26 October 2022

Subjects: Budget, energy prices, tax reform, cost-of-iving relief, National Housing Accord

Post Budget address to the National Press Club

Subjects: Budget, energy prices, tax reform, cost-of-iving relief, National Housing Accord


Thanks so much, Treasurer. I suppose one of the interesting things about Budget nights is that everybody sort of basically says, “Oh, yes, well they’ve delivered their electoral commitments. We’ll just pocket those and move on to the next subject”, and that’s, obviously, as you mentioned. You talked about structural change in the Budget and the period ahead and you’ve talked about moments of adversity. But do you think the fact that things are so grim accelerates and increases the opportunity to produce very big changes in the Budget? You’ve signalled it has to happen on both sides of spending and tax. Is spending reform more important than tax reform? And do you think the tax system is equal enough? Should there be more equality in the tax system? 


Thanks, Laura. I’ll take that in two parts. First of all, when it comes to our election commitments, one of the heartening things about being able to deliver on the commitments that we took to the last election ‑ in areas like early childhood education and in some of the other commitments that we made ‑ is that if you sat down in the current climate with a blank sheet of paper and wrote the main things that you should do in the environment in which we find ourselves, you would do the things that we had committed to. We’ve got these skills and labour shortages; child care is a big part of that; fee‑free TAFE is a big part of dealing with that; as well as migration. So, a lot of the commitments that we honoured last night were, even absent the fact that we had taken them to the election, the right kind of things for the economic conditions that we confront. 

Now, obviously, we showed yesterday that when it comes to putting the Budget on a more sustainable footing, you need a combination of all the things you identified. You need to trim spending, and we did that by $22 billion yesterday. I pay tribute to Katy and her work, but collectively as well. We can’t find a single saving on the expenditure side in the March Budget, and we came up with $22 billion worth of savings yesterday. So, that’s a big part of the story ‑ spending restraint for all the reasons I ran through in my speech – absolutely crucial. The easiest thing in the world is to get a temporary boost to revenue and turn it into a permanent spending commitment. That’s been happening since Howard and Costello. We were determined to avoid that. 

Tax reform has a role to play as well. And we’ve said for some time that the best place to begin is multinational tax reform and that was in the Budget yesterday. We also extended some of the compliance programs, which have been very effective, and we need to continue to be effective so that people are paying the tax that they are supposed to be paying. And I think we’ve been pretty up front about that in saying, well, that’s how we’ve demonstrated that Budgets can be about restraint and trimming spending and sensible tax reform. And whether there’s two more Budgets in the life of this Parliament or three more Budgets in the life of this Parliament, I think people should expect the same type of combination in the Budgets that we’re yet to hand down as we saw in the Budget yesterday. 


Phil Coorey has a question. 


Thanks, Laura. Treasurer, Phil Coorey from the AFR. About six months ago, we were standing here, and your predecessor was up on the podium talking about his own plan for the recovery and a very heavy emphasis or a very large part of that plan involved the private sector. He talked about business leverage and a time for the government to pull back and let business generate the growth, the job creation. It was the kind of language that was notably absent from your Budget last night and tomorrow you’re about to unveil an industrial relations bill which has got a few people in this room nervous. I was just wondering what, if any, is Labor’s planned role for the business sector, for the private sector, in confronting the challenges ahead? 


Absolutely crucial. And I know that my predecessor talked about that a lot, but what we did in the Budget yesterday is we put our money where our mouth is when it comes to working with the business community. You think about the Housing Accord that Julie Collins and I worked on and released yesterday, with a bit of help from The Herald, and what that was all about was recognising that when you’ve got big challenges in the economy, government typically can’t solve them on their own, often the market can’t solve it on its own, and so you work out what are your big advantages. And our advantages in this country are an enlightened business community – they are wanting to do the right thing – big superannuation, trillions of dollars of superannuation funds and, in this case, a building and construction sector led by the peak industry groups who want to do the right thing as well. So, I see business as absolutely central, absolutely crucial to everything we’re trying to achieve. 

The last time we were hearing these numbers, we brought together businesspeople and unions from all around Australia at the Jobs and Skills Summit that Anthony and I hosted here in this room, and I think that was a demonstration, as was the Budget, as was the relationship that I have with people like Jennifer Westacott and others who I respect greatly, immensely, and spend a lot of time with and have a lot of time for. Business will be crucial to our prospects going forward, and I think what we’ve done around the Housing Accord and other areas shows we don’t just say that; we mean that. 


Clare Armstrong. 


Clare Armstrong from News Corp Australia. A 56 per cent rise in power prices is going to force many Australians to avoid turning on their heater this coming winter. In extreme cases this can lead to loss of life if someone has a chronic illness, and they avoid doing something like this. There’s also already warnings that small businesses and manufacturers may go under as a result of these price increases. So, if the $275 that Labor promised at the election isn’t coming, what can the Government do right now to ensure that people can turn the lights on and that businesses won’t go under? 


That modelling that you referred to was done in 2021, and it referred to an outcome in 2025, and in the interim we’ve got a war in Europe, which is creating absolute havoc in energy markets around the world and pushing up electricity prices here at home. It remains the case that renewable energy is cheaper energy. We see what’s happening in global energy markets is a reason to do more, to get more renewables into the system; our opponents see it as an excuse to do less. So, that’s our starting point. 

What we saw in the inflation number today was, unfortunately, the front end of some of these pressures on electricity prices that you’re right to refer to. A bigger and bigger part of our inflation challenge will be a combination of higher electricity prices and the impacts of natural disasters on grocery prices as well. And that number that we got today, 7.3 per cent, a substantial part of that is electricity and we understand that. And we know that that makes life harder for Australians who are already under the pump for lots of reasons. 

We still expect our inflation to peak around the same level towards the end of the year, but petrol has come off a bit quicker and electricity prices and groceries are going to be a bigger and bigger part of that. In terms of what we do about it, obviously there’s already been a number of steps taken. I pay tribute to Chris Bowen in this regard, bringing energy ministers together, because so much of what needs to be done here happens at the state level. He’s brought energy ministers together. He’s made some progress in the Budget. We did more for our regulators in important ways. 

But as I flagged yesterday and I’m happy to repeat today, I do think there’s more work to be done on the regulatory side, and I’ve been deliberate in not pre empting the specifics of that because it involves a heap of colleagues and it involves governments at multiple levels, but if there’s something that we can sensibly do on energy beyond the substantial steps that we’ve already taken, if we can do that to help take some of the sting out of these price rises, then obviously we’ll consider it. 


Mark Riley. 


Mark Riley from the Seven Network, Treasurer. Just further to Clare’s question and what you’ve said, would a price trigger be one of those sensible solutions to the problem? Has the inflation figure today made redundant the main assumptions in the Budget on prices? And if the 50 per cent increase in electricity does eventuate and the 40 per cent increase in gas, will you consider some form of energy rebate or energy supplement in your next Budget, particularly for low‑income people, pensioners and welfare recipients? 


Thanks, Mark. So, in terms of our forecast for inflation, we don’t expect that to change markedly. What we saw today with inflation was broadly in line with what the Treasury was expecting. The market was expecting about seven, it came in at 7.3 so at the higher end of market expectations, but not dramatically so. 

The upside risk to inflation and to that peak, and some of the things that the Reserve Bank and others will be contemplating, will be whether or not the natural disasters play a bigger role in the timing of that peak towards the end of the year. So clearly in volatile times forecasting is a difficult business to be involved in, but what we saw today doesn’t substantially change our expectations, but the combination of electricity and natural disasters has the capacity to be a little bit worse than what we anticipated last night. 

In terms of the challenge in energy, part of it is gas, part of it is as it feeds into energy more broadly. And we have said on the gas front that we need to build on the good work that Madeleine King did in terms of getting more supply into the market, and we need to now consider the code of conduct, like price, in the gas market. High gas prices are absolutely smashing our local industry and they’re making life that much harder as Dan Walton and others have identified today. We’ve got more work to do there. We’ve said that’s the case, again working collaboratively with my colleagues. 

In terms of the type of mechanism, triggers, caps, other kinds of regulation, I’m not prepared to pre empt any of that or narrow down the conversation today. It does involve multiple levels of government, it does involve multiple ministers, and so I’d rather leave our options pretty open. The same goes for in some future Budget if there is a genuine case to provide support to people differently than what we did last night with our $7.5 billion cost of living relief package. If there’s a compelling case to do that at some future point, obviously we’ll consider it. 


Michelle Grattan. 


Michelle Grattan from The Conversation. Dr Chalmers, I think you said you’re not keen on an inquiry to look at the tax system, maybe because you’ve been through such an inquiry, but nevertheless, Michael Keating, a former distinguished public servant and one time head of Finance, has suggested that there should be an inquiry, firstly, into what revenue we need and, secondly, when we establish that, into the ways that such revenue could be raised. It does seem a very logical way to go about things. What do you think of that sort of proposal? 


I’ve got a lot of time for Mike. I spend some time with him. We correspond from time to time. He’s one of those people who have been around this town for a long time that I consult regularly, whether it’s Mike Keating or Martin Parkinson and Ken Henry from time to time. I think I made it pretty clear and I’ve been pretty blunt about it, but we do need to consider the tax system when we think about long term, sustainable Budget repair. 

As I said in response to Laura’s first question, I think we’d be unnecessarily narrowing the conversation if we said we’ve got this massive structural problem in the Budget. It comes from intensifying spending pressures. It comes from the rapidly increasing cost of servicing the trillion dollars of debt that we inherited. I think it would be unwise to limit our options to just one area of Budget repair. And what Katy and I were able to show yesterday, I think, with the help of the ERC and Cabinet colleagues more broadly, is that you can combine all these things – spending restraint, trimming spending, sensible tax reform and making sure that any new investments that you’re making deliver some economic bang for buck. I don’t want to limit the conversation. 

You’re right to assume partly for historical reasons that I don’t immediately rush for another tax review. Other colleagues might have a view about that as well. But I think we broadly know what the challenges are, certainly in the Budget position. We broadly know what the levers are. And last night we began to utilise those levers, but there will be more to come. 


Patrick Commins. 


Thanks, Treasurer. Patrick Commins from The Australian newspaper. You talk about sensible tax reform, and you also spoke about having a conversation with the Australian people about some of these decisions that need to be made. So, will you be coming to the Australian people in the coming months before the next Budget, trying to develop a tax reform package that you can present to Australians at the next Budget? Are you open to everything? Will it revisit some of your previous proposals, perhaps around capital gains tax, all of those things? 


First of all, I mean, we take seriously the positions that we took to the election around capital gains and some of those other proposals. But I think I’ve made it pretty clear that last night was the beginning, I hope, of the conversation about the Budget position and all the ways we can improve it. And I hope and expect that that will continue in the lead up not just to the May 2023 Budget, but the May 2024 Budget as well. 

I think the days of pretending that we don’t have structural pressures on the Budget are over. And, as I said before, part of recognising this moment, that people are appreciating our willingness to talk up to people not down to people. Part of that is about being up front about the sorts of things that the nation needs to contemplate. The nation does need to contemplate how we trim spending, how we show Budget restraint, and whether we’ve got the best tax system that we can have fit for purpose for the challenges that we confront. 


David Crowe. 


Thanks, Laura. David Crowe from The Sydney Morning Herald and The Age in Melbourne. Thank you for your speech and your remark about putting a preference on the blunt over the polished – a great remark that the journalists of the room can relate to. In that spirit, a question about energy. The Budget papers show a 20 per cent increase in electricity prices this financial year and a 20 per cent increase in gas prices this financial year. Obviously, there’s a consequence in later years but just focused on the immediate, is it now too late to stop that happening or do you actually have levers that can change those outcomes this financial year – 20 per cent on each of those factors? 


Well, I’m pleased you asked that, David, because I think one of the things that’ve been lost in this conversation about the first of those electricity price forecasts is that that is already flowing through. I know that you don’t want a heap of kind of partisan reflections here, but what we’re seeing now in that 20 per cent is part of what Angus Taylor hid from the Australian public during the election campaign. Some of you may recall he made quite an unusual intervention to prevent the publication of the change to the Default Market Offer, and so this 20 per cent that we’re in right now, which is starting to show up in bills and starting to show up in figures, is actually part of that. When the DMO went up, that flowed through to retail prices. And so that is already flowing. And that doesn’t make it any easier for people to deal with. I’m not pretending that. But it is an important qualification. The 20 per cent this year is not from now; it’s over the course of this financial year and it’s already begun. And then we’ve got 30 per cent next year and in gas it goes 20 and then 20. 

What we tried to say about any steps that we could take in this area is we’ve taken a bunch of steps in terms of funding the regulators to do their work, I really pay tribute to the ACCC, by the way, who do incredible work under Gina’s leadership in this regard, and we want to involve them more in the solution than we have even in the past. We’ve taken a number of enormous steps around energy and Chris Bowen and Madeleine King and others have done really important work, but we’ve got more to do but some of these price increases are already flowing. 


Are you up to putting price caps on energy?


A bit like the answer to Mark’s question before. I don’t want to hear nominate a preferred path. It would require a lot of consultation with colleagues and with other levels of government, so that’s the reason why I’m not prepared to be more specific. 


Sarah Martin. 


Okay, given your answer to that, Treasurer, I’ll just try pushing you a little bit more. In terms of the options available to the Federal Government, we already have, as you mentioned with the DMO, effectively a price cap mechanism. What are the problems with how that is currently working, and if that is sort of put in place to ensure that energy retailers don’t go to the wall, what more can the Federal Government or is it really going to be up to the states to pursue reform in this area? 


I’m going to try and make sure that you haven’t wasted a question by saying exactly what I said a moment ago, but, I mean, it is in the same areas. A lot of the regulatory powers are held by the states. That’s just a fact. A lot of the good work that’s happened so far has been because Chris Bowen has taken a collaborative approach to working with his state counterparts in some of the other important areas, and that will be the approach that we take going forward as well. 

I’m not prepared to kind of elaborate on some of the mechanisms that are currently in place or the steps that we might contemplate beyond that except to say, I was asked yesterday in the Budget lockup and through the course of the evening and through the course of the morning and I suspect probably the Prime Minister and the Finance Minister and others were as well: what additional steps could be taken. And I think, I believe that more effective than sending people cheques to deal with it in the near term, that a better avenue for us to explore is on the regulatory side and beyond that I don’t want to limit our options. 


Andrew Probyn. 


Treasurer, the Petroleum Resource Rent Tax designed in the ‘80s has proven itself to be wholly inadequate to capture some of the wealth from this great nation. In your Budget, despite the ginormous prices for oil and gas, it’s going to be – going down only about $2 billion. Now, that well known socialist Rishi Sunak, earlier this year increased the windfall super whatever windfall tax for oil and gas in Britain from 40 per cent to about 65 or thereabouts. Is it about time for you to have a proper look at how much tax companies like Chevron is paying for effectively renting a resource that is owned by Australians? 


Well, thanks, Andrew. First of all, the tax taken in the PRRT goes up in the short term and I do genuinely understand that a lot of people would like to see it go up more. But in the Budget numbers last night, there was an increase in PRRT in the near term but you’re right that it trails away after that because of the assumptions that we make about prices. But it has tracked up over the course of recent history when gas prices have been high. And the other thing to remember is that the broader company tax take is substantially higher too, and some of the companies that we’re talking about are part of that as well. 

You mentioned now Prime Minister Sunak and it’s an opportunity to congratulate him, of course, but also to say that I had a conversation with him when he was the Chancellor at the very beginning of our government; I had a conversation with Rishi Sunak, then Chancellor, about some of these issues, including tax, a brief conversation about it. And different countries make different decisions about how they go about this. In our country, in our case, my predecessor, I think, in a welcome way and I think he did the right thing here, Josh Frydenberg. He began an inquiry into the taxation of gas, PRRT, and there was some fruits of work and then it was paused by Treasury when they were dealing with the most intense part of COVID. And they have or are or about to or have restarted some of that work, and I’ll obviously listen to the advice I get from Treasury as they conclude that work. It’s not currently something that we’re focused on. Our intention and our priority and our focus is on building on the work that Madeleine has done on supply to think about price and to think about the code of conduct in the gas market. 


Karen Barlow. 


Karen Barlow from The Canberra Times. Thank you for your address, Dr Chalmers. The Budget papers reveal a building – a sensitive building of national significance coming into the parliamentary triangle, the National Security Office precinct, 5,000 people to be moving in not very far from here and a price tag I understand with nine zeros on it. Considering ballooning costs of construction, cost blow outs in another building across the lake, and a certain moth, the Golden Sun Moth, how can taxpayers be assured that this unknown Budget will stay in Budget? 


Well, first of all, we’ve got to make sure that our infrastructure keeps up with our challenges and that’s why we need to make sure that we’ve got world class facilities for our national security agencies. Obviously, we are aware of the history of some of these big projects, and it’s not talking out of school to say that the focus that Katy and I have brought to some of these discussions and some of the other colleagues is to make sure that we get value for money and that we’ve got a proper handle on the costs. But beyond that, it’s a really important investment that I support. We need to do this for all of the right reasons, and we will. And we’ll try to deliver it as efficiently as we can. 


Andrew Clennell. 


Treasurer, Andrew Clennell from Sky News. It’s been put to me that the Australian Energy Retailer has warned governments that in the Default Market Offer next year prices could rise as much as 50 per cent. What I’m talking about is a 70 to 80 per cent rise, if you include the 20 per cent, that your Budget may have underestimated next year’s rise by 20 per cent. Given that, wouldn’t that have more of an effect on inflation than, say, a rebate to offset that, given all the price points power bills go through, and isn’t it too late for a cap because of the contracts that have already been signed around electricity? 


First of all, I haven’t seen that AER number, but I think it is worth remembering that the numbers that Treasury put in yesterday’s Budget around anticipated increases in prices for electricity were a national average. It is conceivable that in some parts of the market, it is less than that; in some parts of the market, it’s more than that. But I’m not familiar with that particular number. I don’t think I’ve been briefed on that number. But the numbers as they are in the Budget are confronting enough. 

Your point about whether the horse has bolted, a bit like the answer to an earlier question – I think David’s question – is that some of these price rises are already flowing. We’ve made no secret of that. Part of that was a consequence of what was hidden during the election campaign. We’ll do what we can for all the reasons I’ve described in all the other questions about this. If there’s more that can be done about this, more will be done. We don’t want to limit our options. We want to do the right thing, the right and responsible and sensible thing in the context of price rises in electricity, which are confronting, to say the least. 


Katina Curtis. 


Katina Curtis from The West Australian. In the difficult discussion that we’re going to have over the next six or 18 months, are we back in that situation of everything being on the table that we were in perhaps five or six years ago and harking back to that time, would you contemplate, for example, broadening the base or lifting the rate of the GST perhaps in exchange for the States doing more on the NDIS to ease the federal pressures? 


No, that’s not our inclination. And from time to time that gets put to us and we’ll listen to that respectfully. Occasionally that view gets put by one or another state depending on who the Premier of the time is. And over the 20 or so years I’ve been knocking around this building, from time to time, people make that proposal. We listen respectfully, but that’s not a path we intend to go down. 

As you know, and as you allude to in your question, if you increase the GST, every cent would go to the states, and I know that’s what you’re getting at with kind of a trade off with disabilities, but quite often – not in your question but quite often more broadly when people put this to us they’ve got so many different destinations for an increase in GST that it gets spent four or five times over – Budget repair, more money for the States and other destinations for it. We’re worried about the distributional impacts of increasing the GST. That’s why we haven’t been in the cart. But, again, there are advocates for that. We listen to them. But it’s not our intention. 


Can I just clarify? You’re not inclined to increase the rate of the GST but what about broadening the base? 


No, same answer. 


Charles Croucher. 


Hi, Treasurer. Charles Croucher from Channel Nine. About four minutes ago you said you’re going to have a serious go at being as up front as you can be with Australians. Given that and given there’s probably a one‑word answer to this question, should Australians still expect that $275 off their power bills, particularly off pre election prices? 


Yep, it’s in the Budget. [NOTE – The Treasurer misheard the question]


That was about four words. 


Laura is pointing out I was 400 per cent over! 


Poppy Johnston, AAP. The Housing Accord sets up the architecture to ease housing shortages in the long term, but do you think people also need some immediate relief to the housing stress they’re feeling right now? 


As you know, Poppy, from yesterday and from other times that I’ve raised this, I think the Housing Accord is really important because we’ve got incredibly low vacancy rates, high rents and people can’t live near where the jobs and opportunities are being created. So, that’s what has motivated Julie and I as we finalised this policy working with investors, builders and state and territory governments and local governments. 

You’re right that it takes a little while before it comes in – 2024. But that’s deliberate too. Because we’ve got labour shortages in the industry. We’ve got inflation when it comes to building materials. And there’s an existing pipeline of work. And one of the benefits of working so closely with the building and construction sector is because you understand the shape of that pipeline, and so we want to start in 2024 when that pipeline is expected to trail away a little bit. 

Now, your question about: what do we do in the interim? I think one of the most important things in the Budget, not that I’m taking credit for it as a new decision in the Budget, but there’s a $33 billion increase in the Budget when it comes to payments in pensions as a consequence, largely, of indexation. So, payments like when it comes to rental assistance and other kinds of payments, people on fixed incomes, they get indexed and when inflation is high, the indexation is relatively high. I know people would like more than that, I understand that genuinely, but that’s an important part of the way the Budget works and that’s how the Budget is working right now. It is kicked in extra for people on these payments. 

When it comes to working people, one of the reasons I’m so proud that Tony and I – our first order of business for the Albanese Cabinet was our support for a decent minimum wage rise. That was the first thing that Anthony’s Cabinet decided, and I took that through with Tony – first order of business. And that’s important too because we want wages to keep up to the extent that they can. For people who are on low and fixed incomes, those two things working together – indexation and minimum wage increase – we hope makes it a little bit easier. Not easy enough, but a little bit easier. 


Amanda Copp. 


Amanda Copp from the Community Radio Network. The Nationals have accused this Budget of leaving regional Australia behind. Are they right? And the bulk of your Budget commitments for regional Australia focus on infrastructure programs. I’m thinking roads, renewable projects, but how are you delivering services for regional areas? I’m thinking specifically about access to doctors, health care and child care programs as well. 


I’m glad you asked, Amanda, because this line that the Nationals are running is complete rubbish. There is a huge amount of investment in regional communities and a massive amount. Seven hundred and something different investments in the regions including across some of the areas that you identify, projects as well, and all we’ve done in the Budget is we’ve introduced a level of rigour and robustness to spending in regional communities. 

You know, as a Queenslander who knocks around regional Queensland a lot with my colleagues from the Senate and with others, I know how important regional infrastructure is and regional services are. It’s ingrained on my brain. That’s why this line that’s been run that somehow, we’ve gone after the regions in this Budget is rubbish. There’s a lot of investment in the regions – project and services, both sides of that equation. But what we’ve tried to do is we’ve tried to work out – where Barnaby Joyce has been travelling around writing comments on the back of coasters or issuing press releases, we’ve tried to say, “Okay, well, is there a business case for this? Is there a level of rigour?” And, you know, where there isn’t, we might have delayed some spending. And I think that’s the right and responsible way to go about it. 

The other thing I would say about it is this: and it’s not just in this area but really right across the board. We are engaged with local governments and with state governments about how the Federal Government plays an active role in delivering projects and services in regional communities. And the October Budget that we released yesterday had some necessary tidying up of some of those programs, long overdue, but it doesn’t mean that there won’t be new investments in regions in subsequent Budgets as well, and that’s important too. 


Pablo Vinales.


Pablo Vinales, SBS World News. A key mantra of the election “was no one held back and no one left behind”. Can you say to the Australian people given the massive cost of living pressures they’re facing, which you’ve admitted can’t all be addressed, that this Budget does just that? 


Absolutely, because the most damaging thing for people on low and fixed incomes, the worst thing that could happen to those who are at risk of being left behind in this country is if we let inflation get out of control. Inflation inflicts a hammer blow on Australians but particularly vulnerable Australians. And why everything I ran through in my speech is so critically important to this is – we can provide cost of living relief, we’ve got the indexation, we’ve got the minimum wage increase, all these things are important, but the most important thing is we don’t add to this inflation problem because inflation punishes the most vulnerable, the most – it helps but you don’t need to be a Labor person to recognise that. I recognise that. So, we’re not going to leave people behind to fend for themselves against this inflation threat which stalks our economy. It is public enemy number one. It’s our highest priority to deal with it. It’s going to get worse before it gets better but it will get better, and what we’ve done in the Budget is not add to the problem. When it comes to not holding people back, we’ve got this incredibly aspirational agenda around skills and training in so many different ways, because as we deal with these inflationary pressures we can’t forget the reason why we’re here in the first place, which is to provide more opportunities for more people in more parts of Australia, and the Budget does that too. 


We’re conscious that you’ve got to get to question time soon. 


I’d rather hang out with you, but I don’t think I have a choice!


We are more fun. Our question time is more fun than theirs! But Julie Hare will ask you the last question today. 


Thank you, Dr Chalmers. Julie Hare from the Australian Financial Review. I would like to speak to you about the robust and very buoyant jobs market. There are 20,000 new university places in the Budget and 180,000 new free TAFE places. There’s an established countercyclical trend in that the more buoyant the job market the less likely people are to go to university or to TAFE. I’m wondering if there’s going to be an oversupply of education and training places and where these people are going to come from, especially to fill places for child care which you’re going to need by next July. 


I wouldn’t think there would be an oversupply of training. One of the big conclusions from the Jobs and Skills Summit we had here is that we haven’t trained enough people for these opportunities. The opportunities are obvious. They’re overwhelmingly into the future they are in areas like the care economy, as you rightly identify in your question. We need to train more people. What we also need to do and Clare O’Neil’s work in her migration review, working with Andrew Giles and others, is important here too. Sometimes we think in this place that if you have got labour and skills shortages, you’ve got to choose between training or migration or child care and participation or some other thing. The reality is the situation for employers trying to find workers is so substantially challenging that we have to find a way to act on all those fronts simultaneously. 

One of the reasons I’m so proud of our early childhood education changes, the biggest on‑Budget investment in the Budget, is because it’s cost of living relief but also because too often in this conversation about how we fill skills shortages we ignore new parents and particularly new mums. So, paid parental leave and early childhood education are important there. Clare O’Neil’s work on migration is incredibly important and we took some steps in the Budget, including trying to clear that visa backlog. We need to train more people and we need to make sure that the people we train are relevant to the opportunities the economy is creating. 


Please join me in thanking the Treasurer. 


Thanks, Laura.