Jim Chalmers promises a ‘responsible budget’ after RBA’s warning

Added: 2026-05-13

[00:00:00]Well, joining us live now is the treasurer Jim Charmer's. Treasurer, good to see you. Thanks for your time today.

[00:00:04]That's a fairly clear and direct response on spending. Did you get the message?

[00:00:11]>> Well, this will be a responsible budget uh which takes seriously the inflation challenge in our economy because we know that people are under pressure. Now, Governor Bulock was asked yesterday a hypothetical question based on uh some budget speculation that had been in the paper that morning. uh that budget speculation always happens in the leadup uh to budgets. Often some of that speculation is right and some of it is wrong. People will get a sense of it on Tuesday night when we hand the budget down. But overwhelmingly uh what people will see in that budget when we hand it down uh is a big effort to be as responsible as we can be overall pulling back on spending. Uh and so when Governor Bullock was asked, "Will there be if there is a heap of new stimulus spending in the budget?" What would you think about that? That's obviously a hypothetical which doesn't reflect the reality of the budget which continues to be managed in a very very responsible way, including when it comes to levels of spending.

[00:01:08]>> So you can't confirm handouts for workers are coming in the budget next week. Is that happening or not?

[00:01:15]>> I'm not going to add to that kind of speculation. As I said, Pete, you know, sometimes that speculation's right, sometimes it's wrong. This always happens in the leadup to the budget.

[00:01:23]What we've already made clear is that this is a tax cutting government. We've already cut taxes once for workers.

[00:01:29]We're going to cut them again on July.

[00:01:31]Again, after that, in July next year, we've got uh the fuel tax cut that we will fund in the budget, taking some of the sting out of these higher petrol prices. We've got an instant tax deduction, which provides a little bit of extra tax relief as well. And so we've shown a willingness to cut taxes.

[00:01:47]Our political opponents opposed those tax cuts and said that they would repeal them. Uh but we will be pressing ahead with those tax cuts that we've already announced.

[00:01:55]>> Well, I mean, you're going to increase taxes as well, and I'll get to that in a moment. Uh well, that's the speculation anyway, but just um let me ask a different way on this other um suggestion that there will be a handout next week. Would such an offer feed inflation and therefore make the RBA's job harder if you were to do it? Do you concede that?

[00:02:16]>> Well, what matters is the the overall composition of the budget and the nature of your spending in addition to or alongside the the magnitude of that spending. We've made it really clear already uh that we've got very substantial savings in this budget. In fact, this will be one of the most responsible budgets that people have seen certainly uh in the last quarter century or so. And that's because we recognize that even though budgets are not what's driving uh this inflationary pressure that we're seeing from the war in the Middle East and the faster than expected recovery in the private economy, these inflationary pressures are not because of government spending.

[00:02:52]The decision that the Reserve Bank took yesterday was not about government spending. It wasn't mentioned in the statement that the board released. uh but we do understand uh and take responsibility for uh making sure that we are playing a helpful role in the fight against inflation not a harmful role.

[00:03:11]>> Uh and you'll see that in the budget.

[00:03:13]You'll see in the budget uh that there is more than the usual amount of savings. You'll see that the uh net budget position actually improves over the four years rather than goes backwards. Uh and this is because we acknowledge that we can play a helpful role here and that's what we intend to do because responsible economic management has been a hallmark of this government and it will be a feature of the budget on Tuesday night as well.

[00:03:34]>> But do you concern though if spending increases demand when the RBA is trying to limit it? Aren't you doing the exact opposite?

[00:03:42]>> Well, well this is the point that uh Governor Bullock was making yesterday that I have made on other occasions as well. Uh budgets are not the primary driver of the inflation that we are seeing right now. But of course, uh, aggregate demand includes both private and public demand. And that's why it's important that we manage the budget in a responsible way and play a helpful role in this fight against inflation. And that's what we intend to do. You know, let's be really clear here, Pete. The governor was asked, "What would happen if there was a heap of extra stimulus added into the budget? How would the Reserve Bank think about that?" Uh, that's not what we're intending to do.

[00:04:17]In fact, we're winding back spending overall. We've already made it clear in areas like the NDIS, like making the EV tax breaks more sustainable. We're taking this uh these budget pressures seriously. We're taking this inflation challenge seriously because we know that people are under pressure. Uh and so, as the governor acknowledged yesterday, we both want to get inflation down in our economy, but we've got different responsibilities.

[00:04:43]Uh and I'm confident that we are striking the right balance in this budget on Tuesday night recognizing the inflationary pressures in our economy and the pressures that pe that that puts on people who are paying a hefty price for this war in the Middle East.

[00:04:56]>> Okay. Tell me, are you rethinking any plans for next week following yesterday's rate rise and those comments from Bulock?

[00:05:06]Oh, you have to understand that the decision taken yesterday by the Independent Reserve Bank was widely anticipated. Uh, and in our budget forecasts, what we do or what the Treasury does is they take the market's expectation of future movements in interest rates into account already. And so, obviously, uh, reading the tea leaves and looking at the market expectations, uh, obviously like most Australians, we were anticipating the decision that was taken yesterday. And so we haven't hit print on the budget yet. Uh but the decision taken yesterday was broadly anticipated, widely expected amongst economists and so it's something that we were already able to take as we put the finishing touches comments aren't going to give you pause for thought.

[00:05:53]>> Well, the governor's comments were based on um you know speculation and a hypothetical uh outcome which isn't the reality of the budget. The budget is not about injecting heaps more stimulus into the economy as I've explained all the different ways.

[00:06:07]>> I know already.

[00:06:08]>> So, I'm just trying to work out if it's happening or not. It sounds like that's not happening now. Is that what you're saying?

[00:06:15]>> Uh, I'm saying people will see the details of the budget on Tuesday night.

[00:06:18]I encourage people not to assume that every bit of budget speculation is necessarily right in every respect. Uh what happens in the leadup to budgets is people uh uh make assumptions about what's in and what's not in the budget.

[00:06:32]Sometimes those assumptions are right, sometimes they're wrong. People don't have long to wait now to see what's in the budget.

[00:06:37]>> Does Victoria's Does Victoria's Spendathon make your job harder?

[00:06:44]>> Well, first of all, I wouldn't necessarily characterize it the way that uh that you have, Pete. every state government of both political persuasions is doing what it can to manage its budget pressures and to help people through uh a difficult period. Uh obviously when it comes to uh the combined budgets of governments around Australia then the state governments uh a part of that aggregate uh when it comes to how much government spending there is in our economy. But I'm not going to take shots at the Victorians.

[00:07:12]This is a good Victorian government. Uh, and the budget is all about trying to get Victorians through a difficult period, through these circumstances which no Australian chose. This war in the Middle East, which is pushing up prices and making life harder for people. And the Victorian government, like every government of both political persuasions in this country, is doing the best it can to navigate uh through some choppy waters in the economy.

[00:07:35]>> Just back to your budget then, fuel security is expected to be a big part of the budget. Can you reveal what might be in it on the fuel front?

[00:07:44]Oh, fuel security will be an important part of the budget. Uh, and later today after National Cabinet, Prime Minister Albanesey and Minister Bowen uh will be giving uh a sense of what's in the budget when it comes to fuel security.

[00:07:57]Uh, and the fuel security part of the budget is all about securing more fuel.

[00:08:02]It's about more resilient supply chains.

[00:08:04]It's about funding this fuel tax cut, which is taking some of the edge off these higher petrol prices from the war in the Middle East. Uh overwhelmingly what this fuel package in the budget will be uh is about securing more fuel for motorists and for industry and more fuel security for our economy. It's a really important part of the budget that we will hand down on Tuesday night and you'll hear more about it. Okay.

[00:08:28]>> Uh from the PM and Chris later today.

[00:08:30]>> Do that sounds to me like you might be then hinting at matching what the opposition recently came up with to extend fuel storage from 30 to 60 days on shore. Is that what it's going to be about?

[00:08:43]>> Well, the opposition don't come to this with a lot of credibility. They saw our refineries go from six refineries to two refineries. And so, we make our own decisions based on the work that we do.

[00:08:52]We we work around the clock on fuel security. The PM, Chris, other ministers are doing a terrific job securing more fuel for Australia on international markets and making sure it gets where it needs to go. But we know there's more to do and the budget will have uh additional steps when it comes to fuel security for motorists and industry and fuel security for our economy more broadly. And so we work very closely with our international counterparts, with industry uh with our departments uh to make sure that we've come up with the best and most comprehensive plan that we can. Uh it'll be a central feature of the budget. Uh and you'll hear more about it today from Anthony.

[00:09:30]>> Can you at least humor me though? Is it going to relate to the opposition's recent policy about storage?

[00:09:37]>> Well, it's it's determined uh uh without input from the opposition because they don't come to this with any credibility.

[00:09:44]To to be honest with you, Pete, I don't pay a lot of attention to uh what the coalition is proposing. I mean, they're trying to pretend on the one hand there's no war in the Middle East pushing up prices and then on the other hand uh calling for us to do things.

[00:09:58]They don't come to this with a heap of credibility. We've worked up our own plan. Uh we've done that in the usual considered and methodical but decisive way. It will be an important part of the budget on Tuesday night. Uh and it will take into consideration all of the great work uh that the PM and other ministers have been doing to make sure that our country has the fuel that it needs to keep moving.

[00:10:20]>> All right. I just I know you're going to get to another interview. I just want to squeeze this in because we were going to talk about capital gains tax changes and there there might be a broken election promise around the corner, but I want to ask you about young investors who use the stock market to get ahead, maybe to get a house deposit together. I don't know. But now there's the expectation that you'll clip that ticket as well. So isn't that an attack on aspiration?

[00:10:45]>> Uh well, once again, you know, I'm not going to add to the speculation about the budget. I think think there are genuine intergenerational issues in our in our budget, in our economy and in our society uh that we take seriously and that we will respond to uh in uh in the budget on the specifics of any policy change. Uh I'm obviously happy to talk about that uh on another occasion.

[00:11:08]>> Well, you might get that question next week. Jim Charas, the federal treasur, appreciate your time. Thank you so much as always.