Victoria Devine:
Hello and welcome to She’s on the Budget, the series where we break down the federal Budget in a way that hopefully makes you sound smarter at brunch, in the group chat or aggressively pacing Coles wondering why blueberries now require a payment plan. I’m Victoria Devine, and joining me today is the Treasurer of Australia, Dr Jim Chalmers.
Jim Chalmers:
Very kind of you to have me on your show, thanks heaps.
Devine:
I am very much looking forward to sharing this time with you. I know it’s compressed, so I’m going to try and be speedy. But before we get into the economy, the Budget and the fact that Australians do probably need to take out a small business loan to be able to fill up their car at the moment, I want to address what I’m going to call the elephant in the room. That’s that the internet has a lot to say about you. They’re quite colourful. I was reading some headlines and based on those headlines you’re either a visionary reformer, a communist, Jim Reaper – which personally I found quite creative – the man who killed negative gearing, or personally, you’re the man responsible for ruining Christmas lunch conversations for every property investor in Australia this year.
Chalmers:
Wow. I haven’t seen all of those headlines.
Devine:
They’re good, aren’t they? How do you feel about criticism like that flying around?
Chalmers:
I used to find it tougher than I do now. I think now, if you’re a Labor Treasurer handing down a budget with a bunch of changes in it, if you’re looking to some of those outlets for positive headlines you’re barking up the wrong tree. I think, like most Australians, I’ve got more important things to worry about than some of those headlines. I think more and more people are getting their news from people like yourself, rather than from some of those traditional sources.
Devine:
I do feel like it feels a little bit more balanced to sit down and be like, what did you actually mean by that? But I also likened the Budget earlier today, with Albo, to it feeling like a wedding. I feel like the Budget for you must have felt like you were hosting a wedding because half the guests leave furious at the seating plan. No matter what you do during a wedding, someone is going to be upset. Do you think that’s pretty accurate?
Chalmers:
I haven’t thought about it that way, to be honest, but people dress up. My young fellow came down from Logan for the event and I don’t think I’ve seen him in a button‑up shirt for a long time when he’s in the school uniform. So, people dress up.
Devine:
See, there’s a dress code.
Chalmers:
It’s like a wedding in that regard.
Devine:
And no phones.
Chalmers:
No phones temporarily, or at least maybe sneaky phones.
Devine:
Just during the reception, of course.
Chalmers:
Right. It’s not festive like a wedding, but it’s a big occasion and people come from all corners of the country for it.
Devine:
Now, Treasurer, before we get into some heavy stuff, we always start with a money story on my show because we all have one and it shapes how we spend, save and think about money. What is your earliest memory of money?
Chalmers:
I was thinking a bit about this the other day because we haven’t worked out yet how to do the whole pocket money thing for our kids. I was remembering when I was little we had 2 things. We had one of those saver accounts. I’m so old that it was kind of a handwritten balance book that you’d bring in your 50 cents.
Devine:
That’s also what I had, so are you calling me old?
Chalmers:
No, of course not. So, I remember that and I also remember working out whether my older siblings should get more pocket money than me or not because they had bigger expenses and they were older. I can vaguely remember those conversations.
Devine:
Our theory in my house was 50 cents for every age you were. So, you got a pay rise every year.
Chalmers:
It’s like a progressive system of pocket money.
Devine:
Yeah, my mum said it was equality and I’m not sure about that. But we can come back to that. Now, you mentioned before that your younger guy came down from Logan and you grew up in Logan. You’ve spoken before publicly about really understanding financial pressures firsthand which, to be honest, I think is essential for the Treasurer of Australia. Do you think that changes the way that you approach budgets compared to people who’ve only ever viewed the economy through spreadsheets?
Chalmers:
Definitely. For me, everything begins in my local community. Not everyone here gets to represent the area they grew up in and I live about 900 metres around the corner from the house I grew up in – which my school friends think is pathetic, but I think it’s cool.
Devine:
I think that’s really wholesome. We could rebrand that.
Chalmers:
Right. But for me it’s everything and I want my community to think that the work that they’ve sent me here to do is worthwhile. So, it’s a really big part of it. I’m not trying to pretend that I’m necessarily different to other members who get to represent the area that they grew up in. But for me, it is absolutely essential, absolutely essential to how I think about the sorts of challenges that we’re trying to help people through.
Devine:
This year’s Budget, I would say, feels a little bit different to historical Albanese government budgets. Less, ‘here’s some free money’ and more ‘okay, we’re all actually really stressed about money right now, and we’re just trying very hard to not make inflation worse.’ What was the balancing act this year?
Chalmers:
That’s the perfect way to describe it. Every budget’s got a series of fine balances in it. This one feels like the degree of difficulty was a bit higher because we had an inflation challenge, we had people getting through a global oil shock, we don’t know when the war in the Middle East will end or for how long the costs will be borne by people here in our country. So, more than the usual amount of uncertainty.
What we tried to do was to say, okay, it’s effectively a budget doing 2 things at once – helping people through a difficult period, and setting a place up for the future – recognising that particularly in that longer‑term piece, there’s some difficult, politically contentious changes that we want to make. I think the thing I’m proudest of in the Budget, if I reflect on it, is really that some governments would have used what’s happening on the other side of the world as an excuse not to do some of these bigger, longer‑term things. But we’ve done that at the same time as we’ve got a fuel security package and cutting fuel taxes for people who are doing it tough.
Devine:
Yeah. I think that Australians are able to understand global instability from the intellectual point of view. Like, we know what that means, but from an emotional perspective I think it still feels very like, ‘why is this conflict that’s happening on the other side of the world that we didn’t have anything to with do with suddenly making my Woolworths shop terrifying?’
Chalmers:
I had to acknowledge that in my Budget speech actually quite near the front, which is to say that Australians didn’t choose this war or the consequences of this war, they won’t decide when it will properly end, but they are paying a price for it in the meantime. I am trying to acknowledge those pressures coming at us from around the world, but not just rolling up into a little ball and hoping that everything goes okay. Helping people through the difficult period as well as setting a place up for the future.
Devine:
Yeah. With that, you have announced some tax cuts, a new Working Australians Tax Offset, a fuel excise relief and some healthcare investments. But if I am honest, my community and I, we’re still feeling a little bit like we’re drowning. Do you worry that the government can sometimes sound a little bit disconnected from how hard‑hitting things are actually on the ground?
Chalmers:
Obviously I hope not, but I understand that any one of these policy changes, whether it’s any one of the 5 different ways that we are cutting taxes for people with a disproportionate benefit, positive disproportionate benefit for younger people. I can understand that there’s always an appetite for more help and more support. We’ve only been here 4 years, but we’ve cut income taxes 5 different ways and there’ll always be people who would like us to cut taxes by more, we get that. Down the track, we’d like to cut taxes by more, but we can only do what we can afford.
Devine:
Absolutely. The question that I get the most, or I’ve had the most over the last week, is about housing. I have an incredible community of people who would love to own their first homes and I think we need to talk about it because, respectfully, Australians are losing their minds over this Budget –
Chalmers:
Usually when someone says ‘respectfully,’ there’s an especially unkind thing that follows that. But you didn’t do that.
Devine:
No, I’m not that type of person. In fact, when I’m going to do that, I will say quite directly, disrespectfully, because it’s always a backhanded compliment, isn’t it? But this Budget made massive changes to negative gearing and capital gains tax after Labor had previously ruled them out. I spoke to Albo about this this morning, and sometimes with new information we have to make different changes and change our mind. And I think that’s about learning and about growth. But what has changed? Was this an ideological shift? Was it an emotional, was it an emotional necessity? Was it an economical necessity? Like, was there a heap of political pressure? Like, why are we going from saying ‘we aren’t going to touch that’, to ‘hey guys, we have to touch that’?
Chalmers:
I think the best way to convey how we landed here is at the election, we had a focus overwhelmingly on building more homes. We’ve still got that primary focus. There’s not enough homes in communities, not enough affordable options for people to get into the housing market. That’s still the main game. But it became increasingly clear to us that we needed to do more than that, that we had to care as well about the composition of the market.
Over a long period of time, the home‑ownership rates amongst young people have been getting worse. I think for us, in coming to this decision relatively recently, it was more a sense of if we leave it for any longer it will get worse and it will get harder. It would have been, politically, much easier just to leave things as they were but we would have been doing that knowing that we’d be leaving these difficult changes for another generation to make. We’d rather fix them, even though that has invited all of the expected political conjecture.
Devine:
Yeah, because I think that you don’t, and I’m not defending it because I don’t speak for you, but I think when it is like this is made, you don’t make it with the assumption that people are just going to take it willingly. They’re going to obviously be like ‘well, you said!’ and that can be really rough.
Chalmers:
I’ve found that with that, often the people who want to focus exclusively on that, what they’re really trying to do is they’re trying to avoid the substance of the issue. What I mean by that is people who don’t want to contest whether the current arrangements are a problem, the tax arrangements in the housing market are a problem, they’d rather focus on the politics of it or some of those comments and commitments that we’ve made in the past. I understand why people are interested in that, but I would rather people focus on the substance of the change we’re making.
Devine:
Yeah. One thing I noticed in this year’s Budget was how much of the spending was actually tied to women’s financial security, which I love. So, healthcare, child support, paid parental leave, work mobility and endometriosis clinics. Do you think governments are finally starting to understand that women’s economic participation is economic?
Chalmers:
Absolutely. We’ve got 3 big things going for us in this regard. First of all, Katy Gallagher is the Women’s Minister and the Finance Minister, that helps. Second of all, across our economic institutions now we’ve got, for the first time, women leading the Productivity Commission, the Treasury, the Reserve Bank, ASIC and in other areas as well. The third thing we’ve got going for us, and I’m not trying to make a partisan point on your podcast, but the majority of the Labor government is women and that’s not the standard operating procedure in this joint for a very, very long time.
Devine:
Absolutely.
Chalmers:
I think those 3 things combine to make a really genuine difference.
Devine:
So, tell me, what’s something Australians fundamentally misunderstand about federal budgets?
Chalmers:
I think that a lot of the spending is kind of back in a lot of the decisions. People think that we start a Budget with a perfectly blank page and then we decide how much to spend on this or that. Whereas, in reality, there’s a lot of decisions taken for you. For example, the indexation of the social security system, that is automatic. So, that eats up a part of the Budget when the indexation happens. A lot of what we’re really dealing in budgets from one to the next, is really a sliver of discretionary spending. There’s a lot of it that’s already baked in automatically.
Devine:
Yeah, absolutely. Now I have less than 2 minutes left with you because you are a booked and busy man. With Albo and Katy this morning I did what I did on my first interview with Albo and that is a quick‑fire round. I’m going to shoot at you some quick‑fire questions and it’s just first vibes.
Chalmers:
Okay.
Devine:
Keeping cash in your wallet?
Chalmers:
That reminds me of the PM. He does that.
Devine:
Exactly.
Chalmers:
He’s got cash flow basically in his ‑
Devine:
$200 bucks in his wallet. He showed me again.
Chalmers:
Yeah, I discovered this on Easter Sunday once when we went to church.
Devine:
Did it benefit you?
Chalmers:
The plate came around and I had to borrow $20 bucks off him.
Devine:
There you go, he’s a man of the people. Now tell me about ChatGPT.
Chalmers:
I use Claude rather than ChatGPT. But what I’ve noticed is in our lives amongst the parents and peer groups, ChatGPT really seems to be the one that a lot of people are using. But I like using Claude.
Devine:
You’re a healthy man. Do you use an air fryer?
Chalmers:
I don’t but I’ve been thinking about purchasing an air fryer.
Devine:
Thinking about it. It’s a good, good purchase. What do you think of finfluencers?
Chalmers:
Finfluencers, I think as long as people are providing accurate information, well‑motivated information, that’s a good thing. Obviously, there’s a lot of people doing that, that’s fine. You’ve got to make sure that there’s a way to avoid people who don’t have your interest at heart online.
Devine:
Two more. What about the cost of blueberries? We’re currently sitting at $8.50 a punnet.
Chalmers:
Yeah, I noticed that too. A big part of my health kick is berries and I think a lot of people like me are substituting in the blackberries.
Devine:
Fair. Do you make coffee at home?
Chalmers:
Yeah, absolutely, I’ve got a coffee machine. I actually prefer now my home coffee because I’ve perfected exactly how I like it.
Devine:
So do I. All right, Treasurer Jim Chalmers. Thank you so much for joining us today.