Doorstop interview, Parliament House, Canberra

JOURNALIST:

I wanted to begin with the cost-of-living impact of the floods. Which products are likely to be affected and for how long?

JIM CHALMERS:

This is primarily a human tragedy and our focus is on what this means for people in affected communities. But it will also have an economic cost and it will also push up further the cost of living when Australians are already under the pump. We're talking here about some of the best farmland in the world gone under water and that means crops and livestock damaged and that will push up the price of the cost of living. What we're seeing here is lots of damage to a lot of very productive farmland. That will have implications for what Australians can access at supermarkets and it will push up the cost of living as a consequence.

JOURNALIST:

Do you think it will affect people over the festive season and do you think it's going to push up the cost of a Christmas lunch, for example?

CHALMERS:

The full impact of this is yet to be seen. We're still assessing, obviously, and the situation isn't over yet. We've still got real concerns for what might happen later in the week. So the costs and consequences of this are not yet fully known. I think Australians will be bracing for even more expensive groceries as we head towards Christmas as a consequence of what's happening here. This is the unavoidable consequence of some of our best producers being impacted by natural disasters. Unfortunately, we've seen this before. We know that the price of basic groceries and food will go up and Australians will find it that much tougher when they're already under the pump.

JOURNALIST:

How do you see this flowing through to the RBA's considerations on interest rates for the rest of the year?

CHALMERS:

It's a matter for the independent Reserve Bank how they deal with the inflationary pressures caused by these natural disasters. It's not for me to give them free advice or to second guess their considerations. Our focus as we put the finishing touches on this Budget that I'll hand down in a week's time, is to make sure that if we can include the most up‑to‑date consequences and assessment of what's happening here in the Budget, we will. It's quite late in the piece, but we'll do our best. What's happening here will have substantial consequences for our economy, for our Budget, and for the cost of living, and there's no use pretending otherwise.

JOURNALIST:

There's been more aggressive talk from China this week. As we know in the past, they've used economic measures to hurt us. How concerned are you they may do this again?

CHALMERS:

Our focus has been on stabilising the relationship with China. We're under no illusions about the ways that China has changed. They've been more assertive, more aggressive in our region. And I think that's self-evident. Our job is to engage where we can, to stabilise the relationship where we can. We've made it very clear on multiple occasions before the election and after the election that the best way to stabilise that relationship and show good faith, would be to remove some of these restrictions on Australian trade and that remains our position.

JOURNALIST:

Just quickly - does Australia still recognise West Jerusalem as the capital of Israel? Or has that position changed?

CHALMERS:

I've been focused completely on putting together the Budget. I'll leave commentary on that matter for others.

JOURNALIST:

Just one more on the economic sanctions - so how much of an impact are they still having at this point on China?

CHALMERS:

The impact of these sanctions on specific industries is obviously substantial. The impact on the broader economy, less so. But we want our producers, our exporters, our employers to have access to the biggest and best markets around the world and when decisions like that are taken, it denies access to those markets and that's not what we want to see.

As we put the finishing touches on this Budget which I hand down in a week's time, it will be a sensible and solid Budget suited for the times, it will be focused on responsible cost-of-living relief, targeted investments in a stronger and more resilient economy and starting to unwind the legacy of waste and rorts in the Budget. It won't be flashy, it won't be fancy, but it will recognise that Australians are under the pump right now. They've had enough to deal with as it is before the costs and consequences of these natural disasters. This is a human tragedy with economic costs. Australians are there for each other when times are tough and the government will be there for them as well.

Thanks very much.