THE HON JIM CHALMERS
TREASURER
MEMBER FOR RANKIN
E&OE Transcript
RADIO INTERVIEW
ABS NEWSRADIO BREAKFAST
TUESDAY, 24 MAY 2022
SUBJECTS: Swearing in of the Albanese Labor Ministry, Labor’s Economic Priorities, AAA Credit Rating
THOMAS ORITI: First this hour, the new Labor Government has several challenges ahead and one of the biggest might be the economy. Inflation has pushed up the cost of living for families across the country and a record budget deficit could have a major impact on spending. Jim Chalmers was sworn in as the Treasurer in Canberra yesterday, he'll be instrumental in getting Australia's post-pandemic recovery going and Jim Chalmers joins us now from Canberra. Good morning, thank you for your time.
JIM CHALMERS: Good morning Thomas, thanks for having me on the show.
ORITI: How have the past 48 hours been for you? Walk us through how you've been trying to get on top of what you're inheriting.
CHALMERS: I have. It's been a really busy couple of days as you would expect. I had the Treasury Secretary around to my place in Logan City in Queensland on Sunday to begin the briefing on some of these really big, substantial economic challenges that we are inheriting from our predecessors. I spent the day yesterday in briefings with Treasury, there will be more of that today. Looking to meet with the key regulators before the end of the week, speaking to all of the peak organisations and my colleagues in the states and territories as well. The state and territory treasurers. So it's intensely busy. We've tried to hit the ground running. We are inheriting a $1 trillion in debt with not enough to show for it. We've got high and rising inflation and rising interest rates. We've got real wages going backwards and so we've got our fair share of challenges that we are inheriting. We've already gotten to work to try and start to address them.
ORITI: Yeah, no time to rest. I mean, you've said that you're going to go line by line through government spending, and as you've just flagged that that budget repair has to begin now. What does that mean for Australians? Should we expect cuts to spending programs?
CHALMERS: What we said during the election campaign, and we were really upfront about this, is that our key task is to improve the quality of the budget as a first step. That means trying to unwind a lot of the kind of rorts and waste that we've had for the best part of a decade in the budget under our predecessors and to try to replace that with responsible investments in areas where we can grow the economy but also make a meaningful difference to people's lives. So in areas like aged care and child care, cleaner and cheaper energy, TAFE and training, a future made in Australia. The key parts of our economic plan are all about trying to make sure that we can reorient the budget away from spending, which is determined to get a political benefit, towards investments that will get us an economic dividend. So that's the first priority. We've already said there will be something like $11.5 billion in savings that we announced when Katy Gallagher and I released our costings last week, and we will also be going through the budget line by line. We have will have an audit of rorts and waste and the fruits of all of that hard work will be in the October budget.
ORITI: You know, government debt is approaching $1 trillion. Budget deficits for the next decade. Are you confident that what you perceive as spending rorts will be enough to actually achieve budget repair? I mean, can you guarantee there won't be cuts to some of those big programs? I'm thinking the NDIS, for example?
CHALMERS: Yeah, those aren't our targets. We want to make sure we are getting maximum value for money in those key areas, whether it's NDIS, aged care, healthcare and the like. The key there is not to unwind spending but to get more value for it; to make sure that we are getting maximum bang for buck for that important social investment. But there is a broader task, around making sure multinational corporations pay their fair share of tax here, that's part of the story. Trimming some of the spending that has blown out on consultants and contractors and labour hire in the public service can improve the budget by some billions of dollars. Tax compliance, particularly for business; there's a role to play there. So there's a whole range of things that we have already identified but we've been upfront for some time and said we will be going through the budget line by line ‑ not just this budget for October but every budget from here‑on in, to make sure that the money that we invest on the taxpayer's behalf is invested wisely but also to make sure that we actually have something to show for this $1 trillion in debt. It will take generations for Australia to pay back the debt that the Liberals racked up over the last decade, and our job is to make sure that there is a generational dividend for that generational debt.
ORITI: Okay, some would argue that the COVID‑19 had something to do with that in the last few years, no doubt. But just on another thing, can we ‑ the minimum wage, can we expect a rise to the minimum wage now you're in office, and if so when?
CHALMERS: First of all just briefly on that debt point, the former Government had doubled the debt before the pandemic. There's a heap of debt in there that's not pandemic related. On wages, this is one of the most important challenges that we have in the economy that real wages are going backwards. We've been very clear that we want to see people on the lowest incomes get a pay rise that allows them to keep up with the skyrocketing costs of living. It was a cost‑of‑living election in many ways, and one of the reasons why the Australian people got behind us rather than our opponents is because we understand this challenge with wages, we know people are going backwards no matter how hard they work, and so an important first step is to get a decent pay rise out of the Fair Work Commission. Their considerations and deliberations are already underway and we have already made our views clear.
ORITI: So no timeframe on that, though?
CHALMERS: Well, that decision will be released in the coming weeks. It won't be long, actually, that the Fair Work Commission will come out with their view. We have said publicly for some time before and after the election that the best outcome from our point of view is a pay rise for minimum wage workers which allows them to keep up with these skyrocketing costs of living.
ORITI: Cost of living. A big issue of course inflation, 5.1 per cent forecast to hit 6 per cent by the end of the year. I mean, what are your plans for getting inflation down?
CHALMERS: First of all, we have to understand that we are on a trajectory where inflation is expected to get worse before it gets better, and that's why the Reserve Bank has publicly flagged a number of interest rate rises. We are already on that trajectory. So there's some cost‑of‑living relief currently in the budget. Beyond that what we would like to do is implement our policies for child care, for cleaner and cheaper energy, for more affordable medicines and to get real wages moving again. The combination of those policies ‑ which are key parts of our economic plan ‑ the combination of that will put downward pressure on the costs of living. We need to be realistic and upfront with people about the nature of this challenge which has been building for some time. It will take some time to turn it around, but we've got the policies and plans to begin that important work.
ORITI: Now, you have been upfront about the challenges, and you mentioned there it could take generations to fix this, in your words. Is Australia's AAA credit rating safe at the moment?
CHALMERS: Well, it should be. I mean, there's absolutely no reason why our AAA credit rating should change. The first time we ever got a AAA from all three of the major ratings agencies was under the last Labor Government. The first time in our history. We got that under Treasurer Wayne Swan not under Treasurer Costello, not under the Liberal Treasurers after Wayne. So that's an important recognition of economic management in Australia and there's absolutely nothing about our plans which should or in my view will change the way that the ratings agencies look at our budget and our economy.
ORITI: Jim Chalmers, I just want to ask you as well, Labor's Powering Australia plan, the plan there is to reduce national greenhouse gas emissions by 43 per cent by 2030 based on 2005 levels. How are you planning to work with businesses on your government's climate targets?
CHALMERS: Well, I pay tribute to the business community. I think one of the reasons why we are able to land a climate change policy which is responsible and ambitious at the same time is because whether it's the peak business groups like the BCA or individual companies, they really got around our plans for climate change for emissions reduction and that's been, I think, a decisive factor in the way that we have been able to say to the Australian people, "Here are our plans for climate change", they were very supportive of that, obviously, and we want to continue to work with the business community to implement those plans because it's a huge economic opportunity for Australia. This is in many ways a defining moment, this opportunity to change climate change policy in an ambitious but responsible way so that we can grab all of the investment, and the jobs, and the economic prosperity that will flow from using cleaner and cheaper energy to maximise some of our traditional strengths. So business recognises that the investment community recognises that, the Australian people more broadly and certainly their Labor Government does too.
ORITI: I will let you go in a minute, you're a busy man. You've told us you hit the ground running going through the budget line by line. Just finally, how does all of this work ‑ you mentioned October, is that right when Labor is bringing down its own budget?
CHALMERS: Yes, my intention is to hand down a budget in October with Katy Gallagher, the Finance Minister, but also to give a pretty detailed economic update to the Parliament when the Parliament returns; whether that's in June or July. Because what I would like to do is I want to engage the Australian community in a big national conversation about the substantial economic challenges that we have inherited. We will only solve these challenges if we work together: business, unions, employers, employees, communities around Australia and the new Albanese Labor Government. We want to work together to try and start to deal with this legacy that we have inherited so that we can strengthen and modernise the economy for the future and so that everyone can benefit from that.
ORITI: Jim Chalmers, thank you very much for joining us this morning.
CHALMERS: Appreciate it, Thomas. All the best.
ORITI: And to you too. Jim Chalmers there, who was sworn in as the Treasurer in Canberra yesterday joining us live.
ENDS
