Doorstop interview, Canberra

JIM CHALMERS:

What we saw yesterday was a really welcoming, really substantial moderation in the monthly inflation data. This means that monthly inflation came down substantially from 5.6 per cent the month before to 4.9 per cent in the month just gone, well down on the 6.1 per cent that we inherited when we came to office. Now, we're not getting carried away about these very welcome and very encouraging inflation figures. We know these monthly numbers bounce around a bit and we know that inflation is still too high. We know that Australians are under substantial pressure. That's why it is so encouraging to see the ABS yesterday, Deloitte and the OECD overnight, Westpac and others provide a fulsome endorsement of the Government's economic strategy. The Government's economic strategy is to roll out billions of dollars in cost‑of‑living help in ways that take some of the edge off these cost‑of‑living pressures without adding inflation, get the budget in much better nick in ways that have been welcomed by the international community and Deloitte Access Economics, and also invest in the supply side of the economy and housing and skills and energy and in other important ways. We are very pleased to see the Government's economic plan is working to put downward pressure on inflation. We saw that in the numbers yesterday. The week after next I'll be releasing the mid-year budget update. This won't be a mini budget, it will be more like a traditional mid-year budget update. Its defining feature will be responsible economic management to continue to put downward pressure on inflation. People shouldn't expect a heap of new initiatives like we saw in May and in the October Budget before that. What they can expect to see and what they can rely on the Albanese Government for is the kind of responsible economic management which has been backed in so strongly by the OECD, Deloitte Access Economics, Westpac and others in the course of the last 24 hours.

JOURNALIST:

Some economists are warning stage three tax cuts could add to inflation, do you have the same concerns? What data do you have to show otherwise?

CHALMERS:

Our position on the stage three tax cuts hasn't changed. I think it's important to remember that because these tax cuts were legislated some time ago any impact on inflation is already factored in to the Reserve Bank's forecasts and the Treasury's forecasts as well. And so the timing of these tax cuts and any considerations that the Reserve Bank or the Treasury might take into account when they're finalising their forecasts have already been factored in.

JOURNALIST:

What did you make of the OECD report overnight forecasting interest rate cuts by the third quarter of next year?

CHALMERS:

The OECD report overnight was a stunning endorsement of the Government's economic plan. They made it very clear that our responsible economic management is helping in the fight against inflation. Deloitte Access Economics last night made a very similar point. We now know from the OECD, the IMF Deloitte Access Economics, Fitch Ratings, the RBA Governor when she was asked at Estimates – there is a broad and very supportive view of the Government's fiscal strategy. Now when it comes to the future trajectory of interest rates – I did see the comments made by the OECD, including by Mathias Cormann this morning on radio – I don't make predictions about the future trajectory of interest rates. My job is to implement an economic plan which puts downward pressure on inflation and I'm pleased to see that credible institutions are saying that's exactly what our economic plan is doing.

JOURNALIST:

After the Government's win in the Vanderstock High Court decision, are you prepared to give state treasurers a guarantee on Friday that if there's another challenge on excise tax like that, that the Commonwealth is going to compensate them for having robbed their pockets so successfully in the tug of war on federal financial relations?

CHALMERS:

I do want to work with the states on ensuring that they can raise the revenue that they need to fund the services that our people rely on, and I don't think that's a matter of compensation. I think it's a matter of ensuring they have the appropriate assurances about the tax bases that they rely on. This is going to be a really important part of the discussions that I'll have with my state and territory counterparts tomorrow in Brisbane, making sure that they can raise the revenue that they need and we can continue to raise the revenue that we need to serve the people that we both represent. So this will be an important part of that conversation. I also know from the front of the Financial Review today that part of the conversation – and I've known this for some time before the Fin – that part of the conversation is about the GST carve‑up as well and I wanted to say a few things about that. It is neither unprecedented nor especially surprising that state governments would like more money from the Commonwealth. That's a story as old as Federation itself. The state governments have done quite well out of the Albanese Government in ways that we're proud of, because it means better funding for the people that we represent. We've seen that in billions of extra dollars for housing, for example, for skills or in other areas. Now, as we have this important discussion about the GST carve-up we need to recognise the pressures on both sets of budgets, Commonwealth and state and territory, and not just the pressures on state budgets. That's a really important thing and we need to recognise and remember that the GST deal that was struck by Scott Morrison a few years ago has blown out in costs by $27 billion and so that's not irrelevant to the conversation either. So I genuinely want to work closely with my state and territory counterparts. I understand the pressures on their budgets, I'm asking them to understand the pressures on the Commonwealth budget as well. We're always trying to get the best outcome for the people that we represent. We always want to work with people rather than against people where we can. We just need to recognise the pressures that are on all of us, not just some of us.

JOURNALIST:

On COP 28, how confident are you that the Government is on track to meet its 43 per cent target by 2030 under the current measures that you're taking?

CHALMERS:

Our emissions reduction targets are ambitious and achievable and I'm confident that we can get there. I pay tribute to Chris Bowen and other ministers for the work that they're doing, ensuring that's the case. I’m a big supporter, obviously, of the announcement that we made recently to make sure that we can get the reliable, increasingly renewable energy that we need in the system to meet our targets.

JOURNALIST:

Can you please explain why stage three tax cuts are necessary? Why is it good policy?

CHALMERS:

As we've said a heap of times now, we haven't changed our position on the stage three tax cuts. We think it's important when governments can afford to do so and when the economic conditions and the budgetary circumstances permit to return some of the bracket creep that we see in our budgets, and that's really one of the motivations for the kinds of tax reform which has been legislated to come in at the middle of next year.

JOURNALIST:

I believe you're introducing reforms to Australia's payment systems to Parliament today, can you just talk us through those and why you think they're important?

CHALMERS:

This is a really important economic reform, it's about making our economy more dynamic, more competitive and more productive by reforming the payments system, which is a really important part of our economy. And part of that means ensuring that we treat Google Pay and Apple Pay and others like them in the same way when we regulate the payment system as we regulate other forms of payments in the system. And it's part of a broader sweep of reforms as well, when it comes to payments and when it comes to the financial system. We are guaranteeing and ensuring an ongoing role for cash. We are phasing out cheques over time and I think most importantly, we're making sure that our regulations and our laws and our approach to payments and the financial system keep up with the rapidly accelerating change in this part of the economy. So a really important reform today, a very, very important way that we make our economy more modern, more competitive, more dynamic and more productive by focusing on what is a really, really important part of our future prosperity.

JOURNALIST:

You say there won't be any big announcements in the mid-year update. How do you plan on dealing with your colleagues who are calling for more targeted cost‑of‑living relief when you meet with them today?

CHALMERS:

First of all, I know that my colleagues understand that we are rolling out already tens of billions of dollars in cost‑of‑living help in ways that we know from the ABS and elsewhere is taking some of the pressure off the cost of living without adding to inflation. I look forward to conferring with my colleagues about these issues. I actually talk with my parliamentary colleagues all the time individually, in small groups, in bigger groups, relatively regularly. It would be unusual if I wasn't conferring with them. I think that they are reflecting the very real concerns and pressures that people are feeling in our communities and I acknowledge and understand that as well. But I don't just acknowledge that, we're acting on it as a government: cost‑of‑living help, getting the budget in better nick, investing in housing and skills and energy. This is how we deliver for the communities that sent us here, and I think it's entirely appropriate and not that unusual that I would talk to my parliamentary colleagues about it. Every single one of them knows more about the economy than the Shadow Treasurer, and so I look forward to meeting with him later today. Thanks very much.