Interview with Tom Crowley, The Daily Aus
TOM CROWLEY:
Treasurer, thanks very much.
JIM CHALMERS:
Thank you.
CROWLEY:
I want to start sort of by picking up on something that you talk about a lot which is that the Budget is like a conversation between the Government and the public about our challenges and choices. If you had to distil one key message that you want people to take away, what would that be?
CHALMERS:
That at a time when we've got all this inflation in the economy and prices are going up, we've got to make sure that the Government is not adding to the problem. We’ve tried to make the Budget really responsible and at the same time we've provided some cost‑of‑living relief and kept our commitments in some of our important policy areas.
CROWLEY:
On that question, the cost‑of‑living pressures, which are very tangible for a lot of people at the moment, do you understand the frustration, clearly there is a balance in not wanting to make the problem worse but a frustration that more couldn’t be done in an immediate sense?
CHALMERS:
I understand that. I think inevitably when you do a Budget some people would like you to do more and some people would like you to do less, and you've got to try and find a responsible middle path between that. I listen respectfully to people when they make their views known about that and I do understand that people are doing it incredibly tough, that the impact of higher prices in our economy does fall disproportionately on different parts of our community, I understand that. We help where we can but we need to be really careful here ‑ the Budget has got to be incredibly responsible because otherwise the worst outcome, particularly for vulnerable people, would be if a Budget contributed to higher inflation and higher interest rates.
CROWLEY:
I suppose picking up on that idea of things we can and can’t do, I suspect some people will ask the question about, I suppose, comparing something like the JobSeeker payment where the Prime Minister has said it should be higher and then looking at the fact that top earners have thousands of dollars of tax cuts coming in a couple of years' time. Do you sort of understand, again, the frustration that some people might express about what that says about the Government's priorities?
CHALMERS:
I think you're right to point out that the pressure that people are under is now and those tax cuts are a couple of years away and there's a couple of Budgets between now and then. But the broader point around JobSeeker, I think as Labor people and as a Labor Government, we always want to try to find ways to be more supportive of the most vulnerable in our society and that's why one of the first ‑ I think the first thing we did as a Labor Cabinet was to get a decent pay rise for minimum wage workers. I think that's really important ‑ that's often overlooked but that's a really important thing we supported and we want to do the same in some of the workforces dominated by women, including in the care economy, aged care workers and the like.
Beyond that, in the Budget, and I'm not pretending that this is enough, or I'm not pretending that we have taken a decision to make this happen, but people need to understand as well that in the Budget when inflation is really high, that inflation flows through to payments and so JobSeeker, there's an extra $10 billion in the Budget for Jobseeker and that's automatic, it’s indexation, I'm not overclaiming it. But an extra $10 billion in payments for people on JobSeeker to recognise that we do have this inflation challenge, that's felt disproportionately by people on low and fixed incomes, and that's why that indexation is really important.
CROWLEY:
Without talking about specific policies, do you think this cost‑of‑living issue is something that's going to evolve for this government over the next two or three years and how do you look at the whole suite of budgets that you will deliver as part of that?
CHALMERS:
It's definitely the defining challenge in our economy and almost everything we did in the Budget in one way or another was influenced by our approach to this inflation challenge and we expect inflation to peak at the end of this year and then start to trail away. But it will hang around higher than we would like for longer than we'd like partly because of electricity ‑ the higher price is coming from the war in Ukraine but also the natural disasters. The flooding has the likely consequence of pushing up grocery prices for a little while as well. So this is what's impacting on inflation, on the cost of living. And I think it will certainly define how we go about economic policy over the course of 12 months or so. There’s another Budget in May, another one in May after that and I suspect we will be dealing with some combination of these challenges for some time.
CROWLEY:
Another one of the challenges that came up in the Budget was the rising pressure on spending in a whole range of sort of untouchable areas, the NDIS and health and that kind of thing. Is that something ‑ I mean as that pressure grows over time, are we going to have to have a difficult conversation quite soon about either raising more tax or finding more areas where we can cut back?
CHALMERS:
Yes, I think what we showed in the Budget was you need to do a number of things simultaneously. You need to show spending restraint; we ticked that box. You need to trim spending where you think it's been wasteful, where Barnaby Joyce has been flying around Australia writing press releases with a borrowed biro on the back of a coaster, making commitments all around the place. Obviously, you need to trim that back – we did that, there’ll be more work to do there. There is a role for sensible tax reform too, and what we did in the Budget was start to ensure that multinational corporations pay a fairer share of tax in Australia and also to empower the tax office to make sure people aren't dodging their tax responsibilities, and that raises billions of dollars and that's a really important start. I suspect in the future we'll need some combination of those things again and you referenced the kind of national conversation about our budget pressures, I think tax will be central to that.
When it comes to the spending pressures on the Budget, a lot of these things are things we want to do, we want to find room for, we want to support people with disability, we want to have world‑class healthcare, we want to have robust national security. And that's really important to us and so we need to find room for that but we also need to make sure that when we are spending these big amounts of money, which grow over time, that we're getting maximum value for money. And so to people who are on the National Disability Insurance Scheme and to their families, my message to them is we want to put people with a disability at the centre of NDIS, we want to make sure that we can support you as much as we can, part of that is making sure that every dollar we spend in the NDIS is going to that purpose and not being wasted or rorted and that's why the review that Bill Shorten, who is Minister for the NDIS, has begun, and we're hoping that that gives us the opportunity to make sure we're getting bang for our buck.
CROWLEY:
Some of these trickier conversations about tax have been the downfall of plenty of treasurers and prime ministers in the past, some of the thorny debates. What do you think your approach will be to having those kinds of difficult conversations?
CHALMERS:
I’m pretty realistic about it ‑ I understand that when you hand down a budget that's got some cuts to spending, you can't do everything in one budget you would like to do, you need to make difficult tax changes ‑ I know that these are thorny issues and I'm not pretending otherwise. You don’t become the Treasurer with Australia without understanding there are difficult choices to make. We made some difficult choices already and there will be more to come.
What I will try to do is ‑ I won't always get it perfectly right, but I want to try and level with people about the trade‑offs and the choices and the challenges and not just that, but explain that where we have taken action, as we did in the Budget, as we have as a Government in lots of areas, explain why we got to that, why we reached that conclusion, why we're doing what we are. I think there's an appetite for some real talk in the Australian community about those things and that's not to confuse that with a sense of unanimity around some of these difficult decisions. It is inevitably difficult – these are hard, thorny, entrenched issues. People think we've got these challenges as a consequence of COVID or whatever. Some of these challenges have been hanging around a long time. You think about what happened when we came into Government: there was an aged care crisis, there was energy policy chaos, we had stagnant wages, labour and skills shortages, and a trillion dollars in debt. You can't just click your fingers and make that disappear and we don't expect unanimity as we try and deal with those things.
CROWLEY:
One final question: a lot of our audience are young people and issues like climate change and housing affordability, and fear of the future are front of mind for them and I think when they hear talk about trade‑offs and difficult choices, even if there are good reasons for them, I think sometimes there's a bit of cynicism about whether politicians take these big problems with enough of a sense of urgency. How would respond to that sort of concern?
CHALMERS:
I understand that there is some anxiety about the future. I think people are typically relatively optimistic ‑ I know I am ‑ but there is this sense of anxiety about what the future holds for us. I think about that great quote Jimmy Iovine said about fear is a tailwind, not a headwind. We should be using our appreciation of the challenges ahead to spur us forward in areas like climate change. We’ve got a big substantial agenda on climate change. We should be using what we know about the difficulties in the housing market to come up with new ways to address it. And we did in the Budget around the Housing Accord, bringing people together to solve this problem in the rental market, where vacancy rates are low and rents are high, and it’s harder to live where the jobs and opportunities are. We should be up‑front with younger people in particular. We recognise that if you go out in a 10 or 20 year horizon, we actually know where some of these challenges are going to come from and we have an obligation to younger Australians, in particular, to act on them. That’s why we take climate change seriously, skills and training seriously, housing seriously, and there are elements of that in the Budget.
CROWLEY:
Thanks very much Treasurer.
