THE HON JIM CHALMERS MP
THURSDAY, 8 SEPTEMBER 2022
SUBJECTS: Housing, National Accounts, interest rates
Well, the latest National Accounts show Australia is rebounding from the disruption of the pandemic really strongly. GDP increased by 0.9 per cent in the last quarter and has gone up 3.6 per cent over the year. That’s the economic growth figure. The rise has been largely driven by us and our spending, and also exports. It comes as the Government encourages older Australians to downsize their homes. It’s introduced new laws which will make it easier to sell and, hopefully, free up more housing stock. Joining me now, Treasurer Jim Chalmers.
Treasurer, let’s start with the housing stock at the moment. There are now over 13 million spare bedrooms in this country. How big is the problem for housing and how do you plan to fix it?
Good morning, Kochie. It’s really important that when people - particularly who might have had big families and the kids have left the house - that if they want to downsize into something more appropriate for their needs, we want to make sure that they’re not punished in the social security system, and that’s what that change is all about. Because, as you rightly point out, we’ve got an issue with housing stock, but we’ve also got an issue with stock in the right places and in the right suburbs, and all of those sorts of things. So, we’re hoping that that makes a difference, but not just that. We’re going to build a heap of social housing. We’ve got a Help to Buy scheme to help people to get into the market and I’ve also been talking to the superannuation funds, and I will be talking to the state governments tomorrow – I spoke to the local councils yesterday – about whether or not we can incentivise some more superannuation investment in housing, because this housing shortage that we’ve got is a really big challenge in our economy and we need to do more.
Treasurer, should you talk to your own colleagues? Eighty‑four MPs in Federal Parliament own 3 or more properties; 144, almost half the Parliament, own more than one property. Should you put a cap on the amount of property politicians should own and put that back into the market?
I haven’t been contemplating that, to be honest with you, Kochie. I wasn’t aware of those numbers as you put them.
That’s probably not a path that we’ll be going down, Kochie. I can understand why you’ve raised it. Our focus is on the Help to Buy scheme, social housing, building more affordable housing, getting more investment into the sector. Particularly when you consider we’ve got these skills and labour shortages around the country, and if we want to get people to where the jobs are, we’ve got to make sure there are houses as well and that’s our focus.
Okay. Let’s talk about the economy. Cracking economic growth numbers out yesterday for the June quarter. Let’s remember it’s March to June, so it’s a bit in the rear‑vision mirror. All driven by us – Australian households, consumers, spending more. You’re saying even though the figures are good, there’s worse to come.
The figures were solid. They were encouraging in lots of ways. They were partly an increase in consumption, in spending. A lot of people, particularly after that phase of COVID, were heading out more in the services economy - in the jargon - so that’s part of it. But also our exports were incredibly strong and those two things put together gave us a relatively strong and encouraging outcome for that quarter. But as you rightly point out, Kochie, it was a couple of months ago now that we’re talking about. We’ve had rate rises since then. We know that the international situation has deteriorated quite a bit. The US, the UK, China, Russia, Ukraine – all of those things matter. And we’ve got these big constraints in our supply chains – labour shortages, and other issues – which are pushing up inflation in our economy. We are pleased with the numbers that we saw yesterday from the June quarter, but we’re not getting carried away by it because we know that while our economy is growing, the challenges are growing as well.
Because you’re taking more money out of our pockets to spend, aren’t you, through these interest rate increases? The Reserve Bank Governor Phil Lowe is giving a speech later today. Do you think we’re near the top of the cycle for rising interest rates? Will that rise start to slow?
It will be interesting to see what Governor Phil Lowe says today. I think like a lot of Australians I will be paying attention to his remarks later on today. The Reserve Bank takes those decisions independently. What they said earlier in the week when they raised interest rates again was that they expected there to be further increases. But they say this thing in the statement now where they say it’s not on a pre‑set path and that’s, I think, RBA speak for that each month when they meet, they’ll consider the conditions in the economy. But I think most people are bracing for a few more interest rate rises before it ends.
Yes, they are independent, but you have your staff on the board of the Reserve Bank, don’t you? They give the Reserve Bank board a briefing every month. What are they suggesting the Reserve Bank do?
It’s not my direct staff, but it’s the Secretary of the Treasury. The Secretary of the Treasury for a long time has been on the board of the Reserve Bank. What I try to do is not to intervene or breach the confidences of the Reserve Bank board. Steven Kennedy, I’m sure, makes a valuable contribution to the discussion because he’s a first‑class, first‑rate public servant, but I try not to intervene too heavily. I respect the independence of the Reserve Bank. They make these decisions on their own. I’ve got my own job to do.
Okay. Treasurer, good handball. Thank you for joining us.