Interview with Tom Steinfort and Sarah Abo, Today, Channel 9

Subjects: housing market, tax cuts, 1 July cost-of-living relief Tom Steinfort: The Labor government is insisting its Budget isn’t to blame for those dire auction clearance rates we’re seeing. To discuss we’re joined now by Treasurer, Jim Chalmers, live in Canberra. Treasurer, good morning to you.

So your government says this slump is predominantly the fault of a 4.35 per cent interest rate, but last year under the exact same rate the market was fine. So what’s changed? Jim Chalmers: Good morning, Sarah and Tom.

A couple of things about that, the point that we’re making, which you can see in the auction clearance rates and in house prices more broadly, is that that reflects a number of factors, including interest rates, and broader economic conditions beyond the changes announced on Budget night. But also, don’t forget as well, when it comes to both of those issues, auction clearance rates and house prices, nationally in aggregate they’ve come up a bit still, a bit more slowly than what we’ve seen in the past.

A couple of the big markets, Sydney and Melbourne, we’ve seen a bit of a softening, but that pre‑dated the announcements on Budget night. So you’re saying that your priority here is to look after first-home buyers. Any given year there’s about 100,000 first-home buyers in Australia, it’s about fairness for them.

What about the 10 million people that own homes in Australia, because that would suggest this isn’t fair for them? Well, the Treasury assumption in the Budget papers is that house prices will continue to grow but a bit more slowly, that’s what we’re seeing nationally in aggregate. But you’re right to say that our changes are all about giving first-home buyers in this country a fair go.

For too long in this country first-home buyers, particularly young people, have been locked out of a really difficult housing market, and so we’re levelling the playing field for first-home buyers, that’s a really important objective – Are you levelling it though Treasurer, or are you – – of our tax changes, in addition to cutting taxes for workers. – I mean you’re tanking it, right?

I mean the market was already slowing, so why hit it with even harder tax changes? Well, first of all, you’re right to point out that the market was already softening, but I wouldn’t share your description beyond that. What we’re seeing – Well, the auction clearance suggests that – – nationally is that house prices have – – it’s worse.

Well, if you look at the auction clearance rates for the weekend just gone, they came up a bit, Sarah, in national terms, in aggregate terms – From a COVID low. – across the capital cities. They were about – they were steady in Sydney and a bit lower in Melbourne, but they came up substantially in Brisbane and Adelaide, for example, and so we need a bit of perspective in that regard as well.

But we’ve been very clear these ambitious tax reforms are about a fair go for first-home buyers, they are about cutting taxes for workers. And if you think about why tomorrow is so important in this regard, tomorrow, the 1st of July, we’ve got a whole range of cost‑of‑living measures coming in, for example, another tax cut for workers tomorrow, boosting wages for minimum wage workers and award wage workers tomorrow, extending paid parental leave, paying super on pay day, extending petrol and diesel price relief as well, and this is all about recognising that people are still under pressure.

Our tax cuts are an important part of that, and those tax cuts are an important part of our tax reforms more broadly. So you speak about fairness on what you’ve done with those tax changes. Let’s have a look now at the widow’s tax, as it’s been called, and what you’re hoping to do there, because there was, you know, a commitment that wasn’t going to be changed with voters as recently as a month ago, I think it was.

Now we’re looking at, you know, if someone’s partner dies that they will then be, while they’re grieving, hit with a tax hit as well. Where’s the fairness there? Well, I think the most important point to make there, Tom, is that we have already made it clear that we will address that issue in the tax changes, we actually made that clear last week.

It’s an issue that’s come up for a little while now, and we’ve been working through it, and when it came before the Senate last week, we made it clear that we will address that issue where there’s joint ownership, and so – But is that fair? – I know that our political opponents – If you’ve just lost a loved one – – will continue to try and – – all of a sudden you cop a tax bill?

No, that’s why we’re – Explain the fairness in that. – no, that’s why we’re addressing it, Tom, that’s why we’re fixing that, that’s why we’re changing that, so that that won’t happen – Why it did slip through in the first place though, Treasurer? – so your question unfortunately – Because I mean your government faces an issue about trust, right, you don’t have the best track record when it comes to keeping your word, so are we just going to take you on your word this time and hope that you deliver?

Well, that’s your view, Sarah, but we’ve made it really clear – It’s your track record. – this is an issue that we will address in the – I heard you – I heard you the first time, Sarah. Yeah, well, it’s not my view just to clarify. We’ve made it really clear that this is an issue that we will be addressing, and it’s not unusual when you’re undertaking big tax reforms, like we are, for there to be consultation, for there to be subsequent pieces of legislation.

That’s what happens every time the tax system is reformed in this country, it’s not especially unusual. But we’ve made it very clear, to go back to Tom’s original question, we’ve made it very clear that this is an issue that we’ll address, this is an issue that we’ll fix, so that in that situation, where there is joint ownership, people can continue to access those concessions.

All right. And finally, the fuel tax discount will be halved from tomorrow. Obviously oil’s hitting a 4‑month low as well.

Are you confident that this is behind us now, the worst of it, on that fuel shock? Well, there’s still a bit of uncertainty out of the Middle East; some welcome developments in the last couple of weeks, but we need that ceasefire to stick, because the oil price has come down a fair bit, that’s a good thing, but we need that to endure. The really important thing we’ve seen this week, actually for the first time since the war began, is that petrol and diesel prices are now lower than they were before the war began.

That’s partly because of our fuel excise relief, which we are extending and tapering from tomorrow. And as I said earlier, that fuel tax relief which gets extended from tomorrow is only one of a whole range of cost‑of‑living measures that come in from tomorrow, the 1st of July; cutting taxes again, boosting wages for people on the minimum wage and on award wages, extending paid parental leave, paying super on pay day, and extending this petrol and diesel price relief, these are all the ways that we recognise people are still under pressure, but more than recognise that, actually delivering cost‑of‑living relief, delivering real change in the tax system as well to help workers and first-home buyers in particular.

All right, Treasurer. Thanks for joining us today, appreciate it.