Subjects: Budget, cost of living, inflation
Interview with Sarah Harris and Tristan MacManus, Studio 10, Channel 10
SARAH HARRIS:
We were promised solid, sensible and responsible, but we weren't expecting from the Federal Treasurer's Budget speech last night was such a harsh reality check ‑ anyone who had been hoping for significant cost‑of‑living relief will be seriously disappointed. And the dire inflation warning would have shocked even the most optimistic Aussies. Federal Treasurer Jim Chalmers joins us now from Canberra. Treasurer, thank you so much for being with us. First up, how do you feel after delivering your first Budget?
Good morning, Sarah and Tristan. Oh look, pleased to get it away. It's a lot of months of work, really, by a lot of people. And I think in your introduction, it's important to recognise that we do have some difficult times ahead, but I'm still optimistic about the future of the economy and the future of the country. We do have a big inflation challenge in our economy right now and, the Budget was really influenced by that. And that's why we had to be so responsible and so restrained in our spending, because we don't want to make that inflation challenge worse. And we've got a lot of challenges coming at us from around the world, which are felt around the kitchen table, and there's no use pretending otherwise. But we still are fundamentally optimistic about the future of the economy, the future of the country, but we've got some tricky terrain to navigate in the meantime.
HARRIS:
You did use the word responsible ten times in your speech last night, Treasurer. How high will inflation get by the end of the year? We're looking at around the seven per cent mark. Is that worrying for us?
Of course it is. When you've got an inflation challenge of this magnitude, then you need to take it seriously. And the most important thing to do there, when it comes to budgets is to not spray money around indiscriminately, because if you do that, you risk making inflation even worse and you risk making interest rates even worse than they would otherwise be. So you've got to be so careful when you've got this much inflation in the economy, and that's what we have been. But at the same time, we've provided seven and a half billion dollars in cost‑of‑living relief across child care, paid parental leave, housing, medicines and getting wages moving again. And these are really important ways that we can make life easier for Australians without making some of our challenges in the economy worse.
TRISTAN MACMANUS:
How do you find those balances, Treasurer? I mean, a lot of people looking at this, they'll say the bottom line is that the poor are going to pay big time between power, petrol, food and rent, and those with large mortgages are also going to be hit hard. How do you determine who would be ‑ for want of a better word ‑ winners and losers?
I think it's important to remember that when you do recognise, as I do, that the most vulnerable Australians are most at risk when inflation is high. First of all, don't make it worse. But also, in the Budget that I handed down last night, there was something like $33 billion in extra money for pensions and payments. And that's because when inflation is high, we try and make sure that pensions and payments keep up with that, with the indexation. So that's part of the story. And when it comes to low paid workers, one of the first things, in fact the first thing that we decided as a new Labor Government in our Cabinet ‑ and I was pleased to lead that work with Tony Burke ‑ was a minimum wage increase for people on the lowest pay to make sure that they get a decent pay rise to keep up with these costs of living too. And I know that people would like us to do more. I do genuinely understand that. But we've got to be really careful with the budget in these pretty uncertain times. We've got to build a buffer. We've got to not make inflation worse. And one of the things I'm proud about in the Budget last night is we did provide cost‑of‑living relief, we did invest in strengthening the economy, but we did it in the most responsible way we could think of.
We've got to get this inflation under control. Treasurer, the Shadow Treasurer, maintains that a typical family will be $2,000 worse off by Christmas. Is he wrong?
It depends on a lot of different things. And we've learned not to trust what Angus Taylor tells us, particularly when you remember that he was the Energy Minister for some years when these big price rises in electricity began. He tried to hide them during the election campaign. So he's not awash with credibility when it comes to electricity prices. And we won't be taking lectures from what are essentially the leftovers of the former government, which gave us so much of the mess that the Budget begins to clean up.
MACMANUS:
There were no major changes. Are the tough decisions, are they being put off until May? I mean, do we need to prepare for more pain?
First of all, I think there were difficult decisions in the Budget yesterday. $22 billion in savings, all of that spending restraint, trying to return to the budget this temporary windfall we get from high commodity prices and also some sensible tax changes. So we did make, I think, a solid start when it comes to repairing the budget and putting it on a more sustainable footing. But I think you're right that there needs to be ongoing work in these areas. And what we tried to convey to people yesterday and before that too, is that the Budget yesterday was not the end of some of this hard work to put the budget on a more sustainable footing. It was the beginning of that effort. There will be another two or three Budgets in the life of this parliamentary term. And in every Budget we'll try and make sure that they can be as responsible as possible.
How demanding has the lead up to last night been on you personally, Treasurer?
There's a lot of hard work from a lot of people. A lot of people put these Budgets together. I've always been a little bit uncomfortable with this sense that the person who reads out the Budget speech is somehow solely responsible for every element of the Budget. The truth is, we work closely wit people like Katy Gallagher the Finance Minister, the Prime Minister behind me here. We work closely with our Cabinet, with hundreds of public servants and others. We do a lot of consultation. So it's a big collective effort and It's a lot of hard work. But I hope it's worth it, because at the end of the day, all we're trying to do is to do our best to provide that relief where we can, but also to make sure the budget is as good a nick as it can be for some of the difficult challenges that we've got ahead.
Alright. Treasurer Jim Chalmers, we really appreciate your time. Thanks for joining us this morning.
Thanks for having me back.