JIM CHALMERS:
Today's new inflation data provides further evidence that inflation has passed its peak and is now moderating in our economy. The worst of the inflationary pressures are behind us, but they will hang around higher than we'd like for longer than we'd like. The Consumer Price Index rose by seven per cent over the year to the March quarter, down from 7.8 per cent over the year to December. In the quarter, inflation rose 1.4 per cent ‑ this is the smallest quarterly increase since December 2021. Inflation began building in our economy early in 2022. The biggest monthly increase in inflation was in the March quarter of 2022, before the election, and it's now easing in our economy. The ABS monthly indicator also came out today and it also moderated to 6.3 per cent over the 12 months to March from 6.8 per cent in the year to February. While inflation is still unacceptably high, we do welcome the fact that some of these price pressures in our economy have started to ease. But even as these pressures ease a bit, we understand that Australian households and small businesses are still under the pump.
Cost‑of‑living pressures are still coming at us from around the world and they are still being felt around the kitchen tables of this country. That's why the Budget will contain cost‑of‑living relief which prioritises the most vulnerable people in our community. Assistance, for example, with energy bills will go to people on pensions and payments and there are two other sets of developments today which are key as well and which will make a difference to these cost‑of‑living pressures. The first one is Mark Butler's announcement on pharmacy. This means at least six million Australians will halve their medicine costs and need fewer visits to the GP to get the medicine that they use the most and this will save people more than $1.6 billion over the next four years. And this is on top of the cheaper medicines policy which kicked in at the start of this year which people are already benefiting from as well. So that's the first development today. The second one is the mandatory code for gas and the policy that we have released for final consultation today. Now, the existing price cap is taking some of the sting out of those energy price rises already but this code now is about ensuring more gas at reasonable prices for Australian consumers and ensuring an even playing field between producers and users as well. It's a $12 cap until a review in 2025 with exemptions for major producers who make legally enforceable commitments on supply and price and for smaller players supplying the domestic market, and it will be enforced by the ACCC. The mandatory code is all about securing more gas at more reasonable prices and ensuring that level playing field. It's about giving the industry the certainty that they need to invest and ensuring Australia remains a reliable trading partner. And if you couple that with action to cap coal costs for power generators, the gas price caps under the Government's Energy Price Relief Plan have nearly halved future wholesale energy prices. So these are good examples of how we address the cost‑of‑living pressures that people are facing without adding to inflation. You'll see in the Budget that I hand down that we will prioritise the most vulnerable. There will be a premium on what is the most responsible and you'll see that in the Budget in 13 days' time.
JOURNALIST:
Treasurer, given inflation and the announcements today, would you expect to see the RBA keep the cash rate on hold next week?
CHALMERS:
The Reserve Bank will take its decisions independently when it meets next week to consider the future movements of interest rates. My job and my focus is to provide responsible cost‑of‑living relief in ways that don't make this inflation challenge in our economy worse. We've also got substantial issues to deal with on the supply side of the economy as well ‑ many of them neglected for the best part of a wasted decade. So the Reserve Bank will make their decision and they will explain their decision publicly. My job is to land this Budget. The Budget will be about three things ‑ responsible cost‑of‑living relief, laying the foundations for future growth in our economy and also making sure that our economy and our country is more resilient to these global economic shocks that we're seeing.
JOURNALIST:
Treasurer, a number of your Labor colleagues are calling on the Prime Minister to take action and increase Youth Allowance and JobSeeker payments. Could you survive on just $49.50 a day?
CHALMERS:
There will be cost‑of‑living relief in the Budget and it will prioritise the most vulnerable people, I want to make that really clear. And the suggestions that have been made to us are made in good faith, I believe, and they recognise that it is difficult to live on these payments and that's why it is such a high priority of our government to get as many people as we can into good, secure, well‑paid jobs. The unemployment rate at three and a half per cent does give us the opportunity, particularly in communities which are impacted by entrenched disadvantage and long‑term unemployment, whether it's via our Employment White Paper or the work that Julian Hill and others are doing on the committee on the jobs services arrangements, all of these ways demonstrate our priority which is to look after people where we can, to do that in a responsible way but also to try and make sure that more people can grab more opportunities which are provided by an economy that's got unemployment at three and a half per cent.
JOURNALIST:
But do you think that you could live on $49.50 a day?
CHALMERS:
Well, as I've already indicated, I acknowledge and I recognise that it is tough to live on the JobSeeker payment. And that's why we want to move as many people as we can off that payment and into good, secure, well paid jobs. A high priority of this Government is job security and job creation and wages growth, and we want to see more people grab those opportunities. Now we recognise that there is a range of views out there about the adequacy or otherwise, of this payment. I have a lot of respect for the people who've made this suggestion to us today in the letter that has been released today. These are good people making suggestions in good faith. And it's not unusual at this point in the Budget cycle for people to call for more spending in one area or another. My job is to weigh up all the competing demands on the budget, to do the right and responsible thing to try and make it all add up. And so I make it clear once again, there will be cost‑of‑living relief in the Budget. It will prioritise the most vulnerable, and there will be a premium on what's responsible in the context of all of these pressures on our budget, on our economy, and most importantly on people.
JOURNALIST:
The Shadow Treasurer thinks you should be able to deliver a surplus given expectations for commodities and income tax windfall. What do you make of that suggestion?
CHALMERS:
Well, the Shadow Treasurer was a cabinet minister in a government which had almost nothing to show for a trillion dollars in debt. And so I don't think people take Angus Taylor very seriously when it comes to the budget. He is in many ways the poster child for the waste and rorts which define the wasted decade and the trillion dollars of Liberal debt that we inherited. And we've made it really clear that we see a substantial part of our job in this Budget, and otherwise, is to clean up the mess that we were left. Now, the Budget will improve substantially this year and next year as a consequence of low unemployment and good prices for our exports. But a lot of the pressures on the Budget intensify rather than ease after that ‑ we've made that clear as well. We've been up‑front with people about the pressures on the Budget, the influences on the Budget in both directions. And we've tried to be as responsible as we can and show as much restraint as we can, because we've got a big mess to clean up.
JOURNALIST:
Student HECS debts are set to increase in perhaps one of the most economical per centages in history. Do you think that young people have any hope of paying off their HECS debts?
CHALMERS:
Of course they do and one of the good things about the HECS system is it means that people only begin to pay it back ‑ a sliver, a portion of their education costs ‑ when they earn a certain amount of money. And the arrangements for HECS and for university loans and education loans, have been unchanged by this Government. This is long standing practice, people pay it back when they reach a certain level of income, which I think is appropriate. Obviously, this inflation in our economy has a lot of consequences. It means that payments are indexed so that people can try and keep up but it also means that there are other aspects which are indexed as well. This is the normal way that the budget works. Our job is to try and get on top of this inflation challenge in our economy, to provide assistance where we can do that in the most responsible way and that's what we're focused on doing.
JOURNALIST:
There's been a few reports around suggesting you haven't ruled out maybe a small increase to JobSeeker. Is that something you can rule out? Any chance for a modest boost?
CHALMERS:
Well, a couple of things about that. As I keep saying, there will be cost‑of‑living relief in the Budget, and it will prioritise the most vulnerable. I've given some examples. For example, the energy bill relief, will be focused on and prioritise people on pensions and payments. There are 37 recommendations in the Economic Inclusion Advisory Committee report, and we will progress a number of them. But we've made it clear that we won't be able to progress all of them immediately. We are still putting the finishing touches on the Budget, as the Prime Minister indicated this morning. We are working methodically through all of the recommendations. But we've been up‑front with people that the chances are funding all 37 of those recommendations immediately, that's a very difficult thing to do in the context of all of our other budget processes. We are a Labor Government and we will always try and do what's right by people. We have to do that in the context of responsible economic management which recognises the pressures on the budget. We take these considerations and these proposals in good faith. These are good people calling for more spending in the Budget, my job is a bit different ‑ I need to make it all add up. I need to do that in a responsible way and that's what we're focused on. We've got 13 days until the Budget will be handed down. It will be focused on the most vulnerable and it will put a premium on what's responsible and you'll see the fruits of that work in 13 days. Thanks very much.