Sarah Abo:
Good morning to you, Treasurer.
Jim Chalmers:
Good morning, Sarah.
Abo:
Well, weren’t you chipper yesterday? Are you going to take all the credit for this after blaming everything else for the high inflation to begin with?
Chalmers:
Well, first of all, I’m always chipper. And, secondly, I went out of my way yesterday to say that this is progress that Australians have made together and it’s good progress. It’s a very welcome development that we saw inflation come down really right across the board in those numbers which were released yesterday. It was a powerful demonstration of the progress that Australians have made. Three years ago, inflation was 3 times higher and rising. We’ve been able to get that inflation down, kept unemployment low, got real wages growing again and all of those are good things.
Abo:
It has taken longer here in Australia than it has in other part of the world, though, you are aware of that. But let’s look at grocery prices. I mean, they are still firmly on the rise – eggs, meat, fresh produce, all more expensive than they were this time last year. How are you going to make those costs come down?
Chalmers:
Well, there’s some important points there. First of all, Sarah, on your point about the international environment, inflation is rising in the US, the UK, Canada and New Zealand, and it’s falling in Australia. Secondly, food inflation slowed in those numbers yesterday. I understand that people are still under pressure when they’re at the supermarket –
Abo:
Well, they’re still up 19 per cent for eggs, 12 per cent for lamb, 9 per cent for coffee.
Chalmers:
Eggs are a different case because we know that there’s been the chicken cull, and everyone who’s been in a supermarket knows that that’s played out in the price of eggs. That’s the first point –
Abo:
4.6 per cent for veggies.
Chalmers:
Food inflation is slowing. It was 6.6 the quarter before. And so still too high, still more work to do, but it’s coming down, so that’s an important point as well. Inflation is coming down, that’s a good thing but we know the job is not finished. It’s not mission accomplished. People are still under pressure. We’ve still got global economic uncertainty. Growth is slow in our economy. That’s why the cost-of-living help is so important and it’s why it’s so important that we do what we can to continue to make our economy stronger, more resilient, more productive as well.
Abo:
All right, well let’s hope to your point about the inflation in other parts of the world go back that ours doesn’t bounce back up as well.
Let’s move on now, and Trump’s announced new baseline tariffs of up to 20 per cent for countries yet to strike a deal, which kind of includes us, Treasurer. Are you still going to assume the 10 per cent at our border, or do you have any further clarity that it is going to stay that way?
Chalmers:
Look, our understanding and our working assumption is that we get the 10 per cent. But obviously when it comes to –
Abo:
So you don’t have any confirmation? Like, no one’s picked up the phone and actually spoken to Trump or his people about whether or not that’s the case?
Chalmers:
We’re engaging with the Americans all the time. And it’s not unusual – really, a couple of times a week there is an announcement about tariffs. There was another one about India overnight, for example. And so we don’t pretend that anything in this environment is necessarily set in stone but our understanding, our expectation, our working assumption is that we get the 10 per cent. From our point of view, the 10 per cent is too high. We think it should be zero because these tariffs are an act of economic self‑harm. We saw in the US, as I said before, inflation is going up. Earlier in the year they had slower growth, interest rates on hold in the US overnight. They haven’t cut rates, I think, for 12 months or so whereas in Australia, interest rates are coming down, so we think these tariffs are bad for the American economy, bad for the global economy, not good for us either and so we’ll continue to engage with the Americans.
Abo:
So come tomorrow, still 10 per cent as far as you’re concerned? You don’t have confirmation either way?
Chalmers:
As far as I’m aware.
Abo:
Okay. Well, Trump, of course, still hasn’t appointed an ambassador to Australia. Look, it did take him 2 years last time, so he’s got form on this. But I guess on top of the tariffs, on top of not meeting with our PM, beef, AUKUS, it doesn’t kind of seem like we’re a priority for the US at the moment.
Chalmers:
Well, I’m not sure about that. The Prime Minister has had 3 conversations with President Trump. I’ve engaged with my counterpart. Penny Wong has, Don Farrell has. There’s a lot of engagement going on with the Americans –
Abo:
Yeah, nothing’s changed, I suppose.
Chalmers:
Well, we’ve got the lowest tariff rate of any of the countries. We’ve got the baseline –
Abo:
Because of our surplus.
Chalmers:
The Americans run a trade surplus with us. That’s one of the ways that the economic relationship is one that benefits the US and benefits Australia. We’ve made that point clear as well. It’s a really important relationship. We engage in that light.
Abo:
Does it worry you we don’t have an ambassador yet, or you’re not fussed?
Chalmers:
As you said, it’s not that unusual for countries to take a little while to appoint ambassadors. It hasn’t prevented us from working closely with the Americans on issues of mutual interest, including in the economy.
Abo:
All right. AUKUS, the US review will now extend for another few months. Our $1.6 billion is gathering dust, it would seem. Do we have any clarity on when they might start building these subs, any certainty that it’s actually going ahead?
Chalmers:
Just like when it comes to trade, we continue to engage the Americans on AUKUS. It’s a really important defence deal that involves the 3 countries and it’s not unusual for new administrations or new governments to review it. I think the UK did that as well when the Labor government came in.
Abo:
There seems to be a lot of uncertainty, Treasurer, when it comes to the US. We don’t quite have any confirmation on kind of anything.
Chalmers:
I’m not sure about that, I think that might be overdoing it, but more broadly there’s a lot of uncertainty in the global economy. We’re certainly seeing that play out. Tariffs are part of that, national security considerations are part of that as well. I agree at least in that regard. But it’s not unusual for new administrations to do these kinds of reviews. It’s not unusual for us to continue to engage, whether it’s on defence, whether it’s on the economy, and that’s what we’re doing.
Abo:
All right, Treasurer, thanks so much for joining us this morning.
Chalmers:
Thanks very much.