Interview with Michael Rowland, News Breakfast, ABC

MICHAEL ROWLAND:

Treasurer Jim Chalmers is in northern New South Wales alongside the Minister for Emergency Management, and he joins us now. Mr Chalmers, good morning to you.

JIM CHALMERS:

Good morning, Michael.

ROWLAND:

Before we get to the overall cost on the national economy, a lot of people there in the Northern Rivers region of New South Wales are still living in temporary accommodation close to a year since those devastating floods. Can you understand the anger and frustration still felt by some of these flood victims in that area? 

CHALMERS:

Of course I can, Michael, and that's the key reason why Murray Watt and I will be in the region today to listen to people's stories, to engage with local leaders in particular, to make sure that we can rebuild communities like Lismore the right way and with the right manner of urgency. I think inevitably when disaster hits a town like Lismore, as big an impact that it had, and with the skill shortages and labour shortages and other pressures on our economy more broadly, unfortunately you can't rebuild these places overnight, but we do need a sense of urgency. Really, what we want to say to the people of flood‑affected communities - and right now our friends in WA and South Australia are experiencing the worst of it as well - is that Australians are there for each other when natural disasters hit, the Government will be there for you as well, and not just when the flood waters are rising, but after they subside, and so we have come to the table working closely with the New South Wales government to fund where we can this rebuild, as well as natural disaster payments. We're focused on the human cost of these natural disasters, first and foremost, but there is an economic and a budget cost as well, we recognise that - it was a big focus of the October Budget, and it will be a big focus of the May Budget as well.

ROWLAND:

How will that economic cost affect all Australians? 

CHALMERS:

It's one of those factors which will largely determine our fate as an economy and as a country in 2023. I'm optimistic about our country, I'm optimistic about our economy and our future but I'm realistic too, that 2023 is likely to be a difficult year, certainly in the global economy - many people are expecting a big global downturn in 2023, but natural disasters as well will play a role. And so again, when you think about it, if something like seven in every 10 Australians lived in a natural disaster‑affected area in 2022, these natural disasters are becoming more prominent, more damaging - that has consequences for the broader national economy as well. When it comes to things like the price of fruit and veggies in our supermarkets, when you consider a lot of our logistics chains are broken by these natural disasters, a lot of our prime agricultural land as well as some of our mining areas as well.

So, for all of those reasons, the national economy is vulnerable to natural disasters. Our job as a government, which we enthusiastically embrace, is to make our budget more responsible, our economy more resilient, and that means doing a better job not just responding to natural disasters, as important as that will always be, but also mitigating where we can, getting in ahead of some of these natural disasters to make our communities more resilient too.

ROWLAND:

The economy is facing so many challenges. I want to pick up on, I guess, the broader challenges, the IMF, as you well know, Treasurer, reckons a large slab of the world economy will go into recession this year. Are you confident Australia can avoid a recession? 

CHALMERS:

It's our expectation that Australia will avoid a recession. The numbers that the Treasury put into the budget that I handed down not that long ago in October certainly made that expectation clear. And we've got a lot of things going for us in Australia: low unemployment, the beginnings of some wages growth, good prices for what we sell to the world, but we won't be completely immune from another global downturn - the third in around fifteen years, and so I'm optimistic, but I'm realistic as well.

And some of those reports about the global economy, some of those forecasts which have been released by the International Monetary Fund, the World Bank and others make it clear that the global economy is in for some very choppy water in the course of 2023 - we won't escape that completely, but we've got a lot of things going in our favour.

ROWLAND:

Okay. Now, I know the Reserve Bank is independent, but if you're a board member of the Reserve Bank, Treasurer, would you be cognisant of everything you've just said about how parlous a state the economy is in before pressing the button on further interest rate increases this year? 

CHALMERS:

You're right, Michael, that I don't pre‑empt or second‑guess decisions taken by the independent Reserve Bank, but clearly, whether it's the board or the bank as an institution, they weigh up all of these issues in the global economy. It's no secret that the global economy is having a difficult time right now, and that has implications for us, and what the Reserve Bank board does when they sit down in February, and when they sit down at each of their meetings as they weigh up a combination of global factors, domestic factors. No doubt they'll be monitoring, as we are, the impact of the interest rate rises that began before the election and continued through the course of 2022; they'll weigh all that up, they'll come to a decision independently.

My job as the country's Treasurer is to make sure we're providing that cost-of-living relief in a way that that doesn't add to inflation in our economy. We did that in October. We've got some more cost-of-living relief coming when it comes to energy bills, electricity bills, which we've flagged, and so I've been working on that really over the course of the last couple of weeks as well. We know people are doing it tough, we know that higher interest rates impact mortgage holders immediately, but flow through the economy with a bit of a lag, and so that's one of the things that we're monitoring, and no doubt the Reserve Bank's monitoring as well.

ROWLAND:

Okay. Just a couple of other issues quickly before you go, Treasurer. I know you've got a full morning coming up ahead of you. The Prime Minister is under fire for hopping in Lindsay Fox's private chopper last weekend to get from Geelong to Mr Fox's Portsea mansion. Do you agree that was not a good look? 

CHALMERS:

I think it's entirely appropriate, Michael. It's important that the Prime Minister got to WA that day, and he did. He was in flood‑affected communities in Western Australia that very same day. A trip like that gets declared in the usual way on the usual timeframe, and I think it's important that we engage with all parts of the Australian community, including business leaders, and the Liberal Party has got to decide, should we be engaging with business leaders more or less, because they say both of those things at once, and they've got to pick one. I think it's appropriate that the Prime Minister and the Premier spend time with Lindsay Fox; I think it's appropriate that the trip is declared in the usual way, and I think it's not just appropriate, but commendable that the Prime Minister got himself to flood‑affected communities in Western Australia so quickly to make sure that he is playing a much more hands‑on role in these sorts of things than his predecessor ever did.

ROWLAND:

Okay. And finally, what do you make of the New South Wales Premier, Dominic Perrottet, admitting that he wore a Nazi uniform on his 21st birthday?

CHALMERS:

I think the people of New South Wales have got an opportunity in March to express a view about this. For those of us who want our communities, our states and our country to be more inclusive and more tolerant, obviously this revelation cuts right across that. It's appropriate that he apologised for it. The people of New South Wales will get a chance in March to determine whether they think that's enough, or whether it's time for a change to someone like Chris Minns, who I think would make a remarkable Premier of the state of New South Wales.

ROWLAND:

Treasurer, thanks for joining us this morning. Thank you.