VIRGINIA TRIOLI:
An eighth straight increase in the official interest rate, which has been announced by the Reserve Bank of Australia. And we can all expect the bank will keep going that way in the new year. What are we all to do? Jim Chalmers is the Federal Treasurer and joins you now. Treasurer, I know you have limited time this morning so thanks for joining us.
JIM CHALMERS:
Thanks very much, Virginia,
TRIOLI:
Another rate rise, more mortgage stress, uncapped and rising food and energy costs – and I'm not even including hospital waiting times, and lack of GP appointments in all of this pressure. Why after 6 months of being in office can't you find a way to alleviate this stress?
CHALMERS:
Well, Virginia, I think it is important to begin by recognising that people are under pressure. This is the eighth interest rate rise, they began before the election and these decisions taken by the independent Reserve Bank do make life harder for people with a mortgage. The impact of these rate rises is felt more or less immediately by people with a mortgage, but the impact on the economy comes in some months down the track and so that's the balance that the Reserve Bank's trying to strike. Some of these other pressures in our economy – we are working, for example, on trying to take the sting out of some of these energy price rises, we've got a plan to provide cheaper medicines, cheaper early childhood education, get wages moving again and we're seeing the beginnings of that wages growth in our economy which is welcome after a decade of stagnation. But none of these challenges are easy to deal with. In lots of cases, we're dealing with a decade of neglect and we've only been in office for 6 months. But we handed down a Budget that provided some responsible cost‑of‑living relief. We're working on energy and other areas, because we know people are under the pump.
TRIOLI:
Well, I didn't ask you about a plan. And you say that 6 months is not long enough, but for those of us who are having to deal with interest rate rise after interest rate rise, the need for immediacy is right now, why is it taking so long?
CHALMERS:
Well, I don't accept that it is Virginia. We've got cheaper medicines coming in in a few weeks’ time, we've got an increase in the minimum wage which we supported which is already flowing in the economy and we've taken a number of other important steps. We do recognise that people are under extreme pressure and interest rate rises make things harder for people and we don't take the decisions on interest rate rises but our job is different to that – it's to make sure that the Budget is responsible and the economy is more resilient and we do what we can to fight this inflation which is making life harder for too many people. And that's why there are important steps taken in the Budget, important steps taken in the industrial relations system and also important conversations going on right now to try and take the sting out of the energy price rises which are becoming a bigger and bigger part of the inflation problem.
TRIOLI:
Well on that, when Australians do need real cost‑of‑living relief right now in their lives and in their homes, are you happy to pay our taxes to compensate New South Wales and Queensland for a reduction in the windfall coal and gas profits they've been quite unexpectedly reaping? Is that where our money should really be going in order to get a cap on energy costs?
CHALMERS:
That's not the main part of what we're proposing here and what we're –
TRIOLI:
Just to jump in there, and my apologies – it clearly will be the solution to actually getting that plan in place, that compensation paid – our money – to New South Wales and Queensland.
CHALMERS:
Well, that's yet to be determined, Virginia. The main part of the conversation that we're having with states and with the industries and with the regulators is whether or not there is a responsible and meaningful and time limited opportunity to use regulation to take the sting out of some of these energy price rises that we expect next year and that conversation with the states is the most pressing part right now because there's an energy ministers meeting tomorrow and a National Cabinet meeting on Friday. The Prime Minister, despite his COVID diagnosis is working very hard with his colleagues at the state level to see if we can get to a landing point. We said that we want to come forward with a policy between now and Christmas. This involves multiple levels of government, it involves multiple industries, it involves multiple regulators, so we're acting with some urgency, but there's a lot of complexity here, a lot of moving parts, and we're working our way through that in a responsible way.
TRIOLI:
Just finally, if it does end up that some compensation has to be paid to New South Wales and Queensland are you going to be able to look us all in the eye and tell us that that's taxpayers money well spent?
CHALMERS:
I think our highest priority right now is to try and get a landing on energy prices. This is the main thing –
TRIOLI:
That might just be the cost that we pay.
CHALMERS:
I've been pretty open and up‑front with people over the course of the last couple of days and said our priority is in regulation and we come to the table with a reasonable, constructive approach with the states and we're prepared to do what we need to do to satisfy our main objective here, which is to take some of the sting out of these price rises in the energy system. It is a bigger and bigger part of our inflation problem. We don't want to ignore it. We don't want to see our industries hollowed out by high gas prices and we don't want to see Australians under more and more pressure if we can do something about it. And so our responsibility which we embrace is to work with the states and industries and regulators to get to a landing point here and that's what we're working around the clock to do.
TRIOLI:
I know you've got another interview. Jim Chalmers, thank you for joining us. I appreciate it.
CHALMERS:
I appreciate your time, Virginia. All the best.