Interview with Kieran Gilbert, Newsday, Sky News

Subjects: upcoming Budget, tax policy, gas reservation Kieran Gilbert: The Treasurer is with me live in the studio ahead of the Budget. Is it all printed now, done and dusted? Jim Chalmers: Not quite.

We haven’t hit print on the Budget yet, usually over the next couple of days. This one’s been especially difficult to finalise because of these international developments that you’ve been covering through the course of today. Every day there’s been some unpredictability in the global economy and that’s meant that we’ve taken the time to get it right.

We’ve got this big emphasis as well on fuel security and today, gas reservation, for this reason. Because developments in the world are very unpredictable right now and the Budget is partly about making our economy more resilient in the face of all of that. I know your colleagues, Chris Bowen and co., will announce the 20 per cent gas reservation.

I don’t expect you to announce it. But in terms of the context of it, there is the debate about the tax on gas exports. This is a significant move to shore up supply.

How does it affect the pricing and so on? And do you think it satisfies people’s wish to get more bang for their buck on the resources under our feet? I don’t want to steal the PM’s thunder, but there’s been a lot of work going into this from in the Cabinet – particularly Chris Bowen, Madeleine King, Tim Ayres – and they’ll make the announcement very soon.

It’s really all about energy security, industrial capacity, and to try and put downward pressure on gas prices. I know that there’s a debate raging about gas taxes. I understand people have got strong views about it, I understand the arguments.

We reformed the PRRT in the first term to try and get more return for Australians sooner. But there are good reasons, very good reasons, to focus instead on our 2‑way supply arrangements with our Asian partners, particularly our refining partners, and also on gas reservation. This is a really important step that the Prime Minister and others will be announcing today.

It does go to our energy security, which is especially important right now. Does it risk future investment? Some in the industry are saying it could put a damper on investment.

Well, obviously there will be a range of views about that and the industry will have an opportunity to talk through their views about it. But I know, having worked on this with the colleagues for a long period of time now, that it’s very attuned to our international obligations, very attuned to the need for investment, because gas is such an important part of the energy transformation.

So it won’t cool the investment? We don’t believe so. We’ve done a lot of work to take into consideration those kinds of concerns.

One of the things that I want to get your thoughts on is this intergenerational equity piece, because it’s something you’ve been talking about a lot. But if you pull the ladder up on some of the concessions that I’ve been able to, and others able to use, then my kids, your kids can’t use those. So, aren’t you pulling the ladder up on the next generation?

Isn’t it the opposite of intergenerational equity in that sense? Well, I understand your question. Obviously I’m not going to pre‑empt any decisions or elements of the Budget on Tuesday night.

Without backing in some of the assumptions in your question, I think it’s really clear to a lot of Australians that the housing market and the tax system is making it harder for people, particularly for younger people. I think we’ve got an obligation and a responsibility to respond to that in one way or another. It will never be about making judgements about people who have done well.

We want people to do well. In fact, one of our motivations here is to make it easier for more people to get into the housing market. I think any objective observer of the housing market over recent decades would understand that the percentage of owner‑ occupiers has gone down significantly, and that’s – People want to invest as well, don’t they?

So, you want to give them the chance to have a house, invest in one, but are you knocking that opportunity off? You have to wait and see what’s in the Budget on Tuesday night. It’s not that far away.

Now, I’m obviously aware there’s a lot of speculation. That speculation can be right and it can be wrong. I’m looking forward to telling you all about it on Tuesday night, I’ll probably be sitting here when I speak to you or your colleagues on Tuesday night.

But our motivation there is not to make judgments about people who’ve done well, but to make it easier for people who feel locked out of housing because of the way that our housing market and our tax system interacts. Yes, I’m delighted to say you will be speaking to me on Tuesday night. I’m delighted too, Kieran.

Thanks. Looking forward to it. Now, on the tax relief for small business, this loss carry back.

Again, you’re not going to confirm this stuff, I get that. But I guess it goes to one of the pillars of your Budget and you’ve said this publicly, you’ve got 4 of them – tax relief, productivity, fuel security, longer‑term savings. In terms of the productivity story, how important is it that you lift the run rate?

You know, and you love your cricket like I do, this economy needs to lift its run rate, big time. Oh, absolutely. To use another metaphor, we need to lift the speed limit on the economy.

One of the big motivations, particularly of the productivity package, but more broadly is we’ve got to get the place growing quicker with lower inflation, obviously. What we learned in the course of the second half of last year, when that private investment came roaring back in ways that we welcome, it did bring some inflationary pressure. We’ve been upfront about that.

Then the war in the Middle East made that inflationary pressure much worse. So, we need to lift the speed limit in the economy. That’s why there’s been a lot of focus on tax, that’s understandable.

A lot of focus on savings, a lot of focus on fuel security. Those will all be essential elements of the Budget on Tuesday night. But there will also be a very substantial productivity package too.

That’s all about lifting the speed limit on the economy. Part of that is encouraging investment, isn’t it? You’ve got to get business to invest.

Yes, absolutely. Right across the Budget, you’ll see that that’s a very big motivation of what we’re trying to achieve. If you look at what’s happening around the world, people are looking for reliable places to invest their capital.

Australia’s got a wonderful story to tell the world. At a time where there’s all this volatility and all of this churn and change, Australia is a very compelling proposition. The best way to shift productivity in the right direction after 2 decades of underperformance is to get what the economists call capital deepening and that means more investment in things like the energy transformation, the technological revolution, the changing composition of our industrial base.

These are all very, very important ways to think about how we build this economy in a way that delivers higher living standards and higher wages for more people in the future. When you say it’s the most ambitious budget you’ve delivered, is there a reason why? Is there one part of this Budget that you say, that’s the ambitious bit?

It’s ambitious across the board. What I mean by that is a budget might be focused on productivity, it might be focused on tax reform, on significant budget savings and sustainability, on fuel security. This Budget is being asked to do a number of important jobs all at once.

If you think about the developments just in the last few months in the Middle East, that has forced us to recalibrate elements of the Budget, but also at the same time as we’ve held onto this ambition. What people will see on Tuesday night is really a budget which does a lot of different things at once. And are there broken promises?

When you’ve said previously you wouldn’t touch things in the lead up to an election and yet you are going to do it? Do you have to admit that you’ve broken promises? Well, I mean a couple of things about that.

First of all, I’m not going to pre‑empt the announcements that we make on Tuesday night for all the reasons that you would understand. More broadly, and I think I said this earlier in the week and the Prime Minister said this too, there are good reasons to focus in the last election campaign on housing supply. Overwhelmingly, that’s our focus and our priority is on housing supply.

I think it’s very clear that that, as important as that is, we also need to focus on the composition of the housing market. That’s what our 5 per cent deposits are all about as well. So, if we come to a different view in the Budget on Tuesday night – You’ll be up front about that?

We will explain that, we’ll be up front about that. What matters most is that governments take the right decisions for the right reasons, taking into consideration the legitimate pressures and concerns that people are facing. Do they need to go to an election though?

Shouldn’t you take it to an election if you’re going to make a significant change of that magnitude? I think the responsibility is to explain why, if there’s a change of view, why the government has come to a different view, and if there are changes in that regard on Budget night, then that’s what I intend to do. To explain why the government’s come to a different view.

If you think about this Budget and the course of this term in office, in this parliamentary term, we’ve spent the first year delivering on a whole bunch of commitments we took to the people – more urgent care clinics and the like – there will be more ambitious reform coming out of this Budget, and where that has necessitated a change in direction from the government, I will, the Prime Minister will, and others will explain why.

Okay, we’ll talk to you on Tuesday, Budget night. Thanks for your time. Thanks Kieran.