Sally Sara:
The federal Treasurer, Jim Chalmers, is in Brisbane in his electorate of Logan, and joins me now. Treasurer, welcome back to Breakfast.
Jim Chalmers:
Thanks very much, Sally.
Sara:
How are things in Brisbane this morning as people are preparing for Cyclone Alfred?
Chalmers:
Well it’s a bit like the calm before the storm here in Logan in my part of southeast Queensland. We had some rain overnight, but it’s kind of eerily calm today, but we know that this cyclone will be on us before long.
You’re right in your introduction to say something like 4 or 4.5 million Australians are potentially in harm’s way, that’s about 1.8 million homes. We expect that there will be billions of dollars of damage.
And our advice to people who are listening, Sally, to your program, is now that we think that the cyclone will cross a little bit later, more like Friday than overnight Thursday–Friday, is people really need to make the most of this opportunity, this warning that we have to make the necessary preparations. If they haven’t already prepared their yards, if they haven’t already cleaned out the gutters, filled up the bath tub and done all those sorts of things, they need to do that ASAP. And also make sure that they’ve got everything they need to log in and make insurance claims, to log in to myGov in case they want to access some of the payments which will be made available afterwards. This is the best time to prepare, don’t leave it any later, don’t be complacent. Everybody needs to be prepared and stay informed.
Sara:
As the cyclone draws closer to the coast, what interactions have you had with the insurance industry and what message are you giving them in the lead‑up to this?
Chalmers:
I spoke to the CEOs of some of the major insurance companies last night. And spoke to them about the preparations that they’re putting in place to make sure that they can process a lot of claims as quickly as they can. I’m confident that they know their responsibilities and their obligations to people.
One of the things that we need to be really conscious of is these thousands of workers that the insurance companies have processing claims, a lot of them will actually be from affected areas in southeast Queensland or northern New South Wales, and so we need to remember that, make sure that we’re dealing with each other respectfully.
But I’m confident that the insurance companies know what they need to do, I’m confident that they’re putting in place the arrangements to process lots of claims, and I’ll obviously stay in pretty frequent contact with the CEOs to make sure that’s the case.
Sara:
What levers do you have to compel the insurance companies to do the right thing?
Chalmers:
Obviously there’s a bunch of regulations, which is about making sure that their customers are treated fairly. I know that there have been – over the years there’s been some anxiety about that, and we try and learn from that. My colleague, Daniel Mulino has had a parliamentary inquiry into that. And so they try and learn, just like we try and learn as governments and as communities from the disasters which have preceded us.
But this one’s a bit different, we’re not used to seeing a cyclone this far south and a population centre this massive. So there will be a lot of pressure on systems including insurance, and people need to make sure that they’ve got all their paperwork in order, they know how to log in and make a claim so that they can get that claim sorted as soon as possible after the storm hits.
Sara:
You’re listening to Radio National Breakfast, and you’re hearing from the federal Treasurer, Jim Chalmers, who’s in his electorate of Logan in Queensland, as southeast Queensland and northern New South Wales prepare for Tropical Cyclone Alfred.
Treasurer, you’ve said you’ve been finding room in your budgets for climate mitigation and adaptation. But is it enough to keep up with the disasters that we’ve been seeing?
Chalmers:
You’re right that we have found some extra money for mitigation, I think something like a billion dollars over 5 years. We’ve tried to reorient the budget towards preparation and mitigation as well as responding to natural disasters, and that’s because these disasters unfortunately are becoming more frequent and they’re becoming more severe, I think that’s just a scientific fact.
And so the onus is on us, the responsibility is on us, and we’ve embraced that responsibility to try and do more where we can to make our communities a bit more resilient. There will always be more that needs to be done, we will always do what we can to find as much resources as we can for what is a really important task.
Sara:
The latest GDP figures have shown some improvement, but how much of that is due to population growth and people working longer hours?
Chalmers:
The GDP numbers yesterday, the National Accounts yesterday were very encouraging. They showed that our economy has turned the corner. It is growing solidly, we did see a solid rebound in growth, and that’s not primarily because of the 2 things that you mentioned. Per capita growth is positive again after a period of softness in our economy.
But the most encouraging thing from my point of view in those numbers yesterday was the fact that the private sector is doing some of the heavy lifting now. We want the private sector to take its rightful place as the primary driver of growth in our economy.
There are good reasons why public spending was helping to keep the economy ticking over over the last couple of years, but the private sector is rebounding strongly, growth in our economy is broader. That’s a very good thing.
It’s all evidence that the economy has turned a corner, we are seeing more positive signs, and that means that there are good reasons to be more confident about 2025, but not complacent, because we’ve got a lot of global economic uncertainty, and we’ve also got this heavy weather bearing down on southeast Queensland and northern New South Wales.
Sara:
You’re saying that the economy has turned a corner, but living standards are still lower than when you came into office, and labour productivity has declined for the third straight quarter; it’s at the same level it was in 2016. Does that suggest that a private sector‑led recovery is still a long way off?
Chalmers:
It doesn’t suggest that, it suggests that the private sector‑led recovery is happening, we saw that in the numbers as I’ve just explained.
When it comes to living standards, living standards were falling dramatically when we came to office, and now they’re growing. But there’s a lot of ground to make up because when we came to office inflation was galloping, real wages were falling, interest rates were going up already. And we’ve been able to turn around a lot of those things. We’ve got inflation down, real wages are growing, unemployment’s low, we got the debt down, interest rates have started to be cut, and now we’re seeing solid growth in the economy as well.
And so we’re turning things around. We inherited an economy where living standards were falling dramatically, they’re growing again and that’s a good thing, but we know that people have got a lot of ground to make in their household budgets.
Sara:
Treasurer, we’ve heard Donald Trump address Congress yesterday and mention the 2nd of April for the start of reciprocal tariffs, but there was no direct mention of Australia. Are we safe, do you think?
Chalmers:
We don’t take any outcome for granted when it comes to those considerations about tariffs. As you know, we’ve been engaging at every level, the Prime Minister to the President, a number of senior ministers have been engaging with our counterparts in the US, making the case for Australia, for Australian industry and Australian workers. But we take no outcome for granted. I suspect the decision on Australian exemptions has not been made, and so we’ll continue to make our case.
Sara:
What makes you think that the decision is yet to be made?
Chalmers:
Well, it hasn’t been conveyed to us, and so what we’re doing is we’re taking the opportunity to point out to our American counterparts and friends that this is an economic relationship of mutual benefit, full of opportunity. The Americans run a trade surplus with us, they enjoy tariff‑free access to our markets, we make a big contribution in areas like critical minerals, we pay our own way in defence. All of these things are really important parts of the case that we make to the Americans as they work through these policy announcements out of Washington DC.
Sara:
Just finally, on defence, we’ve heard until the past 24 hours that Mr Trump’s pick for a top Pentagon post says he wants to see Australia increase defence spending to 3 per cent to counter China. Can we afford that?
Chalmers:
It’s not unusual for figures in the administration to call on other countries to spend more on defence. That was the feature of the first Trump Presidency, and it will be a feature no doubt of the second one.
My response to that would be to point out that Australia is already very substantially increasing its defence spending, something like an extra $50 billion to 2033–34 in an otherwise tight budget, and that’s because we recognise our responsibilities here, we are investing a heap more in defence, and that’s important.
Sara:
Treasurer, thank you very much for making some time this morning, and we’re hoping that everyone stays safe in the areas that are likely to be affected by Cyclone Alfred.
Chalmers:
I appreciate it, Sally, thanks very much.