SABRA LANE:
The Treasurer has confirmed he’s working with state and territories, the building industry and superannuation funds on an ambitious plan to provide more affordable housing. I spoke with Jim Chalmers earlier.
Jim Chalmers, you’ve been determined to manage expectations for your first Budget. Do you think voters will find it boring or brave?
JIM CHALMERS:
That will be up to the voters, Sabra, and that will be to the broader Australian community. The Budget will be solid, it will be sensible, and it will be suited to the times. And it will recognise that when you’ve got all of this global uncertainty all around the world, the best defence against that is a responsible budget at home, and that’s what this will be.
LANE:
The Nine newspapers are reporting that you will unveil a plan to build a million homes through collaborating with state and local government, the private sector and the superannuation industry. How exactly will that work?
CHALMERS:
I’ll have more to say about this tonight when I release the Budget and I’ll have more to say in the Budget speech itself. But I’ve made no secret for some time now that as I go around Australia speaking with local communities, local employers and local workers, one of the big challenges that we have in our economy is we’ve got these jobs and opportunities being created, but it’s becoming harder and harder to live near where those job opportunities are. And so I have been working really closely and really hard with superannuation and other institutional investors, with the states and territories, with the building and construction industry as well and with the union movement to see what we can do to shift the needle on affordable housing. It’s a big priority for us. It’s one of the big challenges in our economy. I’ve spent a lot of time working on this over the course of the last few months – a lot of listening and a lot of bringing people together. And we’ll see the fruits of that tonight.
LANE:
Our sources are telling us there’ll be a focus on new affordable homes. Labor has already promised the $10 billion Housing Australia Future Fund to build 30,000 social and affordable homes over five years. So that million homes, is that in addition?
CHALMERS:
That will be inclusive of all of the policies and all of the effort that we’re putting in as a Commonwealth and at the state level as well. But we believe we need an ambitious target for affordable homes. I don’t think anybody in Australia thinks the housing market is working as it should, particularly for people who want to live near where they work. And so that’s a big focus of ours, we’ve made no secret of that. There will be an ambitious target in the Budget. And I want to thank the states and territories and the super industry, and the broader institutional investment groups and the building and construction industry as well, because we do want to work together here. This is a big national challenge. If we work together we’ll give ourselves a chance to meet the moment.
LANE:
Are you prepared to give us a time frame?
CHALMERS:
There will be a time frame in the Budget tonight, and I’ll have more to say about this. This will be a priority of the Budget, and I’ll have more to say about it in a few hours’ time.
LANE:
Spending on health and aged care is set to be $135 billion this financial year – 548 billion over the next four years. That is a lot of money. So does that mean the long waits to see a GP are going to come down and there’ll be better aged care services?
CHALMERS:
Certainly that’s our intention. One of our big objectives in this Budget – I pay tribute to Minister Mark Butler and the Cabinet for the decisions that have made room for some of this new and important spending in health. We want to take pressure off emergency departments, we want to strengthen Medicare, we want to fix the crisis in aged care. Those are very clear priorities and, again, you’ll see that in what we fund in the Budget.
LANE:
In some areas people are having to wait four to six weeks just to see a GP. Are you expecting that these investments will have an impact on that?
CHALMERS:
We’ll have more to say about that. Mark Butler in Health and Anika Wells in Aged Care will have more to say about these policy areas. But I think it’s pretty clear to Australians that health is a big priority for their new Labor Government. We’ve got a lot of spending pressures on the Budget, but we need to invest in people’s health. We recognise that a healthy community gives us the best chance of a strong economy, and you’ll see that in the Budget.
LANE:
You’ve talked and acknowledged that economic circumstances have changed due to the Ukraine war, inflation soaring, interest rates rapidly rising. Does that mean that key promises on lifting wages and energy prices, for example, being $275 lower in 2025 can’t be delivered?
CHALMERS:
Inflation will be the primary influence on the Budget. I think everybody listening to your program, Sabra, understands that cost‑of‑living is going through the roof. And a bigger and bigger part of that, unfortunately, will be electricity price rises as a consequence of the war in Ukraine, and as a cost and consequence of almost a decade of energy policy chaos. And so we’ve been up‑front with people and said that there will be higher costs for electricity. They are unavoidable given the international conditions. But we’ve also said this: renewable energy is not just cleaner energy, it’s also cheaper. It’s also ‑ in time ‑ more reliable, particularly when you’ve got all this geopolitical uncertainty. A lot has happened since that modelling was released that you’re referring to. And what’s made the situation worse is that it’s only now that we’ve got a Government that wants to introduce some semblance of policy certainty and stability into the market. And that’s important too.
LANE:
Sure, but does that now mean that you cannot deliver that promise? A lot was made of it ‑ $275 lower in 2025?
CHALMERS:
The modelling refers to 2025, and we’ve got some big challenges in 2022. We’ve been up‑front about that, including just now. But renewable energy is cheaper energy. There’s been a lot happen since that modelling was released. And the fact that we’ve had a decade of energy policy chaos hasn’t helped.
LANE:
How tough will this Budget be, and how tough will be it working on another Budget in May to put things like the National Disability Insurance Scheme on a sustainable path, and to afford things like the nuclear subs and decent aged care? Can you do all of that without reforming Australia’s tax system?
CHALMERS:
There will be hard decisions in this Budget. But you’re right that we see this as the beginning of a long, hard road of budget repair. You know, this is the foundation really of all of the work that we need to do in the budget to put it on a more sustainable footing. Now the best place to start is to return to the budget some of these big, temporary near term increases in revenue that we’ll see in the Budget that I release today. It will take a very responsible approach to those temporary revenue increases from higher commodity prices. That will differentiate us from our predecessors. We’ve also got $22 billion in Budget improvements. But there will need to be more done over the course of subsequent Budgets to put the budget on a sustainable footing. It’s in structural deficit. We’ve done well over the next couple of years when the inflation challenge is most acute, but we do have a structural problem in the budget, and it will take more than one Budget to rectify it.
LANE:
Jim Chalmers, thanks for joining AM.
CHALMERS:
Thanks Sabra.