JIM CHALMERS MP
SHADOW TREASURER
MEMBER FOR RANKIN
E&OE TRANSCRIPT
RADIO INTERVIEW
AUSTRALIA TODAY WITH STEVE PRICE
WEDNESDAY, 30 MARCH 2022
SUBJECT: Federal Budget
STEVE PRICE, HOST: Jim Chalmers is the Shadow Treasurer and he could be the Treasurer of Australia by the end of May. He obviously had a busy night and again this morning. Thanks for your time, I know how flat out you are.
JIM CHALMERS, SHADOW TREASURER: How are you Steve?
PRICE: I'm okay. When I look at the numbers, you've got a wage prediction in these Budget papers with wage growth to increase from 2.75% this financial year to 3.25% next year. Do you believe those numbers?
CHALMERS: If it happens this time, it'll be very rare Steve. Before last night, the Government made 55 different wage forecasts, they've been wrong 52 of the times. So they've got a pretty notorious record of overpromising and underdelivering on wages. What really matters to people in last night's Budget when it comes to wages, is the fact that real wages are falling. Wages growth is nowhere near inflation in the economy and that's why so many of your listeners are falling further and further behind.
PRICE: You get to, if you take the figures as they've published them from Treasury, and you look at near the middle of this year, 2022, so that's after the election - you're going to have wages that might grow by 2.75%. But the inflation number is at 4.25%, so you’ve got a 1.5% gap right there. And I just mentioned, you know the cost of buying your lunch, well you can add to that everything else. I mean, the cost of fuel has been addressed overnight but everything else, particularly those things that middle income families need to buy, are going up.
CHALMERS: It's exactly right, it's not just petrol. Petrol’s a big part of story but it's also groceries, it's rent, it's child care, it's building supplies. To give your listeners a bit of a sense of that percentage number that you just talked about with real wages. On average, the average Australian worker in the Budget last night is worse off about $26 a week, when it comes to those real wage cuts in the Budget. The difference between inflation and wages is about $26 a week on average. That gives you a bit of a sense of why people are falling further and further behind. There was nothing in the Budget last night, which made up for the fact that people have had these stagnant wages and falling real wages for so long. There was nothing in the Budget which makes up for almost a decade now of the Government coming after wages, job security, pensions, Medicare - the list goes on.
PRICE: It puts the acid on you though, doesn't it. We're going to have an election in May, when we're going to have to vote on which party can deliver a better standard of living, because that will be the biggest election issue. So, will you have to - between now and whenever the election’s called and then polling day - be very specific about how you are going to help out lower to middle income families in particular in Australia to beat the twin enemies of inflation - which will include a mortgage rate increase, probably - because the interest rates are going to go up?
CHALMERS: First of all, interest rates will go up no matter who wins the election. The Reserve Bank's made it clear and everybody's made it clear that they can’t be at zero forever, so that will stick when that happens, when rates go up. That will be a big impost on family budgets. It is our responsibility, Steve - I agree with you , between now and the election, and we've been doing it for some time - to show how we go about things differently. Our criticism of the Budget is that it doesn't see beyond May. It's a tremendously short-sighted document. It's a vote seeker Budget when the country needed a plan for the longer term. That's why we have been talking about things like cleaner and cheaper energy with our Powering Australia plan, or more accessible childcare with our cheaper childcare plan, or free TAFE where we've got skills shortages - because skills shortages are holding back the economy. Investment in the NBN so people can decide not just how they work or where they work from. To investment in advanced manufacturing so we can add more value here, at a time when we've got all this pressure on our supply chains. These are our economic policies and they're designed to give cost of living relief to families, to make the economy more competitive, more productive over the longer term, so that we can grow it without adding to these inflationary pressures
PRICE: On cost of living, they're going to need your support to get through the petrol price cut, which is the excise you've already agreed to do that. What about the $420 cost of living offset for those earning less than $126,000, does that get a tick as well? And the $250 payment for pensioners, vets and concession cardholders?
CHALMERS: Yeah, they’ll all go through today Steve. We're in conversation with the Government now about when that legislation will hit the parliament later today. Our Shadow Cabinet has already agreed to support the cost of living measures in the Budget, and the fuel excise, the tax offset, and the cost of living payment for pensioners, and a few other things which are associated with that. So, my expectation is that that will pass the parliament today.
PRICE: On petrol, we're going to have to wait a couple of weeks, the petrol in the ground doesn't immediately get cheaper overnight, the excise is already paid further up the chain. If we fast forward to six months Jim, how comfortable are you going to be telling Australians that their fuel price is going to increase by 22 cents a litre because that's when this will run out?
CHALMERS: That's effectively the decision that the Government announced last night - that we'll have cheaper fuel for six months and then it will be more expensive fuel at the end of September. That's what the legislation will say and I think it's a symbol really of how the Government's tried to take a lot of problems that existed before the election and just pushed those problems to the other side the election. There’s a short-sighted element to that, there's a lot of politics at play there. We want to provide that support for people but we do so recognising that whoever wins the next election, that fuel price will go back by 22 cents a litre after the election at the end of September. That's what the legislation will say.
PRICE: Net debt will get to $864 billion by 25/26. You’ve used the word trillion, are you factoring in interest rate rises there are you?
CHALMERS: No, there's two measures of debt. The gross debt will hit a trillion dollars, I think, in 2023. The net debt is as you describe it. But on those measures - gross debt or net debt - the Government had already at least doubled those measures of debt before the pandemic, and then added much more obviously during the pandemic. Our criticism of that, is that we don't have enough to show for that trillion dollars in debt. You'd think if a government borrowed that much that there’d be more of a legacy. Instead, the legacy is that trillion dollars of debt, falling real wages, and no plan for the future.
PRICE: But that's COVID, isn't it? I mean, you would have had to do similar things with things like JobKeeper. I mean, you've been supportive of JobKeeper, a lot of our debt is through a pandemic, surely?
CHALMERS: Well, when the economy is at risk, as it was, we have always been sensible and responsible and said there is a role for Government to lean-in in crisis times, and that sometimes inevitably involves borrowing, being sensible about that. But the thing that the Government doesn't like talking about - I’m not sure if your listeners are completely across this - but when it comes to net debt, most of the net debt was added by this Government before we had even heard of the Coronavirus. A lot of this debt was racked up - you'll remember, you’ve got a long memory Steve - remember the Government used to wander around Australia when gross debt was $280 billion, saying it's a debt and deficit disaster? They more than doubled that even before the pandemic and now it's heading towards a trillion dollars in the next couple of years.
PRICE: Just a final one, the infrastructure spend, and particularly in the regions. $7 billion over 11 years targeted it would seem to me on the headline reading of it, by me overnight, to places in Australia’s states and territories where the Coalition needs to win seats.
CHALMERS: That's been their form, hasn’t it? As you know, they typically take decisions on a political basis rather than a genuine economic one. To be honest with you Steve, there is a lot of detail in that infrastructure spend my terrific colleague Catherine King goes through very carefully. It takes longer than half a day for us to understand all the moving parts there. Our criticism of infrastructure is not just that it's determined by this Government along political lines rather than economic and community lines, but also that they are notorious for announcing big numbers before election and then not building stuff after the election. They’re notorious for overpromising and underdelivering on infrastructure, we've seen that time and time again. It’s not what they announce in a Budget that matters it’s what they actually build, and that's where they've fallen short.
PRICE: Last one, finally, Anthony Albanese will deliver the Budget Reply speech. Will we get some more specifics that we don't yet have? Or will that wait until the elections called?
CHALMERS: There will be policy in the Budget Reply, but it will be career-limiting in the extreme Steve, for me to go through that.
PRICE: You might have detected what my next question will be. What’s going on there?
CHALMERS: Well, I encourage your listeners to tune in at 7:30pm Eastern Daylight Saving Time. Tune in on TV, or the internet, or on Facebook, because it's an important opportunity for us to layout, you know, what a plan for the future might look like. The Budget was silent. The Budget’s got a shelf life of about six or seven weeks. It is a vote seeker Budget when the country needed a plan, and Anthony will be talking about some of the things that we would do differently.
PRICE: Appreciate your time, I know how busy you are. Thanks a lot.
ENDS
