Sally Sara:
Well, 72 per cent, that’s the likelihood of an interest rate rise today according to share market expectations. Higher than expected inflation data last week could force the Reserve Bank’s hand, testing federal government claims that it’s been managing cost‑of‑living pressures. Jim Chalmers is the federal Treasurer and joins me again in our Parliament House studio. Treasurer, welcome back.
Jim Chalmers:
Thanks for having me back on your show, Sally.
Sara:
Would an interest rate rise from the Reserve Bank today indicate that the government has failed to get inflation under control?
Chalmers:
First of all, I’m not going to make any predictions or pre‑empt what the Reserve Bank will decide today and announce this afternoon. That’s appropriately a matter for them to determine independently. I’m not part of their discussions.
On the broader point about inflation, we have acknowledged and I acknowledge again today that inflation is higher than anyone would like. It didn’t come in that much higher than we expected last week, but it did come in higher than we would like. It’s a reminder that people are still under pressure. Despite all of the progress that we’ve made together in our economy, there are still cost‑of‑living pressures there. Now some of those pressures are temporary – things like holiday spending in the most recent data – but some of those pressures are more persistent.
The government’s focus is on rolling out cost‑of‑living help in the most responsible way that we can, rolling out more tax cuts to ease the pressure on working people in particular, and also to continue to repair the budget. We’ve made really substantial progress there but there’s always more work to do.
Sara:
How confident are you that government spending isn’t the factor that’s fuelling inflation right now?
Chalmers:
Well, I’m very confident in that most recent data, that uptick that we saw in the data which came out last week which you referenced in your introduction. That uptick in that data was primarily holiday spending, but it was also the withdrawal of the energy rebates, there were some persistent pressures there in housing, and there were some weather‑related factors as well.
But overall, we know that inflation is higher than we would like. People are under more pressure than anybody wants. That’s why the responsibility that we have, the responsibility that we embrace, is to continue to manage the budget in a responsible way, continue to roll out this cost‑of‑living relief which recognises that even though the Budget is not the primary determinant of prices in our economy, we can play a helpful role, and that’s what we intend to do.
Sara:
What’s the message this morning to Australians who are still battling higher cost of living and are now bracing for potentially higher mortgage repayments? What sort of measures will there be in the May Budget to help people in those situations?
Chalmers:
Well, first of all, more than acknowledge that people are still under pressure we’re acting on that. Cheaper medicines which came out last month, more bulk billing, student debt relief, 3 tax cuts. That’s all acknowledging and acting on the very real pressures that people are feeling in our community and around our country.
Now, this inflation challenge will be a major influence on the Budget in May. It won’t be the only influence. We’ve got a long‑term productivity challenge to turn around, we’ve got all of this global economic uncertainty as well, but inflation will be a major focus. We don’t write the Budget in the first week of February, we release it in May, but this will be one of the big considerations.
Sara:
Treasurer, it’s been more than 5 months since your Economic Reform Roundtable. There were plenty of ideas there from business to improve productivity. When will you bring more economic reform to parliament?
Chalmers:
First of all, we took very, very substantial action in the aftermath of the reform roundtable. We did an absolute mountain of work on the Construction Code, environmental approvals, abolishing another 500 nuisance tariffs, the work we’ve done with the states and territories on a single national economy. We haven’t waited for the Budget in order to put in place very important changes to make our economy more competitive, more dynamic and more productive over time.
The Budget will also focus very substantially on the issues raised at the roundtable and how we continue to make our economy more productive. Now, in recent quarters we’ve seen a little tick up in productivity, but it’s nowhere near enough to turn around this very substantial productivity challenge we’ve had now in our economy actually for the last couple of decades, not the last couple of years. So the Budget will focus on that, too.
Sara:
To bring you back to the question, will it be not until the Budget that we’ll see more economic reform?
Chalmers:
As I think I made clear in the answer to the first question, Sally, we didn’t wait for the Budget to already put in place very substantial meaningful changes which came out of the reform roundtable in all of the areas that I identified. But there will be more in the Budget.
As we sit down to have the discussions about the main elements of the Budget there will be 3: the inflation challenge, one; the productivity reform challenge, 2; in the context of all of this global economic uncertainty, which is accelerating rather than easing.
Sara:
Treasurer, just briefly, because I know you’ve got to get to another commitment, you’ve intervened to urge the corporate regulator to remove the residential addresses of directors from its public‑facing database. Why, and what does this say about transparency?
Chalmers:
Well, the reason that we’ve encouraged ASIC to make this change – it’s an ASIC decision that we supported, very, very supportive of and asked for – is because we were convinced, particularly in the aftermath of Bondi, that there was a public safety issue here. I had a meeting with the Director‑General of ASIO about some of these issues. We believe that we can have a transparent system without making it so easy for people to be found at home.
We are very concerned about the sorts of threats that are being made. I consider this to be a very important, sensible change that ASIC has made while we consider any longer term changes that need to be made as well. But public safety is paramount. We need to make sure that we’re going to have a transparent system, but one where public safety is not compromised, and that’s why the change has been made.
Sara:
Treasurer, good to have you back in the studio again. Thank you very much for that.
Chalmers:
Thanks very much, Sally.
Sara:
That’s the federal Treasurer Jim Chalmers.