Interview with Mark Riley, Seven News, Channel 7

MARK RILEY:

Treasurer, thanks for joining us. Australians heard you through the election campaign saying the cost of everything is going up expect wages ‑ they’re still not going up.

JIM CHALMERS:

This is the issue we are trying to deal with. We have got an inflation problem in our economy and that’s what is guiding our decisions in the Budget. We have got a plan to deal with inflation – that’s by not making the problem worse. It is about providing some responsible cost‑of‑living relief and we have also got a plan to get wages growing again.

RILEY:

When?

CHALMERS:

With the inflation challenge as significant as it is right now, we need to be realistic that our plans for wages and our plans on the inflation side, will take some time to bear fruit, and we have said that really for some months now. What the Budget shows is that wages growth is picking up, as a consequence of our policies and plans, and some other factors as well. But it won't catch up with inflation, on our estimation, until 2024.

RILEY:

Young families did pretty well out of this Budget.

CHALMERS:

They sure do, they’re front and centre. We’ve said this a family‑friendly Budget. It battens down the hatches against this global uncertainty but it also backs in families and builds a better future for all Australians. So, yes some of the new initiatives around paid parental leave and cheaper early childhood education, they are very important parts of the Budget. But as we have spoken about before, there are also increases in pensions and payments to try to keep up with the cost of living, and there are other measures as well.

RILEY:

Indexation yeah, but for families who don't have small children or babies, they will have to weather the cost themselves in the short term.

CHALMERS:

There are also other elements of our cost‑of‑living plan. We’ve got a five‑point cost‑of‑living plan. Cheaper child care is part of it and paid parental leave is part of it, but also cheaper medicines, a big part of what we are putting forward in this Budget. Also more affordable housing, a big part of what is new in this Budget, and our plans to get wages moving again.

RILEY:

That affordable housing, are we talking about regional areas co‑located where job opportunities are ‑ is that the point?

CHALMERS:

We are talking about right around Australia. My big concern is when the economy is creating jobs and opportunities, we need to make sure people can live near where the opportunities are being created. And that’s what’s guided this Housing Accord ‑ which is about bringing people together, working with superannuation, the states and territories and the building industry ‑ to make a real difference, to make sure that we rebuilding more affordable homes with more affordable rents. We’ve got very low vacancy rates because we have got a supply issue. We’ve got very high rents and we would like to turn that around over time.

RILEY:

Electricity prices predicted to rise by 30 per cent. When will they come down?

CHALMERS:

Unfortunately, a bigger and bigger part of our inflation challenge is going to be energy prices, plus the impacts of these natural disasters when we have got flood‑affected communities in some of our food‑producing areas. So, inflation will hang around higher for longer than we would like, and electricity is part of that. It is a consequence of the war in Ukraine, but also we have spent the best part of a decade as a country with all of these different chopping and changing of energy policies. So we need good, stable, predictable energy policies. We need more renewables in the system, and if there are other steps that need to be taken, we’re prepared to take them.

RILEY:

Yeah those other steps, because the electricity and gas companies seem to be doing alright. They are making pretty good profits. Are you willing to step into the market, intervene in the market to get prices down?

CHALMERS:

That’s something that we are considering. Renewables are cheaper energy. That is the most important thing. Secondly, the war on Ukraine is having a big impact on energy prices. Thirdly, a decade of energy policy chaos hasn't helped. If you recognise all of that, and you see these forecasts for electricity prices in the Budget, I think any responsible government looks to see what else it might be able to do. Is there some regulation change or some other change that might make a meaningful difference? That is some of the work I will be doing with my colleagues now that the Budget is out and released.

RILEY:

So when might families see that intervention?

CHALMERS:

I am not prepared to pre‑empt the end of that process, but being up front with all of your viewers; we know that higher electricity prices are a big problem in household budgets and unfortunately the Treasury does expect that to be a big part of our inflation challenge. We are cognisant of that, we understand that. If there is more that can be done, more will be done.

RILEY:

The money there for a nurse in every aged care facility by July 1, where are these nurses coming from?

CHALMERS:

We have to train more nurses, there is no doubt about that.

RILEY:

In a year, though? We’re talking about July 1.

CHALMERS:

And we also need to be more sensible about our migration settings. One of the reasons why my colleague Clare O'Neil has a review of the migration settings, one of the reasons, frankly, we had the Jobs and Skills Summit ‑ about these big labour and skill shortages in our economy, including in the care economy ‑ is because we have a big challenge here and training is the big part of the story ‑ the most important part of the story and migration has a role to play as well. We need to get this right. Our economy is going to create a lot of jobs in the coming years and increasingly they will be in the care economy, in the services economy. They’re great jobs. Good, secure and hopefully in time well‑paid jobs, so we need to make sure we can fill the vacancies.

RILEY:

Will you ever deliver a surplus as Treasurer?

CHALMERS:

It depends how long I am the Treasurer, but certainly in the current Budget, Treasury is not forecasting a surplus in the foreseeable future, and that is the same under our predecessors. We have got a trillion dollars of debt with not enough to show for it. We have got deficits unfortunately, as far as the eye can see – that was the situation we inherited. What this Budget is all about, is beginning to put the Budget on a more sustainable footing but there will be more work to do after this.

RILEY:

And the theme of the Budget in a couple of words?

CHALMERS:

Responsible and right for the times.