Interview with Peter Stefanovic, Sky News

PETER STEFANOVIC:

Okay, back to Canberra now, joining us is the Treasurer Jim Chalmers. Treasurer, good to see you, thanks for your time this morning. So, the Budget locks in your election commitments. It doesn't address the long term structural spending problems, though. So, can the public expect tougher calls in six months’ time?

JIM CHALMERS:

Good morning, Pete. First of all, there were difficult decisions in yesterday's Budget. It's been quite a while since we've seen $22 billion of savings in a Budget but that's what we did yesterday. It's been a long time since we've seen a government return to the budget almost every dollar of the temporary tax windfall from higher commodity prices, but that's what we did. We showed a lot of restraint. It was very responsible but at the same time we were able to find room to provide cost‑of‑living relief to invest in a stronger economy. Inevitably, there will be more of this hard work to come in the subsequent two or three budgets in the life of this parliamentary term. We've said all along that yesterday was the beginning of putting the budget on a more sustainable footing and not the end.

STEFANOVIC:

And will that mean increased taxes and cuts to spending?

CHALMERS:

Well, what we showed yesterday, and I think what people can expect, is that when you inherit a trillion dollars in debt and deficits as far as the eye can see, and a big structural deficit because of these persistent spending pressures on the Budget which intensify over time as interest rates on that debt goes up, inevitably you need to do a combination of things. It requires spending restraint, which we showed. It requires trimming spending, which we did. And it also requires, where it's possible, some sensible tax changes like the one I announced yesterday to make multinational corporations pay a fairer share of tax here in Australia.

STEFANOVIC:

Will you break election promises if you have to?

CHALMERS:

I think what we showed yesterday is it's possible to make room for our election commitments. I think one of the defining features of what we did yesterday was we were able to fund cheaper child care, cheaper medicines. We were able to fund significant investments in housing and in other areas as well. And we do that by making room elsewhere in the budget, trying to trim back some of the wasteful spending that's become a feature of the budget for too long. And when you do that and when you take a more responsible approach, you can fund your priorities. And our priorities are cost‑of‑living relief, investing in a stronger economy, and beginning the hard task of budget repair.

STEFANOVIC:

You did mention yesterday, and everyone is aware of the concerns now when it comes to gas prices. The Prime Minister also backing up your comments earlier this or our last hour, saying that there are going to be extraordinary regulatory reforms when it comes to the gas market. Can you simplify that for our audience this morning in terms of what reforms or what intervention you are looking at.

CHALMERS:

First of all, we recognise that electricity prices and gas prices are putting extreme pressure on our local industries and on Australians right around the country. And when you've got the kind of forecast increases that were in the Budget last night, I think any responsible government needs to consider a broader range of possible interventions in this market that's not working for our industry and for our people.

STEFANOVIC:

Such as?

CHALMERS:

What I flagged yesterday and the work that we will continue to do with Minister Bowen and Minister Husic and Minister King and the Prime Minister, is to consider whether we can do something in the market to take some of the sting out of these higher electricity prices. We need to remember that these price rises were hidden during the election campaign by our predecessors. We've been up‑front with people about the pressure that this will place on inflation, on the cost of living. We're already providing some cost‑of‑living relief in a really responsible and targeted way. And if there's more that we can do in the actual markets, gas markets, electricity markets, then obviously we'll consider that.

STEFANOVIC:

What about subsidies, UK style subsidies?

CHALMERS:

I'm not sure that some of the proposals that have been made around the world have been terribly effective. I think in the UK, I think it's self‑evident what happened there. Our interest is in delivering cleaner and cheaper, more reliable energy and we're taking big steps there. We've also boosted the powers and the work of the regulators. We've done some work in the gas market already to increase supply, but there's more that we should be looking at doing, and we are.

STEFANOVIC:

Okay, just a final one here, Treasurer. Given inflation will fall within the RBA's target band in 2024, will you rule out changes to the stage three tax cuts for the entirety of this term?

CHALMERS:

Look, we've said repeatedly that we don't intend to make changes there. We've got far more pressing priorities in the almost two years between now and those tax cuts being legislated to come in. Those priorities are cost‑of‑living relief and a stronger, more resilient economy. We've got lots of work to do in the interim and that's what we're focused on.

STEFANOVIC:

Jim Chalmers, appreciate your time on a busy morning. Thank you so much, we'll talk to you soon.