JIM CHALMERS:
Thanks for joining us here in Brisbane. I’ve got about half a dozen, half a dozen issues to touch on, so I’ll try and do that as efficiently as I can. I know that the Reserve Bank Governor is up in half an hour or so and I want to be respectful of that. People will want to tune in to that.
Today the independent Reserve Bank has kept interest rates on hold. This is the outcome the market expected. It means that it is now well over a year since the last increase in interest rates.
The Reserve Bank has put out a detailed statement. I don’t want to pre‑empt the governor’s comments at her press conference shortly. One of the really good developments in recent times has been those press conferences from the Governor. Governor Bullock will get an opportunity to elaborate on the issues raised in the statement that has been released.
I’ve been focused on my job, which is fighting inflation without ignoring the very substantial risks to growth. I note in the Reserve Bank statement that they talk about how inflation has fallen substantially and that the board is gaining some confidence that inflationary pressures are declining. This has been our focus as a government.
We know that people are under cost‑of‑living pressure and that’s our primary focus as a government. That’s why this week we’ll see a 10 per cent pay rise for early childhood educators and students will see their HECS balance reduced as well. This is part of our effort to ease cost‑of‑living pressures at a time when the economy has been soft, and people are under substantial pressure.
What we’ve been able to do in the face of significant cost‑of‑living pressures and global economic uncertainty is to keep the economy growing, see inflation come off very substantially, get real wages growing again, create more than a million new jobs, roll out tax cuts and cost‑of‑living help, as well as 2 surpluses and less debt.
We’re making good progress in the fight against inflation. We’re making good progress when it comes to the key economic indicators. But we know that that doesn’t always translate into how people are feeling or faring in the economy. We know the economy is soft. We know that people are under substantial pressure and that’s why our responsible economic management is so important.
I also wanted to take the opportunity to thank the Governor and the board and staff of the Reserve Bank for their efforts to implement the Reserve Bank reforms which have now passed the Senate. There are 3 parts to those reforms. The parts which are agreed between the government and the Governor and the board, the bits that the Reserve Bank can implement on its own and then there are the legislative bits and the passage through the Senate means that we can now make progress on all 3 fronts.
I thank the Reserve Bank and its leadership for their efforts to implement those changes. The new board won’t begin until after the February meeting. They will be in place from the beginning of March. I will consult, again, with the Shadow Treasurer on the makeup of those new boards. I’d like to do that in the coming days subject to his availability so that we can nail down the membership of the 2 new boards of the Reserve Bank, consistent with the RBA review.
I also wanted to say that I spent the morning with my ministerial colleagues Stephen Jones and Jenny McAllister at Suncorp being briefed on preparations for natural disaster season and inspecting some of the new technology that Suncorp has when it comes to monitoring, particularly when it comes to storm season. I wanted to indicate that one of the reasons why we are seeing a little bit of slippage in the mid‑year budget update, which we will release in the next couple of weeks, is because of extra money in the budget for disasters.
There’ll be an estimates variation in the budget of almost $2 billion for natural disasters, which is unavoidable spending. It’s actually one of a number of estimates variations which have seen a little bit of slippage in the bottom line compared to budget. People will see that in the mid‑year budget update. But almost $2 billion in extra funding for natural disasters – unavoidable spending, but important spending, important investments when it comes to dealing with the economic and fiscal impacts of storm season and natural disasters more broadly. As a Queenslander I know how important it is that we are prepared for summer storm season.
I’ll also be spending the bulk of this week in regional Queensland with 3 terrific senators – Senator Chisholm, Senator Green and Senator McAllister. Together we’ll be covering almost 6,000 kilometres and 6 towns in 3 days – from Brisbane to Hervey Bay, to Rocky to Longreach, to Cloncurry, to Cairns and back again.
This is a really important opportunity for us to engage with local communities and local industries and economies talking about infrastructure, health, training, agriculture and emergency management. We know if we want our economy to grow in sustainable ways again that we need our regions to be a big part of the story.
As a Queenslander I’m looking forward to covering almost 6,000 kilometres with my frontbench colleagues from the Senate, getting out and about in regional Queensland communities, speaking to local communities about local industries, local infrastructure and local services at the same time.
There’s a lot of uncertainty in the economy coming at us from around the world, and I wanted to say a couple of things about recent commentary from China, from the administration there when it comes to supporting activity in the economy.
China has been a big concern to us when it comes to the slow down and the weakness in the Chinese economy. We welcome the recent statements by the authorities in recent days, indeed, in recent months. Any proactive steps to support growth in the Chinese economy are welcome, but we are conscious that there are still serious and structural issues in the Chinese economy.
With all of this going on around the world – weakness in the Chinese economy, some policy uncertainty in the US, conflicts in the Middle East and eastern Europe, political turbulence in places like Korea and France – there’s a lot of global economic uncertainty. There’s a lot of pressure on people here at home. There is always a premium on responsible economic management, but especially right now.
Happy to take some questions.
JOURNALIST:
Do you think it’s right for Sally McManus to make such pointed attacks at the RBA Governor? And have you spoken to her about those comments?
CHALMERS:
I haven’t spoken to her about it. Sally’s comments are a matter for Sally.
I speak for myself, and when it comes to economic policy I speak for the government. We have a very respectful relationship with Governor Bullock. We don’t pre‑empt or predict decisions taken independently by the Reserve Bank and its board.
We’ve made it very clear and I’ve made it clear once again today that I’m focused on my job. My job is being helpful in the fight against inflation without ignoring the substantial risks to growth. We are making very substantial progress in the fight against inflation, and that’s reflected in the Reserve Bank’s statement today.
JOURNALIST:
The RBA board has jettisoned its previous guidance that it was not ruling anything out on interest rates in a further indication it’s more confident about the current path. Do you welcome that?
CHALMERS:
The statement makes it clear that the board is gaining some confidence that inflationary pressures are declining. But one of the very welcome developments in recent months is that Governor Bullock will have her own opportunity to speak to that statement quite shortly.
I’d encourage people to engage with her, to make the most of that opportunity. I speak for the government when it comes to economic policy. Our focus is the fight against inflation. We’re making welcome and encouraging progress in the fight against inflation, and that’s reflected in the Reserve Bank’s statement.
JOURNALIST:
Are you still of the opinion that the RBA not moving on rates is smashing the economy?
CHALMERS:
I think it’s very clear, and it has been clear for some time, that a number of things are weighing heavily on growth in our economy – global economic uncertainty, cost‑of‑living pressures and the impact of interest rates. I think that’s self‑evident. We’ve seen that for most of the year when it comes to particularly slowing growth in our economy.
Not that long ago we got the National Accounts for the September quarter. Growth was weaker than economists had been expecting because of the combination of those factors.
Our focus and my job as Treasurer is to focus primarily on the fight against inflation and to do that in a way that doesn’t ignore the very substantial risks to growth. We are making progress on that front, but we know that people are still under very substantial pressure, and that’s why rolling out our cost‑of‑living help is so important.
JOURNALIST:
Are the RBA’s comments on wages and GDP growth indicative that the RBA has overdone it and should have moved to cut rates earlier?
CHALMERS:
I’m not going to engage in that kind of commentary. I don’t pre‑empt or predict decisions taken independently by the Reserve Bank, and I don’t second guess decisions that they have taken already. The Governor of the Reserve Bank and her board have a job to do. I have a job to do, and I’m focused on my job.
JOURNALIST:
You spoke earlier about meeting with your shadow counterpart about the board announcements. When will you be announcing those appointments, and will you be including workers’ representatives, as Sally McManus is calling for?
CHALMERS:
What people will see when we make the announcements, subject to the consultation that we still need to do including with the Shadow Treasurer, is the appointments that we’re seeking to make to the Reserve Bank Board are first class and first rate people.
We will consult in the coming days with an eye to ideally announcing the makeup of the 2 new boards before Christmas, but subject to that consultation. I take that consultation very seriously.
We have already around the middle of the year had conversations with the Opposition about the possible makeup of the 2 boards. There’s a process which has been adhered to which recommends a shortlist to the government. We intend to pick from that shortlist, and we intend to consult in a genuine way, even with our political opponents, even though they haven’t supported this legislation through the Senate.
JOURNALIST:
So you haven’t ruled out workers’ representatives?
CHALMERS:
I don’t want to pre‑empt the consultation that’s happening, but I’ve made it very clear privately and publicly that that’s not my intention, that we will pick from the shortlist that has been provided to us. The Governor of the Reserve Bank has had input into that, the Secretary of the Treasury and also a third party. This is the process laid out by the RBA review. We’ve adhered to that. We’ve taken it very seriously.
It has been a very genuine effort to get the best possible combination of people on these 2 boards, and when we make the announcement you will see, subject to that consultation, that the people we are considering for the 2 boards are first rate and first class, the sorts of people that should be broadly supported not just in politics but in the community more broadly.
JOURNALIST:
Earlier you spoke about slippages when it came to natural disaster funding. Are there any other slippages you foresee?
CHALMERS:
I do. One of the defining features of the mid‑year budget update will be a whole range of what is, in the jargon, estimates variations.
What estimates variations are is unavoidable spending where the parameters might change or our forecasts might change, and that has implications for spending. Almost $2 billion in extra spending for natural disasters will be one of the big drivers of slippage in the budget. I’ve indicated previously that there is also substantially more money for veterans and there are some other estimates variations as well. One of the real pressures on the budget is the combination of those estimates variations, including natural disasters.
JOURNALIST:
I just want to return to the comments that Sally McManus made. You did say that they were her comments and that she can speak for herself. The ACTU is still a member of the labour movement. Do you concede that they may place pressure on the central bank to cut rates?
CHALMERS:
No, I think the Reserve Bank takes its decisions independently. There will always be a view in the broader Australian community about the future trajectory of rates. People are entitled to express a view on all sides of the argument.
It’s not just Sally McManus who has a view about that, other people have expressed a view about that. Some people in the economics profession, for example, were calling for 3 rate hikes this year, and there have been none.
People are entitled to express a view about that. My focus is on my job, not the Governor’s job. I’ve made it very clear that I have a very respectful view of the independence of the Reserve Bank and its Governor. They will take their decisions independently. They can do that without a running political commentary from people in positions like mine.
JOURNALIST:
What do you have to say to mums and dads who have been waiting for this meeting to hopefully have more money to spend on Christmas dinner? What do you have to say to those people?
CHALMERS:
A couple of things about that. We understand that people are under substantial pressure, and interest rates are part of the story. That’s why we’ve put so much effort into fighting inflation. The 2 surpluses are helping in the fight against inflation, as the Governor has said.
The cost‑of‑living relief, whether it be the tax cuts, the energy bill rebates, getting wages moving again, cheaper early childhood education, cheaper medicines, rent assistance, all of this is about not just recognising the pressures that people are under but responding to them in the most responsible way that we can.
That’s really the difference between us and our political opponents. The Australian Government and the Australian community is focused on the cost of living. Peter Dutton is focused on what flags he has behind him in a press conference.
Our priorities are in line with the pressures that people feel. That’s why our cost‑of‑living relief and rolling that out in the most responsible way we can is our highest priority. We’re making progress in the fight against inflation, but we know that doesn’t always translate to how people are feeling and faring. That’s why our cost‑of‑living help is so important.
JOURNALIST:
Changing tack now, do you think Israel’s actions in Gaza are comparable to Russia and China?
CHALMERS:
I’m here to talk about interest rates and a range of other issues. I don’t want to engage in some of that commentary that we have seen. Our position when it comes to the conflict in the Middle East is clear.
JOURNALIST:
Do you think the Prime Minister waited too long to condemn the synagogue attack in Melbourne?
CHALMERS:
No, the Prime Minister condemned in the strongest possible terms that disgraceful, despicable, unforgivable attack on the synagogue in Melbourne.
We are thinking of everyone in Melbourne’s Jewish community, indeed, the Jewish community, the broader Australian community, when it comes to this act of terrorism.
The Prime Minister was very clear on multiple occasions, including today, when he said that this was an act of terrorism, it was fuelled by antisemitism and it was stoked by hatred, which has absolutely no place in Australian society. The Prime Minister has been very strong on that and again today, including in the last couple of hours.
JOURNALIST:
A Queensland man has allegedly threatened to blow up a Melbourne community centre. He’s since been charged by police. What do you have to say about that?
CHALMERS:
When people make those kind of threats, they should be charged. They should feel the full force of the law. I’m not going to get into the specifics of that. I don’t want to jeopardise whatever legal proceedings are still to come.
But what we want to see in this country is we want to avoid the kinds of tensions that we’re seeing elsewhere in the world. The role of political leadership is to calm those tensions, not make them worse. My fear when it comes to Peter Dutton is that he has a political strategy which is a very divisive strategy, and that’s not leadership.
Leadership is about calming tensions, not making them worse. The Prime Minister has gone out of his way in acknowledging the unforgivable acts at the synagogue in Melbourne. Our job as leaders is to bring people together, not divide and diminish and demean people. That’s the difference between Anthony Albanese and Peter Dutton.
JOURNALIST:
Would you have acted differently or moved quicker to condemn the terror attack in Melbourne?
CHALMERS:
The Prime Minister condemned unequivocally and speedily the unforgivable, disgraceful, despicable attack on the synagogue in Melbourne. That’s clear from the statements that he has been making in recent days.
I’m just going to say one more thing, and then we’re going to have to wrap it up. I just want to say something about Paul Fletcher, who has announced that he won’t be recontesting the next election.
I wanted to very genuinely say that I wish Paul Fletcher well. He’s had a couple of difficult jobs in the Liberal Party, including the Manager of Opposition Business. These are difficult jobs. Paul Fletcher has been a member of parliament I think for around a decade and a half. I genuinely wish him and his family well.
This are 2 moderates leaving the Liberal Party in 2 weeks, and it makes it very, very clear – whether it’s Simon Birmingham or Paul Fletcher – that Peter Dutton’s divisiveness is chasing the moderates out of the Liberal Party. The Coalition no longer welcomes moderates in their ranks. The Liberals are not a middle‑of‑the‑road party, they are an extreme right party. The departure of 2 moderates in 2 weeks makes that really clear.
There is no place for moderates in the Liberal Party anymore. Peter Dutton’s divisiveness has turned the Liberal Party into a party of the far right and not a party of the middle of the road. We’re seeing that in these 2 very substantial resignations in just 2 weeks.
Thanks very much.