THE HON JIM CHALMERS MP
TREASURER
MEMBER FOR RANKIN
E&OE TRANSCRIPT
TELEVISION INTERVIEW
ABC AFTERNOON BRIEFING
TUESDAY, 5 JULY 2022
SUBJECTS: Interest Rates; Food Prices; Federal Budget; New South Wales Floods; Ukraine Visit.
GREG JENNETT, HOST: The Treasurer, Jim Chalmers, joins us in the studio. Welcome, Treasurer. I think consecutively, we have just witnessed the biggest back‑to‑back rate hike since the cash rate was first targeted by the Reserve Bank in 1990, so that puts it into some context. What, though, is the strategy here? Is the central bank in Australia, as elsewhere, trying to nip this in the bud by going harder and front-end loading more so than they normally might?
JIM CHALMERS, TREASURER: Thanks, Greg. The Reserve Bank can speak for itself, the Board and the Governor make their views clear when they make a decision. What they've said today and what they've said for some time is they are worried about inflation in the economy - as am I, as are the broader Australian people - who feel this inflation challenge in every aisle of every supermarket, every week. There is a big, substantial problem with skyrocketing prices in our economy. The Reserve Bank expect it is to get worse before it gets better, but it will get better. One of the most important things that they said in their statement today is they expect inflation to moderate next year, but there will be some difficult times ahead for the next few months as people try and deal with this inflation challenge and the rising rates that come with it.
JENNETT: You know, it might get better, but I suppose the painful part is that it gets worse first. So, what then makes you, to use your words, supremely confident, in the future of our country with so much uncertainty, much of it emanating from the United States?
CHALMERS: Australians are known the world around - whether it's dealing with natural disasters or dealing with other kinds of challenges - for their resilience. We've got the right kind of economic plan, which is all about making the Budget and the economy as resilient as the Australian people - in making sure that we're doing things like dealing with the skills shortages, making sure we're making supply chains stronger by making sure we can add more value here, our child care reforms to make the pool of available workers bigger. All of these sorts of things, all of these policies and plans that we have, are about growing the economy without adding to these inflationary pleasures. Our economy is growing, but so are our economic challenges in the near term, but we have the capacity to deal with them together.
JENNETT: And, so, what's going to protect Australia from recession, whether the US dipped into it or not — a lot of people think it might? Is it just the definitional threshold? We are growing but it would literally take two quarters of back‑to‑back negative growth for us to slip into it. Is that all that gives you confidence about riding through, let's say, the next six to seven months?
CHALMERS: No, what gives me confidence is that we've got the right plan, and you'll see that implemented in the October Budget. We've got a community which has proven to be very resilient during COVID — before that, and since then, as well. And we have other things going for us. We do have low unemployment. We do have strong demand. Some Australians have been able to build a buffer of savings — not everyone, but some. So, we have some things going for us as well. Our economy is expected to grow into the future. What we need to do is navigate these tricky conditions now together and implement the plan that we know will work, and that's what we're focused on.
JENNETT: So, you made an appeal today for different people in the economy, sectors in the economy, to work together on this. If we take it to business, could they or should they be showing some price restraint? We've heard plenty of complaints from farmers that grocery chains, in particular, are really marking up between the wholesale market and the retail shelf. Who is it that you appeal to do their bit to pull us through this?
CHALMERS: Clearly, everybody needs to do their bit. But the pressure on food prices is because we do have some international pressures, but we've also got some pretty serious domestic challenges, too. Anybody in those flood‑affected communities of New South Wales understands - particularly in those big food producing areas - that that will put pressure on vegetable prices and fruit prices in our supermarkets as well. So, we've got a range of challenges. The point that I was making earlier, and the point that I will continue to make, is that our economic challenges are so serious that we need to come together and find some common ground. The Government has indicated what it is prepared to do, and we need other people to come to the table as well.
JENNETT: Would that include workers and unions who might be pressing claims for wage increases above five per cent?
CHALMERS: Well, wages are not causing this inflation problem. If you made a list of all the things that are contributing to inflation in this country, wages wouldn't be on.
JENNETT: Not yet, but maybe into the future.
CHALMERS: Yes, but a lot of people, when inflation is low, they say wages can't go up because inflation is low. When inflation is high, they say wages can't go up. We don't have an inflationary wages problem in this economy. That is clear. We've got a series of other challenges, and I think the union movement and the business community are prepared to work together. The best way to do that, with the Government's help, is to ensure that we get that decent wages growth that has been missing for the best part of a decade. We do that by making our workforces and our workplaces more productive, and that's why skills and training and some of our other policies are so important.
JENNETT: Okay. A quick one on floods. There is assistance flowing now from the federal level. Why not the disaster recovery payment, though? This is the $1,000 immediate cash for those who might have been displaced from their homes. You demanded that so strongly from Opposition earlier this year; why not now?
CHALMERS: Murray Watt, our Emergency Services Minister, has made it clear today - and as recently as an hour or two ago - that he is looking at that payment specifically.
JENNETT: It's still a live option?
CHALMERS: Of course, yes. Our message to people in the flood‑affected areas is we will stand by you, we will be there for you, we will support you. We've already released - with the state government that we're working very closely with, the New South Wales Liberal Government — we've released some disaster payments already. Murray made it clear earlier today that he expects there to be more to come, and that's my expectation, too.
JENNETT: All right, a quick final one because, I guess, we'll put to your opposite number: some criticism, I think it's fairly muted from some Liberals — Dan Tehan, Paul Fletcher spring to mind — about the Prime Minister's travel, that somehow he's taken his eye off the ball domestically. Any validity to that?
CHALMERS: Of course not, it's ridiculous. Premier Perrottet, from the other side of the political fence, made it clear today just how ridiculous that criticism is. They've only been in Opposition for a few weeks and they've managed to spend the last dregs of credibility that they had remaining. We would rather not have to repair these relationships that have been run down. It hasn't prevented us from doing important things on the domestic front. That's what we're focused on.
JENNETT: Yeah, but the Prime Minister has, maybe, created a rod for his own back. He has this communication policy, he told us from Indonesia, that he won't express a view on domestic matters when he's overseas. Might that need to be revised when you consider some of the developments happening here and some of the trips coming up? I'm talking about in the economy, or even natural disasters?
CHALMERS: Well, I'm not going to give him free advice on that. I think the point that he's made is that we operate as a team, and whether it's Murray Watt, Richard Marles, myself, in close contact with Anthony Albanese, making sure that the work gets done here, that's our approach. We work as a team genuinely and he has faith in us to respond to domestic issues as they unfold here in Australia.
JENNETT: All right. Fair enough. Jim Chalmers, thanks for joining us today in the studio
ENDS
