SALLY SARA:
The Federal Treasurer, Jim Chalmers, is my guest this morning. Treasurer, welcome back to Breakfast.
JIM CHALMERS:
Good to be back on your show.
SARA:
The World Bank forecasts aren't exactly rosy. How concerned are you?
CHALMERS:
Well, I think there's a lot of uncertainty in the global economy, and that's weighing on economic growth around the world and here in Australia as well. We do have that combination of conflict in Europe and the Middle East. We've got the impact of higher interest rates around the world, we've got a slow‑down in China, and Australia's not immune from any of those things. It's one of the reasons – these are some of the reasons we expect our own economy to slow as well through the course of the year. But we are entering this period of global uncertainty from a position of relative economic strength. We do have faster jobs growth than any of the major advanced economies; we've created more than 700,000 jobs through the life of our government; we've had two consecutive quarters of wages growth; inflation is moderating, though not as fast as we would like; we've delivered the first budget surplus in 15 years, and there's a second one in prospect, and all of these things put us in better stead to confront this global economic uncertainty which has been outlined so starkly in the World Bank report.
SARA:
The World Bank, as you're saying, is outlining some of those external factors, but they've also singled out policy makers, as you heard in that sound bite for contributing to what could be a lost decade. Do you think that governments, including your own, should be doing more?
CHALMERS:
Well, I think this kind of blunt warning from the World Bank is welcome. We can't be complacent about the conditions we confront now. Our job in Australia is to make this not a lost decade, but a defining decade, to modernise our economy and maximise our advantages. And that's why we are deploying a textbook combination of cost‑of‑living relief to help people through difficult times, investing in a stronger economy in areas like skills and housing, the energy transformation, technology, the care economy and human capital, and it's also why we're getting the budget in much better nick so that we can confront this uncertainty in the world economy, but also grab the opportunities of the future from a much stronger budget foundation. So that combination of policies and objectives and approaches is the right one for the times that we confront. We're under no illusion about the global difficulties, but also the pressures that people are under here in Australia, and that's what motivates our agenda.
SARA:
Treasurer, what do you think the chances are of recession in Australia in 2024?
CHALMERS:
Well, the Treasury's not forecasting a recession in Australia. The Treasury forecasts, and indeed the Reserve Bank and other forecasts are expecting the economy to continue to grow, but more slowly, and partly because of these global conditions we're talking about now, but not only because of that, obviously higher interest rates are slowing the economy as well because they are putting people under pressure. We've even had the impact here in Cairns, in Far North Queensland, with the PM and the premier inspecting the flood damage, obviously that will weigh on local economies in the near term. So there's no shortage of challenges, but I'm confident that we can overcome them. We've got the right combination of economic policies. We have made some welcome and encouraging progress in the Budget and in other areas, but we know there's more work to do.
SARA:
Treasurer, the Prime Minister has signalled the government will be considering cost‑of‑living relief measures ahead of the May Budget. Is everything on the table?
CHALMERS:
We've made it clear that in addition to rolling out these tens of billions of dollars in cost‑of‑living relief that we've already budgeted for, that we are prepared to consider further measures between now and the May Budget; the Prime Minister's made that clear as have I. I don't really want to get into ruling things in or out, but what I can say is that we've shown an ability to roll out this cost‑of‑living relief in a way that takes some of the edge of those inflationary pressures without adding to them. The Australian Bureau of Stats has made it really clear, for example, that our policies on electricity and childcare and rent, mean that inflation would be much higher without them. And so that's the principle that we adopt when it comes to cost‑of‑living relief. We have made some progress there, but we understand that people are still under pressure, and so of course, if there is more that we can do in the budget in a responsible and affordable way, we'll consider that too.
SARA:
Treasurer, in the time we have left, a couple of other issues. Alcoa, the US mining giant, Alcoa, has announced that it will halt production at one of its WA alumina refineries with many jobs lost. There have been suggestions that Alcoa's decision was the result of, in part, too much red tape surrounding resource projects in Australia. How do you respond to that?
CHALMERS:
A couple of things about that. I mean most broadly, we've seen investment in the resources sector grow under the life of this government, in some cases grow substantially. That's the first point. Secondly, when it comes to alumina, we will still be the world's biggest exporter of alumina after this decision, but there's no doubt that this commercial decision taken by the company is really, really tough news for around a thousand workers and their families in a really wonderful part of WA. Kwinana's been home that that refinery for I think 60 years. It's been a significant part of the local community. We urge the company, and we welcome the Cook government's commitment to do what they can for these workers. We should be seeing whether, for example, there are opportunities in the workforces of the other two refineries that Alcoa operates in the west, about 4,000 workers in those refineries. So those other couple of refineries will continue to operate. It's disappointing that this one will close. It's bad news for the workers and the community. We want to make sure that these people can be supported, looked after, and ideally redeployed.
SARA:
Treasurer, there is some trouble on the waterfront at the moment, the conflict between the unions and port operator, DP World. There have been calls for the government to intervene, not only from DP World but also from industry and farmers and other groups. Why won't you?
CHALMERS:
Well, it's not something that I've been contemplating, and my focus in the government has been on this cost‑of‑living situation, and the flood recovery. What we want to see on our waterfront is well‑paid workers, a productive waterfront; we want to see less conflict. So we urge the parties to come to a concluded view where there is a win‑win outcome for people and where our ports can continue to be successful.
SARA:
Is DP World treating its workers fairly in your view?
CHALMERS:
Well, I think that's a matter for the workers and the employer to discuss, and primarily for, in our government, the Industrial Relations Minister, it hasn't been a major focus of my work in the last few days. We've been focused, as I am, in Cairns, and yesterday in the south east corner of Queensland on the flood recovery.
SARA:
How concerning would it be for the government if you have significant industrial action on the waterfront?
CHALMERS:
Well, what we've seen in the life of this government, as I understand it, if I'm recalling it correctly, is we've seen less conflict, that's a good thing. One of the reasons for our industrial relations changes is to get more and better agreements so that people can prosper together. It's obviously concerning when there are big disputes in our economy. We hope that they can be resolved as quickly as possible, but in a way that recognises the hard and important work that people do on our docks and in our ports, and in a way that recognises the broader economic conditions too.
SARA:
Federal Treasurer Jim Chalmers. Thank you for your time.