CANBERRA, ACT, May 10 -- The Treasurer of Australia issued the following transcript:
Note
Subjects: Farrer by‑election, Tuesday's federal Budget, cost of living, housing market
Charles Croucher:
Good morning team and thank you, Treasurer, for joining us for this traditional pre‑budget interview. Firstly, happy Mother's Day to Laura and all the mums.
Jim Chalmers:
Happy Mother's Day to all the mums and if you're missing your mum today, we're thinking of you too.
Croucher:
Let's start with Farrer. One Nation gets 40percent of the primary vote, 60percent 2‑party preferred. I know Labor wasn't there, but this is a big middle finger to the status quo and to the government. What's your takeaway?
Chalmers:
Well, it wasn't a by‑election, it was a bloodbath for the Coalition. No Labor opponent, in the middle of a global oil shock and Angus Taylor still gets more than a 30percent swing against him. And I think what it shows is that the Coalition can't beat One Nation, so they'll have to join them. It's hard to imagine a future Coalition government that doesn't have One Nation in it and that would be a proper 3‑ring circus of right‑wing parties.
And so Labor is the last one standing in the sensible centre of Australian politics. But we're not standing still. We do recognise that people have legitimate concerns about their role in the economy and their role in our society more broadly and the budget won't be a political document, it will be an economic plan, but it will respond to a lot of these pressures and priorities that I think people are feeling in a genuine way around the country and indeed around the world.
Croucher:
Because a lot of people are hurting right now, and you said around the world, but in Australia it is not just fuel and not just inflation, but it's this compounding factor. They're tired of being tired, tired of getting to the end of the week and wondering where all the money is gone. Is there anything on Tuesday night that can help them?
Chalmers:
There will be a focus in the Budget on the cost of living and particularly on housing. Today we're announcing another $2billion to build 65,000 more homes, which is all about more water and power and local road infrastructure to get more projects over the line. So we will respond to some of these pressures in the Budget, whether it be the cost of living or the housing market more particularly, because we understand that people are under genuine pressure.
But the worst thing to do at a time like this is to try and divide the community like Angus Taylor has been trying to do. He bet big on division in this Farrer by election and he lost badly. It would surprise me if the clock wasn't now ticking on Angus Taylor's leadership. And that's because at a time when people are under genuine pressure, you've got 2 choices. Try and respond to them in a considered way, which is what the Budget is all about, or to try and divide people more, which is what Angus Taylor is all about. We shouldn't be surprised that he's failing as leader after he failed as Shadow Treasurer. The clock is ticking on Angus Taylor. The answer here isn't to try and imitate One Nation, it's to try and respond to the very legitimate pressures that people are feeling, the concerns that are broadly shared, which are pushing people to consider some of these mainstream political alternatives.
Croucher:
Let's talk imitation, the -
Chalmers:
Alternatives to the mainstream political parties.
Croucher:
Yes, let's talk imitation. The housing package you spoke about today, that's Peter Dutton's package from the election, isn't it?
Chalmers:
No, it's not. This is an extra 2billion dollars. It takes our total investment to $47billion in housing, and that's because we recognise that housing, particularly housing supply, is one of the main issues that people are worried about in our economy. Now, this means even just the part about incentivising and investing in local infrastructure. This 2billion takes the total to more than 6billion. That is many multiples of what the Coalition did or proposed to do and that's because we understand that when it comes to the housing market, when it comes to the tax system as well, the status quo is not working. Too many people are being locked out of housing, there aren't enough homes, and we can deal with both of those challenges simultaneously.
Croucher:
That all sounds like you're preparing for changes to capital gains and negative gearing. Is that happening?
Chalmers:
Well, you'll have to see the budget on Tuesday night. We've made it really clear that even though the problem in the housing market begins with supply, it doesn't end there. As I said, the status quo in the housing market and the tax system is unfair and therefore unacceptable to us. Too many people locked out, not enough homes. And so, overwhelmingly, the government's focus has been on supply. That's appropriate, that is the main game. But there are additional steps that need to be taken to make the housing market fairer. Too few Australians, and particularly younger Australians, can get a toehold in the housing market. And that means too few people are getting a toehold in the economy more broadly.
Croucher:
So, how does taxing something make it more available?
Chalmers:
Well, there's 2 separate things at once. Overwhelmingly, this focus on supply, that's what today's $2billion is all about. It's what all of the government's efforts are about, in addition to the 5percent deposit, so that's been our primary focus. That will continue to be the primary focus.
But what's happening in our housing market now, it's playing out, I think, particularly to disadvantaged younger people, is that the share of owner occupiers over a very long period has come down as the share of investors has gone up. And I think any responsible government needs to acknowledge that. I think that is one of the main concerns and anxieties that people have in our economy. And so we've said for some time there'll be a tax reform package in the Budget. The details of that will be released on Tuesday night. But people know that we understand there is a legitimate concern about how hard it is for younger people to get into the market, and so the Budget is partly motivated by that.
Croucher:
You've been saying for some time there wouldn't be changes to negative gearing and capital gains as well. I think we're going to argue about this on Tuesday night so I don't want to get into it now. But would that be a broken promise?
Chalmers:
I think the comments and commitments that we made at the election reflected the government's almost singular focus on housing supply, and we're maintaining that focus on supply. I think when governments come to a different view, and if they come to a different view, the onus is on the government to explain why and that would be our approach if we changed our position on some of these key considerations. From my point of view, it has become increasingly clear that housing supply needs to continue to be the main game, but it needs to not end there. There are issues in the composition of the housing market, how hard it is to get into it. And so for me personally, that has been a priority as we put this Budget together.
Croucher:
I think we'll get back to that on Tuesday night. For now, let's go cost of living. The fuel excise has been a big help to businesses, but also to Australians. Is that now done or is that a decision that will be made in June?
Chalmers:
It finishes at the end of June and the budget doesn't propose to extend that. There will be almost $3billion in the budget to fund that fuel tax cut, which is taking some of the sting out of these higher prices we're getting from the Middle East. So, it ends at the end of June, in the Budget.
Croucher:
Is that decision made though?
Chalmers:
We always have contingencies, but we're not anticipating extending that. But if a worse scenario plays out, and there are a number of things here outside of our control, decisions taken in D.C. and Tehran and elsewhere. So, we model a whole range of possibilities, we have a whole range of contingencies. But the Budget funds the fuel tax cut to the end of June.
Croucher:
Two final quick questions. One, the unions are pushing to see work hours come down to 35hours, potentially 4‑day work weeks. Is that something that's in the plans or something being discussed?
Chalmers:
That's not in the Budget, that's not something that we have been considering.
Croucher:
The bigger picture?
Chalmers:
Not something that we've been discussing or considering. Obviously we've seen the comments been made by the union movement and others, but it will be a pro‑worker budget, very much so. A budget which is good for workers, good for first home buyers, good for small businesses. A budget which is about resilience and reform and which takes some difficult decisions as well, but overwhelmingly a very, very pro worker budget. And that's because the character of this government over the first 4years and into the future will always be to do the best we can for Australian workers so that they can earn more and keep more of what they earn. That's why we've got the fuel tax cut. It's why we've got another income tax cut coming in in July and another one next July as well.
Croucher:
The final question. Thursday marks 40years since Paul Keating's Banana Republic speech. We're now looking at a trillion dollars' worth of debt some time later this year. That speech was a line in the sand. It shook up the way Australians think. Are you expecting something similar this week with a budget that seems to be shaking up the foundations of housing, the very bedrock of how Australians have earned wealth in the last 20years?
Chalmers:
It will be a really ambitious budget and a really responsible budget and there are some quite difficult decisions in there that we will engage with Australians on. There will be more than the usual amount of change in this Budget because there's more than the usual amount of uncertainty and more than the usual amount of anxiety about how our economy is playing out.
People should expect to see that when it comes to levels of debt, we have been able to get the debt trajectory down quite considerably since we were elected, there'll be more budget repair in this Budget, the deficits will be smaller, we found more than $60billion worth of savings, we're banking all of the upward revisions to revenue and that's because at every budget, but especially this one, we have taken the most responsible approach that we can.
Croucher:
Treasurer, best of luck with the Budget on Tuesday.
Chalmers:
Thanks.
Disclaimer: Curated by HT Syndication.
