Interview with Peter Stefanovic, Sky News
PETER STEFANOVIC:
The freshest monthly CPI figures show inflation fell to 5.6 per cent last month. We’ve got the Treasurer ready – Jim Chalmers ready there in beautiful Brisbane for us this morning. Jim, good to see you. Thanks for your time. So you gave a stern warning to the RBA last time around that it would have to explain its reasoning for hiking interest rates. Inflation is cooling, but economists still expect more rate rises to come because broader price pressures still exist. Are you at least hoping for a pause?
JIM CHALMERS:
Good morning, Pete. And obviously, as you know – we talk about these things from time to time – and I don’t pre‑empt decisions taken independently by the Reserve Bank and its board. What I will say is that there was, I think, quite a welcome moderation in the inflation numbers that we saw yesterday. Australians are still under the pump, we understand that, but inflation is moderating off that peak that we saw around Christmas time, and that’s a good thing.
No doubt the Reserve Bank and its board will factor that in. What’s happening with retail and consumption and what’s happening with household savings and construction approvals and the global economy and all of these factors that they usually weigh up when they come to a decision on interest rates, no doubt they’ll do that again next week. They’ll come to a decision independently. I won’t pre‑empt it or second guess it.
The point that I made last time, which I’m happy to make again and again frankly, is the Reserve Bank’s got a job to do. They can explain and defend the decisions that they take. I’ve got a job to do, which is to deliver the biggest surplus that we announced yesterday to try and put downward pressure on inflation, which is what we’re doing via the budget, something the Reserve Bank Governor has acknowledged as well, and invest in the future of the economy. That’s what I’m focused on.
STEFANOVIC:
Okay. Well, now that you are flush with extra cash, Treasurer, what, if any, extra handouts are you considering to help folks at home?
CHALMERS:
Well, I think it’s really important to recognise that the biggest surplus that we’re expecting to see this year doesn’t come at the expense of cost‑of‑living help for Australians; it actually makes that cost‑of‑living help possible. By getting the budget in much better nick than what we inherited means we can provide that $15 billion in cost‑of‑living help to take some of the edge of these pressures without adding to inflation at the same time as we invest in the future. And we’ve been able to do that because we’re banking such a big part of these revenue upgrades which we’re seeing in the budget, we found $40 billion in savings and we’re showing spending restraint as well. So by doing that, by getting the budget in much better nick, it means that we can do some of the things we did in the budget, which is provide cost‑of‑living help for people doing it tough.
STEFANOVIC:
So how big’s the surplus going to be now, Treasurer, from 4.2 billion?
CHALMERS:
Well, we get the numbers for the end of June in the next couple of months and so we’ll make it clear when we can what the final budget position is.
STEFANOVIC:
Okay.
CHALMERS:
We’re not at the end of the financial year yet, but what is already clear is that the budget surplus will be bigger than what we printed in May. We were deliberately cautious and conservative and restrained and responsible about that because my predecessor printed ‘back in black’ mugs and flogged them off on the internet.
STEFANOVIC:
Yeah.
CHALMERS:
And didn’t deliver a surplus. We’ve tried to be more careful about it, and that’s what you’re seeing.
STEFANOVIC:
Okay.
CHALMERS:
You’re seeing the fruits of that responsible economic management in the bigger budget surplus.
STEFANOVIC:
Just back on that point of helping folks, Treasurer, next week childcare subsidies kick in, but childcare centres are jacking up their fees with extra wages to pay. So is that policy now counterproductive?
CHALMERS:
Of course not. This will be a game changer for Australian families and particularly for parents with young kids because it will take some of the pressure off these price pressures that people feel and it will make it easier for people to work more and earn more if they want to. So it will be a game changer.
STEFANOVIC:
But is that not an example of a wage price spiral, though?
CHALMERS:
It’s not. It’s not a wages policy; it’s about assistance with the costs of child care and education –
STEFANOVIC:
But wages are related. Extra wages are related.
CHALMERS:
I don’t think anyone would describe it that way, Pete, with respect. What we’re doing here is providing substantial help. If you’re on 120 grand as a family, you’ve got one kid doing three days a week, the benefit is about $1700 a year, so it’s a substantial bit of help for people. But there are price caps in the system, they’re important and I’ve also worked with Jason Clare to ask the ACCC to make sure we get a handle on pricing in the early childhood education system more broadly, and that’s really important – they’ll report to us in the coming months. But this assistance is really important and people will be better off as a consequence.
STEFANOVIC:
Okay. Just a final one here, Treasurer – reports out of 4BC yesterday suggested the city might go to its Indigenous name of Meanjin for the 2023 games. As one of its highest profile residents, would you support this?
CHALMERS:
Look, I saw that report this morning actually, and it’s not a conversation I’ve been aware of or been part of. Obviously we saw what happened on K’gari over there – what used to be Fraser Island. I think that was an important development, working with the locals. But I haven’t been focused on this story that 4BC ran yesterday. I haven’t been part of that conversation.
STEFANOVIC:
All right. Waiting for word from the Premier on that one. Treasurer Jim Chalmers, thanks for your time, as always. We’ll talk to you soon.
