SARAH ABO:
Thanks so much for your time today. This, of course, was a very big call from the Reserve Bank Governor yesterday. Philip Lowe caught a lot of analysts off guard, some of them saying that it might have even been pretty vindictive because of your changes to the RBA. What do you make of it?
JIM CHALMERS:
I obviously don't agree with that last part of their analysis. It caught the market by surprise, that happens rarely, but it can happen ‑ the market got it wrong yesterday. I think it was a pretty blunt, pretty brutal reminder of the challenges in our economy, particularly this inflation challenge, which your viewers are feeling every day as they feel these cost‑of‑living pressures. And that's really the main focus of the Budget that I'll be handing down in less than a week's time, to try and help people deal with some of these costs‑of‑living pressures, prioritising the most vulnerable Australians and trying to provide that relief in a way that doesn't add to this inflationary challenge that we have in our economy.
ABO:
Treasurer, that pressure has really been around for 12 months now and it hasn't really alleviated. The Opposition is saying this hike shows the RBA has no confidence in your Government.
CHALMERS:
The worst quarter for inflation was actually the March quarter last year, when they were still in office. They handed down a budget that had no savings, they had a trillion dollars in debt with almost nothing to show for it. They had hundreds of billions of dollars of deficits, all nine of their budgets that they handed down were in deficit. And so I don't think people take the Opposition especially seriously when they make these kind of comments given their record. And the truth is, that it will take more than one budget, more than two budgets, to clean up the mess that the Liberals left us.
ABO:
Millions of Australians around the country are paying upwards of $10,000 extra each year because of these rate increases. How much has your mortgage gone up? Are you feeling the pain?
CHALMERS:
It's not about me, Sarah, I'm not going to get into that. Obviously, I do recognise that a lot of Australians are under the pump and when interest rates go up, it makes life even harder. And that's why cost of living is such a big focus of the Budget. It's why we're making medicines cheaper, it's why we're making child care cheaper, it's why we're providing some help with energy bills in the Budget. And it's why there'll be other elements to our cost‑of‑living relief plan, which will be responsible, it will be targeted, particularly to the most vulnerable Australians. But most of all, it will recognise that people are doing it tough right now, the Government understands that and we will respond to that in the Budget.
ABO:
There's going to have to be a lot of savings to be found for these families. I mean, this is sounding a lot like a game of ‘recession roulette’ ‑ economists are warning it could be?
CHALMERS:
I'm obviously not going to get into that kind of language. But the Reserve Bank, the Treasury, and the market economists all expect the Australian economy to slow later this year. It's a consequence of what's happening in the global economy, but also the impact of these rate rises that are already in the system ‑
ABO:
So are we going to see a recession ahead?
CHALMERS:
That's not something we're anticipating, not something that the Treasury will be forecasting in the Budget. The Budget won't have an expectation that the Australian economy will go backwards ‑ but it will say that consistent with all these other forecasts ‑ that the Australian economy will slow considerably, and we need to take that into account as well. The Budget will be a difficult balancing act between providing the cost‑of‑living relief that people need, being conscious of the pressures on the budget and all of that debt that we inherited, but also making sure that we can grow our way out of this slowing economy by investing in things like energy and laying some of these foundations for growth in our economy.
ABO:
You face a huge challenge ahead and the problem is that Australians are the ones copping it. You talk about migration and housing, it's just mounting all the time. I mean, there's speculation that Government will increase the JobSeeker allowance, but only to those over 55. Why that age cohort? Basic grocery costs are the same regardless of someone's age, and probably the younger generation is going to have to pay for families as well.
CHALMERS:
Well, my advice to all of your viewers, Sarah, is to tune in on Tuesday night and see across the board, the cost‑of‑living relief that we will be providing. There's always speculation in the lead up to the Budget, sometimes it's right, sometimes it's not ‑
ABO:
Give them something today though, Treasurer, they've heard that awful news yesterday from the Reserve Bank, is there anything you can tell us right now?
CHALMERS:
Well, I can assure your viewers, Sarah, that there will be substantial cost‑of‑living relief in the Budget. It'll prioritise the most vulnerable. It won't just be limited by age, and it will be responsible.
ABO:
And rather than increase JobSeeker, any hope for helping them find jobs?
CHALMERS:
That will be part of our focus, we've got unemployment at three and a half per cent. We want to make it easier for people to grab the opportunities in the labour market and try and make sure that people can get good, secure, well‑paid jobs. That's a big part of our focus and you'll see that in the Budget too.
ABO:
I guess the challenge is pushing up inflation by increasing JobSeeker but we'll see how it plays out. Thanks so much for your time, Treasurer.