Interview with Jamila Rizvi, The Weekend Briefing podcast
JAMILA RIZVI:
Jim Chalmers, welcome to The Weekend Briefing.
JIM CHALMERS:
Thanks, Jamila. Nice to see you and hear you.
RIZVI:
What a pleasure to have you on the show because you and I have known each other quite a long time, and it is not every day that someone you know becomes the Treasurer of Australia.
CHALMERS:
I hope it's a little while yet until another person that you know becomes the Treasurer of Australia - long may this continue Jamila! We have known each other for a long time now and you were involved in the Jobs Summit that we convened a little while ago, and I really appreciate that. And it's been a real buzz to see how well you're going.
RIZVI:
That's lovely. Tell me about your experience coming to government because I know you've been asked all the political questions and all the economic questions about what you are going to face - and we'll get into that - but at a purely personal level, politics is something that for a lot of people feels far away, you've been connected to it for a long time. To reach such a peak like that, so young, was there a moment when you got the job where you're like `oh God, it's me now, like, I'm the one'?
CHALMERS:
There was actually and it wasn't when you might think. On election night, it was a bit of a blur and you spend a lot of time with local supporters and all of that, and so it doesn't really hit you on the night. On the next day, the Treasury Secretary came out to my house to brief me in Logan City in Queensland. And we've had a laugh about people thinking that becoming a Treasurer is glamorous, but we spent the 30 minutes before the Treasury Secretary arrived cleaning purple crayon off the walls that little Jack had arranged for Steven Kennedy's arrival. It didn't really even hit me then. For me, it was on the Monday morning after the election, and Laura and I were in a car going up the long driveway to the Governor General's place to get sworn in and that's when it hit me. When you have been working for something for a long time, as you would appreciate, there is a very, very brief, very fleeting sense of satisfaction, and then it doesn't last long - you are thinking about trying to do the job well. For me, it was driving up that driveway to the Governor General's house because we got sworn in at nine o'clock on the Monday morning after the election, which is historically quick because Anthony Albanese had to go see Joe Biden and other world leaders in Tokyo. So we got sworn in more or less immediately, and that's when it hit me.
RIZVI:
What about from a professional perspective because one of the things that happens when you come to government is that suddenly you've got access to documentation and what's going on behind the scenes? And you have that moment where you get to see what you didn't get to in Opposition, you get to see where the bodies are buried, you get to open the books. Was that a shock?
CHALMERS:
The process of it wasn't a shock, and that's because I'm very lucky. You and I worked together in a former government. And you know, I worked with a lot of the Treasury people that are there now. I worked closely with Treasurer Wayne Swan for five and a half years, almost six years. I worked closely with the Treasury, the Reserve Bank, the economic regulators, and all of that and so my big advantage - something I'm really grateful for - is that actually being the Treasurer, there's not much that surprises me about the job itself. Obviously the numbers are confronting - you get some advice when you first arrive as Treasurer and some of that is comforting, and you think about how you're going to manage it, sequence it and prioritise it, how you're going to deal with some of these challenges. But actually being the Treasurer, the big advantage that I have is that I've been in this portfolio before, and I'm not daunted by the actual job itself.
RIZVI:
You have to take a perspective to what the Government does that is very much across government - there's a real centrality to the portfolio you hold. If you come to government, and you're the Minister for Climate Change, you know what your focus has to be. Whereas for you, you sort of almost have to have a step back and think about what you're trying to achieve as a government as a whole. Before we get to some of the nitty gritty of different bits and pieces, you've got a Budget coming up in October. What kind of philosophy do you take to that? How do you think about how the Government chooses to spend all of our money?
CHALMERS:
I think of it at two levels. At a policy level, my job is to make sure that we fund the commitments that we made whether it be childcare, climate change, TAFE and training. It is to make sure that we are keeping faith with those commitments and funding those commitments. So at a policy level, it's still relatively clear, even as we work across a whole bunch of different portfolios. We meet in this thing called the Expenditure Review Committee - it meets most weeks, but in the lead-up to the Budget, it meets two, three or four times a week. So we have ministers in and they talk to us about their portfolios, and we try to deliver. We try to fund the commitments that we make as a government. But at a personal level - and this is what I find really enjoyable about the Treasury role - is that we've got all these great colleagues. I like seeing the Treasury as trying to help them succeed in their portfolios. You mentioned the Climate Change Minister. It's good for the Government, more importantly it's good for the country, if we do something meaningful on climate change. And so the opportunity to work with Chris Bowen, in that example, is one that I really value. So you do have a finger in every pie, and sometimes you've got to juggle a lot of different things but we've got great ministers who've got great policies to deliver, and we want to be helpful, and that's our role.
RIZVI:
Who sits on your personal board, so to speak, when you're going about? You've obviously got a team of advisers, you've got a department to back you up, you've got your ministerial colleagues but when you're turning ideas over in your head, and you're trying to work out where the savings are, where the spending should be, who do you talk to? Who do you consult? Who do you listen to?
CHALMERS:
I'm really lucky because for my whole adult life really - and you would have a version of this in your professional life - when you have people who have been through what you're going through, and they're prepared to encourage you and help you, then that's a really fortunate place to be in. And for me, I've got two former treasurers that I speak to very frequently - Paul Keating and Wayne Swan. That's a gift because there's not that many people who actually know what it's like to be the Treasurer of Australia, and those two guys did it for a long time. So I talk to them frequently. I would talk to both of them at least weekly, sometimes more frequently than that if there's a big issue running. There's a heap of people but I think those two former treasurers - having access to those guys makes a big difference.
RIZVI:
You've inherited a whopping great debt, as Treasurer, which must make for really good times for you thinking about what you want to achieve. How do we move a conversation in this country away from a basic `debt bad, deficit bad' to a place where we think about some debt as necessary and useful?
CHALMERS:
I think that's a perfect question because I am worried about that trillion dollars of debt, partly because as interest rates go up, it costs more and more for us to service that debt as people know in their own budgets. And so that $20 billion a year or whatever it might be, prevents us investing that in other areas. So I think the debt matters, but where I think your question is bang on is we need to think not just about the quantity of spending but the quality of spending. And if you think about policy areas like childcare, where you've had a long standing interest, you get a lot of value out of investing in childcare, and so borrowing to improve childcare delivers a dividend for families, but also for the economy - so that's quality spending. Borrowing money to splash around the country at the whim of Barnaby Joyce is not by anyone's estimation, quality spending. And so what I've tried to do and I've got more work to do on this front is to help people understand that we care about how much debt there is, but we also care about what that debt is being used to fund. And in my view, if it's being used to fund childcare or cheaper and cleaner energy or better opportunities in TAFE and training or a better NBN or all these other things that we value as a society, then it's worth it. But that means trimming back on some of the areas where we're not getting bang for buck out of all this money that's been borrowed.
RIZVI:
Cost of living is leading the news bulletins every night at the moment and I think most of us know from just chatting to people in our own lives and in our own communities that there are a whole lot of people struggling. And it's not just the poorest Australians, there are a lot of people who are suddenly realising they have to tighten their belts. What are you going to do about it?
CHALMERS:
Firstly, the diagnosis is right. We've got inflation which is high and rising - that means the prices that people are paying for the essentials are going up. And our challenge is to provide a bit of a relief for people without splashing so much cash around that the Reserve Bank raises interest rates more. The Reserve Bank takes its decisions independently, and one of the things they think about is how much spending there is in the economy and whether they need to wind that back. And so governments need to be careful not to inject so much cash with no strings attached that it makes the job of the Reserve Bank harder. That's the balance we have to strike. The best way through that and the reason why we've settled on the cost-of-living package that we have, which will be in the Budget in a few weeks' time, is if you provide cost-of-living relief via childcare costs then that also has an economic dividend. It doesn't make inflation worse, it makes it easier for people to balance the family budget, but it also has an economic dividend, because we want more people to be able to make that choice to work more and earn more if they want to do that. So that's got an economic dividend. Making medicines cheaper, which is our other big cost-of-living measure, that has a health dividend. Obviously, you don't want people dodging scripts or making themselves unhealthy because they're substituting out the cost of their medicines for the cost of food, or something like that. And so that's why our cost-of-living measures are all about, what can we do to make it easier for people at a time when prices are going through the roof, but how can we do it in a way that helps the economy too. And the third way that we do that is to try and get wages moving again. One of the reasons why people are in a hole in their family budgets is because their wages have been stagnant for the best part of a decade now. So as inflation goes up, wages aren't keeping up with the cost of living. That's why a lot of our policies are about how do we responsibly get wages moving again.
RIZVI:
We've got a whole bunch of young people who listen to The Briefing and the Weekend Briefing. And while at a personal level, I so appreciate the idea of investing to make childcare costs cheaper, having paid a whole bunch for that over the last however many years - and as someone who takes a lot of medicines, I appreciate them being cheaper too - but for a lot of young people, neither of those two things apply. And I think often people in their twenties especially feel like they're kind of left out on Budget night. There's a lot of talk about families and pensioners, and suddenly you're sitting there going 'yeah, but I'm 20 something.' The number one thing that always comes back to us at The Briefing, when we talk to young people about the economy is they feel like they will never-
CHALMERS:
Can I guess? It's housing, isn't it?
RIZVI:
Yes. Yes, they all want to own a house. They feel like that's impossible, and that makes sense to me - right? My parents bought their first house at, they were both 21. They bought a nice house in suburban Canberra for like, I don't know, $12,000 or something like that. And then they sold it 10 years later for $200,000. That is not going to be the reality for this generation.
CHALMERS:
So this is the thing that I'm working on in addition to all of the commitments that we've made, where we're trying to deliver them in the October Budget, and also trying to get a handle on this debt that we were talking about before. A lot of my time spent at the moment is working with my colleague, Julie Collins, who's the Housing Minister, to work out how do we actually properly shift the needle on how many houses are being built in this country. And the best way, in my view to do that, is to bring the state governments, the local governments together with the building industry, who I've been speaking with frequently, and with the superannuation funds to try and work out, can we agree how many extra homes we need to start to take the pressure off, whether it's rent, or housing affordability. How do we make sure that those homes are in areas where there are jobs, because we don't want particularly young people to have to commute for two hours from somewhere they can afford to live to wherever their job is. That's a big, big part of the challenge. And so I'm trying to bring people together with Julie Collins to work out can we get superannuation to invest in affordable housing, where people need it, where people are working in a way that delivers good returns for superannuation fund members at the same time as it fixes this perennial problem that we've got. I understand the frustrations that people have about housing and we've got a bunch of policies already - a help-to-buy policy, a policy for social housing. We've got all of these funds, but we need to do more than that to properly shift the needle on housing. Our near term challenges are wages and inflation, and skills shortages, but I think the kind of big issue that we've got over the next whatever it is five years or so is how do we build enough houses where the jobs and opportunities are. We've actually got really low unemployment in this country at the moment, but we're having trouble connecting people with opportunities and housing is part of that. And that's why I'm spending a heap of my time on it.
RIZVI:
If we take a step back from that and look at a broader context and the experience of younger people, particularly of millennials and Gen Z as they as they come through and come into adulthood, is part of the problem that for decades, we have had governments of both stripes that have built policies that favour baby boomers, that are built to deliver for the biggest generation because they're the biggest voting bloc?
CHALMERS:
We have had this issue where we've got this big chunk of people who were born immediately after the Second World War, moving through stages of life, and I think that they have been a priority for governments of both political persuasions and I don't necessarily think that's a bad thing. But we should be able to deliver for people in aged care and health care services without ignoring the legitimate generational angst that there is about some of the things that we've been talking about. And our job - particularly as a new government and people have high expectations of new governments - is to make sure that there's no generation which is ignored by our policies - and housing is a big part of that, and climate change is a big part of that, and skills and training is a big part of that. Issues around discrimination is central to that as well. And so we want people to keep us up to the mark on this. We don't want to be seen as a government for one generational cohort or another. Even in our own team, we've got a mutual friend in Anika Wells, who has been interested in this area of policy for a long time. How do we make sure that in looking after the baby boomer generation, we're not ignoring the millennials? And that's a challenge for us but it's a challenge we're up for because we understand that one of the reasons why trust is broken down in politics is the sense that politics is for someone else other than me. And I think that feeling is most pronounced in the millennial generation so we've got a responsibility to try and turn that around.
RIZVI:
And I think it's probably most pronounced in one area of policy more than anything else and that's around climate change and action on climate change. I think there was a lot of optimism around election time, and some hope that we were going to see some more movement from this government than the previous government. But young people as a bloc have a pretty high standard and high level of expectation when it comes to action to reduce emissions - is Labor going to get more ambitious?
CHALMERS:
I think we're plenty ambitious already but I understand and I in some ways I welcome the idea that people want us to do more and sooner - that's welcome pressure. We want people to keep us up to the mark when it comes to our level of ambition on climate change. You know 43 percent by 2030 is an ambitious target and we took political risks to announce it in opposition and to implement it in government. And so I feel like we've struck the right level of ambition but the idea that there are people out there that want us to do more, that's good. That's good. Keep us up to the mark. There are a lot of people who want us to do less and we liked the idea of trying to strike that right balance. This Government has the best chance of ending the climate wars of any government that I've seen in my adult life and some of them I've worked for, and I've been through and got the scars in other roles from other attempts to land something meaningful here where we didn't get a done. And I feel like we're going to get it done this time and that's because we've struck the right level of ambition. We've got the right level of commitment. We believe in it, and I think people will see the fruits of that commitment in coming years.
RIZVI:
We're short on time so I'm going to ask one more question. We've got a fair idea of what you want to spend on in this October Budget that's coming up. Where are the savings going to come from?
CHALMERS:
We're working through that. There's some trimming we can do. There are these funds called discretionary funds, which is Treasury-speak for when a government announces a massive bucket of money and then ministers just get to hand it out. There are a bunch of those that are predecessors turned into a bit of an art form, which we're going to trim back - there are some savings there. There are some other savings that come from recognising that a lot of stuff that has been promised in recent years will take longer to build, for example - so there are some savings there, what the economists call reprofiling the spending. Delivering, but perhaps delivering a little bit later than what has been committed to. There are some tax changes - multinational tax changes will deliver some benefits for the Budget as well.
RIZVI:
You could get rid of the stage three tax cuts?
CHALMERS:
You are not the first to pitch that up, Jamila.
RIZVI:
It's not an original idea!
CHALMERS:
We haven't changed our position on that. One of the things I'm trying to do differently - and this probably is a good point to end on - is I've observed over a long period of time, this kind of politics as usual, which says that if somebody has a different view, then you've got to run them down. And there are people who've got a firm view, well-motivated people who I like and trust, who've got a view about those tax cuts. I think we should have a conversation about spending, about investment, about taxes. And so people will raise those issues with me from time to time, our position hasn't changed on them but we should be capable of having a conversation about the future of the Budget. And so I don't get too worried about people raising it the way they have - well-motivated people think we should do something different there. I listen to everyone, but our position on it hasn't changed.
RIZVI:
Jim Chalmers, good luck for your first Budget and thanks so much for being our guest.
CHALMERS:
Thanks for the opportunity. All the best.
