SARAH ABO:
Treasurer Jim Chalmers joins us now in Canberra. Treasurer, good morning. Thanks so much for your time. I'm not going to bother asking you what you think the RBA will do today - we know they're independent and all of that - but it's fair to say Australians won't be able to cope with another rate rise. This is going to be really tough for a lot of households.
JIM CHALMERS:
Good morning, Sarah. It's certainly true that Australians are under the pump and we understand that, and part of the reason for that is that they've had these interest rate increases, which began before the election last year and continued afterwards. And you're right that the Reserve Bank will take its decision independently today but the government takes responsibility for what we can do in this fight against inflation. It's inflation that has been forcing up interest rates, and so our highest priority is rolling out this cost-of-living help. That's rolling out right now. But we're also getting the budget in much better nick, to take the pressure off inflation. And we're investing in those parts of the economy, the supply chain parts of our economy, to help on this front as well. And it's been good to see inflation is coming off a bit. It's still higher than we would like but we've been making welcome progress, and I think the Reserve Bank will obviously take that into consideration today as well.
ABO:
Treasurer, you're a top bloke, and we keep hearing from you about how the government is doing all it can to try and help households out here but that just doesn't seem to be enough. I mean, mortgage holders who've been held on 12 interest rate hikes so far - they've got nothing left, they deserve a break. The Australian today's reporting that almost 150,000 households will tip over a mortgage cliff in the next three months, some can expect to pay more than $1,500 extra a month, That money, it can't just materialise.
CHALMERS:
No, I understand that and that's why the government is prepared to play a role and is playing a role. You think about right now, we've got help rolling out when it comes to the cost of early childhood education, taking some of the edge off electricity bills, we've got rent assistance increases coming, we're making it easier and cheaper to see a doctor and to get medicine. So what we're trying to do is to provide as much cost-of-living help as we can, to roll that out right now, but to do it in the most responsible way that doesn't actually add to inflation at the end of the day. And what we've seen in the last couple of weeks - we've seen inflation which is still too high, but it's coming off that peak. The highest quarterly inflation was actually at the start of last year - it's about half as much in this quarter that we've just got the data for now. And that's welcome progress but we understand nowhere near enough. People are still under the pump and interest rate rises have been part of this challenge.
ABO:
The trouble is, it's affecting those out there who can probably least afford it those with a mortgage. If rates do rise, even just one more time, some economists are predicting we could be pushed into a recession as a result. What will it take, do you think, to tip us over and then you're going to really have to do something?
CHALMERS:
We still expect our economy to continue to grow. But I've got to be upfront with your viewers, Sarah, we think the economy will slow considerably as a consequence of these rate rises which are in the system, but also the global economic uncertainty and these pressures that people are feeling. We're already seeing our economy slowing and that has been as we've anticipated. We don't share the view of some of the economists who are predicting a worse outcome than that, but we do expect things to slow up and we're seeing some of that already.
ABO:
So not a recession or a recession?
CHALMERS:
We're not forecasting a recession. The forecasts in the Budget from the Treasury said that they expect the economy to continue to grow, but slowly.
ABO:
What does that look like for Aussies?
CHALMERS:
Well, I think Australians understand in their daily life that they are under more pressure. And they're under pressure because of this inflation, which has been a feature in our economy now for a year and a half or so, and these interest rate rises which are about combatting that inflation. Really, for me, it's to understand the pressure that people are under to take responsibility for what I can do and what we can do as a government, and that is to ensure that our number one priority is rolling out this billions of dollars in cost-of-living help, which will reach Australians this month and next month and the month after, and will take some of the edge off these cost-of-living pressures. But we're also getting the budget in much better nick, which is important. The bigger surplus is an important part of the inflation fight, as well as trying to invest in the economy so that it can grow without facing all of these inflationary pressures, which are putting people under the pump.
ABO:
All right, Treasurer, as always, thanks so much for your time.
CHALMERS:
Thank you.