Steve Austin:
Jim Chalmers is the federal Treasurer of Australia. Jim Chalmers, morning to you once again, Jim.
Jim Chalmers:
Good morning, Steve, how are you?
Austin:
I’m very well. How will AI make Australia more productive, now that you’ve announced the office attached to the Prime Minister’s office and what the guidelines or the rails are, how will it make Australia more productive, Jim?
Chalmers:
Well, it’s a transformative technology, probably the most transformational technology that you or I will see in our lifetimes, and it has the capacity to speed up and complete so many tasks that are essential to making our economy more dynamic, more productive, more competitive.
If you look at that really considered speech that the PM gave yesterday, what that’s all about is seizing and shaping this opportunity presented by AI in a way that captures that outside risk in our economy and in our communities at the same time as we recognise and manage some of the risks as well.
And so it’s more than setting up a new office; that’s a reflection of the leadership role that the PM is taking here, coordinating the work of a whole range of Ministers, including my work in this area, but also making sure that we’ve got standards when it comes to building data centres, also making sure that creators maintain control over their work.
These are all the essential questions and elements of our Artificial Intelligence Strategy, which is all about making sure that we can use AI to make our economy more productive and dynamic at the same time as we manage the potential downsides.
Austin:
One of the great benefits of AI is that it can do a whole lot of bureaucratic tasks that a team of people would need to do but it can do them just with a press of a key in their – it’s almost instantly done, it’s so quick. This in many people’s minds would necessarily reduce the need for Commonwealth public servants. Do you envisage that public servants will reduce, or the numbers reduce as the government adopts more AI models into its decision‑making?
Chalmers:
We think the numbers are about right, but the nature of work, whether you’re in the public sector or the private sector will change. If you look at that report that my colleague, Amanda Rishworth, put out from the Employment Department, that’s all about the ways that artificial intelligence will change work, it’s about the ways that it will improve how people go about their daily tasks, as you rightly point out. But the nature of work is changing, the pace of that change is accelerating, and that’s true whether you work in the public sector or the private sector.
Austin:
So the overall number of Commonwealth public servants with the introduction of AI won’t change, Jim Chalmers?
Chalmers:
Well, we said on a number of occasions, Katy Gallagher has, and I have, including in recent days, we think the number is about right, but the way that people go about –
Austin:
But will it change, Jim, is my question?
Chalmers:
No, I don’t anticipate that. But that’s partly because the roles and responsibilities of the public service evolve over time. We’re delivering an NDIS we weren’t delivering a couple of decades ago, we’ve got big responsibilities to process more veterans’ claims, for example, and so there are good reasons for those numbers. But the nature of work will change, we’re upfront about that.
An important part of our work and our considerations about AI are about making sure that workers in the public sector and the private sector are part of this really important transformation so that we can use AI to improve people’s working lives rather than just the worst version of this, which is creating some level, I think, of anxiety in the community. One of the reasons why the PM’s speech was so important yesterday was that it is reassuring people that we can attract this investment, we can make the most of this opportunity, we can get this right the Australian way, and part of that means recognising the absolutely fundamental role of people in the workplace.
Austin:
What does this mean for the taxpayer‑funded PsiQuantum facility in Moreton Bay that’s currently underway? It’s a $1 billion investment by the Australian taxpayers, half of that from the federal – half of that from the Commonwealth, half of that from the State of Queensland. What does it mean for the PsiQuantum facility?
Chalmers:
Well, you’re right that that one’s already underway, and again, that’s a game‑changing technology, but it’s a different one, complementary technology but different types of technology. We’re talking about standards for large data centres being built, and that is about quantum computing. Without kind of nerding out on your program, Steve, the difference is that the data centre is about training and running AI models at large scale while quantum computers are about solving a smaller number of really specialised tasks. Over time those 2 things will become more and more closely related, but for the time being they’re complementary but different technologies, and the PsiQuantum project, a really good project, has already begun.
Austin:
My guest is the Treasurer of Australia, Jim Chalmers. This is 612 ABC Brisbane.
I’ve been reading the latest publication by the Parliamentary Budget Office, the July 2026-27 Medium-Term Budget Outlook, and it appears to cast doubt on your budget projections, in particular your optimistic forecast. Do you stand by your budget projections?
Chalmers:
I do, Steve, and I think you’ve skated past the main point of that report, I say that respectfully.
Austin:
What’s the main – okay, let me ask you, what do you say is the main point, Jim?
Chalmers:
The PBO found that our budget position has improved. We’ve got debt down, we’ve got the deficits down, not that long ago we delivered a couple of surpluses, and so that has quite substantially improved the budget position over that medium term trajectory. And we’re doing that at the same time as we’re cutting taxes 5 times, because we found a heap of savings, debt’s down about $200 billion on the trajectory that we inherited 4 years ago. And so overwhelmingly the story of the budget in this country is of quite a substantial improvement over the last 4 years. There is more work to do, but we’ll always –
Austin:
But that’s because of income tax, isn’t it?
Chalmers:
We’re cutting taxes 5 times, Steve, that’s the first and most important point, and over that medium‑term trajectory, that 10‑year period that the Parliamentary Budget Office is talking about, I think it would be unwise to assume that there wouldn’t be more income tax cuts at some point in that 10‑year period, but don’t forget –
Austin:
But the PBO says that the revenue is projected to increase as a share of GDP driven by increasing personal income taxes, in other words you’re taking money out of the pocket of citizens of Australia.
Chalmers:
Well, what we’ve shown, Steve, is a willingness to cut taxes and return that bracket creep. We’ve actually done that now 5 times using 3 different mechanisms. So this is a government that cuts income taxes, our opponents said that they would repeal those tax cuts, but we’ve proceeded with them. And that’s because we understand and embrace this responsibility to return bracket creep when we can afford to do that. We’ve done that time and time again, and we hope to have the opportunity to do that again in the future.
So that’s a really important point. The other important point, if you look at that trajectory, if you look at the budget papers, what that shows is something like 3 times more of the budget improvement over that period is from our reforms on the spending side of the budget, not the taxing side of the budget. There’s 3 times more savings than tax changes benefitting the budget over that period.
Austin:
If you get the NDIS sorted out.
Chalmers:
Here I tip my lid to Mark Butler and Jenny McAllister and the colleagues, I think you know how much time and effort that has been going into making sure that the NDIS is sustainable so it can deliver for people the services that they need and deserve, and so that has been a big part of our efforts on budget repair.
Now there’s always more work to do. We’re not pretending that the budget is in perfect condition, but it is in much better condition than it was 4 years ago, and you can see in that Parliamentary Budget Office report the progress that we’ve made getting that debt down, getting those deficits down at the same time as we’re cutting taxes 5 times in 3 different ways.
Austin:
One of the debt concerns of Australia is the level of state debt that the PBO looks at. Are you concerned about the debt levels of Queensland. Are you concerned about the debt levels of Queensland in specific, Jim Chalmers?
Chalmers:
Well, what I try and do, Steve, and I think I’ve made this clear to you before on your show, I mean the state governments have got pressures on their budgets, and whether they are LNP governments like here, Labor governments elsewhere, I try to recognise the pressures that people have on their budgets. I try not to take kind of cheap shots at them about the management of their budget.
I think it’s self‑evident that the Queensland budget, if you listen to the ratings agencies, that the ratings agencies have expressed some concerns, and I think the Treasurer here has responded to that as well.
So the Commonwealth’s budget is AAA and rated steady by all 3 major ratings agencies, the Queensland budget is not, as I understand it. But I have enough to do when it comes to managing my budget without getting too deeply into the management of the budget here in Queensland.
Austin:
I guess I’m asking that because the government here is under a lot of pressure to lower or return to the normal coal royalties regime so that companies don’t collapse in Queensland. Do you have a view on that, Jim Chalmers?
Chalmers:
Obviously I’m aware of that debate that’s happening here in my home state, but it’s not something that I’ve been deeply involved in. I work closely with resource companies and I work closely with state governments. I’m aware of that disagreement that exists between the miners and the Queensland state government, but it’s not something that I spend a lot of time trying to mediate.
Austin:
I’ll leave it there. Jim Chalmers, thanks for your time.
Chalmers:
Appreciate it, Steve. All the best.
Austin:
Jim Chalmers is the federal Treasurer of Australia.