Interview with Greg Jennett, Afternoon Briefing, ABC
GREG JENNETT:
Jim Chalmers, it's always an honour to have you on the program. Thank you again for joining us on pretty hectic day around here. Now your budget has just been put on the hook for what will be billions of dollars’ worth of additional assistance to the states. I was contemplating asking you a broad question about exactly how much. It might be fairer to break it down into different elements. The NDIS – a 50‑50 coverage between the states of additional foundational supports, what's its projected value?
JIM CHALMERS:
Well, first of all if we can go broad, we will account for the progress made today at National Cabinet in the mid‑year Budget update. The foundational supports as the Prime Minister said and as the state and territory governments have indicated require us to do a bit more work. They've actually asked the treasurers to do a bit more work on that. But more broadly, the outcomes around the No Worse Off extension, the additional health measures, the hospital funding and the firearms agreement, these will be accounted for in the mid‑year Budget update that I release next week. I think it's really important to recognise just how crucial this progress which was made today is. I pay tribute to the Prime Minister and I thank the state and territory leaders and treasurers for the way that they've engaged and for the progress that's been made here. This is really a stunning outcome at National Cabinet to make progress across all of these key areas at once in the interest of the people that we jointly represent, I think is a really terrific outcome.
JENNETT:
Now we don't underestimate the significance of any of them if you've watched lots of National Cabinets or COAGs before then the idea that you nail down a hospital funding agreement, NDIS and GST all in one session is not bad going. Just on the NDIS is it clear to you whether foundational supports as the states pick those up are for people currently in the NDIS or for new diagnoses?
CHALMERS:
Well, two things about that. First of all, we're not asking the states to pick up all of those, we're asking for the states to co‑fund them with us. I think that's an important part of the progress made today. And secondly, Bill Shorten when he's at the Press Club tomorrow will talk about all of these issues in the context of the NDIS review. We think there's a need for foundational supports outside the system. How that is finalised is partly a matter for treasurers but fundamentally an issue for disability ministers like Bill.
JENNETT:
All right now, one figure I reckon you might have closer to your fingertips is around the hospital funding element. Growth to 45 per cent for the Commonwealth share will take a little time but that must be a known quantity. What is it?
CHALMERS:
For the health and hospitals agreement, the cost begins in 2025 and so the cost from 2025 to the end of the decade, we think is around $15 billion. But again, all of this will be accounted for in the MYEFO, in the mid‑year Budget update, all of the different constituent parts of this. In some instances, it requires more work to work out the profile and the trajectory of that funding. But to give your viewers a sense of magnitude, over that five‑year period or four‑year period from 2025, we think about $15 billion.
JENNETT:
A substantial amount of money, what assurance comes to the Commonwealth that you're not just giving a free ride to the states here on the efficiency and management of those hospitals?
CHALMERS:
The efficiency and efficient price part of the arrangements is part of it. But there's always work to do to make sure we're getting maximum bang for buck and not just in health and hospital funding, but also the NDIS, also when it comes to other funding arrangements. We shouldn't lose sight of the bigger picture here, Greg, the quite remarkable progress that the Prime Minister has been able to broker here, with the goodwill of the states and territories across those key areas, which you've acknowledged – they are big parts of our budgets, they recognise the pressures on both of our budgets. And we will do the work to account for and settle the cost of all of this but broadly we have accounted already in the mid‑year update for these investments.
JENNETT:
Understood and the last single element that I'll just zero in on now is GST guarantee No Worse Off. Yesterday, you were strongly against rummaging around the back of the fiscal couch trying to find extra money. Today you're on the hook for three and a half billion dollars for the next three years. Are you saying at the same time this is it at the end of those three years?
CHALMERS:
The point I was making about the Commonwealth's couch was that we were interested in a deal but not a deal at any cost. We weren't interested in continuing it forever in advance of that review that the PC will do. But I got the ball rolling at the treasurers meeting. I said here's what a one‑year version might look like, they said `we want it forever'. I think in the best traditions of COAG or National Cabinet the leaders got their heads together, and they worked out a middle path that everyone's happy with. And I think that demonstrates the goodwill that people bring to the table. And yes, it's expensive for the Commonwealth, and yes, the cost has blown out. But we're talking here about GST and hospitals and NDIS, some of the big pressures on governments at both levels, and we've made really welcome progress here. I'm delighted, frankly, with the outcome on the GST No Worse Off Guarantee.
JENNETT:
All right. Thank goodness your budget is in good shape, or perhaps less worse shape than your last set of official predictions because the economy is weakening in ways that aren't completely unexpected. You indicated yesterday there'll be no additional household assistance package around MYEFO next week but you are more open to drawing something up in the countdown to next May's budget. Based on what you're seeing in the data now, where would that assistance be best directed?
CHALMERS:
Well, a couple of things about that – the economy is slowing in expected ways, that's the inevitable consequence of all of the rate rises in the system and global economic uncertainty so this has been expected. Secondly, we know that people are under pressure. That's why we're rolling out the cost‑of‑living relief which is already in the system and which the ABS says is making a difference to take some of the edge off inflation and we've said as you rightly identify in your question that the appropriate time given the MYEFO is a traditional mid‑year budget update, not a mini budget, that we will consider our economic conditions and our budget position after the MYEFO and before the budget when it comes to any additional support. Your question is about where that support might go, I don't want to pre‑empt that but it has been demonstrated to your viewers that the help that we've put in the system has been really carefully designed – it took half a percentage point off inflation in the last quarter and so if there's any additional support to come, we will be just as careful and just as responsible and just as targeted.
JENNETT:
Sorry to interrupt but energy is kind of already covered, isn't it, but that would leave fuel excise options, rent assistance options, welfare benefit increases, are they all in play?
CHALMERS:
Well, those are all of the options that we contemplate when we put together budgets and in each of those cases apart from petrol, we made big commitments in the last budget and they are rolling out right now. Petrol prices have been swinging pretty wildly as a consequence of decisions taken on the other side of the world. Electricity bill rebates are taking some of the edge off, our rent assistance is doing the same, our early childhood education fee relief has been a game changer, we're pleased and proud of that. We're making welcome and important progress in the fight against inflation but the fight's not over.
JENNETT:
All right. With six months to go until the start of stage three tax cuts, what is the inflationary effect of them in their first full year – $20 billion worth?
CHALMERS:
Well, first of all, as you know, to pre‑empt where this is headed Greg, we haven't changed our position on the stage three tax cuts and when it comes to inflation, I think it's important to recognise that because these were legislated some time ago, the inflationary effect or otherwise of these tax cuts is already baked into the system and so we don't expect when these tax cuts hit the economy from the first of July next year, we won't be then revising our forecast to take them into consideration, they're already considered.
JENNETT:
I've heard you give that explanation before but I'm kind of more interested in the ingredients and the recipe than the baked product.
CHALMERS:
You should be relieved to hear that it's the same explanation, Greg.
JENNETT:
I'm a bit relieved. Do you have that figure though? It must have been produced the inflationary figure for the first year.
CHALMERS:
Well, these were budgeted for before we even came to office so we haven't had to budget for additional stage three tax relief. We haven't had to change our forecast since we've been in office because they were legislated some years before we came to office.
JENNETT:
No, but if you've got a forecast that says three, it may well be that without stage three tax cuts, it could be two and a half.
CHALMERS:
No, I understand your question. We don't disaggregate it for policies that were legislated some years ago.
JENNETT:
All right, Let's see what made MYEFO brings on further updates around the economic parameters. Look, just finally, I think it's fair to say Jim Chalmers that you are not renowned for intemperate remarks or any rancour in your control of media conferences. Yet, the Attorney is copping some heat today for berating a female journalist. Was he right to give the answer he did?
CHALMERS:
I think we all need to try and be as civil as we can and we have a great deal of respect for journalists from all of the outlets in this press gallery and beyond. I think in Mark's defence, he was reflecting a frustration that we all feel about the situation that has been imposed on us by the High Court. This is not a decision taken by the government, it was a decision imposed on the government – we are responding to it and the question went to that. We play the cards that we've been dealt by the High Court, we're doing the best we can, we need the Parliament to help us and the Coalition will have an opportunity to do the right thing later today.
JENNETT:
Sure, so on the substance of the question, rather than I suppose the anger that it elicited, you agree with the Attorney, there is no apology called for or warranted in respect of victims, such as the woman in South Australia?
CHALMERS:
Well, I agree with Mark that this is not a situation of our making. We are responding to a situation that has been imposed on us and we have no alternative – and this is the point that Mark made – we have no alternative but to play the cards that we've been dealt by the High Court and that would be the case whether it's a Labor government or a Coalition government. We have to respond to the High Court decision, we don't have a choice about that, we have to do that because the decision has been taken and I think Mark's answer reflected that.
JENNETT:
Well, thank you for stepping outside of the Treasury laneway just briefly and finally at the end, and many thanks for your participation in the program. Alas, we won't be around to cover on Afternoon Briefing MYEFO next week, but I'm sure you'll struggle on without us. Jim Chalmers, thank you.
CHALMERS:
Thanks very much, Greg, and thanks for a great show all year.
