SALLY SARA:
The Federal Treasurer Jim Chalmers joins me now. Treasurer, welcome back to Breakfast.
JIM CHALMERS:
Thanks very much Sally, nice to see you.
SARA:
Why are you trying to save cash, and which businesses will be forced to accept it?
CHALMERS:
Well, what we’re doing is we’re trying to modernise the payment system, recognising a lot of people prefer to use digital, but making sure that we don’t leave people behind who want to maintain the use of cash. There are about 1.5 million Australians who still rely primarily on cash, most of us go digital, but 1.5 million is not a small number of people who rely on cash. And so, what we’re doing is we’re making sure people can pay cash for essential items if they want to and if they need to and that’s because we know that cash can be a really important backup, it can be a lifeline. It gives people peace of mind and a sense of security and that’s why we want to make it an ongoing feature of our economy, even as people go increasingly towards digital payments.
SARA:
So which kind of businesses will be affected, and will any be exempt at all?
CHALMERS:
We want to focus on businesses selling essential items like petrol, groceries, pharmacy, and there might be others that we determine as we go through the next part of the consultation, but we want to make sure that we’ve got appropriate carve‑outs for small businesses, and we want to make sure that there’s a particular focus on regional Australia.
So we want to be reasonable about this. We want to give people choices and options. About 94 per cent of businesses already accept cash but that’s down from 99 per cent just before COVID, so there’s been a shift away from cash amongst some businesses. We want to make sure that people still have that option if they need it or if they want it.
SARA:
These reforms will also see the phasing out of cheques. What does that mean for people who are still using them now?
CHALMERS:
I flagged this a little while ago and today’s the next step in phasing out cheques but I want to reassure people who still use cheques that we’re doing it on a pretty long run‑up.
We’ll be phasing out the issuing of cheques by the middle of 2028 and the receipt of cheques by the middle of 2029 so that gives people lots of time to prepare. And again, we’re modernising the system, we’re phasing out cheques over a long run‑up, we’re maintaining an ongoing role for cash, really just to recognise people’s choices. We know what the direction of travel is here, we know people overwhelmingly want to pay digital. Most people want to pay digitally but we want to make sure that for some people who still need that option, that option’s still available to them.
SARA:
While we’re talking about banks and cash, the Fin Review has a story today about the regional bank levy, a system that reward banks with a regional presence, and there would be a cost to banks without them. What would that mean for some of the banks that are not branch‑based? Why should they be penalised when anyone can access them online?
CHALMERS:
First of all, we’re a government that takes seriously our responsibilities to the whole country and not just parts of the country and it’s no secret that the decline of banking services in the regions is a challenge for a lot of Australians and so, it shouldn’t surprise people to hear that we engage pretty regularly with the banks and with others to try and find some solutions here. It’d be kind of unusual if we didn’t try and do that. And so what the Treasury’s been doing is engaging with the financial sector, with the banks to see if there’s something that we can do here which recognises the direction of travel again as the way our financial system modernises, but trying to maintain a decent level of access and services for Australians who live in the bush.
SARA:
Let’s talk about the 2 sitting weeks that we have ahead of us before the end of the financial year. From a legislative perspective what does a successful fortnight look like, what do you want to get through?
CHALMERS:
We’ve got a pretty full book. Last week was a huge week, making a bunch of announcements in economic reform but the next fortnight is going to be even bigger trying to progress our legislative agenda.
For me, there is a big focus on housing, a big focus on superannuation. If I can, I’ll try and introduce next week the production tax credits legislation as part of our Future Made in Australia agenda. So, an enormous agenda in the last couple of weeks of the sitting year and we’ll do what we can to advance as much as we can of it.
SARA:
Legislating is one thing, getting things into action is another. We’ve had some hints from the Prime Minister that there’ll be some announcement surrounding the National Reconstruction Fund, but according to the Fund’s own website and its own returns there still hasn’t been any money dished out.
CHALMERS:
Oh, we’ve made sure we’re getting it right.
SARA:
A year’s a long time, Treasurer.
CHALMERS:
You want to make sure that you get things right, you work through things in a considered and methodical way and that’s what we’ve done here. We’re stacking up a new institution from scratch and it’s going to make some really important economy‑changing investments and I’m really excited with the sorts of investments that the National Reconstruction Fund will be making, and they’ll be public before long.
SARA:
The Greens say, on the issue of nature‑positive and housing, the Greens say that they’re willing to negotiate passage of the nature‑positive bills in exchange for a country‑wide ban on native forest logging. Will the government take them up on that?
CHALMERS:
That’s primarily the conversation that Tanya Plibersek and others would be having. That hasn’t been a big focus for me. I’ve been focused, as I said, on super and housing and some of the other negotiations we’ve got going on with the Greens.
We’re realistic about the Senate, we don’t control the Senate. We play the cards we’re dealt. We get as much past as we can. If there is responsible progress that can be made, we try and make it. If there are concessions which can be made, we try and make them but on the specifics of the environmental laws I’ll leave you in the very capable hands of Tanya Plibersek.
SARA:
Well, you’re saying that housing’s one of the issues that you’re dealing with. The Greens have also extended an olive branch on the government’s housing legislation which includes Help to Buy. They want 25,000 new homes to be built from existing applications to the Housing Australia Future Fund. Is the government prepared to work with the Greens on this to get it through in the next couple of weeks?
CHALMERS:
We’ve shown a real willingness to work with the Senate to pass our very ambitious and very substantial housing agenda. We ask the Greens to put more homes for more people to rent or buy before their political interests. If they want to see more investment in housing, they’ve got to vote for it.
We’ve shown a willingness to be reasonable about these sorts of things in the past. We’re serious about getting this agenda rolling out when it comes to housing because it’s one of the biggest challenges in our economy. So, I call on the Greens to do the right and responsible thing on behalf of renters and people who want to get a toehold in the housing market because that’s what our legislation’s all about, and if they believe those things they’ll vote for it.
SARA:
How confident are you that it’ll get through?
CHALMERS:
It remains to be seen. I don’t like to pre‑empt outcomes in the Senate. It can be a pretty wild place sometimes in the Senate. I’m very grateful for the work that Katy Gallagher and Penny Wong and others do in the Senate to try and progress our legislative agenda. We take nothing for granted. We know there’s a lot of negotiating going on right now. Our interest here and our objective here is to pass as much legislation as we can in the next couple of weeks. We know that we’re running out of parliamentary runway, this year at least, and so we want to get as much done as we can.
SARA:
Will you be delivering the Budget in May?
CHALMERS:
That’s my expectation. That’s certainly what Katy Gallagher and I are working towards, a Budget in March. The Prime Minister has asked us to be ready for that and we will be. We’re actually spending a lot of time right now working on the mid‑year Budget update. The Expenditure Review Committee met for I think 6 or 7 hours last Tuesday, it’s met for a lot longer than that, and that’s because we’re putting the mid‑year Budget update together, and then the focus will pretty quickly shift to a Budget in March.
SARA:
You’ll deliver your Ministerial Statement on the Economy on Wednesday this week. Last time you did this address was 2.5 years ago and you said then that Australians were paying a hefty price for a wasted decade. Are they still paying that price or is the government needing to take responsibility for cost‑of‑living pressures?
CHALMERS:
We have always been upfront and we have always taken responsibility for our part of helping people with this cost‑of‑living challenge. And what I’ll be able to do when I update the parliament on Wednesday is to detail the progress that we have made together as Australians, getting inflation down, getting wages up, rolling out cost‑of‑living help, being realistic about the challenges that we still confront but being optimistic about the future as well.
SARA:
Incumbency is proving toxic for some governments around the world as they try to deal with cost‑of‑living pressures, inflation. Why would Australians give you another shot at managing the economy if economically speaking many Australians are worse off than when you started?
CHALMERS:
Because we’ve more than halved inflation, we’ve got real wages growing again, we’ve created more than a million jobs for the first time in a parliamentary term, we’ve given every taxpayer a tax cut, and we’ve still delivered 2 surpluses for the first time in almost 2 decades. Peter Dutton and his reckless arrogance would put that progress at risk and people would go backwards because he hasn’t supported our cost‑of‑living help, he doesn’t support decent wages, he came after Medicare last time he was in office and so, in a very tangible way, the election will be between a Labor government which is helping people with the cost of living, getting inflation down, getting the Budget in better nick, versus a Coalition led by Peter Dutton which would put all of that at risk and people would go backwards.
SARA:
Looking further afield, at the G20 Anthony Albanese will meeting with Chinese President Xi Jinping. What are you hoping that the PM can achieve at this meeting?
CHALMERS:
Well, I think this Prime Minister has shown a really quite remarkable capacity to manage the relationship with China, a relationship which is full of complexity but full of economic opportunity and the progress that he’s been able to make working with Penny Wong and Don Farrell and the other colleagues has had very substantial and tangible economic benefits, so I would expect in those discussions that his efforts to stabilise that really important relationship will continue. And if you look at what the Prime Minister’s been able to do and the colleagues have been able to do is inherit a series of relationships which weren’t in perfect nick, to try and stabilise those relationships and to do that consistent with our national interest and in a way that’s good for our workers and our businesses and our investors.
SARA:
Do you think the Trump presidency will be good for the Australian economy?
CHALMERS:
I think it remains to be seen. First of all, don’t underestimate our capacity to make it work for us. We play the cards we’re dealt in lots of ways when it comes to the leaders that other countries choose and the relationships that are available to us. We are well placed, we are well prepared, but we’re not immune from changes in policy around the world and that’s because we’ve got a very trade‑exposed economy. That’s typically a good thing but it means when there are changes to policies when it comes to trade and tariffs and in other ways, we need to make sure that that works for us, not against us and I wouldn’t underestimate our capacity to do that.
SARA:
The PM told Insiders yesterday he didn’t specifically ask US President‑elect Donald Trump to exempt Australia from tariffs which are expected. Should he have brought that up do you think?
CHALMERS:
They had an excellent initial conversation, a very productive conversation, one of the first world leaders that President Trump spoke to after winning the election comprehensively. And so, I think that’s a very good sign and no doubt the arrangements as President Trump rolls out his agenda will be a central feature of the discussions that we have with our American friends. But that first conversation was an initial one, it was a productive one, and I think it speaks well of our ability to work closely with the Trump Administration in the interests of the Australian people.
SARA:
How do we make it work when we have an Ambassador who on the record has been very critical of Donald Trump? Would it be useful if Kevin Rudd apologised?
CHALMERS:
I don’t think that’s necessary. I’m pleased you asked me, Sally, because I’ve seen for myself how effective Kevin Rudd is as our Ambassador. He has been incredibly helpful to me as I build relationships on both sides of the political aisle with the economic policy makers in the US. He is a tireless, diligent, intelligent representative of the Australian people, and I think he has been an excellent Ambassador for Australia in DC and he will continue to be an excellent Ambassador for Australia in DC because of that tirelessness, that work ethic, the respect with which he’s held around the world and the relationships he’s been able to forge with Republicans and Democrats alike.
SARA:
In retrospect should he have been more respectful of Donald Trump?
CHALMERS:
I’m not going to go back and sort of parse everything that Kevin Rudd has said in the past, nor would I do that with other senior politicians with long records of public service. What really matters is that we make this relationship work for us and I’m confident that Kevin can be a key and successful part of that effort.
SARA:
Treasurer, we’ll need to leave it there. Thank you.
CHALMERS:
Thanks so much, Sally.
SARA:
That’s the Federal Treasurer Jim Chalmers joining me on Radio National Breakfast.