CANBERRA, ACT, April 30 -- The Treasurer of Australia issued the following transcript:

Note

Subjects: inflation, effect of Middle East conflict, young people in the housing market, Budget

Matt Shirvington:

Joining us now is Treasurer Jim Chalmers. Good morning to you. Thanks for joining us. Busy time. Let's start with inflation. First off, you say things are going to get worse before they get better. How bad is it?

Jim Chalmers:

Well, we're finalising our forecast for the Budget, but I think everyone expects that this hefty price that Australians are paying for the war in the Middle East will continue to reverberate around our economy, whether it's its impact on prices or on economic growth. And so over the course of the next week or so, what we will do is we'll finalise our expectations. But I tried to be really upfront with people yesterday when we got these difficult inflation figures that really the costs and consequences of what's happening on the other side of the world, pushing up petrol prices at the bowser and flowing through our economy, we expect that to continue for a little while yet.

Natalie Barr:

Okay, let's look at the taxes. You're looking at axing both negative gearing and reducing the capital gains tax discount. By all accounts, some of our top banks and economists say it won't improve housing affordability, but it will add $30billion to your budget. Is it just really a cash grab?

Chalmers:

Well, a couple of things about that, Nat. I mean, obviously, when we're only less than 2weeks from the Budget, there's always a lot of speculation. And I think particularly this time around, we haven't finished the Budget yet. And so, some of these sorts of deliberations haven't been concluded yet. But in principle, some of the changes that you're talking about, some of the changes that people have been reading about, would raise nowhere near the sorts of dollars that you just referenced in your question. And so, we're working through these issues. We've been upfront with people and said that we think that there are issues in the housing market and in the tax system that we are working through.

There are some issues of intergenerational fairness that we're very focused on. And one of those issues is around whether or not young people can get a toehold in the housing market. I think a lot of us are very concerned about, over time, the way that there are fewer and fewer younger people who are able to buy their own homes. So, housing supply is the main game. The housing minister will say a bit more about that later today. But within that, we want to make sure that people can actually get a toehold in this market as well. And so that's driving some of these deliberations as we get closer to finishing the Budget.

Shirvington:

Are you worried that it could push up the rental market because if investors aren't making the gains that they thought they would be when they bought the property, that they're going to have to increase the rental margins?

Chalmers:

Well, again, it depends a bit on the policy. And the Budget's not settled yet. The Budget will be settled in the course of the coming week or so. And so, it's hard to answer those kind of specific questions about a Budget which isn't finished yet. But obviously we think very carefully about any implications of any changes that we make when it comes to housing or when it comes to tax reform. But as I said a moment ago, one of the big issues, in addition to supply, one of the really big issues, I think, is the way that over time, the amount of young people who are in home ownership, owner‑occupiers as a proportion of the overall housing market, that's been trailing away. And I think that's a concern to a lot of people, including probably a lot of your viewers.

Barr:

Okay, so you're obviously addressing that in the Budget. Thank you very much for your time. Treasurer Jim Chalmers there.

Chalmers:

Appreciate it. Thanks, Nat and Shirvo.

Disclaimer: Curated by HT Syndication.