Interview with Peter Stefanovic, Sky News

PETER STEFANOVIC:

Joining us live is the Treasurer Jim Chalmers. Treasurer, good to see you. First of all, will the government reverse its decision and grant extra flights to Qatar Airways?

JIM CHALMERS:

Good morning, Pete. No, our focus now is on an aviation green paper that Catherine King and other colleagues are working on to make sure we can get our aviation sector, which is a really important part of the economy, as strong and as competitive as it can be.

STEFANOVIC:

Labor states, business groups, tourism bodies, even Wayne Swan says this needs a rethink. Are they all wrong?

CHALMERS:

Well, the important thing to consider here, Pete, is that this decision which was taken in the usual way by the transport minister in the same way that transport ministers from the other side of politics have taken decisions like this in the past, it’s taken in the national interest but it hasn’t prevented there being additional capacity added to international flights in Australia and so, we are seeing extra capacity come on – that’s a good thing. Tourism is actually a really important part of our economy hanging in and growing at the moment because we’re getting really strong investment in tourism. We’re getting lots of visitors and so our international capacity is expanding. That’s a good thing. Transport ministers from both sides of politics from time to time take decisions in the national interest and that’s what’s happening here.

STEFANOVIC:

What is the – everyone keeps talking about the national interest. What part of the national interest is this?

CHALMERS:

The Transport Minister assesses that when they get these – not from companies, by the way –

STEFANOVIC:

Do you know what it is?

CHALMERS:

It’s for the transport minister to assess that and when ministers from both sides of politics get these proposals – not from companies, by the way, but from countries – we get these proposals from time to time and the minister in the usual appropriate way assesses it but the really important thing, Pete, as I said a moment ago, is routes are expanding, capacity is expanding. There is lots of interest in tourism in Australia from overseas and also domestically, that’s a good thing. It’s good for the economy and it’s good for competition.

STEFANOVIC:

But isn’t it in the national interest to bring air fares down? Because they’re still sky high, as you and everyone knows.

CHALMERS:

And that’s why it’s important that we have seen in the instances of other companies and other countries that international capacity has been expanding. That’s a good thing, that’s how we get that downward pressure and that doesn’t prevent us as a government or as a minister, a transport minister, from taking these sorts of decisions from time to time, just like Catherine’s predecessor took in the past.

STEFANOVIC:

All right. I mean, we talked about the Prime Minister yesterday claiming that the transport minister made the call without his knowledge. Does that not seem right to you? I mean, Qatar Airways, owned by its government, and the Prime Minister wouldn’t be aware of that kind of decision. I find that awfully strange and unlikely.

CHALMERS:

Well, as I’ve said a couple of times I think Pete, this is how the arrangements are set up. The transport ministers make these decisions and really right across the government in different ways there are decisions taken like this which are the appropriate domain of ministers – in this case, the transport minister and as I said before, in earlier governments this is how it’s happened as well. It’s a decision taken by the transport minister. They weigh up a whole range of considerations, they come to a view and they communicate the view and that’s what’s happened here.

STEFANOVIC:

Are you comfortable with Alan Joyce’s massive bonuses after taxpayers helped save the airline and customers were ripped off in the meantime?

CHALMERS:

I can certainly understand people’s anger at Qantas and I think people are absolutely filthy about some of the things that have happened at Qantas over the course of recent years and alleged to have happened over the course of recent years. I think it’s really important that the major focus of the new leadership at Qantas is to regain and maintain the trust of their customers but also the country and I think Vanessa Hudson has acknowledged that. That needs to be the main game for Qantas now. People are angry at Qantas, I think that anger in lots of instances is justified and so the leadership at Qantas, the new leadership at Qantas needs to make its highest priority to regain that trust and maintain that trust.

STEFANOVIC:

Was your government too close to Alan Joyce?

CHALMERS:

No, I don’t think so, Pete. I think it’s important that ministers engage with leaders in corporate Australia, in the union movement, in the community sector. I don’t think it would surprise anyone to know that we engage with major employers, not just in this sector but really right across the economy. I think that’s what the Australian people want us to do.

STEFANOVIC:

And do you change your approach at all with Vanessa Hudson in the job?

CHALMERS:

Not necessarily but I think Vanessa Hudson’s approach will change. I think there is around Australia a lot of anger about Qantas, as I said, and the highest priority of the new leadership needs to be to address that and to respond to that.

STEFANOVIC:

All right. Well, let’s get finally to your wheelhouse no – the RBA Governor pointed to China as the biggest danger to our battle against inflation. You know, a major part of your job is to deal with worst case scenarios, so what is the worst case scenario here when it comes to China’s flatlining economy?

CHALMERS:

Well, our economy is being buffeted by two main things – one is global uncertainty and the Chinese slowdown really is the most concerning part of that right now and also the way that these interest rate rises have been biting in our economy and we see that in some of the recent data about household spending and retail spending. I think people are expecting the combination of the slowdown in China and the impact of higher interest rates here to slow our economy really quite considerably. We don’t know if we’ll see that in the numbers at 11.30, but we’ve seen enough already to know that that is happening.

The worst case in China is yet to be seen but we are quite concerned about it to be frank with you, Pete. This is one of the things that we monitor most closely because a slowdown in China will be something that will impact our economy, is already impacting our economy right now, combined with the impact of this inflation and these higher rates and that’s why the government’s highest priority is to roll out billions of dollars in cost-of-living help in a way that takes the edge off inflation rather than add to it. We’ve seen that in energy prices, which is welcome, we're seeing that in other areas as well. That's our main focus – to take some of the edge off these inflationary pressures without adding to them, we’re doing that in the context of a lot of global economic uncertainty.

STEFANOVIC:

All right. That’s the Treasurer, Jim Chalmers. Appreciate your time, as always, Treasurer. Talk to you soon.