SARAH FERGUSON:
Treasurer, welcome to 730.
JIM CHALMERS:
Thanks very much, Sarah.
FERGUSON:
Now do you agree with Reserve Bank Governor Philip Lowe today that we should all be moving in together to solve the rental affordability crisis.
CHALMERS:
Look, I thought the point that Governor Lowe was making today was that we need more housing supply in our economy, I think that's self‑evident. We've got very low vacancy rates, rents are rising faster than we want them to, and so we need to build more homes. And that's really a central feature, not just of the Budget, but of the Albanese Government's broader economic plan to build more homes, so that people can find good, affordable places to live near where the jobs and opportunities are being created in our economy.
FERGUSON:
Now, it's true that the rental squeeze has got worse. New figures today show that rents have increased year on year by 6.1 per cent. For people who are struggling, that's going to eat up most of the rental assistance that you made available at the Budget, do those people just have to accept that they're going to keep going backwards?
CHALMERS:
I don't think so. The fact that rents are rising faster than we'd like is really a key motivation for the biggest increase in Commonwealth Rent Assistance in three decades which was in the Budget. We need to act on two fronts and we are ‑ we need to build more homes, we've got a range of policies to that end ‑ but we also need to take some of the edge off these rising rents as well. And we're doing that when it comes to Commonwealth Rent Assistance. We've got rising rents because we don't have enough homes, not because Commonwealth Rent Assistance is too generous.
FERGUSON:
But at the same time, I think the rental assistance in the Budget offered up to $31 a week, someone paying $400 a week rent will have seen their rents go up by 24 or so dollars a week. That is essentially, it might not eat up the whole amount, but it does mean they're going to be going backwards, doesn't it?
CHALMERS:
Well, it means we're helping where we can. We are trying to provide support where we can to take some of the sting out of these high and rising rents. I think it is self‑evident in lots of ways that the cost‑of‑living pressures are coming from high rents, they're coming from out‑of‑pocket health costs, and they're coming from energy costs. And that's why those are the three big priorities for the $14.6 billion cost‑of‑living relief plan that we put in the Budget, and which we designed in a way to take some of the edge off these cost‑of‑living pressures without adding to inflation ‑ something that the Reserve Bank Governor said today is expected to work. He said today that the Budget is not adding to inflation, if anything, it's taking the pressure off inflation. And I think that was the key point that he made in his testimony earlier on.
FERGUSON:
At the same time inflation is higher than forecast, it must nonetheless be a blow to you in your attempts to relieve the pressure on households?
CHALMERS:
We've made it clear for some time, Sarah, that inflation is persistent in our economy. It peaked around Christmas time and it is moderating, but it will be higher than we'd like for longer than we'd like. We did get a number today in the sixes for monthly inflation. That's lower than the 8.4 per cent we saw in the year to December. So it's moderating, but the monthly figure jumps around a bit. Today's number was largely explained by the changes in the timing of the fuel excise relief and a couple of other issues. But inflation is still the major concern that we have about our domestic economy and indeed around the world. That's why it's the primary focus of the budget and our broader economic plan.
FERGUSON:
Now, on top of all of this, electricity prices are due to rise up to 25 per cent in some places. How much extra pressure is that going to put on inflation?
CHALMERS:
Well, I think it's important to recognise that the steps that we've taken in the energy market are taking some of the edge off these price increases. If you think about the Budget forecasts for electricity prices next year, we were anticipating a 36 per cent increase, now we're expecting a 10 per cent increase. And that shows the impact of our policies. And once again, the Reserve Bank Governor today and on other occasions, has pointed to our energy relief plan as one of the big reasons why we are taking some of the edge off these inflationary pressures. As I said before ‑ energy, rent, out‑of‑pocket health costs ‑ are a big part of the story here and that's why we've acted in a methodical way, a responsible way, a carefully calibrated way to try and take some of the edge off those kinds of cost‑of‑living pressures that people are feeling right around the country.
FERGUSON:
Let's move on to PwC. Philip Lowe thinks that the PwC partners who were involved with misusing confidential tax information should be named. Do you agree with him?
CHALMERS:
I think that will happen in time. This has a way to go yet ‑
FERGUSON:
What do you mean by in time? How much time before those names are made public?
CHALMERS:
It remains to be seen. There are a number of processes underway, as you know. I am personally, the Government, I think the country is absolutely filthy about what's happened with PwC. We want to be able to consult in good faith with the business community on changes that have the capacity to affect them, and people shouldn't monetise that for their own gain. And so that's what's happened here and that's why people are understandably and justifiably angry. We've been responding in a decisive way and in a methodical way across a number of fronts. I've already introduced some legislation to clean up the Tax Practitioners Board, and I said I'll go further if I need to. The Treasury has already referred it to the AFP, which is an important part of the process. And my colleague Katy Gallagher through her procurement responsibilities has already tightened up how we go about making these contracts. And all of those things are important but we have said, if more needs to be done, of course we will consider doing more. We cannot have a repeat of this absolutely appalling episode where people were monetising government secrets, when governments in good faith were trying to consult with corporate Australia.
FERGUSON:
So the PwC tax partners will be named. You've also got ongoing contracts with PwC that you can't cancel but once those contracts expire, will Treasury work again with PwC?
CHALMERS:
Well part of the changes that Katy Gallagher and her finance department have been talking about is making sure that we take character and past behaviour into consideration when we make new contracts. And I think you can read into that what you will. I don't make the contracts, the Treasury Department makes those. There's good reasons for politicians to be at arm's length from some of that, but one of the big priorities here is to make sure that where a company has done the wrong thing in the past that that's taken into consideration into the future.
FERGUSON:
Would you be comfortable having a business with that culture back in the building?
CHALMERS:
I'm really worried about what we've seen here at PwC. To be perfectly frank with you, Sarah, ever since I heard about it, I've been ropable about it, as are most people who have thought about it. Because what we've got here is a company which took government secrets, provided in good faith in the interests of consultation, and sold that to clients. And that's why we've acted methodically but decisively across a range of fronts to deal with it. And we've said publicly, privately, we've had discussions internal to government, that if we need to do more here, we will do more here because we need to clean it up. And we need to give people faith that the processes of government are sufficiently robust to prevent this from happening again.
FERGUSON:
Treasurer, thank you very much indeed for joining us.
CHALMERS:
Thank you, Sarah.