JIM CHALMERS:
First of all, I wanted to note the firies in my community who have been injured, attending to that fire in my neighbourhood there at Slacks Creek overnight. We are thinking of you. We know the unbelievable sacrifice that firies and their colleagues make in looking after our local community. I've been in contact this morning with the leadership of the firies in our area. We know that there will be loved ones and friends and colleagues who will be doing it tough and we wish the injured firies a speedy recovery from the injuries that they incurred looking at our community and our local people.
Today, the Reserve Bank has lifted interest rates by a quarter of a per cent. This is a really difficult decision for a lot of Australians who are already under the pump. This is a reminder that inflation remains the primary challenge in our economy. This is a reminder of the difficult economic conditions in which we frame the second Budget. The Budget is in a week’s time from now. The priorities in that Budget will be responsible cost‑of‑living relief that doesn't add to inflation. Laying the long term foundations for future growth and opportunity in our economy, and also making our Budget and our economy and our people and our country much more resilient to the sorts of global economic uncertainty that we've seen in recent times. It will be a responsible Budget, it will have two main tasks; to see people through a difficult period and to set this country up for the future. We know and this interest rate decision today is a reminder, of the complex combination of economic pressures that are being felt right around the country. The Budget will seek to alleviate some of that pressure, at the same time as it positions this country to take advantage of the remarkable opportunities that lay ahead. The Budget is in a week’s time.
Two important announcements that we've made today which will be in the Budget ‑ the first one is payday super. It's just common sense to pay superannuation with wages. It's a simple change, it will strengthen the system, and it will also strengthen people's retirement balances. And it will do that because it will make it less likely that people miss out on the superannuation that they've earned and they're entitled to. The overwhelming majority of employers do the right thing when it comes to superannuation. But by paying super more regularly with wages and with salaries, makes it far less likely that people will miss out on the super that they've earned. And what we've done here is we've deliberately given employers and super funds a long run up until 2026, so that they can prepare for this really important change. This will make a difference to people's retirement balances. It will make the system stronger and fairer. And we've given people a long lead time, a long run up, so that they can make this change happen. The last one I wanted to touch on before I turn to you for your questions is around smoking and vaping. I am really proud of the changes that Mark Butler announced today in relation to vaping. I say, as the Treasurer, but also as a parent. And as an Australian, that this explosion in vaping, particularly amongst our kids is one of the biggest challenges that we have in local communities like mine. It's a huge challenge in our schools. It's a huge challenge in our families and around our communities. And I really just couldn't be more supportive of what Mark Butler has announced today with vaping. It's a really important set of initiatives. We can't sit idly by and see another generation of Australians get hooked on nicotine. This stuff is supposed to help people get off nicotine, not hooked on nicotine. We've seen it explode, especially amongst our kids, they have been very, very troubling developments. And that's what makes today's announcement really important. Over to you.
JOURNALIST:
The decisions that you took at the last Budget caused the bottom line to worsen by net $9.8 billion, according to Budget Paper One. Does this renewed evidence that inflation is persistent mean you should actually be making decisions that generate a net improvement in the bottom line and take money out of the economy rather than putting more in?
CHALMERS:
This inflationary environment puts a premium on what's responsible and what's sustainable. And the most important set of decisions that we took in the October Budget, were to bank 99 per cent of the upward revision in revenue, at the same time as we made key investments in strengthening our economy and fixing our supply chains, and dealing with some of the issues on the supply side of the economy. So the amount of spending matters, but the quality of spending and the type of spending matters as well. What's most important is that we show the necessary restraint, so that every new dollar that we're investing makes a meaningful difference, whether it's growing the economy, or helping people get through a difficult time, you can expect to see a similar strategy in the Budget next week.
JOURNALIST:
Given record rises in rates across the country, why not increase Commonwealth Rent Assistance, by even a small amount?
CHALMERS:
Well, you'll have to wait a week and see the combination of cost‑of‑living relief measures that will be in the Budget. We know and we acknowledge that Australians are doing it tough. There will be a cost‑of‑living package in the Budget and it will prioritise the most vulnerable Australians and what we will try and do there is to make sure that the relief that we provide will be meaningful but won't add substantially to this inflation problem that we've got in our economy. And so you'll have to wait and see the combination of measures that we will announce on Tuesday night. I make the same point that I've been making for some time ‑ no government of either political persuasion can satisfy all of the demands for new spending in the Budget. Typically, in the lead up to the Budget and particularly the week before a Budget, there's always a lot of speculation. Often large swathes of that is accurate and some of it turns out to be inaccurate and so I would caution you against making assumptions about what is in and not in the Budget. I'd encourage you to see what we announce on Tuesday night.
JOURNALIST:
Treasurer, Phil Lowe today said that the RBA is expecting growth of one and a quarter per cent this year. That's lower than what they were forecasting just three months ago. Once you take into account population growth, people are going to feel like they're in a recession. Are you worried that the RBA is tightening rates so much it could drive the country into recession?
CHALMERS:
Well I don't second guess the decisions taken independently by the Reserve Bank, as you know. My job is different, it's to hand down a Budget which is carefully calibrated to these economic conditions that we confront right now. The Reserve Bank, the Treasury, I think almost everybody expects the Australian economy to slow substantially later this year, that is the inevitable consequence, in my view of higher interest rates combined with the global slowdown and so the Reserve Bank's forecasts reflect that, the Treasury's forecasts reflect that too and you'll see that in the updated forecast that I release on Tuesday.
JOURNALIST:
Just on JobSeeker. Considering the number of people who are on this payment and related payments, are you satisfied that the conditions are right in getting people into work? And just secondly, if I may, are you considering changes to consumer contributions in aged care in next week's Budget?
CHALMERS:
No is the answer to the second part of your question. We've got a substantial aged care agenda already. Clearly, at some future point there will be more work to do when it comes to making aged care sustainable but our focus in the Budget as we've indicated before is bedding down the changes that we've already announced as well as giving aged care workers the kind of pay rise that they need and deserve to look after older Australians. Could you repeat your first question, Sarah?
JOURNALIST:
JobSeeker, the old mutual obligations and settings and getting people into work, just considering the number of people on the payment at the moment, are you satisfied that's all exactly the way it needs to be?
CHALMERS:
Well, a couple of things about that. Obviously, it's really important that we get the JobSeeker payment right, that we do what we can in tight Budgets and in an inflationary environment. But we shouldn't see the task ahead when it comes to Australians who are out of work as one that is exclusively about the adequacy of the payments. And the Economic Inclusion Advisory Committee report has got 37 recommendations ‑ 36 of them aren't about the base rate of JobSeeker and they are important too. We need to get local communities where there is entrenched, long‑term unemployment, we need specific initiatives there and there will be in the Budget. We've got an Employment White Paper that reports towards the end of this year which goes to some of these issues around participation. Julian Hill and others are working at the committee level on making sure that the job agency providers are doing what we need them to do. So there's a broad swathe of things that we need to do. Now I see today that Peter Dutton says that we should bring back Work for the Dole which I suspect might have been what's prompted your question. I think it's troubling that Peter Dutton doesn't know that Work for the Dole is still in operation. We did not abolish Work for the Dole. There are people on the Work for the Dole program right now. It beggars belief, frankly, that his one big contribution to this whole conversation is to bring back a program that hasn't been abolished.
JOURNALIST:
Just back to your opening comments. So you face a clamour from all over the place, you know, different sectors, to increase welfare spending in his Budget. Is it your expectation or at least hope that the latest rate may now temper that?
CHALMERS:
I don't see it in those terms. I think that the rate rise is really a pretty stark, pretty brutal reminder of the difficult economic conditions that we confront as we finalise the Budget. And I think people are broadly aware that we've got a inflation challenge in our economy, people feel it every day. And inflation is moderating off the peak around Christmas time, but it's still higher than we'd like for longer than we'd like and the forecasts in the Budget will reflect that as well. Our job is to provide responsible cost‑of‑living relief, to do what we can without adding substantially to this inflation challenge that we have in our economy and the best way to do that is to prioritise the most vulnerable and the best way to do that is through ways like the energy bill assistance which I'll detail in the Budget which is all about getting electricity prices not rising as much as what they were anticipated to do last Budget. So again, in a bit like in answer to Rachel's questions, I would encourage you to be careful about the assumptions that people are making about what's in and not in the Budget. There will be a substantial cost‑of‑living package, it will have a number of elements, it will prioritise the most vulnerable Australians and it will be conscious of the inflationary environment that we find ourselves in.
JOURNALIST:
Immigration is predicted to be significantly higher this financial year than previously predicted, given today's RBA decision are you concerned about the impact that immigration will have on inflation? And then also on the housing market as well?
CHALMERS:
A couple of things about that. First of all, it's important to remember that this substantial increase in the net overseas migration number is not a number that the government has chosen. That's not a number that the government nominates or a target that the government nominates. The reason why we are expecting 718,000 across two years of net overseas migration is because the students have come back quickly and the long‑term tourists have come back quickly, and fewer Australians are deciding to go overseas to work. And even with this substantial increase in net overseas migration, we still haven't caught up to what we lost during COVID, and that's important to remember as well. But this is not a number that the government is treating as a target. We understand that when the population is growing, we need to be making investments in housing and in infrastructure. We are doing that. It beggars belief that the Coalition of Cookers in the Senate, the Greens and the Coalition are voting against $10 billion of investment in housing for this reason.
JOURNALIST:
Does it worry you that when it comes to JobSeeker, over the past 20 years more and more mature Australians 55 plus are on JobSeeker, in some circumstances especially women ‑ a lot more?
CHALMERS:
Yes, it does. Yes, it does. You'll see on Budget night what we intend to do about this, but I think the work of both of these committees that have reported to Katy Gallagher and I, have made it really quite clear that one of the troubling developments is that the growth particularly in women over 55 in our unemployment numbers. And we do think that's a problem. It is something that concerns us, particularly for women over 55 who find it harder to get back into the workforce, particularly for the long‑term unemployed. If you're over 55 it's harder to find a job even when unemployment nationally is a three and a half per cent.
JOURNALIST:
You've mentioned the word speculation a lot and obviously just going off the back of Probyn's question, there are reports that JobSeeker will be increased for the over 55 age group. When it comes to younger Australians, there are a lot of younger Australians that can't afford to pay the rent, they can't afford to buy fresh food or any food at all to feed their young families. Can you rule out that younger Australians will be forgotten in this Budget?
CHALMERS:
We will be very conscious of the pressure on younger Australians in the Budget. And we know that Australians particularly vulnerable Australians are doing it tough across the board. And the reason why I've cautioned you against assuming of what's in or not in the Budget is because we should look at what the government announces next Tuesday night in its entirety. We understand that particularly people on payments are doing it tough. And that's why our energy bill relief is directed towards people on pensions and payments. We understand that there are pressures coming from a range of sources on Australians, young and old. We're cognisant of that will respond to that in the Budget.
JOURNALIST:
Treasurer, a few weeks ago you received a report from the Treasury into the Petroleum Resource Rent Tax. I think at the time, you said a decision hadn't been made as to whether you'd respond to that in the Budget or after. Has a decision been made about whether you respond to that review in the Budget and if so are changes going to be made?
CHALMERS:
That decision hasn't been taken. We received that advice, as you rightly point out, quite recently. We've engaged in a subsequent round of consultation as you'd expect, and when I've got more that I can say about that, I'll say it.
JOURNALIST:
Just to clarify, so you won't respond to that in the Budget?
CHALMERS:
No, a decision hasn't been taken on the timing of our response to the Treasury advice which we received very recently. We've been engaged in consultation as you'd expect from us, and when I've got more that I can say about that I'll say it.
JOURNALIST:
A question on the on the 55 plus changes to JobSeeker: notwithstanding what else might be in the Budget for younger Australians, what has been the criteria or the reasoning behind that age number? Is there a reason that that is the cut off for potential changes to JobSeeker on Tuesday night?
CHALMERS:
Well, first of all, I'm not going to pre‑empt the specifics of any announcements that we make on Tuesday night, I thought I've been making myself relatively clear on that front, perhaps not. Wait for the Budget and see what's in there. Probyn asked me am I particularly concerned about women over 55 finding it harder to get into the workforce. And I am, that is the case. And in answer to Stela's question, will there be cost‑of‑living relief which is broader than that that's been speculated on, then the answer to that is, yes. Thanks very much.