Interview with Steve Austin, Brisbane Mornings, ABC Radio

Subjects: Queensland Budget potential credit downgrade, Commonwealth’s support for Queenslanders Steve Austin: Five minutes past 10, broadcasting live from the Grand Plaza Shopping Centre at Browns Plains. Well if you open – so I went to the local newsagent there at Grand Plaza and grabbed 3 newspapers. The Financial Review The Australian The Courier Mail , and let me read you the headlines in different of the pages.

First of all, the Fin Review says ‘Queensland faces credit rating downgrade, amid budget feud’. The Aus says, ‘states furious at stamp duty hit’, and the Courier says, ‘stamped out’. Three newspapers all detailing what the state of Queensland and the Treasurer of Queensland, David Janetzki, is apparently trying to lay at the feet of my next guest.

He’s the federal Treasurer of Australia, Jim Chalmers. Jim Chalmers, thanks for coming back to your neighbourhood. Jim Chalmers: Well a big thanks to you and your team for coming to Logan City here at Browns Plains Grand Plaza.

First of all, as far as I can work out, S&P Global or any of the ratings agencies have not yet actually downgraded the borrowing or the status, the AA‑plus rating of Queensland yet apparently it’s on. Can you confirm it, yes or no, Jim Chalmers? That’s not for me to confirm but they have been saying actually for, I think at least 12 months, maybe 18 months, certainly well before the Commonwealth Budget that they may need to downgrade the Queensland Government’s credit rating.

And whether or not that happens today or at some subsequent point, they have made it very clear that that’s the direction of travel. And so the contrast is the same ratings agencies, S&P Global, Moody’s, only a couple of weeks ago they confirmed that the Commonwealth budget is AAA but they have been saying for some time that the Queensland budget is at risk of a downgrade.

Okay it’s easier for the Commonwealth because you have taxing powers but the state doesn’t. But yesterday in Question Time you had a swipe at Queensland state government, why, Jim Chalmers? Well the point that I made in question time and the point that I would make today is, you know, as a Queenslander and as the Treasurer, we have been investing billions of extra dollars in Queensland.

Billions extra for hospitals and schools and roads, Urgent Care Clinics. The revenue for Queensland, whether it’s Commonwealth revenue like the GST, whether it’s the state‑based revenue like stamp duty, that’s all up. Billions of extra dollars into the Queensland budget and so the point that I’ve made is, it is concerning with all of that extra Commonwealth money being invested in Queensland for good reason, reasons I’m proud of, to see the Queensland rating under such substantial pressure.

The Queensland state Treasurer, David Janetzki, has been warning ever since he came into office that there was the possibility of a ratings downgrade because of the situation that was bequeathed of the new government by the previous state Labor government. Do you accept that scenario at all, Jim Chalmers? Well, unfortunately he’s contradicted himself.

Because yesterday and today he said that it’s the Commonwealth Budget’s fault which was in May of 2026 but on other occasions including deep into 2025 he said that the ratings were already under pressure and that’s the truth. That’s right. Well before the Commonwealth Budget, the Queensland Budget was a source of considerable concern for the ratings agencies.

The result of the previous state Labor government, Jim. Well, I think every budget around Australia, including certainly the Commonwealth budget, is under pressure for one reason or another but the Queensland budget is not under pressure because of the Commonwealth, on the contrary – Look, I’ll get to the Commonwealth – Well that’s my responsibility. Okay.

So you are not going to answer the question about the previous state Labor government and the amount of debt – I think I have by saying that state budgets under governments of both political persuasions have been under pressure for some time in the same way that the Commonwealth budget has. But it is completely wrong, utterly and absolutely wrong, given all of the extra billions we have been giving to Queensland and the fact that stamp duty for example is up 58 per cent over the last couple of years just in Queensland, to say that it’s because of stamp duty or because it’s the Commonwealth government.

There are lots of reasons why the Queensland Government is under pressure, but the Commonwealth is not one of them. Federal Treasurer Jim Chalmers is my guest. This is 612 ABC Brisbane broadcasting live from the Grand Plaza Shopping Centre in Browns Plains.

The Commonwealth has taxation powers. The state does not. So, the state relies on things like land tax and stamp duty.

Now the argument from the Queensland state government appears to be that since you made changes around housing investment, as you know the housing market is taking a turn for downward, whether that’s just a reaction or whether that’s a direct cause of your policies, nevertheless the housing market is taking a downturn and that is reducing the amount of stamp duty available to the Queensland state government.

Do you accept that? Look, there a couple of elements to your question. I mean, first of all the states do have some taxing powers.

Stamp duty for example is a state tax. They get every cent of GST revenue and GST revenue has been coming up in Queensland as well so on the taxing point, I wouldn’t entirely agree with your point. When it comes to the housing market, the housing market has softened, it’s been softening since the beginning of the year because of interest rate rises and other – [inaudible] Says it will be the biggest downturn since 1998 in Australia.

Well that’s his opinion, but – Somewhere between 13 to 15 per cent downturn? Well, if you look at some of what the banks are saying about house prices, obviously they’ve come off a bit, most of the bank forecasts have house prices growing again next year. And the point I’d make about the changes we made in the Budget were to judge them over the next couple of years not on the past couple of months.

That’s another really important point. But on stamp duty, as I said before, stamp duty in Queensland is up 58 per cent over the last couple of years and the ratings agencies have been saying over that whole period that the Queensland rating is under very substantial pressure and so I think it is again completely wrong to pretend that changes in taxation policy to make it fairer for first‑home buyers is to blame for a Queensland Budget which has been under pressure from the ratings agencies for at least a year, maybe 2.

As federal Treasurer you introduced a number of cost‑of‑living measures as you called them, which was taking public money and putting it in certain areas to alleviate the impact of the cost of living. The Queensland state government’s been doing the same thing. So where do you suggest then that the Queensland state government should cut back their spending, Jim Chalmers?

Well it’s not for me to tell them how to run their budget. You are criticising them. No I’m pointing out that David Janetzki, frankly is lying when he says that the pressure on the state budget is because of the Commonwealth.

The Commonwealth has been piling billions and billions of extra dollars in to Queensland for good reason, reasons I’m proud of. That’s the point that I’m making. So what should they cut?

Well again I’m not going to tell them how to manage their budget, I’ve got to manage my budget. You mentioned the very substantial cost of living relief that we are providing, we are doing that in the context of a AAA budget. Our budget has been confirmed as AAA at the Commonwealth level by 2 major ratings agencies in the last few weeks alone.

Now let me localise this for you, Steve, because you have been good enough to come to Browns Plains. Just around the corner here literally just around the corner, only probably a few hundred metres away there’s an Urgent Care Clinic that’s funded by the Commonwealth to make it easier for local families like all of these families and pensioners to find a bulk‑billing doctor.

Now by doing that, by the Commonwealth doing that, it provides cost‑of‑living relief, makes it easier for people to see a doctor, but also takes pressure off Logan Hospital and QEII hospital which takes pressure off the Queensland budget. And so we are doing our bit, investing billions of dollars in hospitals and Medicare and roads, making it easier for people to find a bul‑ billing doctor and so all of these things are reasons why we are helping Queenslanders with the cost of living.

At the same time as we should be helping the Queensland budget. It’s for the Queensland Treasurer to explain why, with all of this extra Commonwealth funding, his rating is still under such substantial pressure. So I want to understand you clearly, Jim Chalmers, federal Treasurer of Australia, accepts no blame or responsibility for a Queensland ratings downgrade by the credit agencies?

I take responsibility for my budget. For the budget that I run – – Nothing for Queensland? No, the rating is under pressure for a whole range of reasons and none of those reasons are the Commonwealth.

The Commonwealth is piling billions of dollars extra into Queensland. Stamp duties has come up in Queensland, the GST has come up in Queensland, there are billions of dollars extra available to the Queensland budget. There are reasons why their credit rating is under pressure, but the Commonwealth Budget is not one of them.

You would be well aware that there’s an enquiry underway both now in Victoria and here in Queensland into the CFMEU. And the early evidence is that the previous state government pumped billions of dollars of tax payer money to, for some reason alleviate or protect or boost or assist or mollify the CFMEU with public money. I want to get your take on how you see those actions, Jim Chalmers, because that was tax payer money.

Yeah, well I can speak for what we’re doing to address the problems with the CFMEU. I mean, as a federal government we’ve come down on the CFMEU like a tonne of bricks. You know we were the government that put them in to administration, you know something the earlier governments of other political persuasions haven’t done.

That’s true. So we have recognised the big troubles in the CFMEU and we’ve actually done something about it. Okay fair enough that’s true.

And the new CFMEU administrator has made attempts to try and point out that they’re different now. Time will tell. So let me take you, so Jimmy sent a question in, he’s a listener, he says ‘Hundreds of thousands if not millions of Australians have a mortgage.

If you look at their cash position they went far deeper into debt over 20 to 30 years than they had the money to repay it ‘. Do you agree with that, Jim, do you think Australians have got themselves in too deep on their personal mortgages, Jim Chalmers? Well, I certainly think it’s true that a lot of people are struggling with big mortgages and really for the last 25 years or so we’ve had house prices growing at about 400 per cent, wages growing about 200 per cent over that quarter of a century and so that has heaped the pressure on people with big mortgages and it’s made it harder for people to buy their first home.

That’s really the main motivation for the tax reforms in the Budget, to try and level the playing field between investors and people who are trying to buy a home to live in and that’s why we’ve taken these difficult decisions that we have because we recognise that people are under pressure and when interest rates go up it piles on the pressure. And interest rates are going to go up more.

Well I’m not going to make a prediction about that, no treasurer does that for good reason. Well you will be able to in a week or 2. But I can make the point that obviously the 3 rate rises in the system already from this year are adding pressure to people and no doubt there are people shopping here at Grand Plaza today who are under additional pressure because of those rate rises.

Flagstone, you could buy a house for $400,000, now you can’t get one for less than $800,000. That’s your area, I think Flagstone is your area? It’s just outside but I understand your point and I heard you talking to John Raven, our wonderful mayor about that a moment ago.

And whether it’s Flagstone or any part of my electorate or indeed any part of Australia, house price growth has been an enormous challenge and that’s why we’re actually delivering real change in the tax system and in the housing market. For too long people have been locked out, particularly younger people and first‑home buyers, and so we are making it easier for first‑home buyers to buy a home to actually live in.

And that’s why we’re making it fairer when it comes to the big subsidy that we’ve been providing investors over the last quarter of a century or so. I want to ask you a question that Ellen Fanning asked you last week. She tried to get you as a Treasurer of Australia to define a battler because your electorate has often seen electorate of battlers.

What is a battler, Jim Chalmers? Well I’ll give you the same answer I gave Ellen, which is – – Oh great. Well I heard you commenting on that.

You’re a politician, Jim, give me a straight answer. Let me explain why. Let me give you my answer.

I don’t really – I’ve got a figure for you. $80,000 and you have to work and your partner is working and you’ve got no choice. You’re a wage slave, $80,000 you’re a battler.

If you’re a tradie you are not probably a battler, you’re earning more money than I am. Yeah, look, the reason why I’ve come at it the way I have rather than the way that you or Ellen had is because I don’t like putting labels on people. I think a lot of people are battling.

I mean you’re right to say that a lot of people are battling. And rather than spend all of my time trying to label or define people who are under pressure I’d rather try and actually deal with the challenges they’ve got. That’s why I’m cutting taxes, that’s why I’m building Urgent Care Clinics – – You’re taking more income tax than ever before.

We’re cutting taxes. Five times. Five income tax cuts, our political opponents voted against those tax cuts – – But they lost, they’ve learnt that lesson haven’t they.

I’m not sure they have. I’m not sure they have. But to go back to the substance of your point.

There are a whole range of reasons why people are battling and that plays out in financial pressure, also I think time pressure is a big part of the reason why people are battling. And that’s why, whether it’s our efforts in early childcare, whether it’s our tax cuts, cheaper medicines, more bulk billing, higher wages, what we’re doing in the housing market, all of this is about not labelling the pressure that people are under but actually trying to do something about it.

Are we getting a recession, Treasurer? Not our expectation, no, not something that the Treasury is forecasting or expecting. We expect the economy to continue to grow.

In fact in those numbers we got in the last couple of weeks we actually had the fastest economic growth, equal fastest of any major advanced economy. But we got some pressures too. I mean if you think about for example the global pressures, the war in Iran has been an absolute disaster from an economic point of view, a global economic point of view playing out here in Australia as well in terms of inflation and growth.

So there’s no shortage of challenges in our economy but we are actually better placed and better prepared than other countries to deal with it. We’ve got some serious issues around inflation, productivity, global volatility and the government is very focussed on trying to help people navigate all of that. So that sounds like a recession to me.

No I think I said at the start of my answer, unless I’ve remembered it wrong – No I take your point but that sounds like a recession. May not technically be there but because of the international circumstances, and this, that sounds like one. Well certainly the global situation is as dangerous as it has been for a while now.

You know this war in Iran has dragged on now for more than 6 months. The longer it drags on and drags out the more pressure it puts upwards on inflation and downwards on growth around the world. That’s fair.

I mean right now, for example, every major advanced economy right now, the market expects interest rates to go up. In every major advanced economy, inflation has gone up I think in 6 of the G7 countries in the most recent data. And so all of that tells us that from an economic point of view the war in Iran has been a disaster.

And so we’re all dealing with that in one way or another. Final question; when do you expect to get together with David Janetzki, Queensland’s Treasurer? That’s a great question, Steve, because I caught up with him a couple of weeks ago.

This is not a personal thing. Over the last 4 years when people ask me about state treasurers and state budgets, whether they’re from the blue team or the red team, I’ve said essentially the same thing, which is to recognise that everyone’s budgets are under pressure, to not give people free advice about it. The reason why I’ve said what I’ve said yesterday and today about the Queensland budget is because I don’t want this lie to take hold that the Commonwealth hasn’t been investing enthusiastically in Queensland when we have.

As a Queenslander and as the Treasurer, Queensland is always going to do really well out of this Albanese Labor government so I’ve pushed back on that but in personal terms I work closely with David and the other state treasurers, we meet from time to time, I don’t mind him. We have a civil, respectful, working relationship but on this he’s completely wrong. And so it should be okay for me to point that out.

Jim Chalmers, thanks for your time. Thanks so much Steve.