Jim Chalmers:
Earlier this morning, the International Monetary Fund issued a very positive statement about the government’s economic strategy. The IMF is very positive about Australia’s economic fundamentals and about the government’s reform agenda. This is a very powerful endorsement of the Albanese Labor government’s responsible economic management. I just wanted to read to you a couple of passages from the IMF report. They say this: ‘Australia is managing a soft landing amid global uncertainty, inflation has declined significantly, the labour market’s still strong and private demand is recovering.’ They go on to say, and I’m quoting again, ‘The Commonwealth’s fiscal strategy has been effective over the post‑pandemic period.’
And so, this is very clearly a very positive, a very powerful endorsement of the way that the Albanese Labor government is managing the economy in a responsible way in the face of all of this global economic uncertainty. Very positive about Australia’s economic fundamentals but also very positive about the government’s reform agenda. Their report goes out of its way to mention the progress that has been made and the momentum that was built at the government’s productivity roundtable a couple of months ago, and they also go out of their way to back in the Albanese Labor government’s approach to net zero. And once again I’m quoting from the IMF report, which says that; ‘the green transition, including the authority’s recently announced 2035 commitments, offers opportunities for enhancing investment, productivity and diversification while contributing to Australia’s climate goals.’
They really couldn’t be clearer when it comes to the economic upside of the government’s orderly transition in Australia towards net zero. The IMF agrees with the Albanese government that net zero is a golden economic opportunity for our country, whether it’s the IMF report released today or the Treasury modelling and analysis in the document I released not that long ago, the conclusions of sensible economic institutions are extremely clear – net zero is a golden economic opportunity for Australia. An orderly transition will give us the best chance of strengthening our economy, creating more jobs, lifting wages and living standards at the same time as we get emissions down over time.
The IMF couldn’t be clearer, the Treasury couldn’t be clearer. Now, the Treasury has also made it clear that the worst outcome for Australia’s economy would be to abandon net zero completely and that is the economic insanity being peddled now by the Coalition. If we were to abandon net zero, that would mean power prices would be higher not lower, it would create serious investor uncertainty and it would weaken our economy as a consequence and that’s what the Coalition is proposing. The Coalition’s proposal to abandon net zero will push power prices up not down, create serious investor uncertainty and they will weaken our economy as a consequence.
Now, the IMF’s made clear today that the best approach to net zero is the approach that the government is adopting, the alternative to that is the economic insanity being pushed by our political opponents. That’s very clear in the Treasury modelling, very clear in the IMF analysis released as well. Once again, a very powerful endorsement of the government’s strategy, our reform agenda, our approach to net zero, the economic fundamentals of this country. We know that there’s more work to do. We know that people are still under pressure. We know that our economy is not yet productive or resilient enough in the face of all this global economic uncertainty and that’s what guides us in our responsible economic management and in our reform agenda more broadly.
Happy to take a couple of questions.
Journalist:
Would you like to see the states get on board for tighter fiscal controls?
Chalmers:
Oh look, I try not to give free advice to my colleagues in the states and territories. We’ve all got budget pressures to manage and my focus is on the mid‑year budget update, which we will release some time in December after we see the National Accounts for September. That mid‑year budget update, it won’t be a mini budget, it will be an opportunity to account for pressures on the budget and to revise our forecasts. And why that’s especially relevant today is because the IMF makes it clear in their analysis today that Australia is seeing the kind of soft landing in our economy that the government has been planning for and preparing for and also, frankly, hoping for. And this soft landing is all about making sure we get inflation down to half what we inherited, we saw real wages grow yesterday for the eighth consecutive quarter which is a deliberate part of our economic strategy to make sure people are earning more and keeping more of what they earn. We’ve got the debt down, we’ve got the triple‑A reaffirmed by all 3 major credit ratings agencies and so that’s my focus, managing the economy and the budget in the most responsible way that we can, and that means a focus on the mid‑year budget update in December.
Journalist:
How much money has the government spent campaigning for the COP in recent years?
Chalmers:
Well, that’s not a line item in the Budget, it’s part of the ongoing and important work that we do to make sure that our voice is heard in international forums when it comes to climate change and the vast economic opportunities presented to us by the global shift to net zero. And that gives me an opportunity to really welcome the announcement made by Chris Bowen earlier this morning our time about Australia’s approach to COP.
This is a very good outcome in the circumstances. Now, of course, we would have liked to have showcased Adelaide and Australia to the world, but what Chris and the PM and others have been able to secure here is a very important, very welcome opportunity for Australia and that’s because Australia’s interests are best served by making sure we have a powerful and influential voice in global forums and we have assured that by getting the outcome of Chris Bowen being the President of Negotiations for the COP. Our interests are best served by putting the Pacific front and centre, and we’ve found a way to do that as well.
And our interests are best served in making sure that we don’t jeopardise multilateral progress towards net zero at a difficult time for the global economy. And so, the approach that Chris Bowen has announced today ticks all 3 of those boxes: an influential voice for Australia, the Pacific front and centre, and maintaining momentum and progress in multilateral forums. It was in nobody’s interests for this to drag on forever, and so the outcome that was achieved by Chris Bowen and others in the last little while is a very welcome one and especially in the circumstances that we confronted.
Journalist:
After it failed, though, is it fair to say that the hours and the money that was spent campaigning for it has been a waste?
Chalmers:
No, of course not. Because it’s in Australia’s national economic interest for us to maintain an influential voice in the world when it comes to the global shift to net zero and that work would be necessary regardless. And so I don’t see it the way that you have characterised it at all. This is an important opportunity for us to make sure that our voice is heard in the world on climate change and the economics of net zero. It ensures that our brothers and sisters in the Pacific are front and centre in the lead up to the COP, and it also means that we’re not jeopardising multilateral progress towards net zero and getting emissions down.
I think I said yesterday in Perth, on the other side of the country, we didn’t want to see this drag out for another 12 months. That wouldn’t have been in anyone’s interests. For all of us who believe in climate change progress and the economic opportunity presented by net zero, we didn’t want to see this drag out for another 12 months, and so I think this is a good outcome in the circumstances. Certainly good when it comes to those 3 priorities that I mentioned.
Journalist:
The PM has told premiers and state ministers they need to rein in public hospital spending, does that mean the federal government expects the states to cut the public hospital activity to suit the budget bottom line?
Chalmers:
What we’re proposing is to dramatically increase hospital funding for the states. The $20 billion of additional investment in hospitals, on top of the $200 billion or so that we’re already providing, represents a very substantial increase. Even since the structure of the deal was agreed at the end of 2023, I believe, our position that we’ve put to the states has increased by $7 billion. So, we’re talking about increasing Commonwealth investment in hospitals. There are good reasons to do that, $20 billion is a very substantial offer that the Commonwealth has put on the table and that’s because we recognise that there are pressures on public hospitals.
It’s also why we’re putting so much time and effort and resources into urgent care clinics and the work that we’re doing tripling the bulk‑billing incentive to take some of the pressure off our emergency departments as well. So I think any objective observer of what we’ve been doing in hospitals funding, what we’ve been doing in health funding more broadly and strengthening Medicare would conclude that we are dramatically increasing investment in our health system and that’s a good thing.
Now, finally on the states, it’s not unprecedented or especially surprising to see that the states are campaigning for more money from the Commonwealth. That story is as old as federation. We continue to engage with the states and territories in good faith. I do as Treasurer, the Health Minister does, the Prime Minister does, to try and get the best outcome that we can for the people that we represent.
Journalist:
The IMF report suggests that the federal government should provide oversight to state spending, saying they’re putting a strain on the budgets. What can be done by the Commonwealth to hold states accountable and is there a discussion between premiers?
Chalmers:
Well, there’s always a discussion between treasurers about the pressures on our budgets. But again, even when provoked, I try not to give free advice to my state and territory colleagues managing their budgets. My responsibility and my job is to work closely with Katy Gallagher and our Cabinet to focus on where we can make a meaningful difference to our own budget. And working together, we’ve got Commonwealth debt down by almost $200 billion. We delivered 2 surpluses and got the third year’s deficit down to a fraction of what we inherited, we found $100 billion in savings, we’ve engineered the biggest nominal positive turnaround in the budget in a single parliamentary term in the history of this country. And so we’re focused on our job, we continue to engage with the states and territories as they grapple with some similar sorts of pressures.
Journalist:
Meta is moving on our social media ban laws about a week earlier than when the ban actually comes into effect. What do you make of that and would you like to see other social media companies follow suit?
Chalmers:
It’s really important that the platforms and the tech companies play their part in what are really important reforms to protect our kids online. And so no doubt Anika Wells, who would be following this much more closely, would have a detailed view about the announcement made by Meta. But we want to see the platforms and the tech companies do their bit. We want to make sure that we’re all working together to protect kids online and that’s what this reform is all about.
Journalist:
The Grattan Institute has found taxpayers are spending $6,000 more for a hospital visit of a person about to enter an aged care home than an otherwise identical patient returning home. Would it be more efficient use of taxpayer dollars to build more aged care facilities so there are enough beds to minimise the bed block crisis in the country?
Chalmers:
Obviously we want to make sure people are getting the care that they need in the most appropriate place and the federal government has provided a substantial amount of money, whether it’s investing in new aged care beds, or whether it’s providing money to the states to help people, get people out of hospitals where they would be more appropriately cared for somewhere else. We know this is part of the conversation that the states have initiated with us around the hospitals funding deal. As always, we engage with the states and territories in good faith. We want every Australian, particularly older Australians, to be cared for where they can be best cared for and that’s what motivates us.
Journalist:
Is the federal government planning to reimburse South Australia for funds already spent on COP preparations?
Chalmers:
I haven’t heard that mentioned by anyone else before now. I say to the South Australian Government, Premier Malinauskas in particular, obviously it’s disappointing for South Australia, it’s disappointing for Australia after being so well supported around the world that we can’t showcase that beautiful city and beautiful state in our country to the world in the context of COP. We’re all working in a pragmatic way to get the best outcome that we can. I think this represents the best outcome we can get in the circumstances and I hope and I expect that Premier Malinauskas, who is a pragmatist, will understand.
Journalist:
Can you understand South Australia feels hard done by here? They’ve done the work and been preparing for the bid for months now but the only winners here are Chris Bowen and other Pacific partners.
Chalmers:
I obviously don’t see it the way you have described it. I would only repeat what I said a moment ago. Premier Malinauskas, who is an absolutely outstanding premier of a wonderful state in South Australia, he’s put his best foot forward. I could understand that there would be some disappointment from his end, but we’ve tried to find a way through here and I think this is the best outcome we could get in the circumstances because it puts the Pacific front and centre, it maintains an influential voice for Australia and it means that we’re not stuffing around for another 12 months to try and get a solution. And so Adelaide’s a beautiful city, I spend a lot of time there, the in‑laws are there. It’s a wonderful state, South Australia. And obviously, we’re always looking for ways to showcase Australia in the world. It didn’t pan out the way that Premier Malinauskas would have liked, but I hope that he understands this is the best outcome we could get in the circumstances.
Journalist:
The state government is launching its own review into the GST system, accusing the national Productivity Commission’s probe of being too light touch. Do you think it’s fair that Queensland’s GST revenue has grown by only 28 per cent while New South Wales has had a 58 per cent increase? Are we being short‑changed?
Chalmers:
Of course, not. I mean – and this is the sort of absurdity that we get from the Treasurer here in Queensland. The Commonwealth government is pouring billions and billions of dollars, extra dollars, into Queensland. We do that enthusiastically, not just because I’m a Queenslander, but because we believe in investing in this wonderful state of Queensland. We are investing heaps more money in schools, we’re making sure that the no‑worse‑off guarantee is being applied. You know, $7 billion for the Bruce, $3.5 billion for the Olympics – this Albanese Labor government invests a lot of money and resources into Queensland and for good reasons, we’re proud to do that, we’re enthusiastic about that.
Now, when it comes to the GST distribution, that’s determined at arm’s length by the Commonwealth Grants Commission. When it comes to the Productivity Commission’s work, it hasn’t finished yet, and so it’s strange for the Treasurer here in Queensland to dismiss a process that only really getting started. And so the Productivity Commission will put out an issues paper before long. I hope it’s quite soon. Certainly by the end of the year, but I hope it will be quite a lot sooner than that. And he will have an opportunity to make his voice heard in that, to make his views known. Obviously, every state and every territory wants a bigger share of the GST carve‑up, again, that’s not unprecedented, but we should have some honesty from the Treasurer here in Queensland. The Commonwealth’s pumping billions and billions of dollar extra dollars into Queensland and that should be recognised when he gets this kind of weekly or fortnightly run in the Courier‑Mail, making these sorts of points, pointing the finger at others. He should focus on his job, I’ll focus on my job, we’ll both support the good people of Queensland.
Journalist:
Mr Janetzki’s issue with the review is that the in‑principle draft has a reference agreed to by the state [inaudible] carve‑up by the states and territories was not what was in the final version of the terms of reference. Did you water down the terms of reference?
Chalmers:
No, of course, not. The terms of reference are deliberately broad and they allow the Treasurer here in Queensland and every treasurer and every state government to make their views known. This is an important opportunity for the Treasurer here in Queensland. I encourage him to make the most of it. We haven’t watered down the terms of reference. They’re deliberately broad so that he can make his views known. And this is more about the partisan politics of the state government here than it is about getting a good outcome for Queensland. We have shown, not just with our words but with our deeds and with our billions of dollars, we’re big investors, enthusiastic investors in Queensland – the Olympics, the Bruce, the schools, the offer that’s on the table for hospitals – and it’s dishonest in the extreme to pretend otherwise.
Journalist:
Meta are sending out alerts to kids about their accounts soon getting closed. Have your children received any notifications? It looks like platforms are taking reform seriously.
Chalmers:
I mean, first of all, I’m not going to go into the details of my kids. I’m not aware of any notifications that they’ve received but more broadly, I’d refer you to the answer I gave Kaiser a moment ago, which is these are really important reforms. They’re about protecting all Australian kids online. Where we can do that, we expect the platforms to do their bit as we move towards the full implementation before long.
Journalist:
There’s been some suggestion that the states and territories have threatened to boycott a meeting with NDIS Minister McAllister; are you aware of any such discussions or threats from the states?
Chalmers:
No, I’m not aware of that but I always believe that you get more out of engaging rather than disengaging. That’s true of the world, it’s true in the federation. I’d encourage the states and territories to take the approach that the Commonwealth does, which is to engage and negotiate in good faith in the interests of the people that we jointly represent.
Journalist:
As the population ages and grows, the country is going to need more hospitals. Is it feasible for the Commonwealth to enforce an 8 per cent gap on the annual growth of funding?
Chalmers:
What we’re talking about contributing is a $20 billion increase in hospital funding in the context of some very substantial budget pressures. We’ve found that $20 billion to offer to the states, a $7 billion increase since the structure of the deal was agreed at the end of 2023 and I think that represents a willingness on the Commonwealth’s part to do more on hospitals. Extra tens of billions of dollars to invest in hospitals because we recognise the pressure that’s on hospitals at the same time as we’re doing what we can in primary care to take some of that pressure off with urgent care clinics and strengthening Medicare so that fewer people rock up to the emergency departments. So we’re investing on a range of fronts and the offer that we’ve put to the states reflects that.
Journalist:
So you’re not proposing that they reduce the amount of growth?
Chalmers:
We’re proposing that they sign up to an extra $20 billion in the hospital system, and that’s an extra $7 billion since the original offer was put and I think it shows a willingness on the Commonwealth’s behalf to do the right thing by the states, by the hospitals and by the people that we jointly represent so that people get the healthcare they need and deserve.
Thanks very much.