Interview with Waleed Aly, Rachel Corbett, Carrie Bickmore and Peter Helliar, The Project, Channel 10
And the Treasurer Jim Chalmers, joins us now. Thanks so much for your time. What exactly are you going to do about these energy prices?
Thanks Waleed, and hello everyone. Obviously in the Budget that we put out this week, there was difficult news when it comes to energy prices, and I think most of your viewers would understand that a big part of the story here is the war in Ukraine, which is pushing up prices around the world, but it's felt around the kitchen tables of Australia. And so we've taken some steps already. Obviously, our overwhelming priority is to get more renewable energy into the system because that's cheaper energy. We've also taken some steps to try and empower the ACCC and some of our regulators in these areas, particularly around gas. But we're also in the process of considering a broader range of options to see whether there's anything else responsible that we could do in energy markets to try and take the sting out of some of these price rises.
I understand you have to consider options, but it does sound, from what you say, that you don't actually have a plan yet.
We've already got a plan on the renewable side, we've already got a plan on the regulators’ side and there's funding for the regulators in the Budget. But I've just tried to be upfront with people yesterday and today and say that there is more work to do on the regulatory side, but because it involves a bunch of my colleagues, including the Energy Minister, because it involves states and territories who actually control a lot of the regulation of energy markets, then obviously we've got a bit more work to do. We'll do that in a considered way and not just kind of announcing stuff on the run.
You say that our viewers would be aware of the war in Ukraine, indeed they would, and that has a huge impact on energy prices. But they would also be aware that while that war was going, you promised that energy prices would fall $275 in the election campaign. Was that a promise you were never really in control of and able to keep?
What that number refers to is the modelling that we did in 2021 before the war in Ukraine, and the modelling referred to an outcome in 2025. So between ‘21 and ‘25 we've got this war in Ukraine. We're not going to pretend that doesn't have an impact. And the other big thing which is impacting here is our energy markets are more vulnerable to these global shocks because we've had almost a decade now of stuffing around on energy policy and all these kind of chopping and changing which has created this energy market chaos. We've had years now where lots of capacities coming out of our system and not a lot is going in and we need to fix that. That's central to our plan.
I understand that, but that critique you make - sure. But you repeated that promise when the war in Ukraine had already started. And all the criticisms you want to make about our energy markets and investment in renewables, that was all true at the point that you made that promise. You said that you’d do something on wage growth. You now concede that wages are going to go backwards until 2024. Joining the dots here, they do seem like promises that weren't attached to reality.
I think people would understand that when you get modelling done in November or December of 2021, which doesn't anticipate a war in Ukraine, that has obvious implications.
But you’re promising it in 2022. So the modelling fine, but you were still promising it in the election campaign.
We were referring to modelling that was done in 2021. I genuinely don't want to quibble on that point. Waleed, I know the point that you're making. Our response to that is firstly, renewable energy is still cheaper energy, that's why we need more of it. The war in Ukraine is obviously having an impact and we can go back and forth on that if you like. But then thirdly, the fact that we haven't got energy policy right as a country over the past kind of wasted decade of missteps in energy policy, has made it harder to deal with these circumstances. And I know that the kind of electricity price rises which were forecast by the Treasury and released in the Budget yesterday are confronting for people, they're confronting for everyone. They are a bigger and bigger part of our inflation problem. They're a bigger and bigger reason why inflation is higher than we'd like, for longer than we'd like. And that's why we're contemplating some of these other options.
You talked last night about hard decisions and one of the criticisms about last night's Budget is that those decisions have been kicked down the road. What are some of the tough decisions that you've made for this Budget, do you think?
We made $22 billion in savings in the Budget. The last Budget in March had $0 of savings in terms of spending. And so that gives you a bit of a sense, an extra $22 billion in savings is not easy. Those are difficult decisions because you're delaying or cutting spending which has been committed at some point during the election campaign or in some other way. So that's not easy. But the other thing, which is kind of hard to boil down into a ten or 20 second answer, but when you're getting this big surge in tax revenue from our commodity prices being higher than anticipated, then you've got a choice. And one of the hard decisions that we had to make was to let that flow through to the Budget so that we're not making inflation worse by spending too much, and so that we're getting some of our debt levels down. Because one of the fastest growing areas of government spending in the budget that we inherited is actually the interest rates on the trillion dollars of debt. And so what we've been able to do in the Budget over four years is get debt down. That means we're borrowing less and we're investing it more wisely.
We just heard from disability advocate Ellie before. She was extremely angry and upset. Can you promise people like Ellie that you are going to balance the book so the NDIS is sustainable?
My promise to Ellie and to everyone on the NDIS, is we want to make the NDIS as good as we can for Australians with a disability and their families. We created it. We think it's crucially important that we provide that support. In order to do that, we've got to make sure we're getting value for money. We've got to make sure there's no rorting. My colleague Bill Shorten is doing a great job at getting to the bottom of some of these issues around sustainability. In order to make it as good as it can be, we need to make sure that it's efficient and getting value for money.
Yes, exactly how? Because you look at the figures and the money you want to reclaim from rorting, I think, comes to something like $290 million. The budget for one year of the NDIS, this financial year, I think, is $35 billion. It's a drop in the ocean. If you're talking about trying to get it back from rorting, you'd need something more comprehensive than that, wouldn’t you?
I think it's not a bad start. We've only been in office for five months or so. That's a reasonable start to be thinking about recovering some of those rorted funds, because we don't want to see money wasted anywhere in the Budget, but particularly when it comes to the NDIS. And Bill Shorten, who is the relevant Minister has got a couple of processes underway, including the original architect of the NDIS and another colleague going through the NDIS to make sure that it's got people at the centre of it, but also to make sure we're getting value for money.
Treasurer, this is your first Budget. It's a big milestone. Congratulations. People have different ideas whether they like it or not. I know after every Viral Wednesday, I go home and I have a nice glass of wine and I relax. Okay, what did you do? Did you smoke a cigar? And if you did, did you make sure it was indoors?
I didn't. I snuck into my apartment so I didn't wake up two visiting kids. I nodded off and what felt like five minutes later, my alarm went off again and I did a whole bunch of media this morning. I'm going to try and have a swim in the ocean on the weekend. That's the thing I've got in my mind, the thing that I'm really looking forward to. If I can get into the ocean at Southport or Maine in Southeast Queensland for half an hour on Saturday morning, that'd be a win.
It's a long way to go for a cigar.
It’s a very ‘rock and roll’ lifestyle, isn’t it.
I'm not a big cigar guy. I'm not a big cigar guy, as you've probably concluded.
Treasurer, thanks very much for your time.
Thanks for your time.