THE HON JIM CHALMERS MP
TREASURER
E&OE TRANSCRIPT
RADIO INTERVIEW
FIVEAA
THURSDAY, 8 SEPTEMBER 2022
SUBJECTS: first homebuyers, fuel excise, pensioners, Federal Budget
LEON BYNER:
But in the meantime, I want to introduce you to a bloke who is more than qualified to look after some of the headwinds and financial challenges of our country and that's the Federal Treasurer Dr Jim Chalmers. Jim, thank you for coming on today.
JIM CHALMERS:
Thanks for the opportunity, Leon. How are you?
BYNER:
I'm excellent and I'm hoping that you're in exactly the same disposition. Now, the interest rate decision by the RBA increases the cost‑of‑living pressures for all of us, as you would know. When is the Government going to be in a position where they will stop using the line "we inherited a trillion dollar debt"?
CHALMERS:
Well, that's just the fact of the matter, Leon, and I don't think it's worth tiptoeing around that basic fact. However you describe it, any objective observer of the Budget would say there is a trillion dollars of debt in there and that means we have to be incredibly responsible about the commitments that we make. That's just the reality of it and it may be that our predecessors don't like it being mentioned in those terms. So be it. That's one of the challenges that we confront.
BYNER:
Because it was announced late last week that there will be a change to how much pensioners can earn if legislated, and this passes during the next session of Parliament. So I guess the point is you guys are now in control, you've got the settings and you've got at your disposal the levers to use to try and lower the impact of some of these challenges. That's the case, isn't it?
CHALMERS:
Yes, of course it is. And we take responsibility, Leon, for dealing with the issues that we confront in the economy and in the Budget. We work almost around the clock on some of these issues to make sure that we can make a difference where we meaningfully can and that's why we've got cost‑of‑living relief on the way in childcare and medicines and TAFE fees. That's why we've got a policy to get people those strong and sustainable wage rises that they've been denied for too long. That's why we're investing in some of the issues in the supply chain which are pushing up inflation and that's why we're trying to deal with some of the waste that's been a feature of the Budget for too long so that we can redirect money to where it's spent more productively. That's what we take responsibility for and that's what we're working on.
BYNER:
And still on the subject of pensioners, Social Services Minister Amanda Rishworth announced earlier this week a plan to incentivise the downsizing of homes. What's the Government doing at the other end, though, to encourage first homebuyers to have a go at entering the market?
CHALMERS:
So we've got a range of housing policies. The most specific one to that challenge that you mentioned is we've got a policy called Help to Buy. What that means is that we help people into the market by taking a share on of the loan. There are programs like that that have worked around Australia which we've learnt from in implementing our policy, which comes in next year. And in doing that, we hope to help people get a toehold.
But more than that, we want to build more social housing, I've been talking with super and other big investors about building more affordable housing. There are a whole range of things that we need to do. The housing shortage is one of the big issues in our economy, pushing up the price of rent and it's making it harder for us to get the workers where we need them, where the opportunities are. So it's a big focus for the Government in housing.
BYNER:
Alright, now, on the fuel excise cut, is that still going to be finishing at the end of the month?
CHALMERS:
It is, Leon, and to level with your listeners, the reason for that is that we just can't afford to continue it forever. Even to continue it for another 6 months would cost about $3 billion just for that six‑month period. So what we said before the election, during the election, and after the election is that we don't think we can afford to extend that and so the petrol price relief will come off as our predecessors legislated it towards the end of September.
BYNER:
Now on this, those at the real margins, in this case we talk about pensioners, of which there are many, when are we going to give pensioners the opportunity of being able to earn more money without it very strongly impacting on the tax obligations?
CHALMERS:
So one of the most important outcomes of the Jobs and Skills Summit that the Prime Minister and I convened last week in Canberra was an initiative from my colleague from down your way, Amanda Rishworth, a terrific Minister for Social Services. And what we agreed with her and with the participants at the Summit, was we would make it so that people could earn another $4000 this year over the remainder of this financial year. So $11,800 in total before their pensions reduced. What we're hoping that does is incentivise more, particularly older Australians, to maybe work a day or two without being penalised in the pension system because we need more people to do a little bit more work. We've got these skills and labour shortages, we believe older people have got a big contribution to make if they want to make it in the workforce so we want to make it a little bit easier to do that. We've done that in a pretty responsible way and we hope that it makes a meaningful difference.
BYNER:
Do you need to legislate this, though, and if you do, it's something that's got to be a priority, surely?
CHALMERS:
It is a priority, yes, it's a huge priority to get it in place, because we want those ‑ if there are workers out there who have been deterred by what happens to their pension if they work a little bit more, we want them to make a decision to work a bit more if they want to because we've got these shortages and so it is a priority. It's one of the most important things that came out of the Jobs and Skills Summit last week.
BYNER:
So this is a matter of urgency, is that right?
CHALMERS:
It is, yes, because it's for this year and it runs until the end of the year and we'll have a look at it towards the end of the financial year to see that it's working as it's intended to do and then we'll make a decision about the future of it.
BYNER:
Now you're preparing the Federal Budget for next month. Is this going to be a full‑blown Budget or just a comprehensive update given we had a Budget earlier this year?
CHALMERS:
It will be a proper Budget but the outline of it is already pretty well known in the sense that we've got to implement our election commitments including providing some of that responsible cost‑of‑living relief that we've promised and we've got to begin the task of winding back some of the wasteful spending in the Budget so that we can invest it in more productive areas. So I think unusually, 6 or 7 weeks out, people largely know what the Budget will be about. We didn't want to go 13 months between Budgets, from April this year to May next year. We thought we should update the Budget properly and that's what I will be doing next month.
BYNER:
When you refer to wasteful spending in the Budget, could you just quickly give us an idea of a couple of the things that really stick out at the front of this? What are they?
CHALMERS:
I'll give you an example from the last 24 hours. We're doing this audit of rorts and waste in the Budget. Katy Gallagher and I are going through it line by line with our departments, and one thing we found in the last little while, with the help of investigative journalism and others, is there was an $18 million grant to an organisation which wasn't adequately set up to receive that grant and so we announced overnight that we won't be paying that $18 million grant or the millions of dollars in ongoing funding afterwards. We know that that on its own is not going to eliminate that trillion dollars in debt that we talked about at the start, but it's a good example of the type of work we're doing to try to make sure where money is being allocated for something that we're not getting bang for buck, we need to wind that back and invest it somewhere else.
BYNER:
You've talked a lot about cost‑of‑living issues, so what's at the forefront that you want to do something about quickly? Can you give us a broad idea of what's that going to mean? What's going to be in the Budget in that space?
CHALMERS:
The biggest on‑budget commitment in October will be our game‑changing childcare policy and that has got two aims. First of all, it will make life easier by easing the cost‑of‑living pressures on particularly new parents. But also by making it easier for those new parents, and especially newer mums to return to work if they want to. That will have an economic dividend. We've got these skills shortages and we want people to work more and earn more if they're prepared to so we've got to make it easier for them in the childcare system and so childcare is something I'm really proud of that will be a big feature of the Budget in October.
BYNER:
Just for the record, so people understand, as Treasurer, what's the biggest headwind that you face, or we face as taxpayers, just trying to make ends meet?
CHALMERS:
At the household level, do you mean?
BYNER:
Yes, for ordinary consumers because cost‑of‑living, every time you talk about anything it gets back to the cost‑of‑living issue.
CHALMERS:
Yes, yes. Well, it's one of electricity prices or grocery prices right now. Petrol has obviously been a big, substantial problem for much of the year but it’s come off its peak relatively substantially on average. So power prices, big part of the story, but also groceries. When it comes to groceries, one of the things I've noticed ‑ when your listeners go to the supermarket and they can't find something on the shelf, it will often say there's an issue in our supply chain. So people understand what that means. We don't have the labour or sometimes ‑ whether it's in the logistics chain or somewhere else ‑ to get goods to market and that's pushing up inflation, too, and so I think groceries and power prices.
LEON BYNER:
Alright, so as Treasurer, just for the record, what's your number one priority to help the people listening right now?
CHALMERS:
Get wages moving again. That's the big task. We've had almost a decade now of wage stagnation and when we've got all this inflation, it means people are falling further and further behind and so we've got to get wages moving again. There's a role there for training, for childcare, for enterprise bargaining to be fixed. There's a role right across the board and I think the primary focus of the next few years will be how do we get people earning more in a responsible way, sustainable way, but to get their wages moving so that they can keep up with the cost of living and even, ideally, get ahead.
BYNER:
Jim Chalmers, thank you for coming on this morning.
CHALMERS:
Thanks for the chat, Leon. All the best.
