JIM CHALMERS MP
SHADOW TREASURER
MEMBER FOR RANKIN
E&OE TRANSCRIPT
RADIO INTERVIEW
BUBBLE POP, COMMUNITY RADIO NETWORK
SATURDAY, 7 MAY 2021
SUBJECTS: How the Budget process works; Labor’s priorities for Budget 2021-22.
AMANDA COPP, HOST: Jim Chalmers, welcome to the show.
JIM CHALMERS, SHADOW TREASURER: Thanks for having me on the show.
COPP: So, what is a federal Budget?
CHALMERS: Well, once a year, the federal Government hands down, basically, their spending plans. And their assumptions about how much tax they'll raise. And what the economy will look like. And it's obviously of massive interest, not just to the business community and investors, but the whole country has some stake in it, because it really is the Government's best guess on how things are about to play out. And how much of, you know, Australians money, taxpayers’ money, is being allocated to different priorities.
COPP: So, that sounds like something that's pretty important for the Government, but why should everyday Australians care about what is in a federal Budget?
CHALMERS: Well, most aspects of a federal Budget have tangible consequences for Australians, in every part of the country. So, for example, the Budget will lay down how much people are taxed, how much of their pay packet gets allocated to tax every fortnight, or every month, however often you get paid. And so, that's obviously a very meaningful part of the Budget for Australians. But also, if you're an age pensioner, the Budget allocates money for your pension. If you're studying there's how much money, in relative terms, goes to TAFEs, and universities, and schools, and early childhood education.
So, it's a massive document, and it's quite hard to read, and it's very technical, but that shouldn't prevent us from recognising that it has really quite tangible, massive consequences for people in their everyday lives.
COPP: Definitely. So, how does the federal Budget actually work, in kind of a logistical sense? Does the Treasurer himself actually write the Budget? Who's the one who's actually making all the decisions when it comes to what is being spent on what things?
CHALMERS: The big decisions are made by the Cabinet, by the Government. So, in this case, the Morison Government has a Cabinet, you know, typically around 20 people or so, who would make these big decisions. There's also a committee called the Expenditure Review Committee, which goes through it all in a fair bit of detail. At the end of the day, the Prime Minister and the Treasurer are the two most influential decision makers in it all, but there are literally thousands of public servants, largely in the Treasury Department, but also in the Finance Department, and Prime Minister and Cabinet Department, and others, that spend four or five months in the lead up to Budget working on a lot of these issues. And getting the decisions ready for the Prime Minister, and the Treasurer, and the rest of the Cabinet, and the Expenditure Review Committee.
And a lot of the decisions in the Budget are already kind of made for you. You know, in describing the economy, it can't be completely divorced from reality. But also, there's a whole bunch of decisions locked-in. Some of our defence spending, for example, is locked in six, and eight, and ten, and sometimes thirty and forty years down the track. So, some things aren't that easy to shift around. There's a series of decisions around those bits that can be moved around, how much extra do we spend on childcare versus spending it on aged care, for example. Those sorts of decisions are made by Ministers, but largely the Prime Minister and Treasurer.
COPP: Now, I know this can get a bit political, in terms of the best approach, but if you can keep your bipartisan hat on for just a little longer, given we've just had the first recession in almost thirty years here in Australia, how can a Budget help Australia's economy bounce back from that?
CHALMERS: Well, the most important way to do that, is to make sure that the Budget is spending money on the things that can help grow our economy, and particularly grow jobs in our economy. So, at the moment, there's about, I think, a trillion dollars in debt in the Budget. And both sides have recognised that it's important that when the economy has been as weak as it has been, it's been in recession, there is a role for the Government, via the Budget, to step in and help. And that's why we've got way more debt than we would usually have, even though debt was growing before. And so, that's kind of agreed across both sides of the of the Parliament, but where the parties begin to disagree, and I won't do it here, is around how you get the best value for money for that money that you're borrowing.
And the best thing that a Budget can do in circumstances that we're in now, coming out of recession, with a couple of million people either unemployed or not able to find enough hours, is to make sure that the additional money that the Government is investing, we get bang for buck, we get a good dividend. And we measure that dividend in terms of what it means for jobs and opportunities for people. And so, we're not wasting it on things that are secondary. The primary purpose of the Budget, this time around and typically, is how do we get the economy growing in a way that creates good jobs and opportunities for people?
COPP: Now, you're the Shadow Treasurer, sounds like a pretty important role, but do you get any input into the federal Budget?
CHALMERS: Not, usually, no. I mean, occasionally, there'll be an opportunity to discuss with my opposite number, the Treasurer, an issue in the economy, but typically, the Budget is the preserve of the Government. We make our preferences known in the run up to the Budget. Sometimes, robustly. We try and be as constructive as we can about what we think should be in the Budget. We have a role to play, but it's typically not, I'm not sitting in the Cabinet Room with Josh Frydenberg, you know, having fifty per cent of the say in what's in the Budget.
COPP: Well, we'll have to wait until the next election, see what happens. Now, I will allow you to kind of put a bit of a political hat back on, but just quickly, what would you like to see in this year's Budget?
CHALMERS: I think there's a couple of really pressing issues that need to be dealt with in the Budget. Aged care, I think, is a no-brainer. Aged care has been neglected for a while now. It costs a lot to do something meaningful on aged care, but I think the time has come, for this Budget to make aged care, a real priority, a genuine priority. Same for cheaper and cleaner energy. I think there's a role for Government there in getting energy costs down, and particularly in the renewable space. Clearly, there's a need to get better at teaching and training our people for technological change. So ideally, there'd be a big skills component in the Budget.
But I think, more broadly, sort of sitting over the top of that, I feel that we're at a really important moment in our history. We've come out of this recession, we've still got a lot of patchiness in the economy, and we can't sort of miss the opportunity in this Budget to do meaningful things. Those sorts of things which would genuinely modernise the place and make our economy stronger as a consequence.
COPP: Well, I think that that was a fantastic explanation. You've shed some light on what can sometimes be a pretty confusing issue. Thanks for joining us on the show, Jim Chalmers.
CHALMERS: I really appreciate the opportunity. Thank you.
ENDS
