Interview with Patricia Karvelas, RN Breakfast, ABC

PATRICIA KARVELAS:

The federal government wants to change the economic debate and will soon release a wellbeing framework. The ACT uses a similar model already, using it to help guide future government policy decisions and the impact of community wellbeing being weighed up in government decision‑making. The Treasurer has also delivered a speech in which he talks about the reason he believes in the surplus and has given some hints perhaps about cost‑of‑living relief. He joins me in the studio now ‑ Federal Treasurer Jim Chalmers, welcome back to Breakfast.

JIM CHALMERS:

Lovely to see you, Patricia.

KARVELAS:

Last night you talked about that surplus and you said "ours is a government of hard heads and warm hearts". What does that translate to? Because it's been interpreted differently by different newspapers. The Australian says you're not going to do cost‑of‑living relief, the AFR says you are going to deliver cost‑of‑living relief. What's the case?

CHALMERS:

Well, the point that I'm making in that speech at the Brotherhood of St. Laurence last night was that we have demonstrated over a little over a year in office that you don't have to choose between managing the economy in a responsible way and providing cost‑of‑living help for people who really need it – people who are doing it tough. And I think for too long the economic debate has been dominated in this country by this false choice between responsibility and compassion. And so, the speech I gave last night was all about our economic plan and the way that we're managing the Budget. And the main point of that which goes to the bigger surplus, and which goes to the cost‑of‑living help that we're providing is that the textbook response in the kinds of economic conditions that we confront together is you get the Budget in much better nick, not at the expense of people doing it tough, but so that you can provide a much more solid foundation to help them and that gives you flexibility. If the Budget is in better nick, it gives you flexibility down the track if the economic conditions deteriorate more substantially to do more if you need to.

KARVELAS:

Okay, so that does give me some clarity. What you're saying is if you make an assessment that the economic conditions are deteriorating, you do believe there might be a case for more support?

CHALMERS:

I think it's smart and responsible to manage the Budget in a way where you are improving the bottom line if you can ‑ and we've made a really substantial improvement to the bottom line, the Budget's in much better nick than what we inherited, and that's a good thing ‑ but it hasn't come at the expense of helping people, that's in addition to helping people. We've got a cost‑of‑living package which we're rolling out right now which is really important, it will help people with out‑of‑pocket health costs and rent and medicine costs and across the board and that's really important but having a Budget which is in much better nick means that if ‑ at some future point ‑ and we're not contemplating additional measures right now ‑ but at some future point if we need to, we do that from a much more solid foundation and that's because we're managing the Budget so responsibly.

KARVELAS:

So the big question is ‑ what defines that future point for the next Budget?

CHALMERS:

Well, in every Budget you assess the economic conditions that you confront ‑ we've done that twice already.

KARVELAS:

But we do have my MYEFO, of course, that happens at the end of the year too ‑ is that an opportunity?

CHALMERS:

MYEFO is largely –

KARVELAS:

An accounting exercise, sure.

CHALMERS:

Typically an accounting exercise, but I think we've shown as a government that we've been responsive to the economic conditions and again, I'll be talking to the international counterparts at the beginning of next week and when we do, we'll be telling a story about a textbook fiscal response to these economic conditions ‑ improving the bottom line, prioritising the people who are doing it toughest, modest but meaningful tax reform into the future as well. All of these things are really important given the really substantial global economic uncertainty that we confront together.

KARVELAS:

The wellbeing element is another part of the announcement you made last night. You have identified about 50 indicators of wellbeing. What will you be tracking and what does it look like in terms of decision making? It's a nice headline but what does it look like practically?

CHALMERS:

Well, first of all, the government's primary focus remains this inflation challenge and managing the Budget at a difficult time but we have said in addition to that, not instead of that, we should do a much better job as a country at measuring what matters, at tracking our progress against some of the things that we care most about. And so in the next few weeks, I'm looking to release what will be Australia's first ever national wellbeing framework and I'm looking forward to doing that. And that will try and arrange these sorts of indicators – almost 50, as you rightly identify – under a number of themes. We want our country to be prosperous and secure and cohesive and healthy and sustainable, and so the wellbeing statement will provide those measures under those headings. And I've been really pleased with the reaction that I've had to this because people understand that the usual way that we track the economy – very, very important – GDP, unemployment, inflation, wages – I'm not proposing to do away with any of that, but in addition to that, let's do a better job of tracking progress against some of these other measures as well which go to issues like, for example, how much time families have together, or how healthy people are including mental health, all of these sorts of things – environmental sustainability, these things matter too.

KARVELAS:

It's funny you say that because the RBA Governor recently said – and I'm going to go to that – you know, people can take on an extra job, for instance, to pay off their mortgages. You just mentioned family time, that's not really a solution is it then?

CHALMERS:

One of the things that we've been talking about putting together – this wellbeing framework – is how people trade off the various pressures that are in their lives. Financial pressures, of course but you and I know as parents as well – having time with family, some of these other priorities – people are making difficult trade‑offs and a lot of people are doing it tough right now – that's our primary focus in a financial sense but there are other ways that we want to track our progress too and that's what the wellbeing framework is all about.

KARVELAS:

Let's move on to some other issues. You and the Reserve Bank Governor Philip Lowe are set to head to I think it's the G20 gathering in India next week and can we expect an announcement on Mr Lowe's future before you go?

CHALMERS:

I'll be taking my recommendation to the Cabinet colleagues about the position of the Reserve Bank Governor up soon. I don't want to pre‑empt the timing or the nature of that discussion because I genuinely want this to be – think of it this way, this is one of the most important appointments that the government will make and it's a big job as we talked about last time, it's a big call. And so I'm working through it in a really methodical, measured, considered and consultative way and that means taking seriously the views of my Cabinet colleagues. There'll be a Cabinet discussion before long about it and then ideally, I would make an announcement immediately after that.

KARVELAS:

Okay and you mentioned consultative, who are you consulting with? I mean, have you spoken to the Opposition?

CHALMERS:

I have had a preliminary discussion with Angus Taylor about this appointment. I'm grateful for the opportunity to have that discussion with him and if he wants to have another conversation about it, I'm up for that as well but we've had a preliminary conversation. I'm not obligated to do that in any way. Not even under the new arrangements proposed by the Reserve Bank review am I obligated to have that conversation but I want to be consistent with the spirit of the RBA review and I want to be respectful to the views of the Opposition, so I have given them an opportunity to feed into our considerations.

KARVELAS:

What does feeding into your considerations look like because there's a list – Steven Kennedy and Michelle Bullock – have you talked about names with him?

CHALMERS:

We've had a conversation about the various people that have been speculated on, including the incumbent Governor Lowe himself. I don't really want to get into the details of the conversations I've had with Angus, I think that wouldn't be consistent with the consultative spirit that we've –

KARVELAS:

Did he give you a positive reaction or did he make the case that Philip Lowe should stay?

CHALMERS:

I'm not going to get into that. We've had a preliminary discussion which I'm grateful for, we'll have another conversation if he wants to. I'm not obligated to do that, but I've done that.

KARVELAS:

You say if he wants to, has he indicated he wants to?

CHALMERS:

I think he will come back to me if he'd like to. We talk about issues from time to time – we've got our fair share of differences as you know.

KARVELAS:

Yes, I watch Question Time.

CHALMERS:

We've got our fair share of differences but on the Reserve Bank, I think our interests are aligned in wanting to make sure that we make a good appointment here and that we've got the best possible version of the Reserve Bank into the future.

KARVELAS:

Okay and those names that have been in the public sphere, can you confirm that they are in the mix?

CHALMERS:

I'm not going to go through a list and say who is or isn't on a shortlist for obvious reasons but there are a handful of people that have been speculated upon who of course would be qualified but again, I don't want to pre‑empt the conversation with my Cabinet colleagues, I'll take a recommendation to Cabinet –

KARVELAS:

And then shortly after, you'll tell us.

CHALMERS:

Ideally, yes, I'd like to do that, yes.

KARVELAS:

And how quickly? I mean, Cabinet meets? When's the next Cabinet meeting? Is that what we're talking about?

CHALMERS:

Well, again, I don't want to speculate on the timing of it. I know what you're getting at Patricia, I can see you coming from a mile away on this, but I don't want to pre‑empt that. I want to do this in a really respectful way and that includes respecting the views of the colleagues.

KARVELAS:

Before we get to the news, Australia and the European Union have failed to resolve five‑year long negotiations that have kind of stalled on the free trade agreement. Why?

CHALMERS:

This is a really important agreement and it's a huge opportunity for Australia and we are still committed to getting a deal done, but not at any price and I really wanted to commend the hard work that Don Farrell has been doing to make sure that we try and get a good outcome for Australia here. Now, we're talking about almost half a billion consumers and we want our exporters and our workers and our farmers to have access to that market, but not at any cost. And so, negotiations have been difficult but there's been some progress made. There's more work to do and I really wanted to assure our farmers, our workers, our employees, our exporters, that we are trying to get the best possible deal for Australia. If that takes a little bit longer, then that's fine by us.

KARVELAS:

The NFF says it would rather the government walk away if the deal isn't right, rather than reaching any deal. How much is that guiding your thinking?

CHALMERS:

Well, obviously, we listen very closely to what the NFF says about this deal. We want more access for our farmers in this big market of Europe but we're not looking to walk away, we're looking to get a good deal and if that means that there's more work to be done, that's fine.

KARVELAS:

Very briefly, just on the Robodebt Royal Commission in the last minute we have. A lot has been made about the role of the public service in the scandal. What is being done to ensure that public servants feel like they can provide fearless advice?

CHALMERS:

I think really right across the government, but particularly the good work that Katy Gallagher is doing on public service reform – we need to make sure that we're investing in the capacity of the public service to provide the right kind of advice but primarily here, we're talking about a ministerial failure. And primarily, we should be focused on the fact that these ministers sat around a Cabinet table for years knowing they were doing the wrong thing, knowing that it was causing an incredible amount of angst in our communities and did nothing about it. And so primarily, this is an issue not just of those ministers but of the Liberal Party. The Liberal Party in government failed here and we can't go back to the kind of government that thought Robodebt was okay even as it smashed people's lives and smashed up our communities at the same time.

KARVELAS:

Treasurer. Thanks for your time.

CHALMERS:

Thanks, Patricia.