑up in life expectancy. That's a good thing. I've got this friend, Everald Compton, who used to run Seniors ‑ terrific guy, and one of the things he's always in my ear about, and I appreciate, is he says, "Yep, as we get older, there will be pressure on the Budget and different kind of pressures, but this is a big opportunity for Australia." He talks about turning grey into gold, which is a beautiful, beautiful way of thinking about it. And so I try to think about it like that too.
EPSTEIN:
Okay. I want to live to 100, because I want to actually know the answer to all of the things I'm asking you about. I'm just determined to get to 100 so I can work out ‑ I want to know if we actually end up dealing with the issues around climate change. I want to jump to one final thing, which goes again to how adventurous or not adventurous the Government is. Someone sent me this text, three words, Treasurer: "dump stage three." You know this accusation, and it goes to everything from the AUKUS nuclear submarines through to the income tax cuts next year, the stage three tax cuts. Why does the politics always come ahead of better policy? Why does the politics interfere with the better long term decision?
CHALMERS:
Well, obviously I don't share that description. What we're trying to do is to give back some of this bracket creep that we were talking about a bit earlier on, and these tax cuts kick in at $45,000. I know that people have got strong views about how ‑ about their distribution ‑ I understand that, and I take seriously that feedback, but governments of both political persuasions give back some of that bracket creep over time for some of these reasons we've identified in the Intergenerational Report. Also, what we tried to do with this, all of this other cost‑of‑living help, which is rolling out right now, billions of dollars of help, is to target that to people who need it the most. So you've got to look right across the suite of things that the government is doing; stage three legislated for next year, but right now billions of dollars flowing in rent assistance and social security, and then some of these other ways that will benefit the most vulnerable people the most.
EPSTEIN:
You've been generous with your time. Final question, that again comes up again and again. People don't want to have kids because they worry we won't do enough on climate change. Someone texting, "My son's 25, he won't bring children into this world because of climate." What do you say to people who are that worried about the future and they're accusing you of not doing enough?
CHALMERS:
We will do enough. And we've got these ambitious targets. I understand that some people would rather they be more ambitious, some people would rather they be less ambitious, but one of our motivations here is to do the right thing by future generations, and that's why really a big part of our reform agenda is addressing the risks of climate change, but also grabbing the vast opportunities of cleaner and cheaper, more reliable and increasingly renewable energy. That's a huge part of our agenda. And one of the things I said at the Press Club is that, you know, when you think about what we're trying to do here and the reason why we care so much about this Intergenerational Report and the policies that we want to put in place, is because we want to create the kind of country that we're proud to hand over to our kids, you know, we want it to be one of the we want it to be a legacy of the 2020s, that Australia got its act together on climate change, and on cleaner energy, and the generations, which is whether it's our kids or people contemplating having kids or generations beyond that, we want them to be proud of us, and I think they will be.
EPSTEIN:
Appreciate your time today, thank you.
CHALMERS:
Appreciate it, Raf. All the best.