Interview with Sabra Lane, AM, ABC Radio

SABRA LANE:

Dr Chalmers, thanks for talking to AM. The numbers are apparently much rosier than those in the budget in May but the extra money is not going to go to taxpayers in the form of cost‑of‑living assistance, it'll go to paying down debt. Why? 

JIM CHALMERS:

Well, there will be a substantial improvement in the budget position in the mid‑year update that I release with Katy Gallagher later this morning but there are still substantial pressures on the budget, we are expecting a big improvement, but still deficits across the forward estimates. The other thing about cost of living is we are still rolling out that very substantial cost‑of‑living help that we budgeted for in the May budget. This mid‑year budget update is not intended to be a mini budget or another budget, it's an update, it's a stocktake, and we will consider any further cost‑of‑living relief if it's necessary, in the lead up to the budget next May.

LANE:

All right, many families will be doing it tough this Christmas, some voters are very disenchanted. Homelessness groups are reporting a big jump in demand this year. What do you say to them?

CHALMERS:

We do understand that people are doing it tough and that Christmas time can be an especially difficult time of year. This is one of the reasons why in that $23 billion cost‑of‑living package we have targeted help to the most vulnerable people in our community. It's why we've given electricity bill relief which is still rolling out, we're not just recognising it, not just acknowledging it, we're acting on it as well and that's why the cost‑of‑living help is rolling out right now.

LANE:

You've talked about a substantial revision, you're not planning a surprise surplus in May?

CHALMERS:

We're not planning a surplus in the mid‑year budget update. What people can expect to see today is a very small deficit for the year that we're in right now, a substantial improvement in the budget position for this year compared to the forecast in May, but still a very small deficit. Part of the reason why we're getting the budget in much better nick, part of the reason why responsible economic management is really the defining feature of this mid‑year budget update is because if we get the budget in much better nick, we get these deficits down, we avoid a whole heap of debt and the interest costs on that debt, then we can make room for cost‑of‑living help and for the big investments that we're making in Medicare and housing and energy and skills and all of these important areas. So there'll be a substantial improvement in the budget, that will come as a consequence of our responsible economic management but there's still pressure on the budget. Our job, whether it's finding another $10 billion in savings, whether it's banking these upward revisions to revenue is all about making room for investing in and providing assistance where we can.

LANE:

There are some other big investments too on the horizon - there'll be more money for the National Disability Insurance Scheme, more money for new foundational supports in schools, possibly more money for schools in general. There's also the unanswered question of fixing and paying for aged care. Where will the money come for all of these things?

CHALMERS:

Well, again, this is one of the reasons why we're getting the budget in much better nick so that we can fund the things which our society and our country and our economy really values and really needs and you've run through some of those really important investments. Spending on the NDIS will continue to grow, we do and we are making investments in aged care and Medicare and strengthening our care economy more broadly. And so what we've been able to do over the course of two budgets and now a mid‑year budget update is find a total of $50 billion in savings to avoid hundreds of billions of dollars in debt, tens of billions of dollars in interest costs on that debt and that means that we can focus our efforts and our energy on the things that we truly value and you'll see that in the mid‑year budget update. We've made room for cost‑of‑living help which is rolling out right now, we've made room for these key investments particularly in housing and energy and Medicare and skills, we've made the room for that but that is an ongoing task beyond today's budget update.

LANE:

You mentioned housing there, the Migration Strategy was launched earlier this week - the Opposition says you've closed the door on bringing in tradies at a time when Australia is suffering a building crisis and that the decision will impact housing affordability, and you've made it harder for people to find tradies. Will your policy do that?

CHALMERS:

No, that's complete rubbish and it's another reminder - don't get your information about the economy from Peter Dutton. What the Migration Strategy that we released earlier in the week did, and I commend Clare O'Neil and the other colleagues for this, is it will help tackle the shortage of tradies in our economy. There's a streamline in visa settings, there's a pathway to permanent residents for migrant tradies, there are much faster approvals for the skills that we need. But what we need to make sure here, is that any tradies we bring in are to complement the Australian workforce, not as a substitute for the Australian workforce. There needs to be a demonstrated shortage. In some of these areas, nobody will have any difficulty demonstrating that there is a shortage. And so the streamlined visa processing, the core skills pathway, the pathway to permanent residency, all of these things will improve the position when it comes to getting the skills that we need in our economy.

LANE:

If I could ask about the statement on Israel and Gaza and calls for a sustainable ceasefire, how much impact will that have?

CHALMERS:

I would expect it would be impactful because it's an important statement. It's a statement which condemns the terrorist actions of Hamas but it says that the defeat of Hamas can't come at the cost of the permanent ongoing suffering of ordinary Palestinian people. And I see in the statement, the support for another pause in hostilities, but also support amongst the three prime ministers including our own, for urgent international efforts towards a sustainable ceasefire. Now that ceasefire can't be one‑sided, we need to see the hostages released, we need to see ordinary Palestinians stop being used as human shields. But we do need to work towards a sustainable ceasefire here, and that important statement released by the three prime ministers recognises that.

LANE:

Treasurer, thanks for talking to AM.

CHALMERS:

Thanks, Sabra.