Interview with Charles Croucher, Today Show, Channel 9

JOURNALIST:

I'm delighted to say Charles joins us now in Canberra with Treasurer Jim Chalmers. Charlie, once again, congratulations on the appointment, sir. Over to you.

CHARLES CROUCHER, POLITICAL EDITOR:

Thank you, Dicky. Lovely to be here in the House of Representatives Chamber continuing this tradition with Treasurer Jim Chalmers, who on Tuesday night will speak in this chamber to deliver his first Budget. Treasurer, welcome.

JIM CHALMERS:

Thanks very much, Charles.

CROUCHER:

Treasurer, this week has felt like a week-long warning about what's to come. Do you think Australians will be disappointed come Tuesday night?

CHALMERS:

I don't think so, Charles. I think Australians do recognise that when you've got all of this global uncertainty around the world, you need a good, solid, responsible Budget at home and that's what it will be - it will be solid, it will be sensible, it will be suited to the times, and it will do more than just batten down the hatches. It will back in families, it will build a better future and I hope it will bring Australians together around some of these big economic challenges that we all confront together.

CROUCHER:

You said solid, sensible, suited to the times - that's going to be the mantra, it seems, going forward. These aren't good times.

CHALMERS:

No, we've got some issues to deal with in the near term. I'm still optimistic about the future of our economy and the future of our people. But I think it's recognised right around the country and right across the board that when you've got high and rising inflation. You've got global uncertainty. You've got natural disasters and you've got a trillion dollars in debt because of these big, persistent structural spending pressures in the Budget then that puts a premium on what's sustainable, what's responsible,  what's affordable, and that's what people will see on Tuesday night.

CROUCHER:

I want to get to the debt shortly, but you mentioned some of those big pressures. We know that food’s going up, electricity is going up, there's flights and services, interest rates going up. It seems the unemployment rate will soon be going up. What measures are in this Budget for people at home watching now around the kitchen table that will help them?

CHALMERS:

Yes. So we understand that even though these pressures come at us from around the world, they're felt most acutely around the kitchen table and so what we'll do in the Budget is we'll provide responsible cost-of-living relief with an economic dividend. I think people understand that if you spray cash around indiscriminately in an untargeted way, you can actually make the inflation problem worse and you can make interest rates go up more than they would otherwise go up and so we're very conscious of that. The primary influence on this Budget is this cost-of-living crisis, the fact that inflation will be higher for longer than we would like to see. Our responsibility is to not make that situation worse and to provide that cost-of-living relief in areas like childcare and PPL and cheaper medicines and cheaper costs of education and to try and get wages moving again in a strong and sustainable way again. That's the best approach that we can take to this complex combination of conditions.

CROUCHER:

A lot of those approaches, they don't kick in for six or 12 or 18 months. Is it going to get worse before it gets better?

CHALMERS:

I think, first of all, we need to recognise that even in a Budget which is quite restrained and quite responsible, there will be $33 billion in extra payments and pensions, because we do recognise that times are very tough right now. And so the indexation that kicks in will be substantial. About a third of that $33 billion will be age pension, another third of it will be job seeker payments. And we know that people would always like us to do a bit more, but we can only promise what we can afford. And so our cost-of-living relief is deliberately targeted and timed in a way to not add to these inflationary pressures. We don't want anything that we do on Tuesday night to be counterproductive.

CROUCHER:

You said deliberately targeted. John Howard had his battlers, Julia Gillard had working families, Scott Morrison had quiet Australians. They were the ones they targeted. There's this big group of voters that were so instrumental in making you Treasurer today. What do you call them? What do you see them as and what do you say to them heading into this week?

CHALMERS:

First of all, this will be a family friendly Budget and everything I do in this place is informed in one way or another from growing up in Logan City but I don't like to put labels on people. I hope that people see it as a Budget for the whole country, a Budget which does more than batten down the hatches, it actually brings people together and builds a better future and backs in families and a Budget which is worthy of all of these sacrifices that we've made for each other over a difficult couple of years.

CROUCHER:

Yes. Is it time for people to start tightening their belts, given the circumstances?

CHALMERS:

I don't give free advice to people about their own finances. I've got a job to do here, and the job that I have to do is to make sure that the Budget is solid and sensible and suited to the times, that this Budget is defined by restraint when it comes to spending and more resilience in the economy. We do have a difficult period to navigate together, and I take that responsibility very seriously. I'm not going to give free advice to people around Australia. They know what we're up against and I hope that they appreciate that what we do on Tuesday night, every single word of it has been written with them in mind.

CROUCHER:

Okay, let's talk about some of those things we're learning today. You mentioned that the large increase in social security spending, some, I think, $30 billion odd over the next four years, 10 billion JobSeeker, 11 billion pensions, four and a half billion family assistance, plus carers, plus disability pensions and services. It's all money going in good places. But it goes to a fundamental question where's the money coming from?

CHALMERS:

This is what we've been grappling with because when you've got a trillion dollars in debt, when you've got deficits as far as the eye can see, you've got a welcome improvement in commodity prices, feeding higher tax revenues in the near term, but in a way that doesn't go anywhere near making up for some of these pressures on borrowing costs. The fastest-growing area in the Budget is servicing the debt we've inherited. NDIS, aged care, healthcare, defence - these are all the things we want to invest in. We've got to make sure that we can make room for it. One of the reasons why the Budget deficits get a little bit better in the near term is we've got that welcome improvement in commodity prices. The reason they get a little bit worse after that is because the Budget will provide a more realistic assessment of some of those big, longer term structural pressures and the Budget that I hand down here on Tuesday night will be the beginning of that effort to rein in some of that spending but it won't be the end. It will be a long, hard road of Budget repair and on Tuesday, we take the first steps.

CROUCHER:

So do you spend less or do you tax more?

CHALMERS:

It will require us to do a lot of things simultaneously. First of all, spending restraints so we get this big boost to revenues from commodity prices. We need to take a much more responsible approach to that than our predecessors did. Secondly, we will trim spending. There will be substantial savings in the Budget that we hand down. We've been working very hard around the clock to trim some of that wasteful spending. There will be changes to multinationals and to tax compliance and we also need to make sure that any new spending, any new investments in a more modern, more resilient economy, get maximum bang for buck. Because money is not exactly thick on the ground in this Budget. We need to do what's responsible and targeted and that's what we'll do.

CROUCHER:

A couple of quick ones, because we are short on time. Tony Burke said in June people will see in their bank accounts what the change of government means. Are they seeing that and are they liking what they see?

CHALMERS:

I think what they are seeing is a government which takes our economic challenges seriously, which recognises that even though these pressures come from around the world, they are felt around the kitchen table. We understand that. That's why getting wages moving again and cheaper medicines and cheaper childcare and paid parental leave and all of these things that we found room for are so important. This will be a family-friendly Budget. It will be responsible, there will be restraint, and we will build more resilience into the economy. We've had this wasted decade of missed opportunities and messed up priorities, which has given us energy chaos and an aged care crisis and skill shortages and stagnant wages and not enough to show for a trillion dollars in debt. On Tuesday night, we start to put that right.

CROUCHER:

That's all big picture. It goes back to the kitchen table. Then again, that's not going to help them pay bills.

CHALMERS:

The cost of living and the inflation challenge are the primary influence on this Budget. I mean, this is the thing that is never far from our minds, just like it's never far from the minds of Australians. We will provide that cost-of-living relief. We will do it in a way that is responsible and not counterproductive.

CROUCHER:

Alright, quick ones when it comes to recession, are we looking okay, staying out of it?

CHALMERS:

We're not forecasting a recession in the Budget, not here in Australia, but we will be impacted by a really substantial downturn around the world and we shouldn't pretend otherwise and so, some of the forecasts in our Budget will be weaker than they were at the last Budget and that's a consequence of the deteriorating global economy, the fact that interest rate rises will bite and now we've also got these natural disasters to deal with.

CROUCHER:

Should Australians still expect that $275 off their power bill that was promised during the election campaign?

CHALMERS:

What they can expect is that our efforts to get cleaner and cheaper and more reliable energy into the system will have benefits for them. There's no use pretending that there isn't pressure on the energy market right now. That's a consequence, I think, of a decade of energy policy chaos but also, the war in Ukraine. And the war in Ukraine has dug in and will be with us for longer. So one of the reasons why inflation will be higher than we'd like for longer is because of electricity prices being a bigger part of that and also the impact on groceries from what we're seeing in the flood-affected communities.

CROUCHER:

You've studied Treasurers more than most, in particular Paul Keating. He used to usually have a line that summarised his Budget: “to bring home the bacon” was one. And what's this one?

CHALMERS:

I think this Budget will be about responsibility in the Budget and resilience in the economy. It will be some combination of that - solid, sensible, suited for the times. And I think Australians are ready for that, just as they've been ready for a proper conversation. I've levelled with them about the challenges that we face. I've told them how optimistic I am about the future, but we need to work together to get through a difficult period, and that's what the Budget will help us do.

CROUCHER:

And just finally, what are you doing in 60 hours from now? Ten minutes before you do your speech.

CHALMERS:

Two of my three kids will be here, I hope. Hopefully spending a bit of time with them. They're coming down, and that means a lot to me.

CROUCHER:

Wish you all the best on Tuesday night.

CHALMERS:

Thanks.