National Press Club Q&A 05/04/22

05 April 2022

SUBJECT: 2022 Budget




SUBJECT: 2022 Budget


LAURA TINGLE, PRESIDENT OF THE NATIONAL PRESS CLUB: Thank you very much, Jim. You described the Budget last week in various terms as one unworthy of the Australian people. “Gloried in its shallowness”, “wallowed in its triviality”, “glib”, “incoherent”, “in denial of reality”…



TINGLE: Not a great fan, but Labor just waved it through. The big question, as you say, is what happens next and you know, you say that it is not a Budget for the future. The Budget is forecasting a big gap between spending and revenue for ten years now. You seem to be saying, as the Treasurer is saying, that that will be closed by growth, with the only difference being that you're going to have some slightly better quality spending promises. Have you got any new set of fiscal rules about the size of revenue, the size of spending and how you'll be working out your Budget strategy?

CHALMERS: Well thanks Laura. First of all, Budgets are judged by not just about what's in them, but what's not in them. And our criticism of the Budget is that it has a shelf life of six or seven weeks. The absence, obviously, is the plans beyond that for the future. If you want to go to the specifics of Budget repair, you know, there's a heap of spending, a heap of cash handouts in the very near-term. There's not much Budget repair beyond that except for those $3 billion that the Prime Minister doesn't want to talk about in terms of the secret cuts on page 49 of Budget paper 2. And so, there is, I think, a gap when it comes to Budget repair in the future from the Government. Now, we've said that there are at least four ways that you can improve the Budget. The quantity of the debt matters to us, but the quality of the spending, I genuinely believe, matters as much, if not more. And when we sit around, Katy and I, with our shadow expenditure review colleagues, what we're really looking for... yes, we're looking for ways to make the Budget more sustainable. But mostly, we're looking for ways to make the Budget deliver a measurable economic improvement. And so, when it comes, so that is a key part of it. We shouldn't lightly dismiss that part of our fiscal strategy, but there are three other parts as well. There is a task to deal with the stupendous waste and rorts that we've seen in the Budget. Discretionary fund after discretionary fund, allocated by a colour-coded spreadsheet. That is a problem in the Budget. Because every dollar wasted in that fashion, is a dollar that you can't invest in the economy or you can't provide support for people doing it tough. There is an opportunity to re-orientate the Budget, as we would like the opportunity to do before the end of the year, into more quality investments. And there is an opportunity to do something meaningful about multinational taxes. There's a big global movement on at the moment. All of the countries with which we compare ourselves, they want to work with us on making sure that multinationals pay their fair share of tax where they make their profits, and that will level the playing field for Australian businesses as well. So those are at least four ways that we would go about improving the Budget. And, frankly, when you compare it to what's gone before us for the best part of the last decade, even just doing something about the politically motivated waste and rorting in the Budget would make a difference.

JOURNALIST: Mr Chalmers, part of the criticism from your opponent has been a lack of experience in the Treasury portfolio. Such a pivotal role in such an uncertain time. So I'm curious given your involvement in the handling of the GFC, what were the lessons learned? What mistakes were made? And can you assure voters that those mistakes won't be repeated should you win the election?

CHALMERS: Of course I can. And one of the reasons why I'm proud of my experience, I'm proud of Anthony's experience, our whole shadow cabinet. We've got this terrific mix of people who have been around for a while. We've got newer people who have been in the shadow cabinet for a shorter period, who’ve got the right mix between experience and generational change. And that, I think, is an accurate description of our team. In terms of my own experience, I mean, if Josh Frydenberg's main critique of me is that I haven't handed down a Budget before I've handed down a Budget, that applies to him, too. And by the way, it applies to Peter Costello. It applies to Paul Keating. It applies to a whole heap of others. So, I don't, frankly, I don't pay much attention to that. I have a heap of experience in the economic portfolio. That lock-up that I did the other day was my 16th. I don't think that anyone in the Parliament has done more than that, I could be corrected but I wouldn't have thought so. My defining experience is putting Budgets together during the global financial crisis. I would have thought that most objective observers would have thought that that is handy experience. And yes, there are lessons to be learned from that. Of course, there's lessons to be learned at every turn, and I'd like to think that I've learned them. The other thing which I find extraordinary is when the Prime Minister opens up a similar critique of Anthony. And what it reveals is that they think that holding the infrastructure portfolio and being the Deputy Prime Minister of Australia is not relevant to our economy. Which is a bizarre concession, that they don't see infrastructure as key to economic growth in our economy. Now, I sat around the ERC table with Anthony, with Penny, with others who are here, and I saw the work that has gone in and the experience that we gained in that period and subsequently, and I am confident that the experience that we stack up against these characters will see Australia in a good place.

JOURNALIST: Can you name the mistakes though?

CHALMERS: Beg your pardon?

JOURNALIST: Can you name the mistakes made?



CHALMERS: Sorry, I was just kidding. Look clearly, you know, we're not looking for a re-run. When we sit down and work out what the best agenda is for the future and for the economy, we're not looking to retrace steps. We're looking to do the right thing for the conditions that we inherit. And inevitably, when you do that, you learn from all of your past experiences, good and bad.

TINGLE: Phil Coorey.

JOURNALIST: Thanks Laura. Dr Chalmers, I want to go back to Laura's question in terms of fiscal rules. We're five minutes to an election and all we know from the Labor Party on the economic plans is that we're going to get bang for our buck. I wonder if I could try to pin you down on a couple of things more specific. Are you going to take a tax cap to the election, the Coalition has a 23.9 per cent tax-to-GDP ratio, are you going to be governed by a ratio of your own? And you were critical in your speech of the structural deficit hitting 0.7 per cent of GDP by the end of the medium term coming down from about 3 per cent now. Are you going to try to do better? Are you going for a surplus by the end of the medium term? Can you give us any guidelines as to what will be governing your fiscal strategy - between now and the election - and not after the election?

CHALMERS: Thanks very much Phil. Whether it's the Budget on Tuesday night or whether it's the Intergenerational Report, I think it's made it really clear that it would be hard to anticipate surpluses for some time. That's just the condition of the Budget that we would inherit. When it comes to our fiscal strategy, you shouldn't lightly dismiss getting some value for money. I mean the absence of that has been a big part of not having enough to show for $1 trillion in debt in the last decade or so. We're not attracted to the Government's tax cap, and the reason we're not attracted to it is because it seems to us like quite an arbitrary cap imposed for political reasons rather than good economic reasons. And clearly, as the economic conditions evolve, we take advice from the Treasury and from elsewhere about the most appropriate settings but I think we’ve said really for some time now that the arbitrary tax cap that the Government has imposed, which the Government doesn't hit by the way in the forwards, from memory, is something that they say to try to have a political argument rather than to try to generate a genuine economic outcome.

TINGLE: Michelle Grattan.

JOURNALIST: Michelle Grattan from The Conversation. Dr Chalmers, the Reserve Bank faces a character-forming few months ahead, whichever side of politics wins the election, making judgements about interest rates and also an inquiry which is supported by you and by the Government. Could you say why this inquiry is necessary given some experts think it is not? And would you invite the Governor of the Reserve Bank to have another term when his term expires next year? And if I can add a third prong, one question, do you think that the next Governor of the Reserve Bank, whenever that comes, should be a woman?

CHALMERS: Thanks very much Michelle. I'm not going to foreshadow a decision on the Governor of the Reserve Bank. I made my views very clear on the Deputy Governor, that there was an opportunity to promote a woman into more senior ranks at the Bank and I'm pleased, frankly, that that happened. But I'm not going to pre-empt a decision about Governor Lowe. I will say this, though, I think that Governor Lowe is a fine Reserve Bank Governor. We've been very fortunate in this country to have a succession of very good governors of the Reserve Bank. I've worked closely now with two of them, Glenn Stevens and Philip Lowe, and I have a mountain of respect for Philip Lowe. And he knows and I think that you know that our plan to have the review of the Reserve Bank is not designed as some kind of anti-Bank or anti-Phil interrogation. It's going to be, if we get the chance, a genuine opportunity to work out, ok, since we had the last review of the Reserve Bank, we've had normal times, we've had two sets of difficult times, we've had extraordinary monetary policy and we've had this big question which never seems to be sufficiently answered in a thoughtful, considered way, about the interaction of fiscal and monetary policy. And so, I see the review that way. And so I would like to work closely with the Governor of the Reserve Bank and others who have an interest in this to make sure that we get it right, and that's why I want to have that review

JOURNALIST: You've committed to handing down a Budget later this year if you win Government. You've also acknowledged that the cost of living crisis will continue for many months, so I ask you - if things do stay bad or get worse, will you commit to provide immediate cost of living relief in your Budget, which includes cash handouts?

CHALMERS: Thanks Jen, we'll play the cards we're dealt. We've said that it's hard to imagine a world where the cash handouts in the current Budget continue indefinitely. You know, that's just being up-front about the pressures in the Budget. I've been asked probably 20 or 30 times in six days about what we might do with petrol excise or what we might do with some of the other bits of support for people. And I'm just trying to be up-front and say that it won't continue forever. Having said that, you know, clearly, if we're putting a Budget together, whenever it might be on the advice of Treasury, clearly we'll play the cards that we're dealt if there's a need for more support, clearly, we would look at that. But our starting point is that the support that passed through this Parliament in the middle of last week is temporary. If there are other measures we need to look at, we will. But I'll also say this. Even before last week's Budget, and before Russia/Ukraine and the Government was pretending that everything was fine, even though real wages were falling and people were facing sky-rocketing costs of living, we already had cost of living policies out there. You know, our biggest on-Budget commitment, our alternative Budget at the moment, is childcare. Getting childcare costs down. Making a big difference to cost of living for working families. We've got an energy policy which is all about bringing power bills down. We've got a policy about getting real wages going again. So, I think even if the current support runs out, if and when it runs out, we have enduring ways to support working families through tough times.

JOURNALIST: Can I just confirm sorry, so if you need to extend the reduction to the fuel excise, you will?

CHALMERS: Our starting point is that it ends. If there is an incredibly compelling reason to leave it in, we would consider that. But to be up-front with Australians, no matter who wins Government in May, it is likely that that petrol price relief will end.

JOURNALIST: Thank you so much. Rachel Baxter from Channel 9. So the aged care reform has obviously been the grand centerpiece of last week's Budget reply. But Mark Dreyfus has admitted that there may not be enough trained nurses to implement the plan and have a registered nurse on duty 24/7 in every aged care facility. You're the Treasurer, have you calculated how many nurses will be needed? How much this will cost? And how long it will take?

CHALMERS: Thank you for that, look, we do need more nurses. And one of the reasons why we've got a big substantial training policy and a big substantial universities policy is because where there are areas of substantial skills shortages, we need to deal with that. And that's one reason why one of our biggest emphases, our biggest commitments, has been around skills training. So I think that’s self-evident. We will need to train more people. Our policy does not come in the day after the election. There's a little bit of time to ramp up to it. But our intention is to train more nurses and to fill this gap.

JOURNALIST: How many more though sorry? And you said in your speech as well that the plan is fully costed. How much will it cost for these nurses?

CHALMERS: Well, our plan is $2.5 billion. We've costed that, we’ve put the policy out there and the costing out there. We'll need tens of thousands of nurses. I mean, that's pretty clear, when you want to put more nurses into aged care, you need to train them for that task and that's what we intend to do.

JOURNALIST: Sarah Martin, from the Guardian. Just back to questions that both Laura and Phil have tried to ask you about in terms of fiscal consolidation. You've been very critical of the Budget for being chock-full of wasteful spending. Can you identify spending over the forward estimates or over the medium term that you won't go ahead with? And what sort of saving that would give to the Budget? And you've obviously been very critical of discretionary grant spending. Why not abolish those discretionary grants altogether?

CHALMERS: Thank you, Sarah. I'll take them in reverse order. Your last question: we think that there is an opportunity to trim some of the discretionary funds. But it's difficult from Opposition without full visibility. One of the reasons that we have estimates and other opportunities, is because there's not a lot of visibility on what the Government has committed to from those funds or where some of that money is going to. So that is a process that we intend to engage in. On the other issue about an example of spending that the Government does that we wouldn't do, I think that there's a really clear example. The Government, because they had for so long, this arbitrary staffing cap on the public service, meant that so much, so many billions of dollars were being spent on labour hire and contractors and consultants in areas traditionally performed by the APS. And you know, I spent a lot of time with the accounting firms and the consulting firms, and they do first-class work and nobody is saying that we end that. But there is an opportunity, I think, to have a good look at the spending that goes into that part of the Budget, to work out whether we could do more with less. You know, more in terms of capacity, less in terms of spending on contractors and consultants. And I would expect and this is something that we will detail when we can, but I would expect that that would come up with a saving in the low billions of dollars.

JOURNALIST: Andrew Probyn for the ABC. One of the side benefits of the pandemic, if you want to call it that, is that you managed to get unemployment into the 3s. We will get it into the 3s. Now, obviously one of the reasons there is that the borders have been closed. What would be your approach to unemployment given that wages is one of your high priorities? And that having low unemployment is meant to spark wage increases when you have got pressures in say, aged care, that's going to need, as you've just said, tens of thousands of workers? Are you a ‘Big Australia’ man? Or are you something else?

CHALMERS: Well, I think, and Kristina will tell you this too, there's an opportunity as the migration settings return to something that looks a little bit more like normal, to work out what the best version of that is. What the best mix of that is - temporary, permanent, skilled, unskilled - all of the other types of migration. And so, I've always been a supporter of a decent sized migration program. Overall, it is good for the economy. But what that requires is that you get the constituent parts of it right and that you build public support for it. And so, migration is a big part of the story. On unemployment more broadly, we want the unemployment rate to be as low as possible. And I said in my speech, it's falling in welcome ways, but it's not bringing with it that wages growth that you identified in your question. It's bringing skills shortages, but it's not bringing wages growth that keeps up with the cost of living. So real wages are falling and so the difference between our approach to unemployment and the Government's, and you'd expect to see this looked at in the White Paper if we get the chance to do it, it is that the labour market is a broader story than just the unemployment rate. The labour market is about underemployment. It's about concentrated unemployment, in communities like the one that I represent, unfortunately. You know, it's about wages. It's about job security. And so, we take a much broader look at the labour market. We don't declare victory just because there's a forecast of an unemployment rate. We would declare victory if wages are growing again sustainably in ways that made sure that people can keep up if we're dealing with job insecurity, if we're dealing with all of the other issues that have been issues in the labour market for so long

JOURNALIST: Jade Gailberger from the Herald Sun. The Victorian Labor Government says it has been short changed under the GST formula with the state now getting 86 cents in the dollar, compared to previously 92 cents. Do you think that their complaint is fair? Should the system be reviewed? And what changes would you make if you got into Government?

CHALMERS: Look, we've said to all of the Governments that we don't intend to reopen that deal. That has been a subject of some conjecture. And as always, in these deals, which are done years in advance, but are asked to take into account fluctuations in state economies, there are typically people who are happy for good reason and people who are unhappy for good reason. But we don't intend to reopen that deal that's been done.

JOURNALIST: Jonathan Lea from Sky News. Can I ask you on two topics if you don’t mind. The first one on childcare and the second on stage three of the tax cuts. Labor traditionally has been a party of bold policy. Have you considered universal childcare? We talk constantly about getting families into work and giving children the advantage of education? Is that something that you've costed and looked at? And on the stage 3 tax cuts, do you still support it? And are you concerned that it might further drive inflation?

CHALMERS: Thanks Jonathan. On child care, what we're proposing gets us closer to the system as you describe it. Not universal, but closer to universal than it would otherwise be, because it takes a huge swathe of the workforce and makes it easier and cheaper for them to access childcare. It builds a bigger labour market, so that people who want to earn more and work more can do so. We haven't costed or we're not proposing to go the whole way, but what we've proposed goes a substantial way in that direction and I'm proud of it. On stage three, we don't intend to reopen stage 3. You know, those tax cuts were legislated through the Parliament some time ago. They come in sometime down the track, still. Most of the issues that we identify in the economy which are causing these inflationary pressures are on the supply side rather than on the demand side. And that's why we want to lift the speed limit on the economy. Training and childcare and energy, and all of the other issues that I've identified.

JOURNALIST: Patrick Commins from The Australian newspaper. Your argument that it is about the quality and not the quantity of the spending. Essentially, is that saying that the highest spending, if done right, pays for itself through the economic dividend that it creates? Or do you accept that COVID’s legacy of record debt and deficits means that every Budget for the foreseeable future has to be about spending restraint and Budget repair?

CHALMERS: I think that there should always be, in every Budget, an element of Budget restraint. Pablo asked before about experience that we've had in the past. Even in some of those Budgets during the Global Financial Crisis that had an element of stimulus, they had an element of trimming elsewhere. I get asked a lot, this first Budget that you're talking about, will Katy and you sit down and go through spending line by line? And my answer is that we'd do that every Budget. And even if the circumstances warrant an expansionary Budget at some point, that doesn't mean that you can't look for better ways to spend money within the existing Budget. It's not a free for all, and it won't ever be a free for all under us. So that task will be important. It will be ongoing. There will be opportunities for us to improve the quality of spending, whether the Budget is expansionary or not.

JOURNALIST: Dr, Shane Wright from the SMH and The Age. Your planned review of the RBA and the intersection with fiscal and monetary policy, would that canvas the Bank's Charter? The inflation target itself? And as we have in some other countries, a target beyond the size of which a Budget deficit may not run, given that you've opened it to fiscal and monetary policy intersection?

CHALMERS: Thanks Shane, and thanks for all of your interesting work on this for some time. I've tried not to pre-empt the terms of reference for the review, partly because I'd like to sit down with the Treasury Secretary, Governor of the Reserve Bank and others, and do that properly. But you can imagine, at least a couple of those issues you've raised, if not the last one, that that would be a factor, obviously. Crucial - central - to the Reserve Bank's work is the inflation target, but there are other aspects of it as well. I would like to take a pretty broad look, but a constructive look, consulting with Treasury and the Bank to make sure that we get the terms of reference right. You shouldn't expect detailed terms from us this side of the election before that consultation can appropriately take place.

JOURNALIST: Thank you for taking my question, Dr Chalmers. Gerard Cockburn from the Canberra Times. Just to bring your mind to the floods. You're a Queenslander, you've probably experienced flooding more compared to what we have in Canberra. How much concern do you have about the supply constraints in the rebuilding process, given the material shortages globally? Are there going to be people in Queensland and Northern New South Wales who won't be able to rebuild this year?

CHALMERS: I think that this is a huge challenge that doesn't get enough of our attention. Even before the floods, you've got difficulty finding tradespeople, and you've got very expensive building materials. This was part of the inflation story before the floods, before Russia-Ukraine, before the most recent set of uncertain conditions. So I think that it is realistic to expect that some of the people in my neighborhood, in Northern New South Wales, in South East Queensland and elsewhere, the Central Coast where Anthony was on the weekend - people will be waiting longer than they would like to rebuild their homes and their lives. That, unfortunately, is a consequence of not training enough people and not dealing with some of these controllable aspects of the inflationary pressures in our economy.

JOURNALIST: So, does Government then need to do more to procure supplies for this rebuild?

CHALMERS: I think that there's a role for government in emergencies. You think about AdBlue and the trucking industry for example, there’s a role for government, clearly, there. The capacity to bring the country literally to a standstill, means that there's a role in emergencies. But there is a limited pool of skills and there's a limited pool of easily accessible building supplies, and I think that that’s going to be a big problem in this rebuild. In all of the consultations that you have with these communities - we've all been trying to do as much of that as we can, and for me it's not that hard because my community has been impacted - people are having the insurance assessors in and all the rest of it now. Their expectations need to be managed about how long it is going to take and how much it is going to cost. More broadly, because I see the Prime Minister asked about this in relation to the Perrottet Government's support package and the Morrison Government not coming to the table. What this situation requires is a government that's prepared to work with state governments and local councils on some of these really important issues. People have been there for each other during the floods and they need the federal government there for them as well. There's been limited evidence of that in my view, and so we need the three levels of government working together. If there is a meaningful difference that we can make when it comes to the rebuild, then we should be making it together. No matter what the political persuasion, no matter what federal electorate you live in or what side of the New South Wales / Queensland border, all of that should be irrelevant in the sense that this is going to be a huge challenge in the rebuild. We need a Prime Minister and a federal government willing to work with others to get the job done. We don't have that right now.

JOURNALIST: Lanai Scarr from The West Australian. Thank you for your speech, Dr Chalmers. You spoke about your quest to crackdown on multinationals and the tax share that they pay. Is this just a continuation of Labor's theme during the last election campaign to be against the big end of town? And multinational companies obviously employ Australians. Are you concerned if you crackdown on them and make them pay more tax, there may not be the jobs there for the Australians who are employed by them?

CHALMERS: I don’t see it in any way as a rerun of some of that language that we haven't used for some time. I think that every time I've been here - this is the fourth time this term - I think that every time I've been asked a version of that question.  We want to be a pro-business, pro-employer, Labor Party. Because we recognise that the challenges in our economy are so vast and so substantial that you cannot meet them without a working relationship with business, with unions, with the community sector, with the states and others, to get the job done. But there is a global movement here, and I pay tribute to President Biden and Secretary Yellen, the OECD under Mathias Cormann and others, who say that we've got a challenge here. The playing field is not level. That disadvantages local businesses and disadvantages local communities. So, we think that there is something measured and responsible that can be done here to fix this situation, to make it fairer. That's not to diminish or dismiss the substantial amount of people who are employed here. And I have done heaps of boardroom conversations, as you'd expect from me, in the last three years and before that too. I think people understand, even the big employers - especially in some cases the big employers - they understand that if there is a global move afoot, then Australia should be a part of it.

JOURNALIST: Thank you Laura, thanks Dr Chalmers. David Crowe from The Age in Melbourne and from the Sydney Morning Herald. You mentioned in your speech multinational tax. We know that that’s one area where you intend to raise some revenue. Just a couple on that. The Government, in last week's Budget, did have a revenue raising measure by tightening some of the rules on the multinational tax. They gave some money to the Tax Office to do that. Are you intending to raise more than the Government revealed last week? Or have they stolen your thunder on multinational tax? And just an addendum to that question, is there any other revenue-raising measure beyond multinational tax that you still have on your policy books?

CHALMERS: Thanks David. Our measures on multinational tax will be beyond what the Government proposed in the Budget. What the Government proposed in the Budget was a compliance measure with the Tax Office, as you rightly identify. That’s something that governments of both political persuasions have done at different times. I don't think that is hotly contested. Our measures on multinational tax will go beyond that. In terms of other tax measures, I think we've all made it clear, especially in the last couple of days, that we're not going to this election with other proposals on tax beyond multinationals. We've said there might be a conversation with states after the election, but we're going this election with a proposal on multinationals and nothing beyond that. The issue of the revenue measures that you identify in the Budget raises another important point though, which I wanted to touch on briefly. Prime Minister Morrison stood up after the Budget was released last week and said that there are no revenue increases, no tax increases, no tax measures in the Budget, and there will be. There is $2.1 billion in tax increases in the Budget. His own Budget, the Treasurer’s Budget, $2.1 billion in Budget Paper Two in new taxes and increases in taxes. So he is lying again about tax. The other issue is this. I don't think anyone has ever counted them up, but we’ve counted them up. We think there is about 150 tax changes made by this Government over nine years that weren't taken to election, right. 150 tax and revenue and charges, right. 150. About 100 of them are increases to revenue that weren’t taken to an election. If the Prime Minister wants to have his campaign about taxes, let's be honest about it. There are tax increases in the Government’s Budget and they've raised taxes, I think, by our count, about 100 times without taking it to an election.

JOURNALIST: Dr Chalmers, we were planning to go to about 1:40pm, if you’re happy to keep taking some more questions?

CHALMERS: 1:40 today, yeah?


JOURNALIST: Thank you Shadow Treasurer, Ben Westcott from Bloomberg News. You mentioned in your speech, factory outputs from China, as an example of Australia’s vulnerability to global economic uncertainty. Now there is no doubt that Australia is very dependent on China for its prosperity. In recent years Australia has faced huge pressure from China in the form of obstacles to Australian exports - wine, meat, coal, things like that. Now, Josh Frydenberg and the Government have talked a lot about trade diversification, ramping down Australians dependence on China. Would that be something that will be continued under a Labor Government. And if so, how?

CHALMERS: Of course, I think that's a very important objective, that we have diverse markets, that our big employers and big exporters are able to access as many advantageous markets as they can. I think that's self-evident, that’s bipartisan in lots of ways. Clearly, as you identify in your question, China has been far more aggressive when it comes to the way it treated our exports and that's been challenging for us. The issue for us - and we don't seek to make artificial differences between ourselves and the Government on management of that complex relationship - but some of these issues have been a long time in the making. Ideally, we would have had businesses and employers and exporters able to access other markets before things got so dire.

JOURNALIST: Dr Chalmers, James Riley from InnovationAus, thanks for your address. My question relates to procurement reform and building sovereign domestic capability. I wondered if you can fill some detail on this Made In Australia Office that Anthony Albanese’s talked about, and how the process would work - by which you would identify specific areas of sovereign capability need. And I’d draw your attention to the $9 million a year we spend - or the Government spends - on IT, on information technology, and how that process that you put in place might be applied for today.

CHALMERS: Thanks for that. Obviously, on that massive spend on IT, we want to make sure that we’re getting value for money for it. There’s not much to say beyond that at this point. On the Future Made In Australia policy, it's got a number of parts. Local procurement plans are a big part of the story, making sure that our local businesses get a bigger slice of the action when it comes to government procurement, the way that panels work, and some of the other issues that you’d be familiar with. But also, a role for co-investment in industries, which will be big job creators and big opportunity creators for us for a long time. We’ve got this National Reconstruction Fund, which is all about co-investing in areas where we know that there will be a big opportunity. But where there may need to be some co-investment at the front end to make it work. You think about the manufacturing of batteries, that is obviously a big opportunity for Australia, given our resources and skills mix and the potential there. You think about hydrogen and the other issues in energy, so there’s a number of planks to it. A Future Made In Australia for us means getting procurement right, specifically, and getting the co-investment right, so that so we are not so vulnerable when it comes to these big, long, complex supply chains, the weakness of which has been exposed by the pandemic.

JOURNALIST: John Kehoe from the Australian Financial Review. Good to hear, it sounds you and Kevin Rudd have buried the hatchet, now you're citing his speeches in your pre-election pitch. Can I just ask about the RBA review. Could you just elaborate why it may need to include the interaction with fiscal policy? Related to that, do you think the productivity growth assumptions in the Budget really need a revisit? Because, as you pointed out, if we use a more realistic measurement, the debt and deficit is higher. And with the review, should it be conducted by an outsider who is independent of Treasury and the RBA or something more akin to the Canadian model that Dr Lowe has spoken about, where Treasury and the Central Bank do it together?

CHALMERS: I'm worried about those productivity forecasts. For a long time now, the Government has underperformed against them and there is an assumption that all of a sudden, magically, with exactly the same policy mix, that our productivity is going to markedly improve. And the Intergenerational Report is based on, I think, a rosier view of productivity than the current policy settings are geared to deliver. To be frank about it, I am worried about those productivity forecasts. Productivity growth has been disappointing for the best part of a decade and we need to turn that around. On the RBA review again, a bit like the answer to Shane’s question. I'm reluctant to kind of indicate what kind of model the review might be without having more than a preliminary discussion with the Bank itself and with Treasury. But I would’ve thought that all those models should be considered as part of the conversation. My sense, of the Reserve Bank - and I’m a supporter of the Reserve Bank - it has had difficult decisions to make, as others have pointed out. I think it is important that we speak with them and work out the best way to do this review, and part of the respectful way that I want to do that is not to pre-empt the models, and not to try and draft the terms of reference from opposition.

JOURNALIST: Tim Shaw, Jim Chalmers, Director of the National Press Club. A lot of people outside this room, they definitely understand the word tax. They learned a lot about the word excise last week, and they understand the Medicare Levy. And your Leader’s talked about Medicare, aged care, and also child care. Can you rule out in your first and second term as a Labor Treasurer, any new excises, any new levies? And just finally, for the beer drinking women and men of Australia, can you announce today the 50% cut in the beer excise?

CHALMERS: Well, the answer to the last one is no. Sorry to the beer drinkers of Australia. On the other question, it's the same answer as before. We're not proposing any tax changes beyond multinationals and potentially a conversation with the states. And there's lots of different ways to ask that question, but our priority when it comes to repairing the Budget, is emphasis on quality, maybe multinationals, dealing with rorts and waste. Those are our priorities. And our priority is growing the economy the right way. There's a whole bunch of ideas that get put to us and discussed, naturally, appropriately, in the public domain. But we're not coming at some of those changes that you’ve just suggested.

TINGLE: Thank you, Dr Chalmers.