SARAH ABO:
Good morning to you, Treasurer. We’ve got a bit to get through this morning. How are you doing?
JIM CHALMERS:
I’m great, Sarah. Thanks for having me back. Can I shout out the Queensland Children’s Hospital too? I’ve spent a bit of time there and had a bit to do with them over the years, they’re wonderful people.
ABO:
Yeah, they really are, they do incredible work, don’t they? Well, let’s start with Donald Trump. He was elected on the promise he’d fix the US economy and as part of that he’s vowed to impose those huge import tariffs. It’s what they’re talking about on the sidelines of APEC. But the thing is with Trump, he’s unlikely to listen or even care about the view of world leaders.
CHALMERS:
I think we’re well placed and we’re well prepared but we’re not immune from the sorts of things that President Trump has been proposing and that’s because we’ve got a very trade exposed economy. And so, the point that I’ve been making, the Prime Minister and others have been making, is that the direct impact of some of these proposals might be particularly mild on Australia but the impact more broadly on trade is something that concerns us a little bit more.
But don’t underestimate our ability to make this work for us. We’ve got a good record as a government of playing the cards we’re dealt, managing complex relationships and I’m confident that we can do that again.
ABO:
Will it really only be mild, Treasurer, the impact? I mean China is our biggest trading partner. If they impose those tariffs on to China of up to 60 per cent, that’s going to hurt us.
CHALMERS:
I’m talking about the direct impact on Australia. We did some Treasury modelling, as you’d expect any diligent government to do, we worked through different scenarios, and what the Treasury analysis said was that the direct impact of these tariffs might be relatively mild, not non‑existent, but –
ABO:
I guess it’s really – yeah.
CHALMERS:
‑‑ the impact on the system more broadly and China –
ABO:
The indirect, yeah.
CHALMERS:
The impact on the trading system more broadly, the relationship between the 2 biggest players in our region, that would be a little more concerning. Nobody wins from a trade war, least of all a trade‑exposed economy like ours.
ABO:
Is it easy cover for you, Treasurer, if you are not able to get the economy under control and to ease those cost‑of‑living pressures for Australians?
CHALMERS:
I don’t see it that way at all. We were making good progress on getting inflation down, getting wages up, rolling out cost‑of‑living relief at the same time. We’re doing that in the context of a pretty uncertain world. It is a world of churn and change and Australia has had really 15 years now of economic challenges dealt to us by the world but we’re making good progress, we know that people are still under pressure but inflation’s coming down, wages are going up, cost‑of‑living help is rolling out and all of that’s really important.
ABO:
In that world of churn and change that you mentioned there, it seems Australians may not be super confident that you, your party, your government is the one to pull us out of this. I mean according to a new poll Australians believe Peter Dutton will be better at handling Donald Trump than the PM. How do you plan on shifting that opinion?
CHALMERS:
First of all, as you’d expect me to say, I focus on numbers in the economy, not numbers in the opinion polls. I think more broadly the government under Anthony Albanese’s got an excellent record of managing relationships around the world, making genuine progress, whether it’s with China, whether it’s with American friends or others, we’ve got a very good record. And I say this about –
ABO:
But Peter Dutton and Donald Trump are a bit more aligned, aren’t they, political, fiscally, et cetera. I mean they could foster a better relationship.
CHALMERS:
Well, Anthony Albanese’s already had a very productive conversation with President Trump. And I think when it comes to Peter Dutton, I think he has a kind of a reckless arrogance which doesn’t lend itself to foreign policy and maintaining and managing some of these complex relationships.
I think he would be a risk to our economy and that’s because that reckless arrogance which has been a defining feature of his time as a politician over a long period of time now wouldn’t just set Australians backwards here in Australia because he opposes our cost‑of‑living measures, I think that kind of reckless arrogance doesn’t lend itself to managing these relationships which are so important to us.
ABO:
Shots fired, Treasurer, you are angry this morning.
CHALMERS:
No, no, I think that’s an observable fact from his time in office. He does have that kind of risky and reckless arrogance and that doesn’t lend itself to foreign policy.
ABO:
You probably would say that. But hey, look, maybe not all the polls are so bad, right, I mean not for you anyway. Bookies have touted you, Treasurer, as the next leader of Labor. Prime Minister Chalmers. Do you like the sound of that?
CHALMERS:
No, I like the sound of Treasurer Chalmers, and I’m working my butt off to try and help Anthony Albanese secure a second term so we can keep delivering for people.
ABO:
All right. Well, before you do all that though, you’d have to get bracket creep under control, of course, I mean those stage 3 tax cuts you’ve modified won’t mean much if you don’t act on preventing tax reaching 46 per cent inside this next decade. That’s according to independent Parliamentary Budget Officers. It doesn’t look great.
CHALMERS:
We’re returning bracket creep, that’s one of the main motivations of the tax changes that we’re very proud of which are rolling out in the economy right now. We cut 2 rates, we lifted 2 thresholds. There’s more than one way to return bracket creep, and because of our efforts, people are getting tax cuts right now, but not just a few people, not just people who are already doing very well but every single Australian taxpayer, that’s deliberate, and again, that’s at risk under the Liberals. They can’t tell us what they’re going to do with these tax cuts. The tax cuts are rolling outright now and they’re helping and we’re proud of them.
ABO:
No, they are helping but you did ditch the second part of the – Coalition’s at the time – initiative there with the tax bracket creep, addressing that; Paul Keating did it. I’m sure that will be something that you address.
But just finally, Treasurer, while we’ve got you, cash, it seems is still king for the Labor Party, and your trading mates especially.
CHALMERS:
We’re going to make sure that people can continue to pay cash for essential items if they want to and if they need to. Most people are moving towards digital payments but around 1.5 million Australians still rely very heavily on cash and we want to make sure that they’re not left behind.
So cash will be an ongoing feature of the economy on our watch. Cash can be a really important lifeline, an important backup, it gives people a sense of security and peace of mind and that’s why it will be an ongoing feature of our economy, even as people move towards more digital ways of paying.
ABO:
Yeah, and bank branches as well, so desperately needed in the regions. Treasurer, as always, thanks so much for your time this morning.
CHALMERS:
Thanks Sarah.