Speaker 1: From The Australian. Here's what's on the front. I'm christinamiot.
Speaker 1: It's Monday, May thirteenth. Pay us more or prepare for
Speaker 1: a shutdown. That's the warning from the Australian Federal Police Union.
Speaker 1: They're threatening to walk off the job if the government
Speaker 1: doesn't come to the party on pay and conditions, and
Speaker 1: that could leave airports, public premises and even Parliament House
Speaker 1: without protection. You can read that exclusive story by workplace
Speaker 1: editor Ewan Hannon at The Australian dot com dot a U.
Speaker 1: A Chinese researcher based at a Queensland university has been
Speaker 1: fighting deportation for four years. The government wants Jolong Jou
Speaker 1: gone because of his alleged links to weapons of mass destruction.
Speaker 1: Court documents show the researcher is the fifth visa applicant
Speaker 1: to be pursued by the government on similar grounds. Treasurer
Speaker 1: Jim Chalmers says he's got the balance right ahead of
Speaker 1: Tuesday's federal budget, but he'll break from the Reserve Bank's
Speaker 1: inflation forepasts and lean on consumers to do the heavy
Speaker 1: lifting and reduce spending in the second half of the year.
Speaker 1: So what's driving Jim Chalmers and what kind of budget
Speaker 1: will he deliver? That's today's episode. The nineteen ninety six
Speaker 1: film Jerry Maguire opens with a scene in which the
Speaker 1: titular sports agent played by Tom Cruise, has what I
Speaker 1: guess you'd call an epiphany.
Speaker 2: I began writing what they call a mission stepmen, not
Speaker 2: a memo, A mission stepan, you know, a suggestion for
Speaker 2: the future of our company. Night like this doesn't come
Speaker 2: along very often. I seized it.
Speaker 1: Maguire makes copies of his mission statement and distributes them
Speaker 1: to every one of his colleagues in the middle.
Speaker 2: Of the nighties. Even the cover looked like the catcher
Speaker 2: in a rye. I entitled it the Things we think
Speaker 2: and do not say, the future of our business.
Speaker 1: They love it. Management doesn't how long you Jim?
Speaker 3: About a week.
Speaker 1: In the run up to his second federal budget in
Speaker 1: early twenty twenty three, Treasurer Jim Chalmers had a Jerry
Speaker 1: Maguire moment. He penned a six thousand word essay laying
Speaker 1: out his vision for the future of capitalism.
Speaker 4: Well, my essay is all about how we strengthen our
Speaker 4: economy and strengthen our institutions in a way that strengthens
Speaker 4: our society and strengthens our democracy.
Speaker 1: It was also his vision for himself writ large in
Speaker 1: taking up the mantle as Treasurer, Chalmers said he doesn't
Speaker 1: want to be someone who just occupies the office. He
Speaker 1: wants to enable major change, be a big time reformer.
Speaker 1: Now we've passed the halfway mark of Labour's term in government,
Speaker 1: the next election isn't too far off and Jim Chalmer's
Speaker 1: third federal budget will be handed down on Tuesday night.
Speaker 1: The question is if he's lived up to his own expectations.
Speaker 3: I think this budget will be the most important that
Speaker 3: Jim Chalmers has brought down as Treasurer. It's important because
Speaker 3: the economic challenge is really significant.
Speaker 1: Paul Kelly is The Australian's editor at large. He's been
Speaker 1: covering politics and federal budgets for fifty years.
Speaker 3: But beyond that, it's the third year of the first term,
Speaker 3: so I think this budget is going to tell us
Speaker 3: more about the economic character of the government and of
Speaker 3: the Treasurer, and it's going to outline the essence of
Speaker 3: the future growth strategy for Labor which it will pursue
Speaker 3: over the next several years. He's a gifted communicator. As Treasurer,
Speaker 3: he's ambitious. He sees himself operating in the poor keeping mold.
Speaker 3: He sees himself as a reforming treasurer. But his treasurer
Speaker 3: at a very diffu time, a time when the challenge
Speaker 3: of high inflation inhibits and constrains what the government and
Speaker 3: what the Treasurer can do. And the essence of this
Speaker 3: coming budget will be how Chalmers reconcile the economics with
Speaker 3: the politics.
Speaker 1: Looming over all. This is the legacy of another former
Speaker 1: Treasurer and great reformer, Paul Keating.
Speaker 5: Madam Speaker. Last year, the government paid back three thy
Speaker 5: seven hundred million of Commonwealth debt. This year we'll pay
Speaker 5: back even more. We'll be able to do so because
Speaker 5: tonight I am announcing a budget surplus of historic proportions.
Speaker 1: Keating's been back in the news recently for his frank
Speaker 1: criticism of his labor colleagues, but he's been a mentor
Speaker 1: to charmers, even a bit of a hero. The Treasurer
Speaker 1: who's actually doctor Jim Chalmers wrote his PhD on Keating's
Speaker 1: leadership style. It was titled Brawler Statesman, a nod to
Speaker 1: Keating's feisty and ambitious politics. But Keating's day has long
Speaker 1: since passed and the economic, political and social landscapes are
Speaker 1: vastly different now.
Speaker 3: Well, I think there's no harm in comparing them. And
Speaker 3: I think in one sense Jim Charmers invites us to
Speaker 3: compare them. I think that's probably not a smart thing
Speaker 3: for him to be doing, because Keating was treasurer forty
Speaker 3: years ago. It was a different world and it was
Speaker 3: a different challenge. And essentially Keating's reform credentials have been
Speaker 3: unmatched ever since, and I don't think they're likely to
Speaker 3: be matched by the current government, or frankly by Jim
Speaker 3: Charmers himself. And in many ways he might privately agree
Speaker 3: with that particular point, but there's a deeper problem.
Speaker 1: Their sense of destiny might match, but their agendas don't.
Speaker 3: The Keeping agenda was all about creating a new sense
Speaker 3: of Australian based productivity, eliminating in the tariff, opening up
Speaker 3: the Australian economy, giving more emphasis to market forces, cutting taxes,
Speaker 3: empowering the middle class, deregulating the financial system. Now, that
Speaker 3: is an agenda of enterprise based innovation, relying on markets.
Speaker 3: What we now see from the current labor government headed
Speaker 3: by Anthony Albanezi with a Charmers as Treasurer, is that
Speaker 3: there's a greater emphasis on government, on spending, on government intervention.
Speaker 3: We have a government directed new form of industry policy.
Speaker 3: We have a vast array of subjidies and tax breaks
Speaker 3: to encourage renewable energy and achieve the objective of a
Speaker 3: renewable energy superpower. So essentially we've got a lot of
Speaker 3: changes which many people would call reform, and others, particularly
Speaker 3: a columnists, would say their examples of the country actually regress,
Speaker 3: relying much more on old fashioned government's vention in government spending.
Speaker 3: So I think that is the paradox of the Charmers
Speaker 3: Keeping relationship.
Speaker 1: Jim Chalmers has been setting the scene for this federal
Speaker 1: budget for months now. A speech given at the Lower
Speaker 1: Institute in early May, he said this is the most
Speaker 1: challenging strategic environment since World War II, and he's not wrong.
Speaker 1: Inflation is creeping, growth is slowing, conflict is escalating, geopolitical
Speaker 1: tensions are rising, and climate change is accelerating.
Speaker 3: I think what he's getting at and in this sense,
Speaker 3: is completely correct. But this is a very difficult economic
Speaker 3: environment for the government and the reason it's difficult is
Speaker 3: because inflation is still not mastered. Of course, a lot
Speaker 3: of progress has been made, but the last mile in
Speaker 3: terms of beating in flam has not yet been reached.
Speaker 3: So essentially the problem that the treasurerffaces it's the problem
Speaker 3: between putting in place new expansive policies designed to define
Speaker 3: what this labor government stands for and help the Australian
Speaker 3: people on the one hand, and on the other hand
Speaker 3: the fact that fiscal policy has got to do something
Speaker 3: to assist monetary policy and contain inflation, and that means
Speaker 3: there's got to be a limit on how much you
Speaker 3: can spend. So that's the dilemma.
Speaker 1: Coming up. Why Jim chalmers next move is less budget
Speaker 1: and more balancing act, Well, I've got you, don't forget.
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Speaker 1: know it's great value. Check us out at the Australian
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Speaker 1: Last week, Reserve Bank Governor Michelle Bullock sent Treasurer Jim
Speaker 1: Chalmers a warning. She said the RBA would have to
Speaker 1: act if services costs and soaring petrol prices send inflation
Speaker 1: back up, and by act she means hike interest rates.
Speaker 4: We're not ruling anything in or out because things are uncertain,
Speaker 4: but there is just the recent data of just indicated
Speaker 4: to us we need to be a little bit of
Speaker 4: vigilant on this.
Speaker 1: The Reserve Bank's job is to set the cash rate.
Speaker 1: When it wants people to pump money into the economy,
Speaker 1: the rate drops. But when inflation is as high as
Speaker 1: it has been over the past year or so, spending
Speaker 1: is a dangerous game because everything gets more expensive as
Speaker 1: suppliers and service providers work to cover their costs. If
Speaker 1: that's allowed to go on for too long, those prices
Speaker 1: could stay that way. That's called stagflation. So the Reserve
Speaker 1: Bank does the only thing it can do. It raises
Speaker 1: interest rates. So spending is diverted into mortgages and that's
Speaker 1: putting huge amounts of pressure on Australian households. So what
Speaker 1: Michelle Bullock is saying to Jim Chalmers in the nicest
Speaker 1: way possible is don't put too much money in people's pockets.
Speaker 1: Here's Paul Kelly.
Speaker 3: I think the treasure will present the budget as a
Speaker 3: middle course budget, that is, it's an effort to strike
Speaker 3: a compromise between the economics and the politics. Cost of
Speaker 3: living will be uppermost in the budget speech of the Treasurer,
Speaker 3: and he's made it clear that assistance to people managing
Speaker 3: cost of living pressures will be substantial. There's going to
Speaker 3: be a lot for families, for pensioners, for students, for
Speaker 3: young people, for ever industry, for older people. So the
Speaker 3: government will try and in that sense we'll look after
Speaker 3: the community. That's important. But on the other hand, he's
Speaker 3: got to ensure that he doesn't spend too much. And
Speaker 3: I think what we're going to say about this budget
Speaker 3: when we see it on Tuesday is that with this budget,
Speaker 3: the treasure has taken political responsibility for any future increases
Speaker 3: in interest rates by the Reserve Bank, because we know
Speaker 3: that the more spending you have, then the more that
Speaker 3: puts pressure on the Reserve Bank to increase interest rates.
Speaker 3: So the great danger for the Treasurer, the great risk
Speaker 3: for the Albanza government in this budget is that it's
Speaker 3: going to put more pressure on demand in the economy
Speaker 3: and that means if the Reserve Bank does have to
Speaker 3: increase interest rates again, that in political terms, is going
Speaker 3: to be sheeted back to the government. That's the risk,
Speaker 3: that's the gamble.
Speaker 1: In other words, Jim Chalmers will be walking a tightrope
Speaker 1: on Tuesday night.
Speaker 3: I think there are probably two fundamental factors which might
Speaker 3: define this budget historically. First of all, how will this
Speaker 3: budget be judged in terms of combating the central economic problem,
Speaker 3: which is inflation. Now we won't be able to answer
Speaker 3: that exactly on Tuesday night. The answer will emerge over
Speaker 3: the course of the next year or two. And I
Speaker 3: think the second fundamental criteria is that this budget will
Speaker 3: probably have a strong ideological component in terms of outlining
Speaker 3: what labor stands for and what labor believes in. I mean,
Speaker 3: the interesting thing about the budget is the biggest single
Speaker 3: item in the budget in terms of quantum of money
Speaker 3: will be the tax cuts. But the revamp tax announced
Speaker 3: last January, so they're old news, but in actual fact
Speaker 3: they'll be the biggest single item in the budget. And
Speaker 3: that's another item which points to the question of the
Speaker 3: economic character of the government.
Speaker 1: Peter Dutton will have his chance to respond to the
Speaker 1: new federal budget on Thursday, and Paul says the opposition
Speaker 1: leader has some work to do.
Speaker 3: Too, So essentially what you see is you see a
Speaker 3: lot of pretty busy, almost panic work over the Wednesday
Speaker 3: and the Thursday from the opposition leader to sort out
Speaker 3: how far they go and the budget apply. This is
Speaker 3: what it's always like and it won't change this week.
Speaker 3: But the big question is what does Dutton say about
Speaker 3: what the Dutton leadership is about and what the Liberal
Speaker 3: Party stands for at this point in time. What will
Speaker 3: he say about policies, what will he say about tax immigrations,
Speaker 3: about energy and so on? And this is almost the
Speaker 3: tactical dilemma that opposition leaders face with their Thursday night
Speaker 3: reply to the budget. How far do they go now?
Speaker 3: I think Peter Dutton's got to go some way. We
Speaker 3: haven't seen very much at all from the Liberal Party
Speaker 3: in terms of what they stand for in terms of
Speaker 3: their policy roll out. Now that's sensible in one sense
Speaker 3: because oppositions never like to do that too much. But
Speaker 3: on the other hand, I think Dutton's got an obligation
Speaker 3: to give us something and that's going to be the issue.
Speaker 3: How much will he give us? We'll have to wait
Speaker 3: and see on Thursday night.
Speaker 1: Paul Kelly is The Australian's editor at Large. The Front
Speaker 1: will be in Canberra for the Federal Budget tomorrow night,
Speaker 1: and you can follow our experts, reporting and analysis live
Speaker 1: at the Australian dot com dot au