SAM ARMYTAGE:
Treasurer Jim Chalmers joins us now live from Canberra. Treasurer, good morning. Peter Dutton says that you’ve lost control of the budget. Have you?
JIM CHALMERS:
Of course not, Sam. The budget is in much better nick than what we inherited from Peter Dutton and the Liberal Party.
The numbers that we release today will show that the budget is actually $200 billion stronger than what we inherited in 2022 and that’s because we’ve run a responsible economic strategy and what people will see in the mid‑year update is a responsible set of books which reflects that very substantial progress that we’ve made.
The deficit this year will actually be a bit smaller than what we’re anticipating at Budget time and even when there’s a little bit of slippage in those later years because we’re investing in Medicare and medicines and pensions, we’ve still made that $200 billion worth of progress.
So 2 surpluses in our first 2 years, a smaller deficit in our third year, that means much less debt and much less debt interest. These are the sorts of outcomes which would be completely unrecognisable to Peter Dutton and the Coalition who couldn’t deliver a single surplus in 9 years.
DAN ANSTEY:
There’s the snipe, we knew that was coming. But the headlines, Jim, are going to read 2 surpluses and now a deficit. Has anything gone wrong? Would you admit that there are things that you could have done better?
CHALMERS:
Oh look, there are substantial pressures on the budget, we’ve been upfront about that not just in recent days but really over the last couple of years. Some of the pressures on the budget are intensifying rather than easing and that’s why it’s been so important, Dan, that we’ve run this really tight ship, that we’ve got the budget in much better nick so that we avoid some of that debt and some of that debt interest so that we can afford to give cost‑of‑living help to people who are under pressure, so that we can strengthen Medicare, so that we can invest in the future of our economy, so that we can invest in housing.
So these are a very, very responsible set of books. They do reflect the substantial progress that we’ve made, and they do reflect, I think, the appropriate balance that we’ve struck fighting inflation, helping people with the cost of living at the same time as we repair the budget and invest in the future.
ARMYTAGE:
And Treasurer, cost‑of‑living is still high, inflation is still high, there’s reports in the papers today that the government has a $5.5 billion spending on the election war chest. Obviously we’re going to have an election at some point next year, probably earlier rather than later. A lot of Australians out there struggling would like to see austerity from the government, less spending, more responsibility, and from Peter Dutton in promises as well. What do you say to that?
CHALMERS:
Well a couple of things about your question, Sam. First of all on inflation – inflation’s less than half what it was a couple of years ago but we acknowledge that people are still under pressure. I’ve acknowledged that even in the interview today. That’s why we’re rolling out the cost‑of‑living help that we are rolling out in the most responsible way that we can.
When it comes to what people expect of us, people expect us to run a responsible set of books and that’s what these are. We are providing a bit of help where we can but we’re doing it in a responsible way and we’re doing it in the context of that $200 billion improvement in the budget.
I’m not sure that your viewers are calling out for us to kind of slash and burn and deliver an austerity budget, it’s not the impression that I get moving around Australia. They want us to strengthen Medicare and provide this cost‑of‑living help and they want us to be responsible about that and we are.
And when it comes to the business insolvencies, business conditions are difficult, we acknowledge that, that’s why we’re providing help with energy bills for small business, it’s why we’ve just passed through the parliament a tax break for small business to acknowledge and respond to those substantial pressures but we also need a bit of perspective. What you don’t read in those stories about business insolvencies is that there are more insolvencies because there are many more businesses and as a proportion of companies, insolvencies are actually lower than they were under John Howard, they’re actually lower than the pre‑COVID average and this is a point that the Reserve Bank Governor has herself made, that insolvencies as a proportion of companies are actually low, historically low, over the last couple of years. We say that to provide perspective, not to dismiss the legitimate pressures that people are under.
ANSTEY:
Jim, I’m sure you’re well aware the Democrats in America ran into some trouble telling people that the reality that they were feeling wasn’t actually reality, that things were fine. But they were experiencing crippling inflation and prices were going up and they were trying to relay this to the government. They were saying things aren’t as bad as you think they are. That message doesn’t resonate with people, it’s not just businesses. Rising cost of daily essentials crippling family budgets. When are struggling Aussies going to start to see some reprieve? What would you say to them watching now?
CHALMERS:
First of all, we have acknowledged that even with the progress that we’ve made on inflation and in the budget, sometimes those national figures, those aggregate figures don’t perfectly translate to how people are feeling and faring in the economy. We’ve acknowledged that on a number of occasions and that’s why the cost of living is still our primary focus when it comes to putting our budgets together. It’s also true that when it comes to inflation, the worst is behind us. Inflation peaked a couple of years ago, it’s been coming down ever since, which is a good thing. We know that people are still struggling but the worst of inflation is behind us. These numbers that I release later this morning show that we expect growth to pick up a little bit in our economy next year as well and so next year will be certainly better than the year that we came to office in terms of inflation, and people will see that.
There are good reasons to be optimistic about the future. We’re confident about the future, we’re not complacent about it and we acknowledge, to go back to the start of your question, that people are under pressure and the progress that we’ve made doesn’t always translate into how people are feeling or faring.
ARMYTAGE:
Treasurer, you’ve also said Medicare is not safe under the Coalition. Are you dredging up old fears here? I’m old enough to remember the Mediscare campaign. Are we going to see more of that leading up to the next election?
CHALMERS:
Well you’ll probably also then remember then, Sam, that when Peter Dutton was the Health Minister he came after Medicare. He tried to introduce a GP tax, he tried to attack the universality of Medicare, and we know he’s a risk to Medicare because we know his record as Health Minister. We also know that when we’ve talked about extra spending on Medicare and medicines or pensions, that our political opponents have described that as wasteful spending. That’s a fact as well. When Coalition governments come to office, we know that they don’t like Medicare very much, we know that Peter Dutton came after it last time, and I think he will come after it again and I think these are legitimate points for us to raise.
ANSTEY:
All right, Treasurer, thanks for your time this morning. Very quickly, Christmas a week away, are you on the naughty or nice list?
ARMYTAGE:
Well it depends what happens today, huh?
CHALMERS:
I’m actually on the nice list. Everyone likes to stay on the nice list if they can. But saying that, Christmas is only a little way away, it makes me realise I better get on to it in terms of the Christmas shopping. I’m one of those people who leaves it a bit later and so once I get the mid‑year budget update out the door I’ll get on to it.
ANSTEY:
All right. Get the home budget sorted.
ARMYTAGE:
Get the credit card out, it’s tough out there, Treasurer. Good luck, Merry Christmas, thanks for your time.
CHALMERS:
Merry Christmas to you too, thanks Sam and Dan.