JIM CHALMERS:
Thanks for coming everyone. I’m going to say a few things about our announcement today on cash and cheques, then we will hear from the Assistant Treasurer and then I wanted to say a few things about the fortnight to come.
First of all, I really want to thank Stephen for the absolute mountain of work that he does in our Treasury portfolio when it comes to the payment system. Our objective when it comes to payments is to modernise our financial system but to do that in a way that doesn’t leave people behind, to make sure that there’s an ongoing role for cash and to make sure that as we phase out cheques we’re doing that on a reasonable and longer run up and that’s what today’s announcements are all about.
We know that most people like to pay digitally and we know the direction of travel is towards digital payments, but still something like 1.5 million Australians pay mostly with cash and we want to make sure that people aren’t left behind, so today we are announcing that cash will be an ongoing feature of the economy on our watch. We’re making sure that people can pay cash for essentials if they want to and if they need to.
Cash can be a really important lifeline, it can be an important back‑up, it gives people peace of mind and a sense of security and that’s why we are making it an ongoing feature of our economy even as people make a range of choices about how they pay their bills and participate in our economy. What this means is that businesses selling essential items will have to accept cash with some appropriate carve‑outs for small businesses and with a particular emphasis on regional areas as well.
We have seen these sorts of mandates work in other parts of the world, we’ve seen them work in parts of the United States and we are confident that we can make it work here as well, so we’re making sure that people can continue to pay cash for essential items if they want to and if they need to, essential items like petrol and groceries and at the pharmacy that will give people the peace of mind that they need and deserve. 1.5 million Australians is not a small number of people who use cash for more than 80 per cent of their payments and so today we’re making sure that people are not being left behind, that they have choices, even as we modernise the payment system.
So let’s hear from Stephen and then a couple more things from me and then over to you.
STEPHEN JONES:
Thanks Jim and thanks for the great collegiate work we are doing in this area. I spent a lot of time in regional Australia, I spend a lot of time in senior citizens halls around the country and the one thing that comes up each and every time is older Australians, people from non‑English speaking backgrounds, people in regional and rural Australia will say it’s harder to get cash, and it’s harder to find places who will accept it. What we’re announcing today will guarantee the right to use cash. It will guarantee the right to use cash for essential services and we’re particularly focussed in those areas in regional and rural Australia.
This is good as Jim says for the 1.5 million Australians who use cash for about 80 per cent of their transactions but it’s good for the rest of us as well, we’ve all had that experience where we’ve loaded up the trolley, we’ve gone to the counter and the tap and go won’t work, system is down, and that sends a message to all of us that we need resilience in the system. We need a backup. And the fact that we maintain a capacity to use cash within the system is good for those, the 1.5 million Australians who are adamant that they want to continue to use cash but it’s good for the rest of us because it means we retain that muscle memory in our payment system to enable us to continue to use cash. Thanks Jim.
CHALMERS:
Thanks very much Stephen. So today a big announcement on cash and cheques, last week was a very big week announcing our productivity fund, next steps in our single front door, the PC inquires into the 5 pillars of productivity, but this next parliamentary sitting fortnight is going to be even bigger. Our government will continue to pursue its legislative agenda in the Senate, I will be hoping to introduce new legislation, for example the production tax credits as part of our Future Made in Australia agenda next week if I can.
A ministerial statement to the parliament on Wednesday about the progress that Australians have made together when it comes to getting inflation down and wages up and rolling out cost‑of‑living help at the same time as we reform our economy for the future. We will have more to say – Stephen and I – later in the week around superannuation and the retirement phase, we will be hosting another investor roundtable on Friday focused on housing and the energy transformation and other matters, and next Friday, Friday week, I’ll will be hosting the state and territory treasurers here for the Council of Federal Financial Relations as well. So it’s going to be a massive fortnight.
In and around the parliament, the government has a very full agenda that we’re looking to progress through the Senate and outside the parliament as well and so there will be a lot of activity a lot of action over the course of the next couple of weeks and with that, I’m happy to take some questions.
JOURNALIST:
Couple of questions. Are you doing anything to support access to cash or it’s harder to access at the moment and how will the mandate be enforced? Will there be penalties associated with it?
JONES:
Two great questions. First of all, our efforts to make sure that cash is available particularly in regional areas are complementary to what we are proposing here. You know that we have been working closely with the banks, with Armaguard and others to make sure that there is the flow of cash in our communities, there are some difficult issues there that have had to be worked through but people have been very collegiate about that and those efforts are complementary with these efforts that we’re talking about today.
We are under no illusions, we know the direction of travel is towards digital but we want to make sure that cash is available in communities and that people can pay for essentials with cash if they want to and if they need to, all of those efforts are complementary.
When it comes to penalties, the main difference between what we’re proposing today and some of the penalties that have been proposed elsewhere in the parliament, Andrew Gee who has done a lot of well‑intentioned work I think in this area, our intention is to try and get as many businesses selling essentials to take cash as we can – that number has gone from 99 per cent of businesses just before COVID to about 94 per cent now, so a lot of businesses still accepting cash but we don’t want to penalise small businesses.
We want to find an appropriate way to carve out small businesses to recognise regional pressures and other pressures to make sure that the focus isn’t on penalties, the focus is on making sure that the medium sized and bigger businesses that sell essentials are taking cash and so that’s one of the major differences between the proposals in the parliament and in our proposal today. We have less of an emphasis on penalties, unlike the proposal put forward by Andrew.
JOURNALIST:
Treasurer, on the production of tax credits that you flagged on radio, is there anything in the design phase of that change that looks like, or is it still the same timeframe coming in 2028 still the same kind of scale of it? And why is it only if you can? Is there a risk that this might not actually be put up so we can see what’s in it before the election?
CHALMERS:
Well the if you can part of it is just recognising we’ve got a full legislative and parliamentary book and I don’t like to pre‑empt the sequencing decisions taken by Tony Burke and other colleagues, but our intention if we can is to introduce those production tax credits in to the parliament. There have been some minor but not major tweaks to the PTC regime that we announced in the Budget, that has been I think a very welcome consequence of the consultation that we’ve been doing. These production tax credits are going to be a game changer in our economy, very important to the West but to the whole national economy as well. And so we are looking forward to advancing that agenda. We need some clarity from our political opponents. They say that they’re against them, let’s hear why, and this is one of a number of reasons I think that the approach taken by the Liberals and Nationals has been very anti‑WA and we’ll see that when this legislation is presented to the parliament.
JOURNALIST:
What are some of those changes; are you able to talk to them?
CHALMERS:
I’ll make those clear in due course.
JOURNALIST:
Are you concerned at all about a bump in prices, with businesses forced to carry cash when they don’t currently because obviously carrying cash costs businesses more and it’s normally factored into the ticket but if it’s not, I wonder if that [INAUDIBLE]?
CHALMERS:
Well obviously we’re very attentive to the issues around pricing and competition. This is one of the ways we’re looking to ease pressure on people, not add pressure to people’s household budgets. The ACCC will obviously do their usual work in this regard but don’t forget as well, what we’re talking about here is a system where 94 per cent of businesses are taking cash right now. We don’t want to see the medium and bigger sized businesses vacate the field if they’re selling essentials. We’re prepared to be reasonable about it and we don’t anticipate the sorts of pricing behaviour that you’re concerned about.
JOURNALIST:
You’ve made clear that you focused on the states [INAUDIBLE] tax cuts and revamping them and not signalled major tax, personal tax reform leading into the next election. The Parliamentary Budget Office analysis that’s come out showing that bracket creep is going to cost tax‑payers about half a trillion dollars over the next decade starting from next year. Does that mean that you have to start thinking about another round of tax cuts otherwise you are going to have the highest tax average tax rates for people since the mid‑80s?
CHALMERS:
That PBO analysis does assume I think bravely that there will be no changes to the income tax system for a decade. And often, respectfully, the floor in that sort of analysis is that assumption. It would be a rare period in Australian taxation for there not to be income tax changes over a full decade and we should not lightly dismiss the ways that we are returning bracket creep with the changes we made and tax cuts that we are providing.
We cut 2 rates and lifted 2 thresholds and that recognises there’s more than one way to return bracket creep in our tax system and we’re doing it in a way which is best for participation and making sure that every taxpayer gets a tax cut not just some taxpayers getting a tax cut and they’re flowing in the economy right now as you know. So bracket creep is an ongoing concern of governments, people shouldn’t expect us to take a big new income tax cut policy to the 2025 election but the tax cuts that we put in place from 1 July are rolling out right now. They are an important way that we are helping people with the cost of living, getting inflation down, getting wages up, rolling out tax cuts and cost‑of‑living help, these are some of the reasons why and how we’re taking some of the pressure off people who are doing it tough.
JOURNALIST:
Just following up on Katina’s question; there was some suggestion from Minister Madeleine King earlier that you may bring forward those tax credits just given the increasingly difficult situation facing critical minerals across Australia for a range of global reasons. Has that been considered and is that something you might do?
JONES:
We’re working closely with Madeleine King, terrific Resources Minister. We have been working very closely with her. And the tweaks that we have made to the proposal will be clear when we present the legislation to the parliament.
JOURNALIST:
Treasurer, on the framing of the MYEFO in a few weeks, is it shaping just as a traditional MYEFO or are we looking more of a mini Budget that a Prime Minister might look to launch an election campaign off. Will there be any –
CHALMERS:
I’ve never seen anyone so excited about a mid‑year Budget update Mark.
JOURNALIST:
It’s an exciting time particularly if it’s got things in there for people who are doing it tough at the moment, Treasurer, so could there be more cost‑of‑living relief in this document?
CHALMERS:
Well, the mid‑year Budget update will be an opportunity to update our forecasts and to make sure that we’re budgeting for our priorities. People shouldn’t assume some kind of spend‑a‑thon in the mid‑year Budget update, that’s very clear, nor should they expect that frankly in the Budget in March. If there’s a defining feature of our economic management it’s responsibility and people shouldn’t anticipate the mid‑year update or the Budget to be some kind of free for all of public spending. There will be inevitably measures, new measures that we tally up in mid‑year Budget updates but you shouldn’t anticipate it will be something that looks like a mini Budget or something like that.
JOURNALIST:
Thanks Treasurer. On the original bank levy, is it fair to slug –
CHALMERS:
Where is Kehoe? He’s on TV.
JOURNALIST:
Is it fair enough to slug digital‑only banks whose business model has been designed not to have branches like the traditional big 4, or including banks like ING and Macquarie, recognition that they’re cutting into traditional mortgage businesses from the big banks anyway?
CHALMERS:
Can I just make a few general observations about that and then I’ll obviously get a bit closer to the specifics of your question.
This is a government that governs for the whole country and we take our responsibilities to regional areas really seriously. And it’s been evident to us for some time – and again I commend Stephen for his work here – that the withdrawal of services in the bush is a major concern to us because it’s a major challenge for a lot of Australians. And so it should surprise no one that we regularly engage with the banks and others on really important issues and challenges like this and it would be unusual frankly if we weren’t doing that given the nature of the challenge and the magnitude of the challenge.
We haven’t come to a concluded view on any of these issues, we have done our best to engage and consult confidentially on some of these matters, it’s not especially troubling to us that some of that consultation has found its way into the public domain including in your paper. But I think Australians everywhere and especially Australians in the bush would expect us to engage with the banks to make sure that the appropriate level of services is being delivered.
On the specifics of your question and some of the speculation that we’ve read about in the paper, again we haven’t come to a concluded view, we try and engage respectfully and in a consultative way with the banks to let them in on the sorts of things that we might be considering so that we can deliver for more people in more parts of Australia and that’s all this is.
JOURNALIST:
Treasurer – a few bills in the Senate at present, housing bill of course –
CHALMERS:
I noticed that too.
JOURNALIST:
– the environment bill as well and a new EPA. The Greens have come forward with some new offers to pass those bills, what do you make of those offers and should we expect deals with the Greens on a range of fronts over the next couple of weeks to try and get a few things through?
CHALMERS:
We engage respectfully with the Greens and with others in the Senate and in the House. We know that we don’t have a majority in the Senate and so we play the cards we are dealt, we try and do the best we can to pass as much of our agenda as we can. I say to the Greens if you want more investment in housing, you’ve got to vote for it. I say to the Greens stop teaming up with the Liberals and Nationals to prevent more investment in housing or to prevent more rental properties being built or prevent it being easier for people to get a toe hold in the housing market.
We’ve got a broad, ambitious housing agenda, it’s a credit to Clare O’Neil and to Julie Collins before her and the Prime Minister for his leadership, we want to get cracking on this investment in housing. We engage respectfully, we negotiate where we have to, and people should expect to see more of that over the course of the next couple of weeks.
JOURNALIST:
Alan Jones this morning has been arrested in Sydney by the sex crimes squad. I just wanted to get your reaction given over the generations his close proximity to power especially in this building.
CHALMERS:
Look I’ve got to be honest with you, I just saw it on social media as we were walking here and so my working assumption is that there’s a lot of legal processes to go through and therefore you would understand that it would be unwise and inappropriate for me to comment. I’ve seen the stories but I don’t know any of the details.
JOURNALIST:
Stephen, who is looking quite lonely.
JONES:
I’m really not.
JOURNALIST:
I want to give you a go as well.
JONES:
What a guy.
JOURNALIST:
Last week – MOU with the Cook Islands when it comes to superannuation transfers. Are you looking at that – Pacific Island nations, are we looking to expand schemes like that? And then Treasurer just on the same Pacific kind of banking issue, when it comes to dealings with ANZ, is underwriting what kind of, I guess measures are we looking at or speaking about, are we going to put any direct cash injections in to keeping branches open, are we looking at underwriting as opposed to financial contributions?
JONES:
So our partnership with our Pacific Island nations is extensive and enduring and critically important to us. Delighted to be able to sign and seal the deal with the Cook Islands. Some unique things about the Cook Islands and their people, they’re also citizens of New Zealand, we have a superannuation agreement with New Zealand, which wasn’t flowing through to the people of Cook Islands and in effect what that deal does is equalise the arrangements between New Zealand and the Cook Islands. Now of course, we’ve had representations from other Pacific Island leaders we are working through those representations respectfully. Our priority has been to work with our Pacific Island nations over the last 2 years to ensure that we can secure correspondent banking in the Pacific and we’re making tremendous progress in that area. But of course, we’ll work through the other issues in relation to superannuation.
The Pacific Island labour mobility agreement means that we’ve got a fantastic workforce arrangement going between ourselves and our Pacific Island brothers and sisters. Pat Conroy has done an amazing job in cementing and building that up. So there will be a larger Pacific Island workforce here in Australia and of course one of the great features of them working in Australia is they get exactly the same wages and conditions as you would if you are an Australian resident. That includes superannuation, we want to ensure that that’s working for both countries.
CHALMERS:
Just on the ANZ progress, the ANZ has been terrific engaging with us on maintaining a presence in the Pacific. We have been working very closely with them and with a couple of the other major Australian banks as well. We’re very grateful to the Australian banks for the way that they’ve engaged with us and recognised our national interest here. So there’s been very important progress made with ANZ. I flagged that I think last week in a speech maybe last Monday. We will have more to say about the specifics of that arrangement in due course.
JOURNALIST:
Treasurer and perhaps Stephen, cash obviously plays an important role for some people in some communities. But I guess looking at the production side of things, is there a case for winding back some of the smaller value coins like the 5 cent coin which I think in 2022 costs about 12 cents to produce, or at least to make –
JONES:
Somebody’s got to think of the buskers.
JOURNALIST:
– or at least the process or the procedure of creating these coins a bit cheaper.
CHALMERS:
This is something that Andrew Leigh thinks about a lot. He has carriage in our team for the Mint and the arrangements around currency. All jokes aside, he thinks about this a bit. The appropriate denominations obviously they evolve over time and we keep it under constant review.
JOURNALIST:
I was just going to follow up on Shane’s question about income tax cuts. Last week when Dutton sort of walked back his commitment for income tax cuts for high earners, he talked about the fact that the budget really can’t afford it. What’s your view of that? Is another round of income tax cuts going in the next term of government, will the budget actually be able to afford more tax cuts at that time?
CHALMERS:
Well obviously from Budget to Budget we try and do the best we can for people, recognising the pretty substantial fiscal constraints that we have and that would be our approach in every budget is to make sure that we’re striking the right balance, providing cost‑of‑living relief, putting downward pressure on inflation, fixing the budget, investing in the future, we’ve made clear those are our priorities.
We have absolutely no idea what the Coalition’s priorities are. Sussan Ley said they would wind back the tax cuts, Angus Taylor said he would take revamped tax cuts through to the election, Peter Dutton says they might not. We are rounding the turn here at the very end of a 3‑year parliamentary term in the last sixth of a 3‑year parliamentary term, and these characters still don’t have any costed or credible or coherent policies.
Now when it comes to the government, you know what our priority is – rolling out cost‑of‑living relief, getting inflation down, getting wages up, investing in the future, those are our priorities. We have no idea what they’re on about when it comes to the economy and that’s why they are such an unacceptable risk to household budgets.
Peter Dutton has this kind of angry and risky recklessness which puts household budgets at risk, they’ve opposed our cost‑of‑living help, they won’t tell us what they’ll do with the tax cuts, they won’t tell us what their $315 billion in cuts means for Medicare or housing. We know that Peter Dutton went after Medicare last time he was in office, we know that they hate wage increases, so ordinary Australians will go backwards in tangible ways if we hand the keys to Peter Dutton and Angus Taylor who won’t come clean on their plans – whether it’s on income tax or in other areas as well. Thanks very much.