Jim Chalmers:
I want to touch on 3 things this morning. First of all, the floods in north and Far North Queensland. Secondly, developments out of the US. And thirdly, the costings that we’ve released today on Peter Dutton’s long lunch policy.
First of all, on the floods in Queensland. I’ve spoken to Jenny McAllister this morning – our Emergencies Minister is on her way to Townsville and will be speaking with affected people and communities in Townsville today. I want to thank Jenny for the work that she is doing, working closely with the Queensland Government to make sure that we are keeping people safe at a very difficult time.
Queenslanders are tough and they are resilient, but these are difficult, anxious and hard times for a lot of Queenslanders. Really on that strip from Mackay all the way up to Cairns, coastal and inland communities are being affected. We’ve seen the rivers come up, roads are cut, electricity and water supply have been affected as well. We are doing our bit. We have got the military providing assistance in and around Townsville. We’ve provided some helicopters to help reach isolated communities. The financial assistance which we co‑fund with the states is available and I encourage people in affected communities to check their eligibility for the various payments.
Australians are there for each other in difficult times and the government is there for them as well. We know that it’s an anxious wait as the rivers peak around Townsville. We know that when the waters subside, there will be a big recovery and rebuild effort, and we will be there for people. Our primary focus is on the human cost of these natural disasters, which are becoming more and more frequent. But obviously there will be an economic cost as well, and we will do what’s necessary to keep people safe now, but also to help these wonderful communities in north and Far North Queensland recover as well from yet another natural disaster.
The second issue I wanted to touch on was developments out of the US, particularly in relation to tariffs. These are big developments out of the US, but not surprising developments. We saw these tariffs flagged in one way or another during the recent presidential election campaign. We’re not surprised but we are confident that we can navigate these new policies coming out of the US when there’s a new administration. We expect there to be new policies. We are well placed and we are well prepared to deal with these developments.
Now, obviously, as a very trade exposed economy, we are not immune from escalating trade tensions in the world, but we are confident that we can navigate them. We’re well placed, we’re well prepared, and we’ve also got a very different economic relationship with the US than some of the countries which have been the focus of the last few days.
The Americans run a very substantial trade surplus with us, they have done since the Truman administration, I think, around 1952. That trade surplus with us is about 2 to 1. They enjoy tariff‑free access to our markets and the economic relationship is a very beneficial one for both sides. I think it augurs well for the relationship that Penny Wong has already had discussions with her counterpart. Richard Marles will have discussions with his counterpart and the now Treasury Secretary made time for me in DC before the election. All of those conversations, all of that access, I think does augur well for our ability to make our case to American friends and counterparts about this mutually beneficial economic relationship. All of our efforts are about making sure that a mutually beneficial economic relationship between 2 countries continues to be just that.
The third thing I wanted to touch on was the costings we’ve released today, the Treasury costings on the policy announced by Peter Dutton more than 2 weeks ago and in the context of parliament coming back. Well, school is back, and Peter Dutton’s big lunch will cost billions. We know from the Treasury costings that even on a very conservative estimate of take up, his policy for tax breaks, for long lunches for bosses, would cost $1.6 billion a year and more than $10 billion a year, if all eligible businesses claimed the maximum amount.
Now we know why Peter Dutton wouldn’t come clean on the costs or what he will cut to pay for this policy. Peter Dutton wants Australian workers and taxpayers to foot the bill for their bosses’ long lunch, and the bill will run into the billions. We now know that to be the case. Now, ordinarily, preferably, a responsible Opposition would provide costings when they announce a policy. They haven’t done that and so we have taken this step to provide the Treasury costings of the policy that was announced more than 2 weeks ago. If they’ve got different costings, they should have released it. They haven’t done that. Peter Dutton has not wanted to come clean on what this costs or what he will cut to pay for it and now we know why. The bill will run into the billions, according to Treasury.
As we get deeper into this election year, the contrast is becoming clearer. Labor under Anthony Albanese is for cost‑of‑living help and responsible help for small business and building Australia’s future. Peter Dutton is for making Australians worse off, wasting billions of dollars on this ill‑considered policy and taking Australia backwards.
We won’t hear any lectures from these characters about responsible economic management when they won’t even tell us how much their policy costs. They won’t tell us where their $350 billion of cuts will come from until after the election. They won’t tell us how they’ll find the $600 billion that they need for this nuclear insanity, which will push electricity prices up, not down. And the reason they won’t tell us where the money is coming from is this: Peter Dutton will cut Medicare to pay for nuclear, and that is an important issue which is on the ballot as we get closer and closer to the election in this election year.
Journalist:
Treasurer, on the subject of costings, your childcare bill, which is going in this week, the press release you put out when it was announced at 150,000 extra kids would take up childcare yet you’re costing it at only $427 million over the first 4 years. How do you reckon, are you going to release the assumptions that underpin that, given 150,000 parents get thousands in subsidies, how does it come out so cheap?
Chalmers:
The difference between what you’re asking me about and the costing of the long lunch policy is that we provide updated costings twice a year, and when policies change, we cost them and we make the cost of that available before the election. And that’s what we’ll do again.
Journalist:
Treasurer but what about – but you have released the costings of it and it’s, no‑one believes it basically.
Chalmers:
When the assumptions change, we explain why the assumptions have changed. I don’t think anybody could objectively criticise us for not providing enough detail of our policies. And again, there’s a pretty clear contrast. Peter Dutton put out a press release more than 2 weeks ago. He said he wanted taxpayers to foot the bill for long lunches and entertainment – in the ordinary course of events he would have provided a costing for that. He hasn’t done it and so we’ve had to do it for him.
Journalist:
Thanks, Treasurer. Is there a risk with you going after this policy? The Coalition’s policy, that small business is under pressure with energy costs, labour costs, input costs. They’re dealing with inflation like everyone else. What’s your policy to help small‑ and middle‑sized businesses? And are you at risk of alienating some of those business owners by describing the policy in the terms that you do?
Chalmers:
Our support for small business is responsible. Peter Dutton’s policy would smash the budget and he hasn’t been able to answer basic questions about how he would prevent rorting. What would be the eligibility? And they haven’t released a costing. There’s a very real difference there. We are big supporters of small business, and if Peter Dutton cared about small businesses, he wouldn’t have opposed 2 rounds of energy bill relief that we are providing small businesses. And on top of that, they wouldn’t have held up or tried to hold up the instant asset write‑off in the Senate, which is helping incentivise small businesses to invest in their business. We’ve got competition, policy reform to try and level the playing field so that small businesses and medium‑sized businesses get a fair go in our economy, we’re helping small businesses with their cyber security, so we’re helping small businesses in a range of responsible ways because we believe in the sector and we support the sector. What Peter Dutton is proposing is very different.
Now, we do acknowledge that small businesses are under pressure because of the economic conditions. That combination of global uncertainty, higher interest rates, cost‑of‑living pressures. Small businesses would be substantially worse off were it not for the cost‑of‑living help that we are providing in local economies flowing in local economies. They’d be worse off if we hadn’t kept the economy ticking over when most of the other economies we compare ourselves with have had a negative quarter. We are enthusiastic supporters of small business. What Peter Dutton is proposing is something very different.
The last 2 points I want to make about small business is you’ll hear our opponents talk about insolvencies. The thing that they don’t mention is that the base of businesses in Australia is much higher now, and the average monthly new company registrations is also at a record high. There’s almost 25,000 new company registrations on average each month in the time between when we were elected to December last year. So, the base of businesses is bigger. And as Michele Bullock said, if you take it as a proportion of the number of businesses, which is growing over time, insolvencies aren’t at historical highs. If you look at the trend of insolvencies over time, we’re not even back to where we were trend wise pre‑pandemic. So a bit of perspective there. But we are supporting small businesses doing it tough. We’re doing it in a more responsible way.
Journalist:
Treasurer, you and the rest of the government have spoken about how confident you are that we can avoid the tariffs imposed on other governments recently. But, you know, recent days have shown the Trump administration is not afraid to impose tariffs on allies and friends. Can you maybe elaborate a bit more about why you’re confident that Australia will sort of weather this storm? Does it come down to your conversation with Secretary Bessent in Washington? Did you discuss this with him?
Chalmers:
First of all, we’re not being presumptuous about the discussions we have with American counterparts, but we do have a very strong case to make. Our economic relationship is very different to the American economic relationship with Canada or Mexico or China or the countries that have been President Trump’s focus. We have had opportunities to put that view. We’ll have more opportunities in the future to put that view.
These are 2 great countries and 2 great economies and the relationship can and should be mutually beneficial and that’s the point that we’ll be pressing
Journalist:
Then on that point, Canada and Mexico both plan tariffs on the US. The EU has also looked at tariffs in return, retaliatory tariffs if you like. What’s your philosophical view of whether that should be on the table for Australia?
Chalmers:
I don’t want to pre‑empt that. That’s not our preference. And that’s not something that we’re considering or contemplating. Philosophically or with our lived experience as Australians. We’ve got a very trade exposed economy and so we’re not immune when there’s escalating trade tensions – particularly between big economies which are involved in these trade tensions right now, we’re not immune from that, but we’re confident we can navigate it.
We did a heap of work before the election to look at the possible consequences of trade tensions, and that has helped inform our approach. That’s one of the reasons why we are well placed and well prepared, because we’ve done the work, we’ve put the thinking into it. We’ve got a good case to make. And as I said before, I think it does augur well that senior Australian Government leaders have had access already to senior decision makers in the administration, and we will use that access to press our case.
Journalist:
So, Treasurer, back to lunch. As Angus Taylor has just said that he’ll write to Steven Kennedy and believes that it was a misuse of the APS to do this costing. Can you suggest why you don’t think that’s the case?
Chalmers:
I heard Angus Taylor was losing it this morning on TV. I heard he was just as unhinged as the day that we got those good inflation figures. He’s made a bit of a habit of losing the plot, and I heard he did that again this morning.
When it comes to the costings, which have been done by Treasury, to be frank with you, Tom, I would rather not have to do it. I would rather a responsible opposition provided the costings of their policy and told Australians what they were going to cut to pay for it. That hasn’t happened. Part of my job is to understand risks to the budget, and this is a very substantial risk to the budget. This would smash the budget. So I’ve taken this step to inform myself and the Australian community what the implications of this policy would be. It would have been more usual and preferable, frankly, if the Coalition had been up front from the start.
Journalist:
There about 30 CEOs coming to Canberra this week to talk to you and Angus Taylor. In their policy blueprint they’ve called for a cap on public spending. They also ask for a Cabinet Minister for deregulation. What do you make of those demands and what do you plan on saying to those CEOs?
Chalmers:
First of all, I welcome them. This is not the only opportunity I have to speak with the BCA or its board or other groups that they put together. Every couple of months or so, we have a discussion, a very frank discussion with business leaders, and I welcome it. We don’t pretend that we have all the answers here in the Cabinet room next door and so we engage enthusiastically and in a genuine way with the business community. I’m grateful for the opportunity to do that regularly, and I’ll be grateful for the opportunity to do that tomorrow night as well.
When it comes to some of the ideas that they put in the public domain, and again, I welcome that. That’s a good thing in a healthy democracy. The point I would make is we’ve got a cabinet minister, her name is Katy Gallagher. She is working in her characteristically diligent way to try and streamline regulation, where we can do that. It’s part of the motivation for what I’m doing and the single front door for the approval of big projects and a bunch of stuff that the government’s working on when it comes to some of the reported suggestions around a new government department for efficiency, I think that would be a strange way to seek efficiency by creating another department doing the same thing as the Finance department. That would seem to me to be an unusual way to seek efficiency. But again, we listen respectfully to their ideas.
The last point I’d make is this: without the gimmicky titles that Peter Dutton has given one of his colleagues as a vote of no confidence in Jane Hume and Angus Taylor. Without doing that, we found $92 billion worth of savings in our Budgets and Budget updates, $92 billion. And that’s because we are already working in a diligent way to make sure that we can find savings in the Budget to redirect into some of the big investments we’re making, including strengthening Medicare and in other ways.
Journalist:
Has the Prime Minister had a direct conversation with Donald Trump about tariffs? Is he attempting to have that conversation?
Chalmers:
I’ll leave you in the Prime Minister’s hands to describe his conversations. He had a conversation with President Trump, as you know, after the election, and I’ll leave it with him to provide more details of that conversation.
Clearly whether it’s Penny Wong, Richard Marles, myself, the Prime Minister, we will engage with our American counterparts. We’ve all got an interest here in making sure that the economic relationship is mutually beneficial. That’s the case that we will be pressing at every level of this government.
Journalist:
We’ve had the Chamber of Commerce and Industry and several other industry associations calling on the government to redouble its efforts to accelerate new gas supply and generation. What’s your response to those calls? And I guess in light of those comments, does the 80 per cent rate need to be re‑examined?
Chalmers:
First of all, we’ve made it really clear that gas has got a role to play in the energy transformation. I think any sensible, hard‑headed assessment of our energy needs understands that there’s a role for gas and there’s a role for new supply. I think we’ve made that clear on a number of occasions. But we’re serious about this energy transformation. And in order to hit our targets, we need to make sure that there’s more cleaner and cheaper renewable energy in the system and that’s what guides our efforts.
Journalist:
Just in light of the tariffs, should Australian businesses that export to the US consider diversifying their trade to countries with a more stable political and economic environment?
Chalmers:
I think Australian businesses will weigh up all of these developments in the world and come to their own decisions. We’ve seen in the past where trade policies have been imposed, including by China, that Australian businesses have responded to that. They’ve made sure that their export offering is as diverse as it can be and as secure as it can be. And no doubt they’ll be having those conversations around boardroom tables right around Australia, just as we’re having the conversation around the cabinet table as well.
These are uncertain times in the global economy, not just because of policy announcements out of DC. We’ve seen political unrest in South Korea, to some extent in France, we’ve got a major war still underway in Eastern Europe. We’ve got a tentative ceasefire in the Middle East and so the world is an uncertain place and that has economic implications. We see it play out in our own economy, including the value of our dollar. Just like the government is, businesses will be working out what is their best export strategy in light of these developments.
We are very trade exposed, as I said, and not immune from these kinds of developments. But whether it’s Australian businesses or the Australian Government, we can have a degree of confidence that we will navigate this uncertainty because we have navigated global economic uncertainty in the past.
Journalist:
Treasurer, the PBO was set up to avoid a situation where Treasury was costing the policies of opposition parties. Haven’t you set a dangerous precedent by using the full force of Treasury to examine a policy for which some details you don’t know. And talking about modelling, have you asked Treasury to look at what a 10 per cent US tariff on China does to the Chinese economy and to the Australian economy?
Chalmers:
Two very different things. First of all, on the Treasury, costing, as I said, I think in relation or in response to Tom’s question, it would be better if the Coalition provided these details. Now, either they didn’t know how much it cost when they announced it, or they didn’t want Australians to know how much it cost and now we know why. This would smash the budget. The bill would run to billions of dollars and Australians deserve to know that. They need to know that, and they deserve to know that.
I don’t accept your characterisation that you began your question with. I think this is an appropriate way to inform the government of risks to the budget and to inform the Australian people of those risks. Ideally, the PBO costing would have been made available when the Opposition announced their policy.
On Chinese tariffs, I think as I’ve said to you before, we did a lot of work even in advance of the US election of various scenarios, including escalating trade tensions. We don’t make every element of that public because I made presentations to the National Security Committee, the Cabinet and other cabinet committees, but we have described it in some detail. The broad conclusions from that modelling that we did to prepare ourselves and to plan for any outcome is that the major concern for Australia is our trade exposure and what that means if there are escalating trade tensions, including retaliatory measures. And what you’ve seen in global markets,
I know you’ve been following this closely, Shane, as well as the markets are very jumpy, not just about the original announcements out of DC, but also the measures announced in response and that is playing out on markets. We’ve factored those sorts of things into our considerations and in our discussions and I’ve given you a summary of that here and on earlier occasions,
Journalist:
Treasurer, you haven’t spoken to the Secretary Bessent since he’s been sworn in. Senator Farrell’s counterpart hasn’t been Senate confirmed yet. The Prime Minister hasn’t spoken to President Trump since he’s been sworn in. So, who is putting the case to Donald Trump’s inner circle for Australia on the economy and does that mean that Australian exporters are leaving their livelihoods in the hands of Kevin Rudd?
Chalmers:
Penny Wong has already met with her counterpart – Penny Wong has already met with Marco Rubio. Richard Marles is about to meet his counterpart. I met with my now counterpart before the election and spoke about some of these issues. The Prime Minister has had an initial conversation with President Trump. You’re right to point out that Don Farrell’s counterpart has not confirmed yet and so there are appropriate ways to go about that. But I don’t think any objective observer of our access to the new administration in the US would conclude anything other than the access is already good. It does augur well for our ability to put the case to American counterparts, and those other conversations will happen in due course.
Journalist:
With respect to the policy costings, obviously the Australian people are smart. They care that their taxpayer dollars are being used effectively. But do you think that people in this room and in this building perhaps overestimate how much costings matter to the average Australian? Because all government policies, there are none that are particularly cheap, it’s all billions of dollars. It’s an unfathomable amount of money for an average person to comprehend. So do you think the lunch policy is perhaps just about the vibes of supporting small businesses versus budget costings that they might not be able to understand how expensive it is?
Chalmers:
First of all, we’re supporting small businesses in a more responsible way. We’re supporting small businesses enthusiastically. Instant asset write‑off, help with energy bills, help with cyber competition policy, and in all of the other ways that we’ve run through. I think Australians would be very concerned to know that Peter Dutton would ask them to chip in billions of dollars to shout their boss lunch. That is the simplest explanation of what’s happening here. Tax breaks for long lunches and entertainment. That was the policy announced more than 2 weeks ago. And this is the policy that I’ve asked Treasury to cost now.
It’s my job to understand what the risks are to the budget. I think every Australian has an interest in the sort of responsible economic management that we’ve been providing. Two surpluses, $200 billion turnaround, $177 billion less debt. And we’ve been able to do that because we haven’t gone down the path of rorts and waste, which were the defining features of the economic mismanagement of our predecessors. Again, I think if you’re asking how Australians should come at these questions in an election year, all they need to know is Labor under Anthony Albanese is for tax cuts for workers and help with the cost‑of‑living support for small business. Peter Dutton is for tax breaks for long lunches. He would make Australians worse off and they’d be worse off still, if he wins,
Journalist:
Treasurer, the Prime Minister has made several references to new legislation this fortnight, is Labor preparing any extra cost‑of‑living legislation?
Chalmers:
Well, the parliamentary schedule will become clear over the course of the sitting fortnight, but I wouldn’t draw that conclusion from what the Prime Minister has said.
We’ve got some important priorities before the parliament already, production tax credits are an important priority for the government, the hate speech laws and there might be other legislation introduced as well. But I wouldn’t encourage you to conclude from that, that there will be a big new measure like that in the next 2 weeks. Our focus has been on rolling out the substantial, meaningful and responsible cost‑of‑living help that we’ve already budgeted for.
Thanks very much.