CANBERRA, ACT, Feb. 3 -- The Treasurer of Australia issued the following transcript:
Note
Subjects: interest rates, inflation, coalition chaos, budget savings
Peter Stefanovic:
The RBA is expected to raise interest rates when it hands down its decision later on today, and if it does, our central bank would be amongst the first to reverse course and raise rates for the first time in 2years.
Joining us on this Tuesday morning is the Treasurer, Jim Chalmers, out at Canberra. Thank you so much for your time this morning. Treasurer, if there is a rate rise today do mortgage holders have you to thank for that?
Jim Chalmers:
Well, first of all, I'm obviously not going to make anything that sounds like a prediction or pre‑empt the decision that the Reserve Bank will take independently today. They'll discuss that through the course of the morning, and they'll make an announcement this afternoon.
But regardless of what the Reserve Bank decides today, we know that Australians are still under pressure, inflation is higher than anyone would like. I take responsibility for all aspects of my job, I take responsibility for our part in the fight against inflation, and my focus is continuing to roll out this cost‑of‑living help for people doing it tough including 2 more tax cuts, but also making sure that we continue to do what we have been, which is to get the budget in much better condition than we inherited.
Now, we've got different responsibilities to the independent Reserve Bank, but we've got the same objective here, which is to try and get on top of this inflation without sacrificing too many jobs. That's my focus, and that will be part of the discussions that the Reserve Bank has today.
Stefanovic:
So you do take responsibility for the rate rise, if one comes today?
Chalmers:
I've made it clear every time I'm asked this question that I take responsibility for all aspects of my job, including playing a helpful role in the fight against inflation. That's why in the most recent budget update Katy Gallagher and I found another $20billion in savings, it's why we've improved the budget by $233billion since we came to office, paid down more than $170billion in Liberal debt, delivered those surpluses, got real spending growth down, got spending as a share of the economy down from almost a third to closer to a quarter.
These are my responsibilities, to manage the budget in the most responsible way that we can at the same time as we roll out this cost‑of‑living relief. The tax cuts I've mentioned, but also cheaper medicines, more bulk billing, student debt relief. This is all about taking pressure off people who we understand are under more persistent pressure than anyone would like.
Stefanovic:
Is it your spending though that's leading to this, therefore, making the RBA's decision the tougher one?
Chalmers:
Well, I see that commentary. Often that commentary is more motivated by politics than it is founded in facts. If you look at the most recent tick‑up in the most recent CPI data, for example, the big driver of that was holiday spending, there was the withdrawal of the energy rebates, some more persistent pressures in housing. So some of those pressures are temporary, some of them are more enduring, and we are focused on those in areas like housing.
But if you look at the big story in the economy last year, Pete, it was actually that public demand took a big step back compared to the year before and private demand, private spending, was the big contributor to growth in 2025. Obviously there's always more work that governments can do to make the budget more responsible, to make sure that the budget is as tight as it can be at the same time as we roll out this cost‑of‑living help, but primarily the story in our economy has been about private demand rather than public spending.
Stefanovic:
But isn't the private sector spending increase though a response to your government's economic management where wages and expenses are now higher, which also feeds into the inflation picture?
Chalmers:
Well, first of all, higher wages are a good thing and private sector growth is a good thing as well. If you look at how we compare ourselves with the major advanced economies of the G7, we've got very low unemployment, we've got low debt, we've got an economy which is growing faster than all of the major advanced economies except for the US, and in some cases multiples of what those other countries are growing.
The key here, the objective here for the Reserve Bank and for the government is to have strong growth in our economy, to try and deliver that with low inflation and to do that in a way where we keep as many Australians in work as possible. That's why I say that we've got different responsibilities, the Reserve Bank and myself, but we've got the same objectives and we will continue to play our part in managing the Budget and the economy as responsibly as we can, recognising that these inflationary pressures have been hanging around.
Stefanovic:
Joel Fitzgibbon told us here last week, former Cabinet Minister of course, 'they've got real problems'- so this is part of the quote, Treasurer- 'they have real problems and they'll need to resolve them otherwise inflation will remain sticky or even rise, interest rates will rise again and there will be a problem for the government on a political front'. What's your response to that?
Chalmers:
Oh, look, I respect Joel. I didn't see that interview, I wasn't aware of it till you just read it to me. We're focused on the economics of this rather than the politics. If there's a really big distinction in the parliament right now it's the government focused on the cost of living, housing, the economy more broadly, and our political opponents just focused on themselves. I've continued to focus on the economics, people will make their own conclusions and write and contribute their own political commentary.
Our focus here is the inflation challenge, recognising that some the inflationary pressures in our economy have been persistent in some cases. We expect that some of these numbers will continue to be driven partly by the withdrawal of the electricity rebates in coming months as well.
All of those are factors, but whatever the political conclusions you draw, or whatever the economic conclusions you draw, be assured that this is a government very focused on the cost of living. That's what the cost‑of‑living relief is all about and it's also what our very substantial improvements to the budget since we came to office are all about as well.
Stefanovic:
These conclusions are not the ones that I'm drawing, these are the conclusions that are coming from the nation's leading economists. So are they wrong?
Chalmers:
Well, first of all, there's never a unanimous view amongst economists. I do believe that some of the commentary is motivated in some of the newspapers by politics rather than economics. But I listen respectfully to a whole range, the whole gamut, the whole spectrum of economic views, and I try and read as much of the economic commentary that I can. The economists don't have a unanimous view about the contribution of public demand.
But if you look at the facts objectively, particularly the economy over the course of the last year or so, it's been a story of the public demand retreating being replaced by private demand. It is a fact that spending as a share of the economy was up near a third under our predecessors, we got it down closer to a quarter, we got real spending growth to 1.7percent, which is a fraction of what our predecessors had real spending growth running at. So those are the facts, and I prefer to focus on those rather than opinions.
Stefanovic:
Okay. We've got one of the largest public sectors in the world, and just last week came a near $50billion revision. I put this to Matt Canavan about 20minutes ago, and this was his response to that, and then I'll get your reaction to that Treasurer.
[Excerpt]
Matt Canavan:
How can Jim get his maths so wrong and still hold the position of Treasurer? I mean he should resign in disgrace, because we've never seen anything like this. I mean he's managing that.
[End of excerpt]
Stefanovic:
What's your response to that, Jim?
Chalmers:
I couldn't care less what Matt Canavan says, to be honest with you, Pete. I listen to a lot of different voices, but he's not a respected contributor to these sorts of things. When it comes to -
Stefanovic:
How are you going to find the $50billion though?
Chalmers:
When it comes to that story that was published, the Treasury made it clear - that's over a 10‑year period - the Treasury made it clear that they didn't consider it to be a substantially different outlook over that period. Part of it driven by receipts, part of it was driven by the hospitals deal.
But if Matt wants to draw that conclusion, our predecessors came up with a $60billion error in just one policy, the JobKeeper policy, $60billion out. I don't remember Matt Canavan saying Josh Frydenberg should take the step that he's recommending there.
I think we all know what the Nationals are doing. They're taking a 5‑minute break from bashing the hell out of each other politically. They desperately want an interest rate rise today because they spent the end of last year trying to divide the country, and when that failed, they spent the start of the year trying to divide themselves. They desperately want some bad economic news because they want Australians to be under pressure, because they think that helps them politically. We'll continue to focus on what matters and do our job.
Stefanovic:
So now to the point of fixing it, Treasurer, the Chamber of Commerce said today that major cuts are needed across the NDIS, across aged care, childcare sectors, care economy et cetera. Will spending cuts and restraint be a feature of your upcoming Budget?
Chalmers:
Yes it will, Pete, and it's been a feature of all of our budgets and budget updates. In fact we've found $114billion in savings since we've been in office. To give you a sense of the $20billion that we found in the last update, it took our predecessors about 7 budget updates to get anywhere near that figure. In every budget, in every budget update, we have found savings, we've found ways to make room for other priorities, $114billion in savings, and people should expect that there will be more in May.
Stefanovic:
Okay. Lengthy chat this morning, Treasurer. I know you've got another interview to go to but appreciate your time as always. Thank you.
Disclaimer: Curated by HT Syndication.
