Rowan Holzberger:
Thanks for coming. My name’s Rowan Holzberger, I’ve just been elected as the Member for Forde, where we are today, and Jim, thank you very much for asking me to come along with you today and holding this press conference in Forde.
I think that the election result really does send an important message that Labor’s core philosophy of an economy that works for people and not the other way round is a message that I think resonated particularly in places like Forde.
I know that 10 years or so of the LNP government real wages actually went backwards, where you actually saw them admit that as part of their whole strategy that they said that low wages were a part of their economic infrastructure. And you compare that to the last 3 years of Albanese, and the government led by Albanese and Jim Chalmers, where real wages actually increased. And to make it particularly special, increased at a time that inflation came down. So, Jim, thanks very much for asking me along today and welcome to Forde.
Jim Chalmers:
Thanks very much, Rowan. Can I just really congratulate Rowan on a tremendous victory here in Forde. To have Rowan Holzberger as the Member for Forde means a great deal to us and I’m very much looking forward to representing the people of Logan City, along the border that we share, along that motorway there, representing communities on both sides of the motorway with someone of Rowan’s character and calibre and commitment.
I did want to say something about Rowan’s predecessor, Bert van Manen. I have a great working relationship with Bert. I wish him all the best as he considers what he might want to do next. Bert is a good person, and I worked closely with him and I’m looking forward to working really closely with Rowan.
Now one of the reasons why we’re back in government, one of the reasons why we were successful in Forde is that we made wages and tax cuts and the economy front and centre in the election campaign, and they will be front and centre once again in the second term of this Albanese Labor government.
Our reason for being as a Labor government is to get more people working, earning more and keeping more of what they earn. That’s really the essence of our economic strategy. That was front and centre in our first term in the campaign and will be front and centre in our second term as well.
We are really pleased with the wages data that we’ve received today. These are some very, very encouraging numbers when it comes to real wages growth in our economy. As Rowan said, our predecessors had low wage growth as a deliberate design feature of their economic strategy. We’ve got real wages growth as a deliberate design feature of our economic plan as the Labor government.
What we’re seeing today is now 18 months, 6 consecutive quarters of real wage growth in our economy in annual terms. Annual real wage growth now growing for a year and a half. When we came to office real wages were falling sharply. Now they are growing sustainably. That is a very good thing, a very pleasing, very encouraging outcome that we see in today’s data.
Now it’s especially encouraging that we are getting this wages growth at the same time as we’re getting on top of this inflation challenge in our economy. Real wages reflect the progress we’ve made together on wages, but also the progress we’ve made together on inflation. We’ve got wages growing and we’ve got inflation falling and those are really the key elements of this soft landing that we have been engineering in our economy at a time of really substantial global economic uncertainty.
We’ve got wages growing, we’ve got inflation coming down, we’ve got unemployment very low and we’ll learn about unemployment tomorrow, interest rates have started to come down, we’ve got the debt down, growth is rebounding solidly in our economy, the private sector’s playing a bigger role in that growth, and all of those things are very welcome developments.
Now we know we’ve still got work to do because people are under pressure and the global environment is really uncertain. The best defence against that global economic uncertainty is decent pay, tax cuts for workers, making our economy more resilient at the same time as we help people with the cost of living. We have always seen decent wages growth as part of the solution to cost‑of‑living challenges, not part of the problem. We have been able to make this progress on wages at the same time as inflation’s coming down and that’s very pleasing.
This is the strongest real wages growth for 5 years. This means 18 consecutive months of annual real wages growth. That’s a very good thing and I’m very pleased to be here with Rowan in Forde to tell you all about it.
Happy to take a couple of questions.
Journalist:
Treasurer, can you please clarify how the $3 million super tax will apply to defined pensioner super? Will it apply to judges and politicians?
Chalmers:
We’ve made it clear it applies the same way that the Coalition’s changes did, and we did a lot of consultation to make sure that defined benefit was appropriately represented in the changes that we are proposing. Now these changes are modest. They affect half a per cent of people in the super system. Only balances above $3 million, still concessional tax treatment just slightly less concessional, and they help us fund our priorities, which is strengthening Medicare and building more homes and cutting income taxes and helping with the cost of living.
These change have been in the public domain now for more than 2 years. They’ve been in the parliament for a big slice of that. We’ve made it clear that these changes are relatively modest but they’re important in the context of the budget and defined benefit schemes have been appropriately recognised as part of our effort.
Journalist:
There’s a lot of criticism about the unrealised gains aspect of the change, are you prepared to rethink that or the indexation?
Chalmers:
I’m not sure I agree with the first part of your question, respectfully. I know that there’s a lot of coverage in 2 of our newspapers and I know that there’s a number of people over time who have expressed a view about it. I think it’s good we live in a country where when changes are proposed people have got the ability to express a view about it.
I’m not generally or genuinely stopped in the street about these changes. I think most people recognise that these are modest changes, affect a tiny, tiny sliver of people with superannuation, still concessional tax treatment, just slightly less concessional for people with very large superannuation balances.
I read about it obviously in a couple of our newspapers most days, but I’m sure that people broadly recognise that it’s a modest change but it makes a difference to the budget, and that’s why we put it forward more than 2 years ago.
Journalist:
Wage growth is higher than inflation and productivity, are there any dangers of having wage growth higher than inflation and productivity?
Chalmers:
One of the most pleasing aspects of this wages data is we’re getting wages growth at the same time as inflation’s coming down. This shows just how spectacularly wrong some people have been when they’ve talked about fears of a wage price spiral in our economy.
We’ve been hearing that at different times over the course of the last 3 years or so. There’s absolutely no whiff of a wage price spiral in our economy and that’s because we’ve been getting these decent wages outcomes at the same time as we’ve been getting very encouraging outcomes on lower inflation at the same time, and not just headline inflation but underlying inflation. Trimmed mean inflation is now in the Reserve Bank’s target band as well.
I know that when we get encouraging wages data like this we often hear from the usual suspects who talk about a wage price spiral. There’s been no evidence of that. There’s absolutely no whiff of that in our economy and that’s encouraging. Even if you think about, people will want to write the relationship between these numbers and the decision that the Reserve Bank board will take independently next week without my input, when you think about that, the Reserve Bank itself was forecasting a modest increase in wages in the first half of this year and that’s what we saw today. That’s a good thing.
Journalist:
Treasurer, if I can get your response to Macquarie Securities alleged under reporting –
Chalmers:
Yeah.
Journalist:
– as many as 1.5 million –
Chalmers:
Yeah.
Journalist:
And also do you have any concerns [inaudible] compliance issues [inaudible]?
Chalmers:
A few things about that. First of all, as always I support the good work of the regulators. ASIC in this case but I’m very supportive of the good work that our regulators do in our financial system and more broadly.
I obviously can’t get into the details of this particular instance because of the ongoing proceedings, but we want to make sure that everybody’s playing by the rules in our economy and especially in our financial system, and the regulators play an important role in ensuring that, and I support their work.
Journalist:
So will the likes of Peter Dutton and Anthony Albanese, who both entered parliament before 2004, be subject to these super tax increases?
Chalmers:
Yes, and we’ve made that clear. You read from time to time on social media that somehow politicians on the old scheme before 2004 have somehow been exempted, that’s not the case. So I’m pleased you’ve given me the opportunity to raise that and clear that up.
I think people deliberately have told a different story from time to time, but politicians on defined benefit will be impacted if they’ve got very substantial balances by the changes we’re proposing.
Journalist:
Treasurer, if somebody already has a big loss on their asset why should they pay unrealised gain tax on the recovering end value of that asset?
Chalmers:
They can carry it forward as an important part of the design of what we’re talking about. And again, I’ve seen that talked about but consistent with other elements of the tax system people will be able to carry forward losses.
Journalist:
Treasurer, on that Macquarie Securities, I appreciate you can’t talk about the specifics of the case –
Chalmers:
Yep.
Journalist:
– but there’s alleged misconduct happened over 14 years. Do you have any concerns about lack of resources for ASIC to investigate [indistinct]?
Chalmers:
We always have an interest in ensuring that ASIC is appropriately resourced and appropriately funded. They’ve got a model now which I think does allow for that and the fact that ASIC is on the case here is an encouraging sign that they’re doing their important work.
And I’m serious about not engaging in a commentary on the specifics of it, but the regulators are well‑resourced to do this important work. The fact that it’s in the public domain now and that there’s a process underway is a demonstration of that.
Journalist:
I was going to ask more about defined pensions of public servants, but I think you’ve answered that with Harry’s question, so it’s a very clear blanket rule then, is that how it will apply?
Chalmers:
We’ve made it clear on a number of occasions we spent a lot of time between the announcement and the legislation making sure that we could appropriately recognise people on defined benefits.
It’s not the first time, frankly, that a government has had to grapple with that. You think about the changes that I think the Morrison government or certainly if not the Morrison government then Morrison as Treasurer, when they made the changes to superannuation, they had to factor in defined benefits just like we had to as well.
Journalist:
Back on super, Treasurer, if I can, the Greens wanted the threshold lowered to $2 million in exchange for their Senate support, will you talk to them?
Chalmers:
We’re not considering that.
Thanks very much everyone, thank you.