SARAH ABO:
We are now joined by the Treasurer, Jim Chalmers, from Canberra. Good morning, thanks so much for your time Treasurer. You must be a happy man seeing a third drop in inflation. I guess the question we all want to know, is it enough to halt another rise next week?
JIM CHALMERS:
Good morning, Sarah. Thanks for having me back on the show. Look, it is encouraging that inflation looks to have peaked at the end of last year and yesterday's numbers more or less confirmed that. It's an encouraging sign but it's a sign of the times as well, that inflation with a 6 in front of it is seen as welcome news. And so we still have this challenge in our economy for a little while longer, inflation will be higher than we'd like for longer than we'd like but it is moderating and that's a good thing.
ABO:
When you look at the figures, so it's gone from 8.4 per cent in December, 7.4 per cent in January to 6.8 per cent now. That's still a long way off the 2 to 3 per cent , the RBA would like to see.
CHALMERS:
Inflation is still unacceptably high, even as it moderates. And families and pensioners and others watching the program this morning ‑ we know that people are still under the pump. These cost‑of‑living pressures are still, I think, the most important factor in our economy, certainly the most important focus as we put together the May Budget. People are under pressure, people are under the pump but these inflationary pressures are moderating and that's a good thing.
ABO:
I guess one of the biggest problems off the back of this is, of course, the impact it's having on households. So not just when you're going shopping or not being able to afford the luxuries perhaps, or even just the basics that you would have once ‑ it's now the actual pressure on the housing market. How can we keep households afloat, especially when there is so much pressure on rentals, and on homeownership?
CHALMERS:
From a government point of view, what we've tried to do is to say, here are some responsible and affordable ways that we can give people a little bit of help with these cost‑of‑living pressures, to take some of the edge off these pressures. For example, in the May Budget, one of the centrepieces of that Budget will be some help for people's energy bills. We're working with the states right now to bed all of that down so that we can give people a bit of assistance, because energy bills are a big part of the cost‑of‑living pressures that people are facing. We've also made medicines cheaper. On the first of July, early childhood education becomes cheaper. We're getting wages moving again in our economy, so people who work hard can provide for their loved ones ‑ all of these things are important.
ABO:
Absolutely, and all of that is having an impact, Treasurer. I guess, one of the issues that your government faces now is that a signature policy being in the housing sector, is that you can't push that through Parliament at the moment so you're struggling there. And now we're seeing a new report finding that Australia's migrant intake is having significant impacts on productivity and living standards. And crucially, again, on housing ‑ for all its benefits, do we need to look at halting migration for the moment?
CHALMERS:
On the first part of your question, Sarah, it absolutely beggars belief, that when we've got these pressures in communities, and we've got these pressures on the rental market, in particular, that the Coalition and the Greens have ganged up, to say that they won't support the building of more houses in local communities. That is economic madness. And I cannot understand why they want to go down that path. When we do have the population growing, when we do have pressures on rents and vacancies, it makes absolutely no sense whatsoever.
ABO:
So then do we need to halt migration?
CHALMERS:
We don't need to halt migration, what we need to do is to manage it responsibly. And that's why the government is reviewing our migration settings. We're doing 2 things. At the front end, we're trying to clean up some of the mess in the visa system to clear up that backlog. But we've also got a review to make sure that the longer term migration settings work for us, that they're in our national interest. And that's how we recognise that migration is an important part of our economy and our society. But we've got to get the settings right, so that we can deal with some of the pressures that it places on our communities, and that's what we're doing.
ABO:
The problem is, you've got hundreds of thousands coming in with nowhere to go. I mean, literally, where are they going to live?
CHALMERS:
First of all, some of the figures that have been reported in the media over the last little while ‑ that is a reflection of 3 things. First of all, the international students coming back after COVID. It's a reflection of backpackers and people who are here on extended holidays. And it's also a reflection because it's a net overseas migration figure that more Australians are choosing to stay at home and to ‑
ABO:
But where are they going to live, Treasurer? This is the problem isn't it, at the end of the day.
CHALMERS:
It is a big challenge Sarah, and that's why we're trying to build more homes with our Housing Australia Future Fund, which the Coalition and the Greens say they won't support in the Senate.
ABO:
So at the moment, they can just get by?
CHALMERS:
We've got a whole agenda on housing, Sarah, whether it's the Housing Australia Future Fund, whether it's the Housing Accord ‑
ABO:
It's years away though, I guess the problem we're facing is right now, isn't it?
CHALMERS:
So, we better get cracking. We better get cracking and building more houses. One of the biggest challenges in our economies is we don't have enough homes, we need to boost housing supply. We've got a proposal before the Parliament to do that. The Opposition and the Greens don't vote for that, and that will be on their heads.
ABO:
And just very quickly, the ACTU wants a 7 per cent pay rise, what do you think of that?
CHALMERS:
We'll make our own submission and we won't nominate a specific number but we've been very clear that we don't want to see the lowest paid Australians go backwards. We want them to be able to provide for their loved ones. And so our submission will be consistent with our values and our objectives, and our objective is to get wages moving again, in meaningful and sustainable ways. And it makes sense to begin with the lowest paid Australians as we go about that. So we'll make our own submission and we'll make that public very soon.
ABO:
Alright, Treasurer. Thanks so much for your time.
CHALMERS:
Thanks for your time.