VIRGINIA TRIOLI:
Jim Chalmers is the Federal Treasurer, and he joins me now. Good morning, Mr Chalmers.
JIM CHALMERS:
Good morning, Virginia.
TRIOLI:
In delivering a surplus, albeit one that only lasts a year, do you consider this your most significant achievement in this Budget?
CHALMERS:
Oh, no I don't see the dramatic improvement in the budget position as an end in itself. It's an opportunity for us to build from much more solid foundations in the Budget. All of the other things that we want to do for people, to help people doing it tough, to lay the foundations for future growth, to broaden opportunities in our economy. All of these things spring from the much more responsible economic management that we saw demonstrated in the Budget last night with this dramatic improvement in the budget, which sees us forecasting a surplus this year, smaller deficits after that, and really importantly, much lower debt and so, less interest that we have to pay on that debt. But that's not an end in itself, it's a foundation on which we build all the other things we want to do.
TRIOLI:
Let's go through a couple of the measures in the Budget. An increase in JobSeeker has been universally called for for quite some time and you do deliver that. But it amounts to a two and a bit dollars a day increase. Are you genuinely comfortable with that?
CHALMERS:
Yeah, we tried to do what we can afford, Virginia, and I think it is important to recognise we've increased the base rate of JobSeeker and the associated payments for students and others, but we've done it in a responsible way. We've done it in a way that doesn't blow the budget. We've done it in a way that helps a little bit for people to address these cost‑of‑living pressures without adding to them. But the other point, Virginia, I reckon, is that for some people who can access the increase in the base rate of JobSeeker, they'll also be eligible in lots of instances for the increase in Commonwealth Rent Assistance. They'll also be eligible for the energy bill relief that's in the Budget as well. So I encourage people to look right across the cost‑of‑living package. In lots of instances people will be eligible for more than one part of it.
TRIOLI:
Was it an inflationary fear that's held that back, that increased amount back?
CHALMERS:
Certainly an influence on our thinking in the Budget was this inflation challenge. So the peak in inflation is behind us. Inflation is moderating but it will be higher than we'd like for longer than we'd like, and so that really did guide our approach to the way that we carefully designed and calibrated the cost‑of‑living package, but also the way we're investing in the right kind of growth in our economy and also the spending restraint that we've shown in the Budget. Inflation is still the biggest challenge that we have. These cost‑of‑living pressures are real. None of your listeners need to have that explained to them by me. People feel it every day. So our job, and you mentioned this in your intro talking about the cartoonists and the tightrope, really has been to try and strike a pretty fine balance. Helping people where we can, taking some of the edge of these cost‑of‑living pressures without adding to them.
TRIOLI:
Would you consider a further increase in the next Budget? Is that actually on your ledger as a serious consideration?
CHALMERS:
Well, first of all, I only just handed down the 2023 Budget, I'm not sort of –
TRIOLI:
Yeah, I get that. But given that we're talking about ‑ I accept that, Treasurer, but given that we are talking about, you know, two and a bit dollars per day increase. Is it something that you would be open to revisiting? Because that's a big criticism this morning.
CHALMERS:
Well, as a Labor Government we always try and do what we can do for people subject to the economic conditions and the pressures on the budget. We always weigh that up. I think people know that about us. But again, I don't want to kind of move on from the fact that we've increased the base rate of JobSeeker. We've also increased Commonwealth Rent Assistance, the biggest increase in three decades. We're providing energy bill relief. We're making medicines cheaper. We're making early childhood education cheaper. It is a pretty comprehensive plan to address cost‑of‑living pressures that people are confronting. It's prioritised for the most vulnerable people but that doesn't mean that we're not, we don't have substantial help for middle Australia as well in some of those areas I've just identified, and as well as more than $5 billion to strengthen Medicare. These are all important initiatives which will take some of the sting out of these cost‑of‑living pressures without adding to them.
TRIOLI:
It's interesting I've got a number of comments coming in saying that; I'm a Labor voter, always will be a Labor voter but devastated that this Labor Government has been so gutless dealing with the gas exploration companies. And your priority in relation to that in the Budget was interesting to me and others who noted it last night. You raise more money with your increase to the tobacco excise than you do by capping the tax deductions for the gas producers. So you're not even at this stage prepared to hit those energy giants as hard as they could be hit without destabilising them. Why is that?
CHALMERS:
Well, I think $2.4 billion of revenue that Australian people will get sooner is a good outcome for the Budget, for the Australian people who deserve better return on their resources.
TRIOLI:
Yeah, but there was barely a word of complaint out of them which would seem to indicate to most that this is something they can easily take in their stride.
CHALMERS:
Well I think a lot of people want us to work where we can in a collaborative way and a consultative way, and that's what I try to do. That's the tone that Anthony Albanese sets for his Government. I'm not quite sure why people dismiss almost $2.5 billion which helps fund the increase in base rate of JobSeeker or other elements of our cost‑of‑living package. That is a substantial amount of money. If the accusation is that I've tried to do in a way where I've been consultative and worked with the sector, then fair enough. I care about investment in the sector. I care about supply at a time when the energy markets are going berserk around the world, and I care about honouring our international agreements and trade agreements as well. And so, what I have to do as Treasurer is to recognise some people would rather I not tax them any more at all. Some people would rather I tax them much more. I've got to strike a series of careful balances but $2.4 billion in the Budget wouldn't be in the budget were it not for the effort that I've put in to get more revenue sooner for the Australian people.
TRIOLI:
Jim Chalmers is with you, Federal Treasurer. We've got him for just a few minutes more.
Surely the biggest thing we need to discuss though today, and I know it's one that everyone's talking about and you as a Government would have been considering this too, and you know it better than most. That's the structural bomb that's set to go off in our budget, that we need to raise more money through taxes so that we can fund the spending of government. Why resist doing something about that now?
CHALMERS:
We are doing something about the structural position in the budget. The improvement in the budget is really in two parts. In the near term we've got this big upward revision in revenue, we've banked most of it, that's why we're forecasting a surplus. But the reason why that matters in the longer term, in the medium term and the longer term is because of the discipline we've shown and because of our responsible economic management getting the budget in much better shape over the next couple of years, it means that we can avoid hundreds of billions of dollars in debt, and something like $83 billion in interest costs on that debt avoided, because we took a responsible approach to the budget over the next couple of years. That's really important. It will make a structural difference. In addition to that, we're trying to make sure in the NDIS that every dollar goes to the people that it is designed to support, and in order to do that we've got to get a handle on these increasing costs. And our efforts on that front, and I recognise and acknowledge Bill Shorten's efforts on this front and the Prime Minister and the National Cabinet ‑ we've got to get a handle on that growth in costs and that's what we're doing too. So the improvement in the structural position in the budget is substantial. Obviously there's more work to do. There's always more work to do in each subsequent Budget.
TRIOLI:
Well it's not so much the general statement of more work to do, and it's something that people have been explicit about for years now, which is that in order to keep funding the spending that this Government, and really any government, wants to make, we're not going to in the near future have enough taxes come in to cover it, and that's going to mean some sort of serious taxation reform. Why shirk the opportunity right now when there are people who desperately need the benefits of that, and not do that in this Budget?
CHALMERS:
Well I think that there are substantial tax changes in the Budget which will make a meaningful difference to the structural problems that we're trying to address.
TRIOLI:
So are you saying that's the limit of the tax reform that we can expect to see from a Chalmers Treasurer?
CHALMERS:
No, I'm not saying that, not at all. Obviously, we consider all these issues on their merits but the Budget I handed down last night, whether it's superannuation tax breaks or the PRRT that we were just talking about, whether it's the health benefits from changing the tobacco excise, whether it's the compliance measures, whether it's the action that we're taking on multinational taxes consistent with the OECD program, all of these sorts of things will make a meaningful difference to the structural position of the budget. And, it's interesting that people think that these tax changes are not that meaningful when whenever we introduce a tax change there's an element of controversy, there's an element of political risk. There was on superannuation, for example. But we think it's important. So we are making modest and meaningful changes to the tax system and if there are other opportunities to do that in the future obviously we'll look at it.
TRIOLI:
Just before I let you go on, on those opportunities it is a bit deflating for some to realise that while you're handing out $14 billion in cost‑of‑living relief over the next four years, and as you've noted that really is a substantial figure. The cost of the stage three tax cuts over the same period has now grown to 69 billion. So 69 billion over four years for those proposed and agreed‑to stage three tax cuts versus 14 billion. Now, that can't be acceptable to you. We're going to hear from you down the track, aren't we, some sort of change to that?
CHALMERS:
We haven't changed our view on that, they're in the budget. The reason that number is much bigger than it was at the last Budget is because there's an extra year now in the forward estimates. And so it hasn't been ‑ even though they were legislated some time ago ‑ they don't come in for another year and a bit. It hasn't been part of our deliberations for this Budget. We're trying to provide assistance for people where we can. The other important thing to recognise with those stage three tax cuts which gets forgotten sometimes is they kick in at $45,000, so there is an element in there for low‑ and middle‑income earners as well. And we are typically supportive of tax relief for people on low and middle incomes.
TRIOLI:
Just very quickly, I know I've kept you too long, just very quickly, have you made any cuts to your own household budget to get through these tough times, Jim Chalmers?
CHALMERS:
Oh thanks, Virginia, but I don't really like talking about my own arrangements at home. I understand why you're asking but –
TRIOLI:
Just wondering if you've dropped Netflix or anything like that?
CHALMERS:
My focus is on the broader community, the broader country. I know that a lot of people are under the pump and that's what the Budget tried to address.
TRIOLI:
Thanks for joining us today, Treasurer, I appreciate it.
CHALMERS:
Thank you, Virginia, all the best.