CANBERRA, ACT, March 18 -- The Treasurer of Australia issued the following transcript:
Note
Subjects: RBA decision, government spending, impact of conflict in the Middle East
Matt Shirvington:
In a split decision the RBA lifted its official rate to 4.1percent with the average Aussie mortgage increasing by $2,800 a year- yes, 2,800.
For more we're joined by Treasurer, Jim Chalmers. Good morning to you. The Opposition is saying you're not making the tough decisions here, you're spending too much money, you and your government, you're not doing enough. How much responsibility do you take for these interest rates going up?
Jim Chalmers:
Good morning Shirvo and Nat. Look, I take responsibility for my part in the fight against inflation, including continuing to improve the budget. Our opponents don't have a leg to stand on here. They left us deficits as far as the eye can see. We've delivered a couple of surpluses, we've found $114billion in savings, we've got the budget in much better nick, but there is more work to do; we're upfront about that. There will be more savings in the Budget in May, and that will build on the very substantial progress that we have made in the Budget to here.
Barr:
But are you spending too much, because every man and his dog is saying that?
Chalmers:
Well, we're looking for more savings, and -
Barr:
Yeah, but up until now?
Chalmers:
Well, we've actually improved the budget very substantially, and there will always be views about whether that's too much or too little; I understand and respect that.
Now we've got 2 parts of this inflation challenge: before the escalation of hostilities in the Middle East, we had an inflation challenge which was primarily towards the end of last year because the private sector recovered quicker than people were anticipating, not because of an increase in public spending; and then obviously in the last couple of weeks, that inflation challenge has gotten harder, particularly at the petrol bowser because of the global oil price and for other reasons.
And so, more than acknowledge the pressures that people are under around this decision that would have disappointed a lot of people yesterday from the independent Reserve Bank, more than acknowledge the pressure that that adds to people's household budgets, we're acting on it as well. We're doing a lot of work in fuel markets, we're rolling out cost‑of‑living relief, including 2 more tax cuts that our opponents opposed, and we're also doing a lot of work to make sure that the budget is as responsible as it can be.
Barr:
Yeah, but this interest rate rise had nothing to do with fuel, so you acknowledge that, doesn't it; and the RBA Governor said that yesterday, so this is on you, isn't it?
Chalmers:
Well, what the Governor said yesterday is what I've said repeatedly for some time now which is that we had an inflation challenge in our economy before the escalation of hostilities in the Middle East, but that makes it -
Barr:
But you're not acknowledging that your government has been spending like crazy, government spending, as it is at a decade's high, consumer confidence in this country is the lowest since 2020. Do you think you're accepting your own responsibility for that?
Chalmers:
I'm accepting my part in the fight against inflation and all aspects of my job, including the fact that we've got the budget in much better condition.
I mean when we came to office spending as a share of the economy was up near a third of the economy. We got it down closer to a quarter.
Barr:
Which was COVID, so that was skewed.
Chalmers:
Well, that's why the fact that- the point that you just made about the highest spending in decades is not the case, we did see ‑‑
Barr:
It is except for COVID, Treasurer.
Chalmers:
Yeah, and there were good reasons during COVID why there was government spending. The point that I'm making is in the aftermath of COVID we got spending down from almost a third of the economy to closer to a quarter of the economy. We delivered surpluses which hadn't happened for a decade and a half in this country, we found more than $100billion in savings, we've helped engineer the biggest positive turnaround in the budget since federation in nominal terms, but we know -
Barr:
And now 5years on, look at us; the RBA Governor was answering questions about a recession yesterday.
Chalmers:
Well, the point that the Governor made yesterday and the point that the Reserve Bank's forecasts make is that they are not anticipating a recession, nor is the government. But there's a lot of risk in the global economy right now, and we've got to get on top of this inflation challenge.
Now that's an objective that the government shares. We've made it really clear that this Budget coming up in May is about inflation and productivity, and dealing with this global economic uncertainty, making us more resilient as an economy.
Now we also need to remember, Nat, that we've got a lot of advantages, we've got very low unemployment, we've got faster economic growth than any major advanced economy, we've got lower debt than the major advanced economies as well, and we won't be immune from what's happening around the world, but we have very solid economic foundations from which to confront this uncertain economic future, which is dialled up by developments in the Middle East.
Shirvington:
Unfortunately, we're just paying at every turn. Treasurer, appreciate your time, thank you.
Chalmers:
Thank you.
Disclaimer: Curated by HT Syndication.
