Interview with Michael Rowland, News Breakfast, ABC

MICHAEL ROWLAND:

Treasurer, good morning.

JIM CHALMERS:

Good morning, Michael.

ROWLAND:

We're going to get to the economy in a moment, in your view though, is it the right time for Alan Joyce to go?

CHALMERS:

Ultimately, it's a matter for Alan Joyce and for the company. I think what's important here is the new CEO, Vanessa Hudson, does have a lot of work to do, as she acknowledges, to restore trust in Qantas. There's a lot of work for Qantas to earn and maintain the trust of its customers, and that needs to be the focus now under the new leadership.

ROWLAND:

What legacy does Alan Joyce leave in your view?

CHALMERS:

That's not really for me to judge, Michael. Obviously, we want our aviation sector to be strong and to be competitive, and we want people to have a good experience with their airlines and with the other big service providers in our economy. It's for others to judge his legacy. I think as Vanessa Hudson has rightly identified, there is work for Qantas to do to earn and maintain the trust of the Australian people, and particularly its customers and that should be the focus.

ROWLAND:

Qantas chair Richard Goyder has left open the option, the possibility of clawing back at least some of the hefty bonuses paid to Alan Joyce. In governance terms, broadly speaking, would that be a good position?

CHALMERS:

Again, that's a matter for Richard Goyder and for the board. We've made it clear over the course, particularly of the last few weeks, that when it comes to things like the flight credits and some of these other issues that have been in the public domain, we do want Qantas to do the right thing here. We want Qantas to acknowledge that people are unhappy about some of these arrangements and respond if they can, how they do that, whether they do that is ultimately a matter for them.

ROWLAND:

Meanwhile, there's a Senate inquiry now struck late yesterday into the government's decision to block those extra Qatar Airways flights coming into Australia. You've done that in the national interest. Treasurer, what is the national interest in stopping those flights coming in?

CHALMERS:

Transport ministers of both political persuasions make decisions from time to time between countries about these sorts of arrangements. In our case Catherine King and the former government, Michael McCormack, and before that as well, they weigh up a whole range of considerations. But the important thing for your viewers to understand, Michael, in this conversation about competition and about additional flights and additional capacity, is that there is additional capacity being added internationally and domestically. Our aviation sector is expanding. The flights and opportunities for people to travel are expanding. That's important, that's a good thing and this decision that's been taken on this one specific country-to-country agreement doesn't diminish the fact that international tourism and domestic tourism is one of the big things we've got going for us in our economy right now, and one of the reasons for that is because aviation and flights and routes are expanding.

ROWLAND:

What is wrong, though, with more flights from Qatar?

CHALMERS:

This isn't a decision that I've interacted with. It's not something that I've had to weigh up. The appropriate place for this decision to be taken is by transport ministers as I said before, both political persuasions it's not particularly unusual.

ROWLAND:

Sorry for the interruption but you are one of the most powerful ministers in the government as Treasurer, you must have a view on this when it comes to cost of living for people having to pay potentially higher airfares than they otherwise would.

CHALMERS:

But the point that I'm making, Michael, is that the aviation sector is expanding, international flights are expanding. And what I'm trying to tell you is that different transport ministers, not just Minister King, Minister McCormack under the other government, from time to time, decisions are taken not to proceed with these kinds of outcomes between countries. It's not actually that unusual for transport ministers to take decisions like this. But when it comes to the broader competitive environment, when it comes to adding capacity to our international flights, that is happening, we're seeing that – that's a good thing. One of the reasons why our economy has been weathering the storm the last little while is because tourism has been making a big contribution to that, that's a good thing.

ROWLAND:

Okay. Now the Prime Minister got his dates mixed up yesterday as to when he spoke to the Virgin boss, Jayne Hrdlicka, about this application. I want to ask you, have you Treasurer had any discussions with Qantas executives, Virgin executives about the Qatar Airways application?

CHALMERS:

No, I haven't.

ROWLAND:

Okay and should the Prime Minister have been more transparent up‑front about the conversation he now says he had with Jayne Hrdlicka?

CHALMERS:

The Prime Minister has been up‑front about those conversations and when he realised about the timing in Question Time yesterday, as I understand it, he's corrected that. It's not unusual for the heads of major companies to engage with ministers on different issues. That's not unusual. When it comes to this particular case, I haven't had that opportunity but I engage with the heads of companies of this size, employers of this size all of the time, as does the Prime Minister as do other ministers.

ROWLAND:

Okay, before we move on to the economy, there'll be no review of this decision?

CHALMERS:

That's not our intention, Michael, I think the priority now becomes the Aviation Green Paper. Catherine King, the Minister for Transport, has been working very hard on aviation sector reform. You'll see a green paper before long and then a white paper, I think next year from memory. That's our focus.

ROWLAND:

Okay. We have these GDP figures out today and most economists predict they will show signs of a sluggish economy, still after a weak March quarter. You said yesterday Treasurer in the wake of that welcome interest rate reprieve from the RBA board that a lot of Australians are understandably still under pressure. Are you worried – and you've talked about a slowing economy into this year, late this year – are you worried now that Australians will suffer a slowing economy well into 2024?

CHALMERS:

A couple of things about that. We do welcome the third interest rate pause in a row, but we understand that people are still under pressure even after that welcome decision that was taken independently by the Reserve Bank yesterday. Our major focus is rolling out billions of dollars in cost-of-living support and doing that in a way that takes the edge off inflation rather than making it worse. And obviously, inflation is still the primary challenge in our economy and that's why we've seen these rate rises. When it comes to growth in the economy, we'll see what these numbers say at 11.30, but it's already clear to us that a combination of things like these interest rate rises plus the international uncertainty represented by the slowdown in China and elsewhere is having an impact on our economy. It is slowing our economy, particularly when it comes to household spending. We've seen retail figures and other consumption data slow really quite considerably. We'll see what the numbers say at 11.30 but it's already clear to us the Australian economy is being buffeted by international uncertainty and higher interest rates. The outlook for the next 12 months or so as I've said to you and as I've said publicly, repeatedly, we do expect growth in the economy to be relatively flat over the next 12 months or so. We'll see what the numbers say about that at 11.30.

ROWLAND:

Are you still confident Australia can avoid a recession?

CHALMERS:

That's certainly our expectation, that we will avoid a recession. Obviously, there's a lot of uncertainty, globally and domestically – the two things that matter most to that will be China and the impact of these interest rate rises which are biting on family budgets and on the economy more broadly. But our expectation, our forecast in the Budget, are that the Australian economy will continue to grow but quite slowly.

ROWLAND:

Treasurer Jim Chalmers, busy day, appreciate your time this morning.