Jim Chalmers:
Australia has made substantial and sustained progress in the fight against inflation, and we expect to see that reflected in the inflation numbers this week. Any headline inflation number with a 2 in front of it will show that inflation has more than halved since we came to office. Any inflation number with a 2 in front of it will show that headline inflation is still within the Reserve Bank’s target band. And any progress on underlying inflation would be welcome as well.
Now in Australia, we’ve got inflation down, wages up, we’ve kept unemployment low and we’ve rolled out cost‑of‑living help.
When the numbers come out tomorrow we expect them to show that Australia continues to make meaningful, welcome, encouraging progress in the fight against inflation, but we know that it’s not mission accomplished because people are still under pressure. And that’s why our cost‑of‑living help is so important, the tax cuts, the energy bill relief, and all of the cost‑of‑living relief that we are providing Australians in difficult times in the most responsible way that we can.
As we get closer to the election, the choice will become clearer and clearer. Peter Dutton didn’t support cost‑of‑living help and he will make people worse off. If Peter Dutton had his way, Australians would be thousands of dollars worse off and they will be worse off still if he wins the election.
So the choice will be really clear: Anthony Albanese and Labor fighting inflation, providing help with the cost of living, strengthening Medicare, and building Australia’s future; or Peter Dutton and a Coalition who didn’t support cost‑of‑living help, who came after Medicare last time they were in office, who will come after wages again, and make people worse off and take Australia backwards.
Happy to take a couple of questions.
Journalist:
It’s not long until the RBA meets for the first time of the year. How confident are you feeling about an interest rate drop soon?
Chalmers:
I don’t predict or pre‑empt decisions, taken independently by the Reserve Bank and its board. I respect the decision making process that the Reserve Bank board will undertake. They will weigh up all of the data in our economy, the inflation numbers this week, the jobs numbers and other data and they’ll come to a decision independently without any free advice from me.
I’m focused on my job which is getting inflation down, getting wages up, keeping unemployment low, getting the Budget in much better nick at the same time as we roll out this cost‑of‑living help.
I think it should be possible to recognise that Australians are still under pressure but they have made so much progress over the course of the last couple of years. Not every country can say that they’ve made this progress on inflation that we have at the same time as they’ve kept unemployment at or near historic lows and got real wages growing again in a meaningful way.
Not every country can say that they are providing tax cuts and energy bill relief and cost‑of‑living help at the same time as they improve the Budget, including those 2 surpluses and a smaller deficit this year. And so we acknowledge the pressures that people are still under but we also understand that together Australians have made a lot of progress over the course of the last couple of years.
When we came to office inflation was north of 6 per cent and rising fast, now it has a 2 in front of it. When we came to office, real wages, incomes and living standards were all falling fast, and we’ve been able to start to turn that around. And that’s why this choice at the election is so important because the biggest risk to household budgets and the economy in 2025 is Peter Dutton and a Coalition government. We know that they’re a risk because we know their record. Labor’s record on the economy over the last couple of years is really clear, inflation down, wages up, unemployment low, 2 surpluses and cost‑of‑living help.
Journalist:
Treasurer, you mentioned the Budget and a smaller deficit. The Aussie dollar is falling, it’s been a boon to your tax take, are you hopeful there’s a chance of a third surplus?
Chalmers:
First of all, I think you need to be careful about the assumptions when we see the dollar move as it has, assuming some sort of automatic flow through to the Budget. The dollar is a factor in the Budget, as are commodity prices, but also commodity volumes. So we need to be careful, not to kind of draw a straight line between some of these prices or the level of the dollar and a budget outcome. We haven’t yet seen any evidence of the kind of recovery in the Budget that you are referring to in your question. We are deliberately cautious and conservative and that caution and conservatism is especially warranted at a time of extreme global uncertainty. And so we are not anticipating at this stage a big recovery in the Budget. But what we have already seen is we’ve been able to get the deficit for this year down substantially from what we inherited.
So 2 surpluses, a smaller deficit, the $200 billion dollar turnaround in the Budget that we have engineered is the biggest nominal turnaround in a term of parliament ever, it means $177 billion dollars less debt and $70 billion dollars less debt interest over the course of the next 10 years.
So we’ve made a lot of progress on the Budget cleaning up the mess that we inherited. There was a trillion dollars of Liberal debt when we came to office, we’ve worked very hard to clean up some of the mess in the Budget. We’ve made some good progress, but we need to make some more.
Journalist:
Treasurer, One Nation released their tax policy yesterday, the headline was that couples with children could merge their incomes and claim as 2. Is there benefit in this as a savings measure for low‑income families and what is the flow‑on effect to productivity and to women in the workplace if it goes ahead?
Chalmers:
It’s not something that we are considering. And it’s the easiest thing in the world for minor parties like One Nation to put out press releases calling for big changes. The difference between One Nation or, to be fair, the Greens and others is we have to run the place and we have to make it all add up and that tax change that they are proposing is not one that we are contemplating.