Graham Perrett:
It’s great to be here with Minister McAllister and the Treasurer to announce some of those other supports for my community.
Jenny McAllister:
Thanks, Graham, and thanks for all of your advocacy for your community over in Moreton Island.
It has been a really tough and challenging time for communities in southeast Queensland and in the Northern Rivers. It’s been 8 days since Tropical Cyclone Alfred crossed Moreton Island. I’ve got to say, it actually feels a lot longer because a lot has been accomplished. I was here in the lead up to Alfred and I saw all the hard work that was done by emergency services personnel, the ADF personnel, local government disaster management staff and the thousands of volunteers and ordinary Australians that were out there working to keep themselves and their communities safe.
In that week since, an enormous amount has been accomplished – homes and businesses have been washed out and cleaned up. Electricity has been restored to hundreds and thousands of people, and councils are setting about cleaning up and making infrastructure safe again. And I really want to thank all of the people who contributed so much. Now we know that recovery takes time, and when we think about recovery, the place that we start is with people.
Our government is working closely with the Queensland Government to ensure that supports are available for the different challenges that people in this region have experienced. So if people have lost essential services, if people need to cover the cost of emergency essentials like food or clothing or medicine, or if a person lost essential household contents like bed linen or whitegoods, there are payments available, and they are jointly funded by the Australian Government and the Queensland Government, and you can access those through the Queensland government website.
We’ve also extended, of course, Australian Government support to many people in these communities. If a person has suffered a loss of income as a direct result of Cyclone Alfred, they are eligible for the Australian Government Disaster Recovery Allowance, which offers up to 13 weeks of income support for workers and sole traders, depending on their personal circumstances. We’ve already stood this up in a range of locations, and today, I can announce that the Disaster Recovery Allowance has been extended to an additional 2 LGAs: Bundaberg and Toowoomba.
South of the border, we also have changes that we need to make, along with changes in Queensland. So, if a person has suffered some of the most extreme impacts, including major damage to their home, serious injury or loss of a loved one, they may be eligible for the Australian Government Disaster Recovery Payment. Now, that is the payment that offers eligible residents $1,000 and $400 per eligible child.
Today, I can announce that this payment will be made available in Brisbane, in Ipswich, in Moreton Bay and in Toowoomba, and in localities in the Scenic Rim and Somerset local government areas. South of the border, the payment will be made available in the shires of Bellingen, Clarence Valley, Kyogle and Richmond.
As additional information about impacts becomes clearer, the government will consider other locations.
Now, we know that there will be, in the longer term, more to do when it comes to recovery. My agency, the National Emergency Management Agency, is working closely with the Queensland Construction Authority to understand the impacts. And as we understand more about these impacts, it is our firm intention to be a good partner to the Queensland Government but also to the people of Queensland. It can take time, but my message is that we will be standing alongside Queenslanders every step of the way.
Jim Chalmers:
Thanks very much, Jenny, for being here and for making the announcement today. Also, Graham, the best ever member for Moreton, finishing up at this election. Thank you for the way you’ve represented the southern suburbs of Brisbane.
I wanted to add to what Jenny said – a huge thank you to everyone who’s been associated with preparing for and then enduring and then recovering from ex‑Tropical Cyclone Alfred. Some really quite remarkable acts of selflessness from our first responders, our SES, our Energex and Ergon workers right throughout South East Queensland and into northern New South Wales where Jenny’s from as well. A big thank you to all of them.
Today, we are extending the allowance and the payment. This will be a bit of extra help for the people who are hardest hit. We have been primarily focused throughout on the human cost of these natural disasters, but there will be a very substantial economic cost as well. Recovering and rebuilding from natural disasters will be a key influence on the Budget that Katy Gallagher and I will hand down in 8 days’ time.
Remember, around 5 million Australians were in harm’s way when it comes to Cyclone Alfred, around 2 million homes. At one point, there were more than 450,000 homes without power. In our part of the world, that’s actually the most ever simultaneously. And there was something like 12 million work hours lost when businesses closed down. So, we’re getting a handle on the economic costs, and we’re getting a handle on the costs to the budget, and we will report our initial assessment of that in the Budget Tuesday next week.
Treasury expects there will be about a $1.2 billion hit to economic output just as a consequence of ex‑TC Alfred. That’s about a quarter of a percentage point in GDP. And why also anticipate that there will be some impact on fruit and vegetable costs, depending on how much of the farmland has been impacted, but also when it comes to building and construction costs. We’ve made a heap of progress on building and construction in the inflation numbers, but depending on how much rebuilding will be necessary, we can anticipate some upward pressure on building costs as a consequence.
There will also be costs to the budget, and those costs will be substantial. We will provision an extra $1.2 billion in next week’s Budget in new funding for payments and also to help rebuild local communities as well. That new $1.2 billion will be part of 13 and a half billion dollars total in the Budget to respond to and rebuild after natural disasters.
I want to remind you that when our political opponents talk about wasteful spending, included in the number they use is funding for natural disaster recovery. None of this funding is safe if the Coalition wins the election, and that’s because they think this spending is wasteful.
I’m told that the Shadow Treasurer is off on a little tour. I think that’s a very good thing. From our point of view, the more Angus, the better in the coming months. He should visit every single marginal seat and tell millions of Australians that he tried to deny them a tax cut. He should visit every marginal seat and tell millions of Australians that he tried to deny them the cost‑of‑living help that they need and deserve.
If Angus Taylor had his way, wages would be lower, millions of workers wouldn’t be getting a tax cut at all, and there wouldn’t be cost‑of‑living help. And that means Australians would be thousands of dollars worse off if Peter Dutton and Angus Taylor had had their way. Now, more Australians are now earning more as a consequence of our efforts as a Labor government on wages, and they’re keeping more of what they earn as well because of our tax cuts. All of that is at risk if Peter Dutton wins the election.
One of the most helpful things – one of the many helpful things – that Angus Taylor has said in the last little while was last week when he said, ‘the best predictor of future performance is past performance’. That should send a shiver up the spine of every single Australian under pressure because that reminds us about the Coalition’s attacks on Medicare when they were last in office, the fact they tried to keep wages low, the fact they voted against cost‑of‑living help, the fact that inflation was higher and rising when they were in office, real wages were falling and living standards were falling fast. No wonder they won’t come clean on any policies at all. They have no idea what they’re doing, and they won’t say what they will cut. And no wonder, then, that so many of Angus Taylor’s colleagues are lining up to bag him in the paper.
This would be the worst possible time to risk the progress that Australians are making together in our economy. Our economy has turned a corner. We are making progress together. A change of government represents a very serious risk to that progress because our political opponents didn’t want Australians getting tax cuts, didn’t want them getting cost‑of‑living help, and last time when they were in office, they went after Medicare and wages.
I’m going to have more to say about the Budget and the progress that Australians are making together tomorrow at the Queensland Media Club, but happy to take some questions today.
Journalist:
After 2 surpluses, how bad does the budget bottom line look, and why?
Chalmers:
We’ll make all of that clear in the Budget in 8 days’ time. We have delivered back‑to‑back surpluses for the first time in almost 2 decades. Our opponents promised a surplus in the first year and every year thereafter; they delivered precisely zero surpluses. We’ve delivered 2 surpluses in our first 2 years, and that’s happened for the first time in almost 2 decades.
On top of that, we have helped engineer the biggest ever nominal turnaround in the budget in the history of this country – a $200 billion improvement in the budget, which means we are paying down Liberal debt, and we’re avoiding interest costs on that debt as well. A defining feature of our first 3 budgets was responsible economic management. That will be a defining feature of the fourth as well. Even this year where we will be printing a deficit for the year it will be much, much smaller than what we inherited from our political opponents, and that shows the progress that we’ve been able to make, not managing the government responsibly or providing cost‑of‑living help, but managing the budget responsibly and providing cost‑of‑living help and investing in building Australia’s future.
Journalist:
In terms of cost of living, what could Australians expect in terms of any sweeteners?
Chalmers:
We’ve made it clear that when we can afford to provide more cost‑of‑living help in a responsible way, of course we will consider that. We’ve said that on a number of occasions. But our focus right now is on rolling out the very substantial, very meaningful but very responsible cost‑of‑living help that we’ve already budgeted for – a tax cut for every taxpayer, energy bill relief for every household, cheaper early childhood education, cheaper medicines, rent assistance, free TAFE and getting wages moving again.
When you hear Angus Taylor talking about the cost of living, remember, if he had his way, Australians would be getting none of that cost‑of‑living help. If the Liberals had their way, Australians would be thousands of dollars worse off at the worst possible time, and they’ll be worse off still if the Coalition wins.
Journalist:
In a recent podcast episode, you said that the energy transition is an obsession for you and that Australians may be less enthusiastic given price increases under your government. Can you promise voters that the transition to renewables will lower electricity prices in the next parliamentary term if you win?
Chalmers:
Let me give a little bit of context for that important question. First of all, if you look at the most recent inflation data to the end of last year, electricity prices fell 25.2 per cent. They would have fallen 1.6 per cent without the energy rebates that we’re rolling out that our political opponents didn’t want Australians to get. So that’s the first bit of context.
You’re referring to the default market offer, which is a forward‑looking piece of guidance from the Australian energy regulator. And what that organisation has said is that it’s unreliable coal generation which is putting upward pressure on prices. Energy prices have been a big part of the pressure on Australian families and Australian households. That’s why we’ve provided 2 rounds of energy bill relief to take some of the edge off that, to do better than that in the most recent inflation data.
The worst thing we could do for electricity prices is to keep the unreliable parts of the system for so long while we wait for nuclear reactors to be built. Nuclear reactors would push electricity prices higher. They’re the most expensive form of new energy. They’d keep the unreliable parts of generation in the system for longer, and that would be bad for energy prices.
What we’ve said on a number of occasions now is we want to strike the right balance. We want to get more cheaper and cleaner energy into the system. And we’ve shown a willingness to provide a bit of assistance with energy bills in the interim.
Journalist:
Economist Chris Richardson said that the budget has become too reliant on ordinary income taxpayers compared to other revenue streams. Do you agree with this?
Chalmers:
That’s one of the reasons why we’ve provided a big tax cut in the middle of last year. I actually welcome a lot of the commentary around budget time and at other times about the budget position. It is an opportunity to remind people of those 2 surpluses – the $200 billion turnaround, the more than $90 billion in saving that Katy Gallagher and I have found, the fact that we have made a lot of progress cleaning up the mess that the Liberals and Nationals made of the budget. We inherited a trillion dollars of Liberal debt in a budget full of waste and rorts, and we’ve made good progress cleaning that up, but the job is not finished. So we welcome input from various commentators when the Budget is being finalised, including from Chris.
One of the things I wanted to say about tax – and forgive me for a few numbers here, but it’s relevant to your question, and it’s relevant to Angus Taylor’s little tour of marginal electorates. When it comes to tax, if you think about tax to GDP, the only party to tax higher than the tax cap that Angus Taylor is talking about now was the Liberals under John Howard, and he breached that tax cap 5 times, right? Tax to GDP in the most recent update was 23.4 per cent, down from 23.7 per cent the year before. Under the cap that Angus Taylor and Bridget McKenzie and others like Chris Richardson have spoken about before.
Don’t forget, when you hear people talk about tax this week and in the lead‑up to the Budget, some of the figures that Angus Taylor has put out there refer to a period from before our tax cuts come into effect. This is an egregious bit of dishonesty for him to put out numbers from before more than $20 billion a year in tax cuts that are rolling out right now in our economy.
The Liberals wanted 2.9 million taxpayers to miss out on a tax cut. They wanted 84 per cent of taxpayers to get a smaller tax cut. They wanted 90 per cent of women taxpayers to get a smaller tax cut. Our tax cuts are bringing down average tax rates from 25.6 per cent the year before to 24.1 per cent in the year that we are in now. And that means the average worker will pay less tax every year over the next decade under us‑ something like $22,677 less tax over the decade to 2034–35.
The reason I run through all of those numbers is because it’s relevant to what Chris is saying. It’s relevant to what Angus Taylor is saying. If he wants to have a debate about tax, he should ‘fess up – this is Angus, not Chris – he should ‘fess up and say that the Liberals want millions of Australians to miss out on a tax cut. He wanted them to miss out on cost‑of‑living help as well. And the numbers that he’s pushing around today are from before our tax cuts came into being.
Journalist:
That audit – sorry to interrupt – that audit talks about a 450 million – billion dollar windfall attributed to inflation and commodity prices. What happens as inflation eases and should commodity prices drop, and you block all this spending?
Chalmers:
One of the things that I’m proudest of in the first 3 budgets is that we banked most of the upward revisions to revenue in the budget. That’s historically unusual. Our predecessors used to spend most of those upgrades. We’ve saved most of those upgrades. It’s a big reason why we’ve got 2 surpluses. It’s a big reason why we’ve got that $200 billion turnaround. A big reason why we’ve got Liberal debt down about $170‑odd billion, saving tens of billions of dollars in debt interest. And that’s because we banked most of those upward revisions to revenue. The governments before us used to spend most of that, and that’s what makes it unusual and responsible.
When I read that commentary about so‑called windfalls, there’s a role being played there – a substantial role – by a stronger labour market. One of the things that’s really quite remarkable about the Australian economy is that we haven’t paid for progress on inflation with higher – much higher unemployment. The labour market has stayed strong. That’s good for the budget. Commodity prices have bounced around a lot, but at one point, they were an important contributor. And what really matters when you get those kinds of improvements and upgrades is what you do with it, and we’ve banked most of it.
Journalist:
Thank you. On the GST carve‑up, Queensland Treasurer David Janetzki has requested you reject the latest GST allocation on behalf of your home state. Will you do that?
Chalmers:
I don’t intend to do that, and I think David knows that. I speak to him from time to time. I have a good, respectful working relationship with the Queensland government, as does Jenny. She’s been working very closely with them over the last couple of weeks in particular.
David knows – and I hope you understand – that the Commonwealth Grants Commission process is an independent process which takes place at arm’s length from the government of the day, the Commonwealth government of the day. What happens is that the independent process takes about a year. It includes multiple rounds of consultations with the states. Queensland were clearly expecting a reduction. They had booked part of this downgrade in their mid year update, and they explicitly said at the time that there were further downside risks.
It’s not unusual for state treasurers to want more money from the Commonwealth. It’s not unprecedented for state treasurers to try and blame Commonwealth Treasurers for pressures on their own budgets. I understand that. I’ve got a bit of perspective about that. That story is as old as Federation, and that’s what we’re seeing here.
The other point I’d make is that Queensland’s done really well out of the Albanese Labor government. Billions of dollars in extra funding above baseline levels since coming to government – health, housing, schools, justice and the no‑worse‑off guarantee as well. We’ve committed $7.2 billion for the Bruce Highway. A lot of other states would like to get their hands on $7.2 billion. We’re providing that to Queensland. We’re making almost a 3 and a half billion contribution to the Olympics. And so that’s important perspective as well.
Now, the reason why there’s been this change determined by the independent CGC is because of a really extraordinary bounce back in coal royalties. That’s the other thing as well. Something like $8.8 billion extra in coal royalties over the relevant period compared to the distribution before that. So that’s a bit of perspective. But, again, as a Queenslander, I understand the power of parochialism in these kinds of debates. But there’s a lot of perspective here which I think David is intentionally ignoring.
We’ll go here and then yourself, and then we’ll come back.
Journalist:
If the state government cuts funding to infrastructure and frontline services due to the GST reduction, will you take the blame?
Chalmers:
The state government shouldn’t be blaming the Commonwealth government for pressures on their budget. We’ve all got pressures on our budget. This is not a decision taken by the Feds; this is a decision taken by an independent arm’s length Commonwealth Grants Commission. And not forgetting as well that $8.8 billion in extra royalties. So, nothing that the Commonwealth government is deciding is putting extra pressure on the Queensland budget; on the contrary, the decisions we’ve taken – billions and billions of dollars in extra funding for Queensland – are helping not just the Queensland government but the people of the best state in the Commonwealth. We are very enthusiastic investors here, and that’s reflected in our Budget. Again, it’s not unusual for state treasurers to try and pretend otherwise.
Journalist:
Do you think there are still problems regarding corruption and criminal behaviour in the Queensland Branch of the CFMEU?
Chalmers:
Obviously seeing those horrifying revelations in the coverage last night, clearly this shows how important it is that the government has taken such decisive steps when it comes to the CFMEU. There is clearly not just unacceptable but horrifying behaviour uncovered again. That’s why we appointed the Administrator. That’s why we’ve taken a tough stance. And it’s why my colleague Murray Watt has referred, as I understand it, the relevant matters to the police.
Journalist:
Sorry, just on another matter. The Fin Review has been reporting on Australian University researchers being asked to complete a questionnaire to gauge how their activities comply with the Trump administration’s foreign and domestic policies. How concerned are you about this foreign interference in our universities, and what is the government doing?
Chalmers:
I think you’ll understand that I’ve been focused on a lot of things, including the Budget next week, the new global reality that I’ll be speaking about tomorrow at the Queensland Media Club. I’ll leave commentary on that matter to Jason Clare.
Journalist:
Malcolm Turnbull was very critical of the AUKUS deal this morning. I assuming you saw that doorstop.
Chalmers:
Yeah.
Journalist:
He’s saying that you’re spending all of this money – billions of dollars – and handing over our sovereignty and potentially won’t own the submarines when they’re built. Are we getting a fair deal out of AUKUS?
Chalmers:
A couple of things about that. I saw a transcript of Malcolm’s doorstop in Canberra. I see that he was given an opportunity to just try and think about one good thing about Angus Taylor, and he was unable to do that.
But he also spoke about AUKUS. And the views that Malcolm expressed this morning on AUKUS are consistent with the views that he’s expressed on a number of occasions before. These are not – it’s not a revelation that Malcolm Turnbull doesn’t support AUKUS, and I respect his opinion. I speak to him from time to time about AUKUS and about a whole range of things. That’s not a new position that he’s taken.
The government is committed to AUKUS. We see it as in our strategic interests with big industrial benefits as well. It’s a long‑term agreement which will survive changes of government on both sides of – all sides of the equation, all 3 sides of the equation. But it’s in our interests and we support it for all the reasons that we’ve outlined before.
Journalist:
So we’re getting a good deal?
Chalmers:
I believe so, yeah.
Journalist:
Some Labor rank and file –
Chalmers:
I said I’d go here, and then I’ll come back to you. I’ll go here and then I’ll come back to you.
Journalist:
A two‑part question here regarding the 60 Minutes story that ran last night. How concerned are you about claims there’s rampant union‑led corruption on Labor government build sites in Victoria? And how urgent is there that there’s a proper investigation to ensure taxpayer dollars are not being brought in?
Chalmers:
Extremely concerned. I think anyone who sees the kind of story that was run last night or anyone who’s seen behaviour in recent years would be extremely concerned. That’s why we have taken and are taking the drastic steps that we have taken and are taking.
When it comes to the Victorian Government projects, we’re working with the Victorian Government to address criminality in the construction sector. The AFP and Victoria Police are working very closely together, as they do, as those recent raids demonstrate. Beyond that, when it comes to those Big Build projects, more of those sorts of questions can be directed at our Victorian friends and colleagues.
Journalist:
Just in terms of that 1.2 billion, so that means that nothing will be – funding won’t be cut from other projects? And what would your message be to your Logan constituents who fear that that price increase of fruit and veg, things like that, could really affect their family budget? Is there any modelling to suggest there’s a particular dollar figure or percentage that will be put on everyday groceries?
Chalmers:
We will work through any inflationary impacts of damage done to farms in particular, but also when it comes to building and construction costs. We do expect there to be some sort of upward pressure on prices in both of those areas.
I would say not just to the people in my own community but also to Australians right around the country, we know that people are still under pressure. We know it’s not mission accomplished when it comes to the fight against inflation. But we have made really quite amazing progress together as Australians. When we came to office, inflation was higher than 6 per cent. It was absolutely galloping. It peaked at 7.8 per cent. Now it’s 2.4 per cent. And that shows the progress that we’ve made together, but people are still under the pump.
When you acknowledge that people are under pressure, you’ve got 2 choices – whether to try and help them or whether to leave them to their own devices. Our opponents didn’t want the cost of living help to roll out. Didn’t want the tax cuts, the energy bill relief. They don’t want wages growing as we’ve got them growing. People would be thousands of dollars worse off if they had their way.
We’ve taken a different approach. We’ve found a responsible, substantial and meaningful way to provide that cost‑of‑living help to people who are doing it tough. And if you look forward in the next couple of months, there’ll be an election. And when people make a choice at that election, they’ll be able to choose between a Labor government led by Anthony Albanese, who was there for people and is there for people when times are tough, versus a Peter Dutton‑led Coalition Opposition, who would have been nowhere to be seen during this period.
If you think about inflation, I see there’s a story in the tabloid press this morning about food costs. Food inflation was 5.9 per cent when we came to office; it’s now 3 per cent. We know that people still feel that pressure at the checkout, but we’re doing something about it. Our opponents would rather nothing was done about that. Australians would be even worse off if they had their way and worse off still if they win the election.
Last question.
Journalist:
We’ve heard recently that particularly Americans have been buying a lot of gold. Do you have a sense of why that is? Are we likely to see a little revenue boost in the budget for that?
Chalmers:
I think that’s a reflection of the very substantial uncertainty in the global economy. I’m looking forward to running you through this in some detail tomorrow at the Queensland Media Club because if you think about the big influences on this Budget in 8 days’ time, a key influence is this extra funding we’re providing for natural disasters. Another key influence is global economic uncertainty. We see that on markets. We see that in the way commodity prices change, including the one that you reference.
The other big influence will be the fact that the economy has turned a corner, but people are still doing it tough. So those will be the major influences on the Budget that we hand down in 8 days’ time. I see whether it’s gold, whether it’s the American stock market pulling down stock markets around the world in quite a significant way, this is a very uncertain time in the global economy.
It’s tempting to think that this is only because of a new policy agenda from a new administration in the US, but, in reality, we’ve got what’s happening in DC, we’ve got a weaker and slowing Chinese economy, we’ve got a war in Eastern Europe, we’ve got a tentative ceasefire in the Middle East, we’ve got political disruption and dissatisfaction around the world. And so, all of this makes the global economic environment very uncertain, and that’s why our Budget will be about responsibility, but it will also be about resilience.
That’s what I want to talk to you about tomorrow at the Queensland Media Club, and I hope you’re all there.
Thanks very much.