Interview with Allison Langdon, Today Show, Channel 9
ALLISON LANGDON:
Jim Chalmers joins us now from Canberra. Nice to see you this morning, Treasurer. I feel like we need a bit of Tim's namaste, don't we? There's a bit going on at the moment.
JIM CHALMERS:
Good morning Ally. There is a bit going on right now - it feels like the hits keep coming in lots of ways. And I think it's as we spoke about last week when I was in DC, some of these communities are getting absolutely smashed by these natural disasters. Our focus is primarily on the human element of that - what it means for people in these affected communities - but there will be an impact on the economy as well, and there will be an impact on grocery prices. We're talking here about some of the best farmland in the world producing some of the world's best food. Obviously, when it goes underwater, there's a lot of crops and a lot of livestock at risk. And so we'll learn more about the economic impact of what's happening here but our primary focus - as it should be - is on what it means for people in those communities. People are there for each other when times are tough, and the Government will be there for them as well.
LANGDON:
Let's just start - because there's a bit to get through - let's talk first about assistance for flood victims. Besides the emergency payments, what assistance is on offer? And after what we saw in northern New South Wales, where there were such delays in getting access to money because of red tape, what's been done to fix that?
CHALMERS:
The emergency payments are crucial - we get them out the door as soon as we can. I know my colleague, Murray Watt, been working closely with us and with the Prime Minister to make sure that those payments can flow as quickly as possible. But as always, if there's more that can be responsibly done, obviously we consider that. We think it's an important role of government to be there. When times are tough, when things like this happen, there are payments which kick in, which are already kicking in. There's obviously going to be a big bill associated with rebuilding some of these communities and we'll be there for people in that regard as well. But right across the board, right across the country in every affected area, whatever we can responsibly do, we'll do.
LANGDON:
And this is it, isn't it? We've seen this too many times over the past couple of years. We know what is involved, what's ahead in rebuilding and getting these communities back and people back in their homes. I was reading this morning, too you've got dairy farmers forced to dump milk because trucks can't get in, crops have been lost. How high do you expect grocery prices to go?
CHALMERS:
First of all, we need to recognise that it's heartbreaking for these primary producers, for these farmers, whether it's dairy, whether it's livestock, whether it's crops that can't be accessed now or need to be ploughed into the ground or lost under floodwaters. We need to understand that it's heartbreaking for people and often where people do it the toughest is when the floodwaters recede. It's tough right now, when the waters up. We know we've got some more heavy weather later in the week coming as well. But we need to recognise that it's tough for people in an ongoing way. There are mental health consequences as well as economic consequences. When it comes to the cost of living, we have seen this before unfortunately. When it comes to crops, most recently in southeast Queensland not far from me, where we saw prices in our supermarkets go up because we lost so much of that season's crop. And that's what we're facing again. We don't yet know what the full impact will be on the cost of living. We don't yet know how many billions of dollars this flood and its recovery will cost. I've already had preliminary conversations with Treasury about this but it's premature to put a final number on it for obvious reasons. We're still counting the costs and assessing the damage, but there will be a substantial impact on the cost of living. There will be a substantial impact on the Budget. There's no use pretending otherwise.
LANGDON:
Okay, so going to that then - we know this is all going to have add to inflationary pressures. You're talking about the cost‑of‑living increases that we're going to see here as well. What in next week's Budget will address that?
CHALMERS:
We've got a responsible cost‑of‑living plan, which goes to things like cheaper childcare, cheaper medicines, getting wages moving again, paid parental leave implemented in a staged way. But we've been pretty upfront with people and said that what we don't want to do, and we've seen this overseas, is provide cost‑of‑living relief in a way that just creates more inflation and pushes interest rates up higher than they would otherwise be. We've got to walk a pretty tight line here between doing what we can to provide that cost‑of‑living relief with an economic dividend in a way that doesn't push up inflation, versus spending money in an untargeted way. It's not an easy balance to strike, but we're trying to strike it for the right economic reasons. We want to provide that cost‑of‑living relief, but we don't want it to be counterproductive.
LANGDON:
I feel for you Jim in this role at the moment considering all these pressures that you've got on and having to deliver a Budget. You know what's happening in the UK with the new prime minister, Liz Truss, and what happens when you get the Budget and tax cuts wrong? Are you worried about the same happening here?
CHALMERS:
I'm certainly watching really closely what's happening in the UK. I've spent time with UK counterparts in the course of the last week or so. I think the whole world understands that you can get this balance wrong and I think the UK Government itself is recognising that perhaps they got this balance wrong and they're trying to recalibrate their settings. I think that is an important lesson for all of us. What we've tried to do is make sure that the cost‑of‑living relief that we give doesn't make the job of the Reserve Bank harder, doesn't push up inflation, and that's our focus.
LANGDON:
A lot of people are relying on you to get it right so good luck with that, Jim, appreciate your time this morning. Thank you.
CHALMERS:
Thanks very much, Ally.
