Shane Doherty:
One of the starkest choices of the coming federal election is whether we want nuclear power added to the energy mix. It’s great that we get to vote. If you want nuclear energy somewhere down the track, vote for the Coalition, if you don’t vote for someone else. Yesterday, we spoke to the very pro‑nuclear Ted O’Brien, the Shadow Minister for Energy. Today, it’s the anti‑nuclear federal Treasurer, Dr Jim Chalmers, who, I’m pleased to say, joins us in the studio. Hello Dr Chalmers.
Chalmers:
Nice to see you Shane, happy new year to you and all your listeners.
Doherty:
Yeah, you too. But before we talk nukes, some inflation numbers out today.
Chalmers:
They were pretty encouraging. Underlying inflation came down, and headline inflation is now for 3 months in a row, at the bottom end, the bottom half of that reserve bank target range. And so there are 2 numbers that matter. The underlying number came down, the headline number bounced around a little bit but is still in the low‑to‑mid twos, and that shows that we’ve made a lot of progress on inflation. You would remember that when we came to office inflation had a 6 in front of it. It was much higher, it was rising, it was multiples of what it is now, and it was rising and now it’s come off fairly substantially over the last couple of years. But I know that your listeners are still under pressure, and that’s why the government’s major focus is still on the cost of living. We know even when these big national numbers start to come good, we know that that doesn’t always automatically translate into how people are feeling and faring in the economy, and that’s why we’re maintaining this focus on the cost of living.
Doherty:
Why do these numbers matter?
Chalmers:
They measure prices in the economy. I think as you were talking about with Ebony, and I think Pam, who called in earlier on, inflation matters because it’s about prices in the economy. It also matters because it helps the independent Reserve Bank work out what they think interest rates should be and so it’s a pretty important set of numbers. These monthly numbers we got today aren’t as reliable as the quarterly ones that we’ll get later in the month. But whether we’re looking at it quarterly or monthly, whether we’re looking at underlying or headline inflation, all the jargon, what we’ve seen over the last couple of years is inflation has come off really substantially, but people are still under pressure and that’s why our cost‑of‑living help is so important.
Doherty:
I see the government a bit like a down on his luck punter who’s put the house on a horse called the interest rates. Is that fair do you think, coming up to the election, you really want those rates to come down?
Chalmers:
What we try and do is we try and focus on our part of it. Our part of the equation is to try and be helpful rather than harmful in the fight against inflation and we have been. We knocked out a couple of surpluses in the budget, that hasn’t happened for almost 2 decades. We’ve got the deficit for this year down substantially as well. We’re trying to roll out this cost‑of‑living relief in the most responsible way. So we focus on our bit of it, which is our part of the inflation fight, rolling out that cost‑of‑living help. And we try and let the Reserve Bank do its job, because it’s independent, and we try not to interfere with that, or make predictions or preempt decisions that they might take.
But what we have been pleased about and in today’s numbers in an underlying inflation sense, but more broadly, we’ve been pleased about the progress that we’ve made together as Australians. But we know people are still under pressure, and obviously when the election rolls around at some point in the first half of this year, this will be one of the big issues at play in the election. And I think my job is to remind people that our political opponents opposed the cost‑of‑living help, and we also know that when Peter Dutton was the Health Minister he came after Medicare. We know under the Liberals wages are usually lower. We know that they’ve got this mad plan for nuclear energy, which is the most expensive kind of energy, which will push electricity prices up. And so those are some of the choices that people will have before them in the election.
Doherty:
We weren’t expecting $7 billion for the Bruce Highway. Have you got any more secrets in your back pocket?
Chalmers:
We’ve been working on that for a little while now. A big chunk of that commitment was provisioned in the mid‑year budget update, but we had some more deliberations and some more thinking that we had to do to make that announcement. I was with the PM in Gympie, just outside Gympie, a great part of regional Queensland, a couple of days ago making that announcement. There’ll be announcements in the election campaign, but they’ll be responsible. We’ll make sure that we can afford everything that we promise. And that commitment was really about building the future of this country and recognizing that Queensland, and particularly regional Queensland’s got to be a big part of the story and so we’re really proud of that commitment we made to the Bruce.
Doherty:
Did you learn any lessons from Steven in his election, that Steven Miles, that big spending up into in the campaign, perhaps counterproductive.
Chalmers:
First of all, I’m a big admirer of Steven Miles. I’ve known Steven Miles most of my life, and I’m a huge admirer. I thought he was a terrific premier in the short time that he had. I was a very enthusiastic supporter, and of Annastacia before him. But in every election, state or federal, whether the Liberals win or Labor wins, there are always lessons, and so obviously we watched that very closely. We’ve always had our own plans, our own objectives, and that is to roll out as much cost‑of‑living help as we can in the most responsible way that we can. So for us, it’s been tax cuts, energy bill relief, cheaper medicines, cheaper early childhood education, more rent assistance, student debt relief, fee‑free TAFE and getting wages moving again. We think that’s the best, most responsible combination of ways that we can help. I’ve said on a number of occasions that people shouldn’t expect the election campaign to be a kind of a free for all of public spending. We’ve got to be really responsible. We’ve got to run a really tight ship, and that’s what we intend to do.
Doherty:
But a little bit, maybe? A little bit a little bit more help.
Chalmers:
There will be election commitments. For example, the commitment to the Bruce that you mentioned a moment ago. Backing the Bruce with billions of dollars in investment to make it safer, and also to invest in local economies right around Queensland. That is part of it. That’s one of the commitments we’ve made. We’ve made commitments when it comes to early education, student debt, and there’ll be some other commitments made as well, but they’ll be very responsible. People shouldn’t expect a huge free for all, or some kind of enormous cash splash, because we’ve put a premium on managing the budget as responsibly as we can, and that’s how we’ll continue.
Doherty:
John at Goodman wants to know what you’re going to do to pay down the debt.
Chalmers:
It’s a great question, John, because it gives me the opportunity to point out we’ve actually got debt down $177 billion just since we came to office 2 and a half years ago.
As John would know if he follows this closely, and I know you would, Shane, and your listeners, when we came to office there’s a lot of debt in the budget. Because we were able to deliver those 2 surpluses and get some of those deficits down, it meant that we’ve got debt down $177 billion.
That matters for a whole range of reasons, but one reason that your listeners will really understand is because we’ve got the debt down, we’re going to save about 70 – 7 zero – billion dollars in interest on that debt over the course of the next decade or so. So we’ve made some progress there. We’ve got some more progress to make, but we’re getting the debt down.
Doherty:
Okay, what’s your objection to nuclear energy?
Chalmers:
My major objection to it is that it will push electricity prices up, and that’s been established by independent experts and modelers.
It’s actually the most expensive form of new energy for us in Australia, but also it takes too long, and even if on the best available guesses about how long it would take, it would still only provide a tiny sliver of the energy that we need.
So costs more, much more, takes longer, and would also turn Australia’s back on a lot of the advantages that we have that a lot of other countries would like to have.
But my principal objection to it is it will push electricity prices up, not down.
Doherty:
Everything is about risk and reward. I’d be more pro‑nuke if I knew exactly what impact it would have on my bill. And this is a question I put to Ted O’Brien yesterday. Here’s what Ted had to say:
‘So an independent analysis has been done by Frontier Economics, and they’ve compared the cost of Labor’s pathway to get to a net zero grid by 2050, to the Coalition’s one, which includes nuclear. And it basically says that the coalition’s pathway is $263 billion cheaper, so it’s basically 44 per cent cheaper to get to a net zero grid.’
So kind of sort of maybe 44 per cent cheaper bills with Ted’s nukes. What do you say?
Chalmers:
First of all, that’s not what he’s actually saying.
Peter Dutton made a horrendous gaffe with the 44 per cent figure, and then Angus Taylor repeated it, and poor old Ted’s got to back it in and so that the 44 per cent on prices is not actually a real number.
I’ve got the quote from their modelling in front of me, and it says, and I’m quoting:
‘We do not, at this stage, present any results for the prices.’
So they didn’t model the impact on your electricity bill.
They’re making it up as they go along. Dutton, Taylor and O’Brien have all been guilty of that in the last couple of weeks now.
When it comes to the claimed difference in costs between building different kinds of energy, what your listeners really need to know is that that figure that they’ve come up with is based on Australia needing less energy, having less industry and our economy being much smaller.
So of course, if you pretend that we’re going to need less energy, and there’s not going to be as much industry, and our economy is going to be substantially smaller, of course, they can get that number down, but it’s rubbish. I mean it. It didn’t survive 10 minutes of scrutiny when they released that modeling, and they’ve had to cling to it in quite a humiliating fashion, but nobody credible thinks that what they’re proposing is a good idea on economic terms.
I spend a lot of time in boardrooms and with investors domestic and international, and people don’t want to go in Australia near nuclear energy with a barge pole, because they know we’ve got a different combination of advantages. They know it’s very expensive and takes too long in Australia, and unfortunately, whether it’s Ted O’Brien or his leader or his Shadow Treasurer, they haven’t come clean on any of that.
Doherty:
All right, another issue I have with nuclear is the waste and where that goes. Here’s something that Ted said yesterday:
‘What we will be doing is following best practice internationally. The waste that comes from those nuclear plants is stored on site for the life of the asset, and then at the end of the plant’s life, so these plants, they last, you know, 80 to 100 years, which is why they get prices down, and then it gets transferred to a permanent waste repository, so to one central location.
‘And if you do have Jim Chalmers: on tomorrow, Shane, can I ask that maybe he can tell you where that location is. And the reason he should know is under the AUKUS agreement, Australia has agreed to manage the high level nuclear waste from our submarines. So where will that permanent repository be? That is currently a matter for the Albanese government and the coalition has said, we’ll work cooperatively with you on that.
Over to you.
Chalmers:
Unfortunately Ted’s not being upfront with your listeners. If he was, he’d know that we said almost a year ago, that very small amount of waste associated with the subs would be kept on defence land. We made that very clear, really, some time ago, months and months ago, and that’s the difference here.
They haven’t said how much waste there will be or where they’ll store it, and they need to do that.
One of the reasons why that’s really important is because on their time frame for their nuclear waste, we’re talking about 7 substantial nuclear reactors to power homes, much more energy, heaps, heaps, heaps, more waste than what would be associated with the AUKUS program.
They would need to find that space in the 30s and 40s. We would not need to find space for waste from the nuclear subs until the 2050s and so they need to come clean on where they’d keep the waste.
My primary focus is on the economics of it, but they haven’t come clean on the waste of it, either, and that’s why he’s asking you to ask me questions about our approach when we’ve already been very clear.
Doherty:
Defence land – that rings alarm bells for me. That could be Townsville, that could be Ipswich ‑
Chalmers:
It’s tiny amounts of waste associated with only dozen –
Doherty:
Are we talking a teaspoon?
Chalmers:
The contrast I’m seeking to draw with you and your listeners, Shane, is 12 subs generate a tiny amount of waste compared to 7 substantial reactors. And we’ve made it clear what we would do. We would need to do that from the 2050s, they would need to do it from the ‘30s and ‘40s. They haven’t made it clear how much waste there would be and where they’d keep it.
Doherty:
Did you get to say everything you want to say on the nuclear issue?
Chalmers:
Yeah, I think so. I think that the nuclear waste part of it is important, and people have got very strong views on all sides. I understand that. No doubt your listeners have a spectrum of views as well. But if there’s one thing I can really leave them with, is that the economics of it in Australia mean that if you vote for nuclear power, you are voting for higher electricity bills.
Doherty:
Good. I put that same statement to Ted because I think this is an issue where people deserve to hear all the sides for sure, without the heat and emotion in it, because we do get a vote on it. We do get to say whether we back one side or the other based on this issue. And I think that’s great, that politics should be more like that.
Chalmers:
It should be.
Doherty:
I only wish we got the same choice with the Olympic Stadium. I only wish that the LNP had declared a position on it, so that we could have cast a vote one way or the other.
While I’ve got you....
Chalmers:
Ebony was trying to take it down the coast, I think. I was listening to you and Ebony in the car, and it sounded like she was very keen!
Doherty:
Ebony wants the Gabba. Tom Tate wants everything down. Yeah, the Brisbane game should be on the coast.
Chalmers:
That sounds very Tom.
Doherty:
Can you explain the housing market to me? To me, it looks like the market has failed when demand is near the ceiling and supply is near the floor – usually the market sorts things out. That hasn’t happened. Why?
Chalmers:
We don’t have enough homes, and that’s because when you start as far back as we’ve had to you can’t just flick a switch and build immediately for all the obvious reasons, the million homes that we think we need, and so you’ve got to chip away at it. It’s not just one thing. There’s not just one solution.
So we’re investing in more builders. That’s a big part of the story, skills and apprentices. A big, big part of the challenge, making sure we’ve got the skills we need, that we’ve got about $32 billion of investment, whether that’s local infrastructure, social housing, affordable housing, the housing Australia Future Fund, all of different ways that we’re doing that, and we’re working with the states on planning and zoning, and all of these things together will make a difference.
But you can’t build all the homes we need overnight. Unfortunately, if you could do that, we would have done that by now, but we’ve got huge investments to build a heap more homes, because that is the primary challenge in the housing market, being able to find somewhere to rent or buy.
Doherty:
Before I let you go. Andrew wants to know, can you tell us what the cost of Labor’s renewable energy plan is?
Chalmers:
If you look at the the numbers that AEMO – which is the energy market operator, not a political outfit – they think that the cost of our integrated systems plan out to 2050 is about $122 billion. That’s obviously much less than what the Coalition is talking about when it comes to their nuclear scheme. So that’s much closer to the mark.
That’s the best sense of the kind of investment that we’d need in generation, storage and transmission, a fraction of what they’re talking about when it comes to nuclear.
Doherty:
Thank you for coming in. Really appreciate you making the effort – a reward for everyone who visits us is a Caramello Koala. Ted got one yesterday.
What is your vice? We know the PM’s is licorice flavored lollies.
Chalmers:
I’ve seen him tuck into the licorice. Sometimes he ducks out of the parliament, then back in with the licorice from time to time. I’m trying to go easy on the sweet stuff this year, but I just like the milk chocolate – the big bars of milk chocolate after dinner with the kids. There’s been a bit too much of that from my end, over the last couple of years. So I’m going to try and wind it back.
Doherty:
Thanks. Federal Treasurer Jim Chalmers: joining us there.