JIM CHALMERS:
Thanks for coming down, everyone. I wanted to touch on 3 things briefly, and then obviously happy to take a heap of your questions. I wanted to touch on the G20 meetings last week in D.C., the Queensland election, and also, obviously, the inflation numbers that we’re getting later this week.
I had very productive discussions in D.C. with colleagues and counterparts from around the world. The global economy is full of vulnerability and volatility. The risks of an escalation, further escalation, in the Middle East, the ongoing war in Ukraine, a softer Chinese economy and US political uncertainty – all of those things are weighing on global growth, and the combination of those things is delivering global growth which is tepid but also, in the jargon of the international institutions, the risks to global growth are tilted to the downside, by which they mean there is a lot of uncertainty in the global economy right now, and we are not immune from that.
Very productive conversations with a number of colleagues, including the US Treasury Secretary, the new Chancellor of the Exchequer in the UK, Deputy Prime Minister of South Korea, the new Finance Minister of Japan, Lael Brainard from the Biden White House, and a number of other really important discussions which I’m happy to go into if people have questions about that.
Secondly, the Queensland election. First of all, I wanted to thank the outgoing Premier Steven Miles, and the outgoing Treasurer Cameron Dick for the very constructive relationship that we have had over Labor’s time in government in Queensland. I wanted to thank them for the work that we have done together on behalf of the people that we jointly represented in Queensland.
And I wanted to congratulate David Crisafulli, the new Premier of Queensland, but also David Janetzki, the incoming Treasurer of Queensland as well. I offer them my warmest congratulations, and we will work with the new LNP government in Queensland in the same constructive way that we worked with the former Labor government in Queensland.
I’ve been able to relay my congratulations to incoming Treasurer Janetzki already. We have agreed to catch up this week, most likely on Thursday, subject to the timing of the new government’s swearing in. But we’ve had a very warm exchange and I look forward to talking with him later in the week and working with him on behalf of the people of Queensland as well.
Lastly, as you would all know, there will be new inflation numbers coming out on Wednesday. We have made really substantial, really welcome and encouraging progress in the fight against inflation. The strong expectation from economists is that that progress will continue in the numbers that we get on Wednesday that go to inflation.
We are expecting more welcome progress in the fight against inflation. Whether that headline inflation number is in the low 3s or in the high 2s, what it will show is that inflation has halved on our watch. When we came to office, quarterly inflation measured in annual terms was 6.1 per cent. Economists are expecting something around 3 per cent, whether it’s low 3s or high 2s, what it will show is that under this Albanese Labor government, we have managed to halve inflation.
Obviously the fight against inflation is not over, but it is very clear that from those peaks in 2022 when inflation had a 6 in front of it, 7 per cent later that year, we’re expecting something around 3 per cent, and that will show the welcome and encouraging progress that we are making.
We are coming at this cost‑of‑living challenge from every conceivable and every responsible angle that we can. We’re rolling out cost‑of‑living relief in a responsible way, but also budget repair and responsible economic management are really key components of our fight against inflation. It was very heartening to see the international community recognise and acknowledge the progress that Australia has made when it comes to getting our budget in much better nick.
In 2021, under our predecessors, Australia had the 14th strongest budget in the world, now we’re in the top 3. That is a powerful demonstration of the responsible way that we’ve gone about managing the budget and managing the economy more broadly. And this goes for the international comparisons that many of you have focused on in the course of the last week or so.
Like the rest of the world, we’re seeing a very substantial moderation in inflation but what makes Australia different is that we have been able to do that while maintaining the gains that we’ve made in the jobs market. We have faster jobs growth than any major advanced economy. For us, that means a million new jobs created in a parliamentary term for the first time in our history. And we also have a much stronger budget than almost all of our peers. Those 2 budget surpluses, as the Reserve Bank Governor has acknowledged, have been really key in the fight against inflation as well.
It was very encouraging to see the international community welcome and acknowledge the progress that we’ve made when it comes to the budget. That’s a key part of our fight against inflation, but not the only part. We are coming at this cost‑of‑living challenge from every conceivable and every responsible angle.
Happy to take your questions.
JOURNALIST:
Just on cost‑of‑living assistance in Queensland, Mr Crisafulli didn’t adopt everything Steven Miles promised. I think the bus fares was the main one, and there was a view that the other stuff didn’t really have much effect. And he said on election night – this is Mr Crisafulli – ‘we are determined to make sure that we have respect for your money, and that means the culture of budget blowouts must end.’ Are you going to push back at any suggestion you’re going to get the fire hose out between now and the federal election and spray money around the joint to try and get Labor across the line in majority? Or are you more conscious of the state of the budget and, as you said, getting inflation down? Which one is going to get more emphasis, receive more emphasis from you, sorry?
CHALMERS:
Understood, Phil, thanks. We’ve got our own response to cost‑of‑living help. We welcomed the assistance being provided by the former Labor government in Queensland, but we’ve got our own approach to it and that is already rolling out – tax cuts for every taxpayer, energy bill relief for every household, cheaper medicines, cheaper early childhood education, rent assistance, getting wages moving again. This is substantial and meaningful cost‑of‑living help, but it’s also delivered in the most responsible way. So we’ve got our own cost‑of‑living approach and we’ve made that clear in recent times. We’ve been coming at this cost‑of‑living challenge from every conceivable and responsible angle.
Your question about what does it mean for the coming months, we’ve got a budget update later in the year and a budget in the first half of next year and an election in the first half of next year, and so I understand why you’re interested in that. I want to reassure people and assure people that we will continue to make responsible economic management the defining feature of this Albanese Labor government. This election was never going to be from our side a free‑for‑all of public spending. It wasn’t going to be before Saturday’s outcome, and it’s not going to be after Saturday’s outcome.
One of the reasons we’ve been able to knock out 2 surpluses and get the budget in much better nick is because everything we’ve done, and everything we will do will be through the prism of what’s responsible, what is affordable, and what will make a meaningful difference to people doing it tough.
JOURNALIST:
Treasurer, what do you see as the other messages from the Queensland election to your government, particularly the big swings that Labor sustained in regional areas, the urban fringes in seats that overlap your own, even in metropolitan seats, you took a big whacking there. What messages are you hearing and how will you change direction?
CHALMERS:
First of all, the outcome on Saturday night was decisive, but it wasn’t unexpected. And there are lessons for us, but there are also differences.
As Cameron Dick said on TV yesterday, theirs was a government that had been there for almost a decade, ours is a government in its first term. There are obvious differences, but I don’t want to pretend that there aren’t lessons for us as well, of course there are, there are always lessons in elections like this one. There are always things that we can learn, there are always things that we can do better, and we will go through the results with that in mind.
We have always believed, and we have always acted in relation to this belief that governments are always best when they govern for the whole place – the regions, the suburbs, and the cities. That’s what Anthony Albanese does as Prime Minister. Many of us take to that task a suburban outlook.
You mentioned the outer suburbs that I represent. You were there not that long ago. One of the heartening things – despite some big swings in areas like mine – I’ve got 6 state seats in my federal electorate and we’re looking like holding at least 5 but probably 6 of those. We’ve got these wonderful state members in my part of Queensland. What that tells us, is if you make the right decisions for the right reasons and you’re a good local representative then you can hang on even when things are turning against the government. And so good local representation and good responsible decisions.
Queenslanders are pragmatic and practical people, and the Albanese government is a pragmatic and practical government. We will go through the lessons from Saturday night. We won’t telegraph those lessons to our opponents by running through them in detail for you at a press conference, but we won’t be ignoring the lessons of Saturday. We understand that people are doing it tough, we understand that people often express that at the ballot box which is their right. We will go through the lessons of Saturday with that in mind.
JOURNALIST:
Treasurer, have you ever asked Alan Joyce for an upgrade on your personal travel? And have you ever accepted an upgrade on personal travel?
CHALMERS:
I haven’t asked Alan Joyce, no. I’m not sure if I have received one. I don’t think so, but I’d have to have a look. I’ll come back to you.
JOURNALIST:
Treasurer, to be clear, treasurers’ best intentions are under most strain in the short shadow of an election. Can you promise here and now that any extra help you do give to assist people on cost‑of‑living pressures that they will be paid for in a responsible way?
CHALMERS:
What’s guided us for the first 2 and a half years of our term and what will guide us in the months and hopefully years ahead is taking the most responsible approach that we can to the budget.
We get a lot of free advice in both directions – to provide much more cost‑of‑living help and blow the budget out, or to slash and burn in the budget and provide much less help. One of the reasons why we’re making good progress in the economy – recognising people are still doing it tough, but making progress – is because we’ve struck a series of correct balances when it comes to these sorts of decisions. The fact that we’ve been able to have a couple of surpluses and then smaller deficits going forward at the same time as we have provided this cost‑of‑living relief is a demonstration that whatever we do – whether it’s in cost‑of‑living or elsewhere – we do it in the most responsible way that we can.
JOURNALIST:
Treasurer, just following up Cam’s question, do you think that the rules around the disclosure of gifts and interests should be changed or strengthened so the value of gifts has to be disclosed?
CHALMERS:
I’ve got to be honest with you, Katina, I haven’t given any thought to that. I’m focused on inflation this week, the G20 discussions, the lessons from Saturday’s campaign. I’m broadly aware and I was asked this morning about some of these issues that yourself and Cameron have raised. It’s appropriate that the arrangements are robust. I know that the Prime Minister was asked about this multiple times yesterday in his press conference. I don’t have anything to add to it.
JOURNALIST:
But just in terms of the pub test, what people in the public think, making politically sensitive decisions about airlines, so is it appropriate for politicians to be asking for upgrades and should that practice end?
CHALMERS:
It’s appropriate that there are robust arrangements for it, and that includes some kind of declaration.
JOURNALIST:
Last month Warwick McKibbin released some modelling at Peterson about the impact of a Trump presidency on the US economy and the global economy. How are you setting the mid‑year budget update and the policy settings with a mind to what may occur under a Trump presidency and what that means to the Australian economy?
CHALMERS:
As you know, Shane, and as others have asked and I’ve commented at some length, including in D.C. at the end of last week, any diligent government considers the different scenarios when it comes to election outcomes in a big, significant country like the US, and that’s what we’ve been doing. We know that there will be a change of administration in the US, and so we think through the consequences of that. But I want to make it really clear, as we go about that work and think about those scenarios, I want to make 2 things clear. First of all, we don’t engage in the domestic political debate in the US, it’s a matter for them, we will work with whoever the Americans choose to lead them. The second point is a broader point – Australia has been and will be one of the biggest beneficiaries of well‑functioning global markets. Trade wars can be costly for countries like ours. I’ve made that point this morning in Phil’s paper and elsewhere. I made that point last week at the meetings – that we need more engagement with the world, not less. That’s what our policies are all about.
JOURNALIST:
Just back to what Mark was saying, do you acknowledge or see as a concern that Labor possibly isn’t connecting or is losing touch with people in the outer suburbs or urban fringes?
CHALMERS:
I don’t believe so, but you always need to be vigilant about it. I acknowledged in relation to Mark’s question – I’ve certainly acknowledged it on other occasions – we understand that people are doing it tough and they express that at the ballot box, which is their right.
What we’ve tried to do is we’ve tried to take a series of well‑informed economic decisions, take the right economic decisions for the right reasons, because I believe if you do that the politics will take care of themselves.
This is not a government that chases the fortnightly ups and downs of opinion polls. We’ve tried to do the right thing at every turn in 3 budgets, in all of the updates and all of the decisions that we’ve taken. And the right thing is recognising people are doing it tough, doing what you can to help them, but recognising that you have to do that in the most responsible way that you can.
JOURNALIST:
Treasurer, the markets have been pretty unimpressed so far by the level of stimulus out of China. Obviously, you were there when the Chinese government announced those stimulus measures.
CHALMERS:
You’re not saying those 2 things are related, Ben.
JOURNALIST:
It’s all your fault – no. What we’ve seen so far, is that different from what you were told would be the stimulus measures during your meetings with the Chinese government, and have you been disappointed with the lack of strong, tough measures so far?
CHALMERS:
That’s a great question, Ben. A couple of things about that. There’s still a lot of concern about the Chinese economy, we saw that expressed in lots of different ways at the meetings with colleagues and counterparts in D.C. People are still concerned about a weakness in the Chinese economy, even after these measures have been announced to support growth in the Chinese economy.
For Australia, we’re very welcoming of the steps that the administration in Beijing have announced or have flagged. There’s more detail to come, including on the quantum of that and I think that’s being reflected in markets – that we don’t yet know the total quantum of some of those measures. But the direction of travel from an Australian point of view is very welcome because if our forecasts for Chinese growth in the economy over the next couple of years play out as we expect them to do in the Treasury forecasts provided to us, that would be the weakest period of Chinese growth since China opened up in the late 1970s. So there’s a lot of concern about China, but the direction of travel, the kinds of steps flagged by the authorities, are very welcome from our point of view.
The markets have been very volatile. In the week or 2 after those steps were flagged and announced there was quite a positive reaction. That has settled down over time. We’ve seen that when there have been other big movements in the global economy in the last few months, we’ve seen big movements in what has been a pretty volatile stock market too.
JOURNALIST:
Treasurer, just want to get your view on whether taxpayers through the R&D tax incentive subsidising poker machine developments is an appropriate use of government incentives and tax dollars. And then just to expand on Katina’s question, you said at the end there it’s important that any flight upgrades or things like that are disclosed. What should the consequences be if things aren’t disclosed?
CHALMERS:
I’m happy to leave that to the relevant ministers – Don and others. As I’ve said in response to all of the questions on this, first of all, I believe in a robust system of declaration. Second of all, the PM has dealt with these questions yesterday in Sydney. And, thirdly, my focus has been on other matters.
JOURNALIST:
R&D?
CHALMERS:
I have a personal view about that, which is that it’s problematic. And I don’t have an announcement to make today in that regard, but I saw when some of that information was released not that long ago that that’s the sort of issue that warrants our attention, and it will receive our attention.
JOURNALIST:
Just going to the IMF report from last week, it said that Australia’s budget is one of the strongest in the world and that our cost of living is one of the worst. Does that give more permission for Labor to use Australia’s budget strength to target cost of living and implement more relief? And between now and the election, what can Australians expect in terms of further cost‑of‑living relief?
CHALMERS:
To make comparisons about the Australian situation with the rest of the world, we need to make the whole comparison, as you have in your question. There were some numbers released about inflation forecasts. Obviously we take the IMF very seriously, but those were forecasts about the end of next year. We are making really good progress in the fight against inflation, and we’ll learn more about that on Wednesday when we get the quarterly figures for the September quarter. We’re making really good progress when it comes to inflation, but people are still doing it tough.
When you make that full comparison, you’ll recognise that when it comes to inflation in Australia, we peaked later and lower than many of the countries that people are comparing our situation with. That’s an important piece of perspective as well. And then, as you rightly point out, our budget is stronger. We’ve also had stronger jobs growth and there are a range of other things going for us.
What we’ll continue to do is make the best decisions for Australia, recognising that we’re not immune from pressures in the global economy. We are providing substantial and meaningful cost‑of‑living help already, but people are still doing it tough and we’ve got pretty substantial budget constraints.
We’ll weigh up all of those balances, all of those trade‑offs to make sure we’re doing the right thing for the right reasons.
JOURNALIST:
Thanks, Treasurer. Just on a different topic, the Future Fund and its investment mandate – Greg Combet has been in the chair for a few months now. Have you spoken to him about any potential changes around the investment mandate to take into account net zero or ESG? Do you anticipate any changes there or do you think it will stick in the existing sort of framework?
CHALMERS:
First of all, we are big supporters and big believers in the Future Fund. From time to time we get advice that we should liquidate the Future Fund or something like that, and we won’t be doing that.
We think that the Future Fund is one of those institutions that Australia has going for us, and so we’re very interested in maintaining the strongest version of the Future Fund that we can. Greg’s appointment, frankly, was part of that – making sure that we had someone terrific in the chair when former Treasurer Costello left.
We are in discussions with the Future Fund about what the future of the Future Fund looks like, as you would expect. It is a very different beast in 2024 than it was when it was set up by Peter Costello. Any responsible government looks at what the Future Fund will look like in the 2030s and what it will look like in the 2040s. We’ve had some discussions about that. Those discussions aren’t concluded or finalised in any sense but as you’d expect, I’ve had a heap of conversations with Greg Combet and others about what, if anything, we should be doing to make sure that the Future Fund continues to be a really important institution in the future for this country.
Thanks very much.