THE HON JIM CHALMERS MP
TREASURER

MEMBER FOR RANKIN

E&OE TRANSCRIPT
TELEVISION INTERVIEW
SKY FIRST EDITION

TUESDAY, 5 JULY 2022

SUBJECTS: New South Wales Floods; Disaster Relief; Food Prices; Interest Rates.

PETER STEFANOVIC, HOST: Let’s go to Canberra. Joining us live is the Federal Treasurer, Jim Chalmers. Treasurer, thank for your time this morning. So, just a little bit more on that news this morning. What does it mean – if natural disasters are declared - what does that mean for flood victims in terms of financials?

JIM CHALMERS, TREASURER: Good morning, Peter. We’ll make it really clear during the course of today exactly how people can access those disaster payments, but typically there is a combination of state and federal payments available to people at the household level and also for small businesses, in addition to the cost of rebuilding communities after floods. My colleague Murray Watt, the Emergency Services Minister, will make all of the information necessary during the course of today so that people can access those payments. Our message to the people of New South Wales who are dealing with these incredibly difficult conditions, once again, is that the Albanese Government will work closely with the state government, the Perrottet Government, to make sure that we stand with you and support you through these difficult times. A lot of people are experiencing these difficulties for the second time or more in recent months. What we’re seeing here, Peter, I think, is in the worst of conditions you see the best of Australians. Our message to all of those impacted by floods is that your governments, state and federal, will be there for you.

STEFANOVIC: You’ve got the credit card, Treasurer. How much are we talking here when it comes to providing help to people and businesses?

CHALMERS: It’s too early to tell. Obviously, in some areas, they’re still being impacted by a worsening weather crisis. So it’s too early to tell at the moment how much it will cost, but our priority here is helping people – making sure that people get that help and they get that support that they need in difficult times. Before long, the costs of that will reveal themselves, but we need to do what’s necessary to support people and help people. We’ve been working really closely with the state government to make sure that those support arrangements are in place for those 23 local government areas which are being impacted. My colleagues have been working around‑the‑clock with the disaster authorities, with the state government and with others, to make sure that that relief can get to people, and we’ll have more to say about it during the course of the day.

STEFANOVIC: Sure. Is it going to be – I know there’s announcements coming up later on today - but is it going to be similar to previous natural disaster payments worth anywhere between a couple of hundred dollars per household, maybe even a couple of thousand bucks towards businesses?

CHALMERS: Yes. Those are the arrangements that kick in. What typically happens, is the state government makes a declaration with the input and the involvement of the federal government. There are a series of business payments and household payments that people can access - a certain amount per adult, a certain amount per child - to make sure that people can get the essentials they need, really, to get through the most difficult part of the natural disaster. Those are the arrangements that kick-in. They require some decisions from governments, but typically they have been pretty standard for some time. The key is making sure that we can get that money to people as quickly as possible.

STEFANOVIC: And how do you do that when there’s no power? We’ve got 50,000 people without power this morning. That means there’s no internet access. What do you do there? I mean, this happened recently too with previous floods.

CHALMERS: Yes, and it happened around my place in South East Queensland. A lot of people in Australia in the last couple of years have had multiple floods that they’ve had to deal with. What happens, typically, with the coordinating role for the feds and for the state governments, is the energy companies, the SES - which have had thousands of calls the last few days - local governments and others, they all work together to make sure that we can get those essentials to people. That we can get evacuation centres stacked up so people can charge their phone and have a shower and have a hot meal. All of these things are really important. As I said before - whether it’s governments, whether it’s community organisations, whether it’s the SES and others - in the most difficult times we see the absolute best of people and that’s what we’re seeing now.

STEFANOVIC: Farmers have warned this morning that veggie prices will stay high for weeks to come because of the flooding. So, how much of an economic impact do you expect these floods to have overall?

CHALMERS: The economic impact will be substantial. There’s no use tiptoeing around that, Peter. Grocery prices, including fruit and vegetables, are already going through the roof and this will make it more difficult. The National Farmers Federation and others have made it clear that a lot of areas which are impacted by the floods are food-producing areas, and anyone who’s been in the fruit and veg aisle at the supermarket knows those prices are already very high. This will make it harder because it will chop off even more supply for a little while longer. So, that inflation problem that we have in our economy will get worse before it gets better. It’s got a lot of sources, but this will be one of them.

STEFANOVIC: Okay. Well, the next step in that will be the RBA’s decision later on today. It’s expected to jack up rates another half a per cent. How much will that pump the brakes on the economy?

CHALMERS: We don’t pre-empt the decision by the Reserve Bank board today, but the universal expectation is that there will be an interest rate rise and that it won’t be the last one this year. There’s a strong expectation, unfortunately, for a lot of people, that interest rates that began to rise before the election will continue to rise to some extent for longer - even after today - and so a bigger proportion of household budgets, which are already stretched by the price of petrol and groceries and electricity and other essentials, will be eaten up by mortgage repayments. That is the strong expectation. People will find today’s news really difficult, I think. It will be a tough day for a lot of homeowners. The Reserve Bank Board takes its decisions independently but we know why they’re doing it, and that’s because we’ve got high and rising inflation, and that’s why they have deemed these difficult decisions to be necessary. It will cause some pain for a lot of people. Some people will be able to accommodate these rate rises but many won’t, and it will have a broader impact on the economy as well, which is what it’s designed to do.

STEFANOVIC: Are they going into default territory, those who have overindulged on mortgages?

CHALMERS: I’ve spoken with banks a number of times since the election, and what they tell us is that there’s been a number of people who have been able to get a little bit ahead on their mortgages and there are some people who are right on the margins; and for them, today’s decision will be incredibly difficult. But even for people who have a bit of a buffer, every half a per cent that interest rates go up, if you’ve got a $500,000 mortgage, that’s about $137 a month that you need to find in your family budget. So, even if you’ve got a buffer, that gets eaten up relatively quickly as interest rates get higher. It will be a difficult day. I think there will be some difficult news, some tough news, for a lot of Australians.

STEFANOVIC: Okay. That’s the federal Treasurer, Jim Chalmers, coming to us live from Canberra. Treasurer, thank you. We’ll talk to you soon.

CHALMERS: Thanks, Pete.

ENDS