Author: MIL-OSI Publisher

Source: Australian Parliamentary Secretary to the Minister for Industry

Mark Kenny:

G’day there and welcome to Democracy Sausage from the Australian National University. I’m Mark Kenny director of ANU’s Australian Studies Institute and I’m delighted to welcome back to Democracy Sausage federal Treasurer, Jim Chalmers. G’day there Jim.

Jim Chalmers:

It’s nice to see you again, Mark, thanks for having me back on your podcast.

Kenny:

It’s a great pleasure. There’s a fair bit happening in the world, it seems like the pace of events is such really, I don’t know. You have spoken about this, written about it a few times as well, the rate of change, the number of events that are happening globally and the significance of them and the combination of them. I think and the way things tend to sort of – we end up with these compound problems, don’t we, or compound challenges. I wonder how tiring that is for you but also how in a sense it makes things feel like they are moving so fast.

Take the election for example, a big moment in Australia and a huge historic result as you were, I think, at some pains to grapple with as the numbers tumbled out on election night as you were sitting there on the ABC. But the election itself even seems – even though the 48th parliament hasn’t sat yet – the election feels likes it was quite a while ago now.

Chalmers:

Old news.

Kenny:

It’s extraordinary, isn’t it?

Chalmers:

It really is.

Kenny:

And not in a good way necessarily because most of these events we’re talking about aren’t things that we would automatically dial‑in if we could. Wars breaking out and various calamities, environmental and so forth. How does it feel to you? Does it feel to you like, in politics now, there’s this sense that governments age more quickly because of, just the sort of cadence of events and exposure, and having to explain it and navigate it all?

Chalmers:

It feels almost exactly as you’ve described it, the pace of change and churn is accelerating. And in my part of the shop I think about the fact that even in the last not even 2 decades we’ve had 4 major economic shocks now – a GFC, COVID, an inflation shock and now the shock that comes from these escalating trade and geopolitical tensions. And so the world is moving fast, the global economy is in lots of ways a perilous place because of this cascading change that we’re seeing that we need to respond to.

And so I do feel like our responsibility really in this environment is, there’s an element of making our economy more resilient in the face of all this uncertainty and volatility but also a sense of working out how do we make our people, our economy, a beneficiary of all this churn and change.

It would be naive I think to assume that this change is temporary, short term and that we will return to some long period of normalcy like we saw after the end of the Cold War. And so this really dominates our thinking – the international environment, the pace of change, the way that change is accelerating really is the primary influence on the way we think about this second term.

Kenny:

Yeah you have written about this in the past. You’ve got a reputation, quite rightly, as a thinker and someone who reads a lot and thinks a lot about the big historical trends and the forces that are happening underneath it. How do you reflect on that period that you talked about – that you just made reference to – the period after the Cold War? Of course we always hear it described as framed by the end of history argument and all of that. Now sort of, I suppose, what are we, quarter of a century after the 90s have ended. How do we look back on that now? How do you look back on it?

Chalmers:

Well I look at it in sort of 3 periods. There’s the period from the end of the Second World War to the end of the Cold War.

Kenny:

Which we are saying is about sort of ‘89, ‘90 that sort of time.

Chalmers:

Yeah, that’s right. And you know momentous change in that period, dominated by the Cold War essentially. Then you had the end of the Cold War until the GFC, and others have described that as the Great Moderation.

Kenny:

I suppose you’d say until September 11 though wouldn’t you almost –

Chalmers:

Yeah in security terms, you’ll forgive me for having sort of an economic lens –

Kenny:

– an economic frame, yeah.

Chalmers:

But sure in the first decade of the 2000s, the world changed dramatically and the thing for us as Australians is we were among the primary beneficiaries of that period of moderation between the end of the Cold War and the early 2000s. We, the Australian economy, partly by choice, by intelligent policy choices in the ‘80s and ‘90s but also the way that the world was structured was very beneficial for Australia.

And now we think about these 4 shocks in 2 decades and also against the backdrop of all of this technological change, demographic change, our industrial base is changing and the world is fragmenting. And so now we have to work out collectively, not just as a government but as Australians, how do we become the primary beneficiaries of all of this churn and change in the same way that we were the primary beneficiaries of that period of calm from the end of the Cold War.

Kenny:

Yeah, because during that period I suppose the rules held. There was a thing called the international rules‑based order, there was a sense in which there was at least a predictability about the framing of whatever might happen. Whereas now we don’t have that. We have this sort of sense of, particularly with the US being in a sense the chief architect and enforcer of that international order, having itself begun to walk away from it in quite dramatic ways, economic ways of course with tariffs and everything which we can come to.

But that really – on top of things like pandemics and financial crises and the like – it really makes it, it means that we basically now have what replaced the predictability of the rules is the unpredictability of what follows, almost as a permanent dynamic.

Chalmers:

I think that’s a good way to describe it. Unpredictability is a good way of thinking even about these trade tensions that we’ve got right now because from day‑to‑day, week‑to‑week, the state of the negotiation between the US and China is changing. It’s the unpredictability that is making people wary, making investors wary and decision makers wary. It’s the sense of a lack of stability and predictability, I think as you rightly point out.

And we’ve got this big fragmentation in the world and we shouldn’t over‑interpret that but we shouldn’t under‑interpret it either. The world is fragmenting, it has a huge influence on how we think about our own economy. And again it’s against these – we’ve got all these short term volatility – we see the gold price, the oil price bouncing around, stock markets have been bouncing around before and since so‑called Liberation Day, but that kind of masks a bigger structural change in the global economy.

There’s a big change in the way that the world conducts its business now. And the responsibility on us as decision makers in government, but also in the private sector and the community more broadly, is to work out how do we make our people beneficiaries of that rather than victims of it.

Kenny:

And as you said in the early 2000s for example we were in a very good position to be beneficiaries. I remember covering budgets during that time and they were constantly framed by revenue upgrades, mostly from resources, and the budget was constantly in better shape than it was predicted to be.

Now we are talking about a different world, much less predictable one. But I think I’ve heard you say, and I put the question to you I suppose rhetorically but where would you rather be in the circumstance that we’re in now, would it be Australia or somewhere else? We are still pretty well positioned.

Chalmers:

For sure. I hope it’s not talking out of school, but when Governor Phil Lowe and I used to go to these G20 conferences and we would sit there and we’d – when we were speaking in between the sessions or having a cup of tea or something we’d say, we’d look around the room and you’d say, who would you rather be in this group than us. And it’s an important bit of perspective and what I try to do in the speech at the National Press Club is to say we shouldn’t choose between these false binaries.

There’s a bunch of people that will always talk the economy down. There’s a bunch of people – and maybe politicians are sometimes guilty of this – who will only ever talk the place up. Let’s just put it into its proper perspective.

Australia in lots of ways is outperforming the world. The fact that we’ve got inflation down, while keeping unemployment low, we’ve got real wages growing again, the combination of things that we’ve got in our economy is something that a lot of our peer countries would like to see in their own economies. And we can recognise that at the same time as we can recognise our economy is not productive enough, the budget needs to be more sustainable, we need to be more resilient in the face of all this global uncertainty that you and I are talking about today.

And so I think it’s not just possible to have those views simultaneously, it’s imperative that we do. That we have the proper perspective about our economy. Our economy in global terms is performing quite well, particularly our labour market, which in lots of ways to me is the most important thing, how people are actually earning and providing for their loved ones –

Kenny:

It’s like how the economy works for people.

Chalmers:

It’s the people‑facing part of the economy matters the most to me. And in some of those areas it’s been extraordinary, we’ve got the lowest average unemployment of any government in the last 50 years, at the same time as we’ve got inflation down and got real wages up.

So it’s a long way of saying, let’s have some perspective about the economy. I’m going to try and get better at saying here is all the things that are going really well that we’re really pleased about, here are the things where we need to be doing better if we want to lift living standards for people in our country. Productivity, budget sustainability, resilience in the world, these are the things where we can acknowledge and work together on making things better.

Kenny:

Well let’s go to that productivity thing, because the Prime Minister recently at the Press Club and then you in the speech to the Press Club as well talking about productivity. And I think you have made the point before that the first term, how did you put it, the first term was basically –

Chalmers:

Primarily.

Kenny:

– primarily about fighting inflation but with an eye to productivity and the second term is about lifting productivity with an eye to keeping inflation under control. Is that sort of broadly what you were saying?

Chalmers:

Yeah it is, and I said that the morning after the election on the Insiders panel. I’d sat kind of in one corner of the ABC studio for about 6 or 7 hours in the evening and rocked up to the other corner of the studio in the morning. And that is how I see it.

Kenny:

Imagine what it’s like for David Speers.

Chalmers:

Exactly. I guess the point that I’m trying to make is we already have a productivity agenda. It’s substantial, it’s ambitious. But the bulk of our first term was about fighting inflation. And in the second term I think we still care about inflation, cost of living, real wages, still a huge focus of us but we will focus more on productivity, more on the supply side of the economy.

When we talk about productivity, I think it’s important to remember it comes back to what we were just saying about the labour market more broadly. Productivity can come across as this kind of cold and soulless concept. It’s about how efficiently we use inputs to create outputs in our economy.

Kenny:

Is it widely understood, do you think, in the electorate when politicians and economists talk about productivity? What’s your – you’re an MP right, you represent people, you have your own electorate, you’re dealing with constituents all the time, right. What’s the general understanding of this as a term?

Chalmers:

It’s not a word that people use when they bail you up at Coles or Woolies. I acknowledge that. But it’s really the most important thing that will deliver higher living standards for people. And so I try not to think of productivity as that cold and soulless concept. Productivity is about a more dynamic economy, which lifts living standards, and a more dynamic society where we create more opportunities for more of our people.

And what I’m trying to do is I’m trying to broaden the national policy and political conversation beyond the tired old fights over things like industrial relations. Productivity is about how we adapt and adopt technology, it’s how we transform our energy resources, it’s about making our businesses more competitive, it’s about the care economy, it’s about human capital, how we invest in people.

Kenny:

A lot of these things are things that as you say, they’re good, everyone would agree they’re all public goods. They’re things that should happen and so forth. Many of them – particularly if we think about human capital and getting more from people because they can contribute more and that adds to dynamism in the economy and creativity and opportunities all those brilliant things – but in a sense they’re long‑term investments that are required aren’t they?

We are sitting here in a university. University education and training, obviously been a strong priority of the government. But it needs that’s the – I guess what I’m getting at is these aren’t things that you can just sort of flick a switch and make happen, right. They take long‑term planning and thinking and commitment and funding.

Chalmers:

Well 2 things about that. I mean, first of all there are 2 visions for productivity. And this is not the place for partisan reflections but there’s a view that says we’ll only get productivity if we make people work harder and longer for less. That is essentially our political opponent’s view of productivity.

We think we’ll get productivity if we invest in people, their ability to adapt and adopt technology in a more modern economy. And so the way that our opponents think about productivity, that will never be our jam. That will never be – that’s not what we are on about.

We are not trying to screw down people’s wages and working conditions. We think there’s a better way to go about it. But I think you’re absolutely bang on when you talk about – I think of it as the delayed gratification when it comes to productivity policy. There are some elements of economic policy where you get a bang for your buck sooner.

Productivity is one of those things you got to chip away at and I’ve tried to point out, there’s not one thing as you rightly say, you can’t just flick one switch. If there was one switch we could flick somebody would have flicked it already to make our economy more productive. You’ve got to chip away, you’ve got to have a broader idea of productivity and you’ve got to work with people and bring people together. And that’s what we intend to do.

Kenny:

Let’s take a quick break and be back in a moment. Welcome back. I’m talking with Treasurer Jim Chalmers, ANU alum, among many things. Dr Chalmers, the productivity matter we were just talking about, there’s going to be this roundtable, the Prime Minister has announced, and you’ve spoken about at the Press Club as well.

Obviously, the criticism that people will make if they want to will be another talk fest. We see these from time to time. From what I understand you’re girding against this, you’re trying to design it in ways that will mean that it has to deliver something more than kind of rhetoric and disagreement in a sense.

Chalmers:

Exactly right. I mean first of all I acknowledge it’s kind of unusual to have the Prime Minister and the Treasurer at the National Press Club 8 days apart but it’s deliberate. Because what we’re trying to do is in the Prime Minister’s great speech that he gave at the Press Club. And what I’m trying to do as well, is to say we’ve got a big agenda, it’s ambitious, our priority is delivering what we took to the election but we’ve got an obligation to work out what comes next.

And the best way to do that, the tone that Anthony sets in our government is to try and do that together. And I know when you bring people together there will always be an element of people who want to say that it’s failed before it’s even happened. And it might be that people bring the same old talking points and maybe progress is hard to come by. But that’s not a reason not to have a crack at it and see where there might be common ground.

Kenny:

There’s an acceptance right across the board that productivity is an issue. That lifting productivity is the ticket to higher living standards and to insulating the economy as well against some of these external shocks. So it’s a good starting place, but then you get as you say, people sort of usually retreating in to certain camps defending their position and looking for gains from others.

Chalmers:

There might be a bit of that but let’s see how far we can get if we don’t take that approach. I think broadly people do understand it would be better if our economy was more productive, our budget more sustainable and that we are more resilient in a world that is as uncertain as it is.

I think that is broadly understood and what I want to try to do at this roundtable is to go beyond problem ID into ideas. I want people to bring specific things and I want them to help build consensus, not just leave it to the government to build consensus.

Kenny:

So in other words within the framework of this round table you are looking for people to be talking to each other?

Chalmers:

Each other yeah.

Kenny:

So that the unions for example talking with employers. And together perhaps agreeing on something they can agree on, which will shift the needle as they say.

Chalmers:

And there are so many areas where this is so important. I mean technology, artificial intelligence is going to be a game changer in our economy.

Kenny:

It is for everyone right.

Chalmers:

Yeah and we need to work together to work out how do we get the best version of that. And so that is our hope and let’s be blunt about it, it remains to be seen how much appetite there is for that. But I think we owe it to ourselves to try to work out where there’s common ground. That’s what the round table is all about.

People have been terrific about it in the conversations I’ve had with them so far, already there’s a heap of interest. People will be able to feed in, even if they’re not in the Cabinet room that week and so I think it’s set up to succeed, it remains to be seen whether it will.

Kenny:

So we’re going to be looking for the productivity of the productivity roundtable.

Chalmers:

That’s right, or we’ll get the Productivity Commission to measure it.

Kenny:

Yeah because it’s not – you can’t measure it just by butchers paper can you, and annoying‑smelling textas. It’s literally about, I mean the term people often use is concrete, but what’s substantive or concrete comes from it, and can actually result in policy changes. And you’re confident that that can actually achieve something?

Chalmers:

I’m confident about that. We’ve got a big agenda on productivity, even this week the Cabinet agreed some next steps. We’ve got the Productivity Commission working on a bunch of stuff. We really have everything we need to succeed except consensus and I hope that seeking consensus is not a naive undertaking. I feel cautiously confident that we can make some progress but it remains to be seen.

Kenny:

Consensus of course was the big word in the 1980s with Bob Hawke in particular and the summits that were held and so forth. And we know of course Kevin Rudd had his 2020 – I can’t remember what it was called exactly.

Chalmers:

2020 Summit I believe.

Kenny:

I think it was summit. This is much more, I suppose surgical in a sense.

Chalmers:

Deliberately. We did the Jobs and Skills Summit at the start of our government and I don’t like how that’s been caricatured, the outcomes of that. I actually think we made a lot of progress then.

But rather than hundreds of people in the room, we will host a small group in the Cabinet room. We won’t do a lot of problem ID, the problem is broadly understood. We want people to bring their ideas. We want them to be responsible and realistic about that. We want them to see the whole chessboard when it comes to our national economy, not just their own kind of specific narrow interests.

Kenny:

Yeah because that’s always the frustration for governments isn’t it, it’s all very well for various interests to be pushing their position and perhaps that’s the way our economy and our society has been set up. But our governments have to try to look at the whole – as you say – chessboard, and figure out the implications of each of those moves and what it does to the whole.

Chalmers:

And even in budget terms, it’s very easy to call for huge tax cuts. It’s very easy to call for huge new outlays in one area or another. I don’t dismiss people who call for those things but we have to make it all add up at the end of the day. And so hopefully the kind of guidance we give people about how they approach this opportunity in the Cabinet room in the second half of August, hopefully people take that seriously. I think we will make more progress if they do.

Kenny:

Yeah. Now I mentioned before how you were there on election night and you were watching the events unfold. Do you think in the frame of what we have just been talking about the fact that it is such a stonking majority that the government has. And whilst it’s not impossible for the government to be turfed out at the next election, it’s not impossible but it doesn’t seem very likely to anyone who has been watching the game for a long time.

I mean it is just, that would be such a dramatic turnaround from the current situation. I’m not asking you to comment on that particularly but what I am interested in is whether that changes the dynamic in a thing like this productivity roundtable and in the way generally people are looking at things. There’s a sort of a, I think a level of predictability, about who it is that these interests groups will be dealing with for this term and probably the next. Is that an opportunity for everyone?

Chalmers:

First of all, I don’t believe that a third term is assured. I don’t think those assurances –

Kenny:

I know you have to say it and I agree.

Chalmers:

No, no I believe it. There’s no assurances in politics. There’s no assurances in politics. I do think that there is a sense of relief that the election’s resolved and resolved decisively. I do think that there’s an element of that in the broader community and in the stakeholders I deal with. A little bit of an element of predictability in a very unpredictable world to join up where we began this conversation. So there is, I think that.

For us, you mentioned sitting on the set on election night. The kind of 3 stages I progressed through were firstly surprise, secondly relief. An overwhelming sense of relief. And then thirdly most importantly a sense of gratitude and the reason I mentioned that sense of gratitude is because whether this government has 3 more years to live or 6 more years to live, I am more determined than I’ve ever been to make the most of the opportunity.

Because when you think about where we were at at the end of 2024, it was conceivable that we could lose the election and the clarifying impact of that when you think about the clock is ticking on all of us. The clarifying impact of what could have been a close run thing but turned out to be a decisive thing. Surprised, relieved and grateful and determined to make the most of this opportunity for however long it lasts.

Kenny:

James McGrath, who you were on with, seemed to be moving through those stages slightly more slowly. His weren’t identical stages, they were the opposite I suppose. But he took some time it seemed to me to accept what the numbers were saying. But nonetheless as you say it was a very dramatic night. Just dwelling on that for a moment, how did you feel or how do you feel now reflecting on the sort of brutality of the way your fellow Queenslander Peter Dutton was ejected from politics altogether in that process? There’s a finality about it.

Chalmers:

First of all, on James, I genuinely felt for James. We’ve lost our share of national elections too and it’s just, it dawns on you at some point that you’ve got to do opposition for another 3 years and it’s a horrendous –

Kenny:

Slog.

Chalmers:

So I respect James and I felt for him sitting next to him, and it was a rugged night for him. Yeah, the brutality of 2 leaders of 2 of the 4 biggest parties in the parliament hit the fence on election night. That’s an extraordinary thing. And a brutal thing.

The thing you will notice, I hope you notice, is I don’t dance on anyone’s political grave. I think politics is tough enough as it is when you’re in it that you shouldn’t dump on people when they’re out of it. And there’s a psychological thing about your own local community telling you they don’t want you anymore, I can only imagine that that is especially rugged for him. But I don’t want to dance on his political grave.

I hope he doesn’t mind me saying that I’ve been in touch with him since he lost. We had a friendly exchange. He played politics as hard as anyone, if not harder than most. And so we acknowledge that too but I genuinely wish him well and his family. Politics is hard yards for everyone and to be disposed of with that level of brutality I can only imagine is really tough.

Kenny:

Yeah. I think it should be said that people who dealt with him, with Peter Dutton at a personal level, his colleagues. And he was popular at a personal level because there was a warmth about him and I’ve certainly said this in things I’ve written in the past as well. He was as you say, a very hard political player but he wasn’t like some other leaders that I won’t mention that weren’t particularly popular with their colleagues. Nonetheless, an extraordinarily badly‑designed campaign, it’s just unbelievable.

Look in the brief amount of time we’ve got left, can I explore this idea that the Prime Minister has used a bit and you’ve used in your speech as well, made reference to this idea of progressive patriotism. I’m quite fascinated by this. I think the idea that the political right has had a mortgage on patriotism in the past I think is wrong. But it’s an ill‑defined concept at least or it’s a work in progress. How would you frame it?

Chalmers:

First of all you’re being characteristically humble, Mark, in not pointing out to all of your listeners that you have been grappling with, publicly, with some of these concepts for some time. I have listened to you and read you with interest in the past about this concept about patriotism. And really what Anthony is talking about when he talks about progressive patriotism is this sense that we can have Australian answers to these very difficult global questions.

His progressive patriotism is really about Australian exceptionalism. It’s about the fact that we’ve built together, not just governments, but as a country, we’ve built together Medicare and superannuation, and the Pharmaceutical Benefits Scheme and all these sorts of things, which around the world other countries envy.

And so a sense of patriotism which is progressive, which is exceptional and what I try to say in my contribution to this in tipping my hat to him. And this idea that he has prosecuted, is it’s also very pragmatic, it’s very practical. It’s not especially ideological. It’s progressive in the sense that it’s about being more inclusive, looking to the future not just to the past. But it’s practical, it’s pragmatic, it’s about problem solving. That’s what we intend to bring to this reform task in the second term.

Kenny:

Yeah so things like the Pharmaceutical Benefits Scheme, universal health insurance, Medicare, that sort of roped in to this, right. I guess what I’m trying to get at is what’s beyond what we already do and know, what’s the use of the term if it is just to describe in a sense what we already do?

Chalmers:

I think it’s about recognising this huge opportunity that Australia has because of the progress we’ve made together, because of the way that we think about ourselves and each other. The responsibilities that we have to each other, we don’t believe in this kind of scorched‑earth view of the world that says when the world economy is going berserk it’s everyone for themselves.

And so I think that’s central to it, that’s the progressive part of it, this sense that we’re all in it together at the worst times and in the worst crises. And also a sense of confidence and optimism that despite everything that’s coming at us from around the world we have it within us to respond effectively, not just to play defence, not just to play off the back foot, but to make this work for us. And that’s the mindset that we all need to have.

Four shocks in 2 decades, all of this churn and change in the world, a lot of progress we’ve made as Australians. A lot to be proud of, but a lot that we need to do together and we have everything we need, as I said before, except this sense of consensus about the way forward and if Anthony’s second term is to be anything it’s about the search for that.

Kenny:

One of the things that’s really challenged the consensus, this will probably be the last question here, but one of the things that’s challenged that consensus, probably the most dramatic challenge to any sort of political consensus over the last 15 years or so has been the argument over climate change. It has just been so divisive and so unproductive to go back to a theme we have been talking about before. Just the amount of time that’s been wasted and policy reversals and division and so forth.

You’ve studied, I mean you wrote your PhD about Paul Keating’s period you’ve thought about this a lot, right. The idea of the great reform era of the ‘80s and ‘90s, the things that have been done there. Most of those things of course as is well known can’t be done again, they don’t need to be done again.

But the big reform question now it seems to me and I’m interested in your thoughts about this is decarbonisation of the economy. It’s the transition. We often hear that you shouldn’t waste a crisis. I guess you could also say you shouldn’t waste a huge majority, right. Is this a mandate to accelerate the process of Australia’s economic transition because that’s about resilience as well isn’t it?

Chalmers:

The energy transformation is a big part of our reform agenda, and we come at that with ambition not because we’ve got a big majority but because we’ve got a big responsibility. And we do have a big opportunity to be again as the whole world’s energy sources transform and transition, Australia’s got a really compelling role to play in that. I’m excited about our critical minerals, I’m excited about our human capital base, our renewables sector.

And so I think one of the reasons why we’ve been, I say we, charitably, why the kind of ideology of the extremes on climate change has dominated the conversation. But in the investor communities I knock around in, this is not seen as an especially ideological thing. This is seen as to be about the future of our economy. The future of our industrial base, how we attract and deploy capital more efficiently. This is a very mainstream idea apart from the ideological extremes of X and social media.

Kenny:

We understand that Sussan Ley is reviewing all policies and one of those policies it turns out is apparently, is the commitment to net zero. Or at least that’s what a number of people are urging the Coalition to do, is to walk away from commitment to net zero by 2050. What’s your feeling about that?

Chalmers:

I think if they walked away it would show they haven’t learnt anything from the last couple of elections. And it feels like from my distance I’m not an expert on the internals of the Liberal and National parties, but it feels like they are setting themselves up for a big barney on this.

And that’s not good for the way we think about our economy, the way we think about attracting capital and investment, the way we think about certainty in our economy, that would be a bad thing. First of all, if they spent the next 3 years fighting about this but also if they walked away from something that most sane people see as a sensible way to go for an economy like ours.

Kenny:

Jim, thanks so much for coming on Democracy Sausage again, for being back here on your old alma mater, the campus of ANU. It’s been a great pleasure talking to you and we’ll look forward to doing so again at some point.

Chalmers:

I really enjoyed being back, Mark, and having another great chat, thanks so much.

Kenny:

That’s Democracy Sausage for this week. Until next week bye for now.

Source: New South Wales – News

Source: New South Wales – News

Just after 9am Thursday 19 June police were called to Coventry Road with the intersection of Dalkeith Road after reports of a two-vehicle crash.

Coventry Road is closed with Dalkeith Road.

Please avoid the area.

Source: New places to play in Gungahlin

Source: Australian Ministers for Regional Development

National Australia Bank Limited (NAB) has paid penalties totalling $751,200 after the ACCC issued it with four infringement notices for alleged contraventions of the Consumer Data Right (CDR) Rules.

The infringement notices relate to alleged failures by NAB to disclose, or accurately disclose, credit limit data in response to four separate requests made by different CDR accredited providers on behalf of consumers.

The CDR is an economy-wide data sharing program that empowers Australians to leverage the data businesses hold about them for their own benefit.

For the CDR to be effective it is critical that the data which a consumer has consented to be shared is accurate, up-to-date, complete and in the required format. 

“Poor data quality prevents consumers from experiencing the full benefits of the CDR. When banks or energy retailers don’t provide accurate data, consumers can’t take advantage of CDR products and services to compare products, find better deals, manage their finances or make informed decisions about product switching,” ACCC Deputy Chair Catriona Lowe said.

In this case, a failure to provide accurate information in relation to credit card limits impacted the service a number of fintechs provided to consumers, including some fintechs who offer mortgage broking tools using CDR data. These tools are designed to provide consumers with faster, simpler and more secure loan applications which better leverage their own data. 

NAB’s payment of these penalties is the highest amount paid for alleged contraventions of the CDR Rules to date. NAB cooperated with the ACCC’s investigation and has rectified the data quality issues identified.

Data holders in the banking sector have had several years to understand and implement their CDR obligations. As the CDR continues to mature, data quality within the CDR remains a priority conduct area for the ACCC. In the second half of 2024, CDR participants reported to the ACCC that over 530,000 consumers successfully used CDR products and services across the banking and energy sectors, representing an increase of 135 per cent from the previous six months. During the same period, approximately 582 million consumer data requests were made. 

“All CDR participants are reminded that failure to comply with the CDR rules will result in scrutiny by the ACCC and may result in enforcement action,” Ms Lowe said.

Notes to editors

The payment of a penalty specified in an infringement notice is not an admission of a contravention of the CDR rules.

The ACCC can issue an infringement notice when it has reasonable grounds to believe a person or business has contravened certain provisions of the CDR rules.

More information on the obligations of data holders can be found in the Compliance guide for data holders.

At the time of the alleged conduct the penalty amount for each infringement notice was fixed at $187,800 for a listed corporation. Since 7 November 2024, the penalty has been increased to $198,000 for each infringement notice.

Background

CDR gives consumers the right to safely transfer data about themselves from data holders to accredited persons, potentially to access new products and services, including better deals on everyday products and services.

CDR is an economy-wide reform that is being rolled out sector by sector. The CDR has been rolled out to banking (from July 2020) and energy (from November 2022), with the non-bank lending sector to follow from mid-2026.

The transfer of consumer data occurs between data holders and accredited persons, or accredited providers. The Australian Government has designed and oversees the system to ensure it is safe and secure for consumers. Accredited providers must go through a rigorous process to become accredited by the Data Recipient Accreditor (currently the ACCC) to provide services to consumers using CDR data. A list of current providers (along with further information about CDR) is available on the CDR website.

The ACCC, together with its co-regulator, the Office of the Australian Information Commissioner, is responsible for ensuring CDR participants, including accredited providers and data holders, comply with their CDR obligations.

The Treasury leads CDR policy, including development of rules and advice to government on which sectors CDR should apply to in the future. Within Treasury, the Data Standards Body develops the standards that prescribe how data is shared under CDR.

Source: Northern Territory Police and Fire Services

New public toilet facilities will be installed, funded by the Australian Government.

Source:

19 June 2025

In a world-first discovery, researchers have shown that Australia’s iconic Bogong moth uses constellations of stars and the Milky Way to navigate hundreds of kilometres across the country during its annual migration – making it the first known invertebrate to rely on a stellar compass for long-distance travel.

The landmark study, published today in Nature, reveals how this unassuming nocturnal moth combines celestial navigation with Earth’s magnetic field to pinpoint a specific destination it has never visited before: the cool alpine caves of the Snowy Mountains, where it hibernates for the summer.

Led by an international team of scientists from Lund University, the Australian National University (ANU), the University of South Australia (UniSA) and other global institutions, the research sheds new light on one of nature’s great migration mysteries, involving approximately four million moths each year.

“Until now, we knew that some birds and even humans could use the stars to navigate long distances, but this is the first time that it’s been proven in an insect,” says Lund University Professor of Zoology, Eric Warrant, who is also a Visiting Fellow at the ANU and an Adjunct Professor at UniSA.

“Bogong moths are incredibly precise. They use the stars as a compass to guide them over vast distances, adjusting their bearing based on the season and time of night.”

Each spring, billions of Bogong moths (Agrotis infusa) emerge from breeding grounds across southeast Australia and fly up to 1000 kilometres to a small number of caves and rocky outcrops in the Australian Alps.

The moths lie dormant in the cool, dark shelters throughout summer, and in autumn make the return journey to breed and die.

Using sophisticated flight simulators and brain recordings in controlled, magnetically neutral environments, the researchers tested how moths orient themselves under different sky conditions.

When presented with natural starry skies and no magnetic field, they consistently flew in the correct migratory direction for the season – southward in spring, northward in autumn.

When the starry skies were rotated 180 degrees, the moths reversed direction accordingly, but when the stars were scrambled, their orientation vanished.

“This proves they are not just flying towards the brightest light or following a simple visual cue,” says Prof Warrant. “They’re reading specific patterns in the night sky to determine a geographic direction, just like migratory birds do.”

Interestingly, when stars were obscured by clouds, the moths maintained their direction using only the Earth’s magnetic field. This dual compass system ensures reliable navigation even in variable conditions.

The team also delved into the neurological basis of this behaviour, identifying specialised neurons in the moth’s brain that respond to the orientation of the starry sky. These cells, found in brain regions responsible for navigation and steering, fire most strongly when the moth is facing southwards.

“This kind of directional tuning shows that the Bogong moth brain encodes celestial information in a surprisingly sophisticated way. It’s a remarkable example of complex navigational ability packed into a tiny insect brain.”

Researchers say the discovery could inform technologies in robotics, drone navigation, and even conservation strategies for species threatened by habitat loss or climate change.

Bogong moth populations have declined sharply in recent years, promoting their listing as vulnerable.

The study underscores the importance of protecting migratory pathways and the dark skies these moths rely on.

“This is not just about a moth  ̶  it’s about how animals read the world around them,” says Prof Warrant. “The night sky has guided human explorers for millennia. Now we know that it guides moths, too.”

Co-author Professor Javaan Chahl, a remote sensing engineer from the University of South Australia, made headlines in August 2024 using the discoveries from a previous study led by Lund University involving dung beetles, who use the Milky Way as a reference point to roll balls of dung in straight lines.

Prof Chahl’s team modelled the same technique used by dung beetles to develop an AI sensor for robot navigation in low light.

The Nature paper “Bogong moths use a stellar compass for long-distance navigation at night” is authored by researchers from Europe, the UK, China, Australia, Canada and Australia. DOI: 10.1038/s41586-025-09135-3

A video produced by the Australian Academy of Science, explaining Prof Warrant’s research, is available at: www.youtube.com/watch?v=AqiG_xBUFE0.  Prof Warrant was elected a Corresponding Member of the Academy in 2024.

…………………………………………………………………………………………………………………………

Media contact: Candy Gibson M: +61 434 605 142 E: candy.gibson@unisa.edu.au

Source: Northern Territory Police and Fire Services

Our CBR is the ACT Government’s key channel to connect with Canberrans and keep you up-to-date with what’s happening in the city. Our CBR includes a monthly print edition, email newsletter and website.

You can easily opt in or out of the newsletter subscription at any time.

Source: Tasmania Police

Issued: 18 Jun 2025

Authorities are urging people to avoid unlawfully feeding wildlife after a close encounter with a cassowary.

Security video from south Mission Beach on May 09 shows a habituated male cassowary and his chick approaching a home in the hopes of being fed.

The Department of the Environment, Tourism, Science and Innovation is urging people in cassowary habitat to stop feeding them.

Wildlife Ranger Jeff Lewis said feeding cassowaries changes their behaviour, creating significant risks for people and our iconic endangered birds.

“This incident is one of several cassowary interactions in the area which are linked to unlawful feeding,” Mr Lewis said.

“Thankfully the mother and child were able to get inside to safety, but it’s an important reminder to not interfere with wildlife.

“In April, a man in his seventies was kicked in the leg by a cassowary which approached him expecting food. He was treated for a cut to his leg and was lucky the injuries weren’t worse.

“These incidents are stark examples of the dangers of feeding cassowaries.

“Local wildlife rangers have been warning people of the risks, installing signage and providing education, but the unlawful feeding persists.

“When cassowaries associate humans with food, they can become impatient and aggressive, particularly when accompanied by chicks.

“We encourage anyone with information in relation to unlawful feeding to report it to the Department.”

If you encounter a cassowary displaying concerning behaviour or see one injured, contact 1300 130 372. For general sightings.

Cassowaries can inflict serious injuries to people and pets by kicking out with their large, clawed feet. People are asked to Be cass-o-wary at all times in the Wet Tropics.

• Never approach cassowaries.
• Never approach chicks – male cassowaries will defend them.
• Never feed cassowaries – it is illegal, dangerous and has caused cassowary deaths.
• Always discard food scraps in closed bins and ensure compost bins have secure lids.
• Slow down when driving in cassowary habitat.
• Never stop your vehicle to look at cassowaries on the road.
• Keep dogs behind fences or on a leash.

Source: Australian Parliamentary Secretary to the Minister for Industry

Tom Connell:

Thank you, Treasurer. I’m going to keep this broad, lest I be accused of ruling in, ruling out. So, if you think of how bold you’re willing to be. When we think of economic reform, the truly transformative reform is always, at the time at least, somewhat controversial. If you think of floating the dollar and the accord, if you think of the GST. Are you thinking of that level of boldness when you’re talking about the reform the economy needs around, whether it be productivity or tax or whatever it might be?

Jim Chalmers:

There’s an appetite to be bold and ambitious. What I tried to do in my contribution before is to run through all of the ways that we feel there is already an ambitious productivity agenda underway. We’ve already made a lot of progress on the budget. We’ve made progress in making our economy more resilient. But this is all about testing the country’s reform appetite.

And I don’t see it in personal terms, but I am personally willing to grasp the nettle to use an old saying. I am prepared to do my bit. The government is prepared to do its bit. And what we’ll find out in the course of the next few months is whether everyone is prepared to do their bit as well.

Connell:

I’ve started efficiently. One question and done. We’ll see if my colleagues can follow. We’ve got a long batting order. Tom Crowley from the ABC is first.

Tom Crowley:

Thanks, Treasurer, Tom Crowley from the ABC. Thank you for your speech. And I’ll also ask about tax reform and try to avoid the rule in rule out game.

Chalmers:

I appreciate it, Tom. Thank you.

Crowley:

There is a tension there between ambition and consensus. It goes to the question that Tom’s asking. And consensus is a comforting word for politicians, but maybe one that makes economists a bit wary, because the truth is, as well as constituencies for change in the media and among experts, it’s just a reality that if you want to reduce the reliance on income tax and at the same time you want to be budget neutral or positive, you’re going to have to increase the reliance on some other type of tax and you create losers in the tax system, losers in the electorate.

Do you see that this election gives you the political space to create losers and make an argument to them, even if perhaps you lose their votes, about why they should pay more to repair the budget?

Chalmers:

Thanks, Tom. A couple of, I think, important things about that.

First of all, I think in the aftermath of the election, and not because of the width of the margin, the magnitude of the majority that Anthony and the team won on election day, I think there has been a welcome and encouraging discussion about the level of ambition that Australia has – I’ll come to the Australian Government in a moment – that Australia has to recognise that this is genuinely a defining decade.

The decisions we make in the 2020s will determine the sort of living standards and intergenerational justice that we have in the decades to come. I think there is a broad recognition of that. That doesn’t always exist, but I think right now I feel encouraged and confident that there is an element of that in the broader community, and including in some of the commentary that people in the room here write.

So that’s welcome. That’s necessary, it’s welcome. I think there is some appetite there. The rest of your question, I think, goes also to an important point and it’s about trade‑offs. I think if you take a big step back and think about, take all of the political labels and all of the day‑to‑day commentary out for a moment, and if you tried to work out why a country like ours might spin its wheels on reform, I think one of the reasons for that is because governments have to consider trade‑offs and other participants in the national reform consideration might not need to. That’s why I’ve been very, very specific with the conditions that we put on people’s involvement, because there are trade‑offs, and often difficult trade‑offs.

If you think about in tax, you think about broadening the base and lowering the rate and some of these sorts of areas, which is an important element of tax reform theory, as Ken and others will tell you. There are always difficult trade‑offs associated with that. So what we’re trying to do with this roundtable, but more broadly as well, even absent the roundtable, is to be upfront with all of you and the country beyond, about the trade‑offs. To recognise that the easiest thing in the world is for people to come to us and say, we want you to dramatically cut the taxes in our part of the economy and spend dramatically more on our industry without recognising that there are necessary trade‑offs associated with that.

So let’s see how far we can go together, recognising those trade‑offs, having an appropriate high level of ambition, being upfront with people along the way, and explaining why those trade‑offs are important and why they might be necessary.

Connell:

Peter Hobson from Reuters.

Peter Hobson:

Thanks, Treasurer, I’ve got a question on housing. So Ezra Klein and Derek Thompson’s book ‘Abundance’ has been doing the rounds, and it argues that regulatory barriers –

Chalmers:

We should be on a commission with these guys.

Hobson:

Regulatory barriers and bureaucratic inertia are stifling the construction of new housing, and you want to build 1.2 million new homes by 2029. So how many have you built so far? And to achieve the goal, don’t you have to be more radical? Are you considering bigger changes to regulation, perhaps stripping more power from local authorities and, or, bigger incentives from federal government.

Chalmers:

Even if Clare O’Neil wasn’t in the room, I’d be careful not to front run the sorts of things that she would be considering. But I know that Clare won’t mind me saying that probably the most numerous conversations I’ve had in the last 6 weeks have been with Clare about housing, because we recognise that we need to build more homes sooner.

We’ve got tens of billions of dollars of Commonwealth investment. The states and local governments are very focused on the challenge. Institutional and other investors are working out what meaningful role that they can play. And so all of the ingredients are more or less there, but we need to do better and sooner in order to build those homes.

We have always acknowledged, Clare, her predecessor, certainly from my point of view, that the 1.2 million homes is a very ambitious target, deliberately so. And it will be hard to get there, but it’s not impossible to get there but everyone needs to do their bit. And I know that Clare is thinking about what else might be necessary in order for us to build the homes that our country desperately needs.

Connell:

Matthew Cranston from The Australian.

Chalmers:

I didn’t get a little nod from Clare at the end there so I’m worried that I didn’t nail it. Clare will be available for a press conference immediately following the –

Connell:

We can give her a question if you want?

Matthew Cranston:

Treasurer in your first term you had a desire for low, low inflation. And you pretty much got that. Productivity is a lot harder, and you’ve outlined very clearly, very transparently, that tax reform will be a big part of productivity. I wonder, does that mean, and you’ve said also today you welcome it and expect it. Does that mean you’re pressing the pause button at the moment on tax reform ideas such as unrealised capital gains tax. And do you think that this could open up a bigger conversation on tax reform that will help repair the relationship between tax, productivity and what you say, unsustainable budget deficit?

Chalmers:

First of all, we’re not changing the policies we took to the election. We’ve got a mandate for that change that you mentioned and that you write about most days. What we’re looking for here is an opportunity to build on the progress that we’ve made, including in the economy as you point out. We’re looking for, not opportunities to go back on the things that we have got a mandate for, we’re looking for new ideas.

Now when it comes to the role of tax reform in productivity, I very deliberately said that productivity is our primary focus but not our sole focus, budget sustainability, resilience in the face of global volatility, these are 3 very tightly related concerns, and tax reform is important to budget sustainability, but also to productivity. And so we do see those things as related. We’re delighted with the progress that we’ve made collectively on inflation, we do agree and accept your analysis that says productivity can be harder and less instant in the progress that we make, and tax has got a role to play there.

I think it would be unusual if I said to the country, we’re going to have this big national reform conversation about productivity, sustainability and resilience, but nobody’s allowed to talk about tax. That would be strange, and it wouldn’t be especially helpful to us. And so I anticipate, I welcome the fact that people will come to the roundtable, outside the roundtable, people will pitch up ideas about tax. We don’t see that as an opportunity to walk back on some of the things that we’re already committed to, in this case, some years ago. We see it as an opportunity to work out what the next steps might be.

Connell:

Millie Muroi from the SMH and The Age.

Millie Muroi:

Hi Treasurer, Millie Muroi from the Sydney Morning Herald and The Age.

Chalmers:

Hi, Millie.

Muroi:

Obviously you said ruling in and out is not very productive –

Chalmers:

But –

Muroi:

But you’ve set some ground rules. You’ve set some ground rules for this upcoming roundtable, including that ideas, or packages of ideas, should be budget neutral at minimum, but preferably budget positive. Would you be open to ideas that cost the budget in the short term, especially if they’re expected to improve growth and revenue in the medium or longer term.

Chalmers:

Look, if we’re sure about. We make investments all the time in our budget that have longer term payoffs and longer term dividends, but we don’t want to see that used as an excuse to pitch up a whole bunch of spending that nobody ever pays for. The thing that invites your good question Millie, with Tom’s at the start – and there’ll be people in this room who will be at the round table, there’ll be people in this room who will pitch up ideas before, during and after the round table.

Really, we’re just trying to respectfully encourage people to try and engage in the kind of work that we engage in around the Cabinet table. At the Expenditure Review Committee and the broader Cabinet as well, which is to understand that there are a lot of great ideas, often expensive ideas, and we have to make it all add up. And so the only way this is going to work is if everybody understands that. Not if it’s just left to Katy and I or the ERC or the Cabinet to engage in all of those trade‑offs. I want everyone engaged in that.

And inevitably, there will be a case made in some instances, and sometimes it will be a compelling case that investment up front will deliver a longer term dividend. But that doesn’t excuse us or extract us from some of these longer term structural budget pressures that we’re trying to deal with.

Connell:

The small room you alluded to, does that mean no room for the opposition?

Chalmers:

We’re finalising the invitation list. I say that very genuinely. We’ve done a bit of work on that, but we haven’t finished the work on that. I’ve been a little surprised, to be honest to hear that there’s been some interest from the Opposition, in some quarters. Sometimes you catch a part of an interview where people are running down the idea of a roundtable, other times you hear people saying that they’d like to be constructive. I hope it’s the latter. There will be opportunities for the Opposition to be constructive, whether they’re inside the room or not inside the room.

I think regardless of the final invitation list, it would be a very good thing for Australia if we all did take a constructive approach to it. What I’m going to try and do is where I think the Opposition or the crossbench or the other colleagues in the Senate are being genuinely constructive, I’m going to try and respond in kind, I mean that.

So let’s see how they go. Whether inside the room or outside the room, I think there’s an important role for the Opposition. And not just in the Senate, but in terms of the direction of the country.

We don’t pretend that we’ll be in government forever. Some of these issues will be long standing issues. I don’t even accept the argument that says another term of this government is assured. I think few things in politics are assured. So the more buy in that we can get across the parliament, the better. And so if they are genuine about being constructive, I will be too.

Connell:

John Kehoe from the AFR.

John Kehoe:

Thanks Treasurer for your speech. Spending as a share of the economy, according to Treasury’s own budget forecast for the next financial year is going to be the highest since 1986. Is it inevitable that the tax to GDP level needs to rise, as you’ve alluded to with by saying any tax changes need to be preferably budget positive. And within that, is it possible? Do you envisage that actually you could have a package of tax changes where some taxes go up, some taxes go down? And are you a believer of a package like that could actually deliver higher growth and prosperity for the Australian people?

Chalmers:

If I could just kind of respectfully make 2 points at the start, John. It’s not the highest spending since the 80s. I know that you mean absent COVID, but I think it’s unusual that we absent COVID.

Kehoe:

Excluding the pandemic. Yes, that’s true.

Chalmers:

So I don’t mean to have a shot at you, John, I say that very respectfully. But quite frequently I’ll hear we’ve got the weakest growth in 40 years, or we’ve got the highest spending. That’s not true. And I know that there are reasons why you want to extract that from your analysis, I get that. But let’s not forget that we had spending as a share of the economy almost a third. And some of those things that we didn’t extend when we came to office, they were difficult at the time, some of that spending. We had a lot of people calling for us to extend the fuel excise change, the LMITO was extended by our predecessors but we got called on to extend it. And so that spending that was almost a third of the economy during COVID, we got it down to less than a quarter of the economy in 2022–23

So, I’ll engage with the substance of your question but let’s not lightly dismiss that.

Secondly, when it comes to people coming with packages of ideas which are budget neutral, I hope that people come to this discussion and I know Katy hopes that people come to this discussion, not just with ideas about improving the revenue base, but also about where government spending is not giving us the dividends or the returns that we need.

And so it’s possible that people will come to the discussion with an idea to invest more over here, or to provide tax relief over here, which is not necessarily paid for by higher taxes, but might be paid for by less spending.

So we’ve got an open mind to that. All of those combinations, I think are reasonable. And I hope that people consider all of those different kinds of trade‑offs when they come into discussion.

Connell:

Next question, Trudy McIntosh from Sky News.

Trudy Mcintosh:

Treasurer, on tax reform, any proposal that comes out of this roundtable, will you look to legislate that as soon as possible? Or do you need to secure a mandate?

Chalmers:

First of all, it’s difficult to pre‑empt the steps that go beyond the ideas that people bring to the round table. I think the timing of any changes that we’re able to afford and pick up and run with, I think that’s to be determined.

It depends on the nature of the ideas. Some things where there might be broad consensus at the roundtable, it might not be feasible or wise to wait another 2 or 3 years to pick up and run with them. So let’s see what people propose. Let’s see what the nature of the changes are before we make some of those decisions around timing.

Andrew Probyn:

Treasurer, on the revenue side, what attitude would you bring to this roundtable when it comes to extending the breadth of the GST and the rate of the GST?

Chalmers:

Andrew, I’m not sure if you have, but others over the years have asked me, from that microphone, with me at this lectern, about that. And you know that historically I’ve had a view about the GST. I think it’s hard to adequately compensate people. I think often an increase in the GST is spent 3 or 4 times over by the time people are finished with all of the things that they want to do with it. But what I’m going to try to do, because I know the states will have a view on it, I’m going to try not to dismiss every idea that I know that people will bring to the roundtable.

I suspect the states will have a view about the GST. It’s not a view that I’ve been attracted to historically. But I’m going to try not to get in the process of shooting ideas between now and the Roundtable.

Probyn:

But when you consider that some of the carve outs were from 25 years ago, and a political deal between John Howard’s government and the Democrats, isn’t that something to at least consider?

Chalmers:

I think I’ve answered that, Andrew.

Probyn:

I don’t think you have.

Chalmers:

My view hasn’t changed on all of the other times that I’ve been asked it, but I think one of the ways I’m going to be inclusive and respectful in the lead up to this roundtable is I suspect people will raise that question.

Probyn:

So you’re not ruling it out?

Chalmers:

I haven’t changed my view on it, and again, it’s a nice little cheeky attempt to get a rule in, rule out in.

Probyn:

It sounded to me like you were ruling it out.

Chalmers:

I’m just reminding you of all of the other times you’ve asked me this question and what I’ve said, I’m not walking away from those views.

I think the best way to think about this roundtable is that we’re not using it because we’ve got a predetermined view that we want to change. We genuinely want to hear people’s ideas. I suspect people, particularly people who represent the interests of the states, might raise this with us. I want to be respectful about that, but my view personally hasn’t changed.

Connell:

Next question, Patrick Commins from Guardian Australia.

Patrick Commins:

Treasurer, you talked about the changing tax base, the structural changes in the tax base. And you also said that the net zero transition will reshape our revenue from resources. Is part of that a recognition that the next time we have the next resource export boom, maybe critical minerals, that we need to do better to capture more of the value of our natural minerals when we design a tax policy?

Chalmers:

First of all, I think it’s self evident that as the world’s appetite for different kinds of resources changes over the decades that our offering of the world will change as well. I know that the resources sector sees things in similar ways, and I don’t think that’s especially controversial.

What we’re focused on, as you know, when it comes to resources, the changes that we brokered on the PRRT so that there’s billions of dollars paid sooner to help fund our other priorities. It may be that people bring those sorts of ideas to the round table, a bit like the question that Andrew asked before you. I don’t really want to get into indicating or announcing government policy or rejecting ideas that people might put forward to us. That’s a pretty common view put by people that we can change the way that we tax our resources. It’s not something that we’ve been contemplating or considering or putting work into, apart from the PRRT change, but I suspect people will have views about that in the coming months and years.

Connell:

Nicola Smith from the Nightly.

Nicola Smith:

Thanks for your address, Treasurer, my question is on economic resilience and security. The independent Intelligence Review earlier this year recommended that the Treasury lead its own review of the structure and effectiveness of economic security functions across government, and for a distinct economic security unit to be set up in Treasury, including secondees from national intelligence agencies. What are your plans for these recommendations in the second term? And related to that, given the level of concern about economic fallout from the Middle East crisis, is the Treasury modeling the possible economic impact of conflict or blockades closer to home, including in the Taiwan Strait or South China Sea, and what you’re doing now to build resilience in supply chains?

Chalmers:

Thanks, Nicola. There’s a lot of your question. I’ll try and be efficient with it. First of all, on the structural changes proposed in the Intelligence Review.

I thank Richard and Heather for the characteristically insightful work that they put into that.

We’ve been discussing it over recent months to work out the best institutional arrangements which recognise that the national security interests and our economic security interests, which have always been linked, they’re now more closely intertwined than ever, and we want our systems of advice, we want our institutional arrangements to reflect that.

I’m not here to say that we finalised the work that we might have to do in Treasury under Jenny’s new leadership, new management, to give effect to some of those recommendations. But it is an ongoing conversation. We are taking the recommendations seriously, and we have a very, very high regard for our agencies and our other institutions involved in national security and because of the quality of their work, quality of the Treasury’s work, I’m briefed fairly regularly, or at the moment, daily, on the economic implications of what we’re seeing in the Middle East, and obviously sea lanes are very important to those considerations, the oil price very important to those considerations. I’m briefed daily on that. Some of the broader strategic considerations, the risk of conflict in our own region and closer to home, that’s really a central feature of so much of the advice that I get, so much of the thinking that we do when it comes to our resilience agenda.

I think there are good reasons not to go into a lot of detail about that advice that I receive and the thinking that we do, but to assure you that it’s substantial, it’s high quality, it’s across government, and it recognises that a big part of our economic challenges right now are security related.

Connell:

You want to make the budget sustainable enough, is that possible to do whilst increasing defence spending 3.5 per cent

Chalmers:

What I tried to say with those 6 major structural budget pressures is that there are good reasons in health and hospitals, for example, defence, for example, early childhood education and care, where we are increasing our spending in those areas for good reasons. They are very, very worthy investments that we’re making, and it forces us, encourages us to make room elsewhere in the budget.

So I’m an enthusiastic supporter of more defence spending. I don’t want to speak for all of the other colleagues, but the government is as one when it comes to increasing defence spending, an extra almost $11 billion over forward estimates, almost $58 billion extra over the 10 year, medium term projections.

So we’re making new, substantial and much bigger investments in defence, and that’s a good thing. It does put structural pressure on the budget. It does mean that we have to find room in other areas. But it’s not unique. We have to find room for early childhood. We have to find room for defence. We have to find room for health and hospitals. We’ve made good progress on interest costs, aged care and the NDIS, but Katy and I have never seen this work that we do with other ministers on structural pressures as a kind of a one and done, it’s ongoing.

Probably wouldn’t be a day, Katy and I don’t have a discussion with one or another colleague, out of those 6 main areas where the structural pressures are most acute, where we’re trying to work out, how can we get maximum value for money and make sure that we are satisfying our strategic purposes and our purposes elsewhere in our economy and in our society in a way that we can afford.

Connell:

Tim Lester from the Seven Network.

Tim Lester:

Treasurer, just to pick up on your comments there, you’re quite blunt about strategic threats, acknowledging a more dangerous world and more perilous times for the global economy arising out of the Middle East. Though, on saying that your government is increasing the budget for defence, do you believe that the track to roughly 2.3 per cent of GDP by the early, mid 2030s is still fit for purpose in the current environment. And if you do believe that, what are you saying about the United States’ demand for 3.5 per cent, surely that is stupid if you hold to the current Budget.

Chalmers:

I’d say, Tim, that to go from 2 per cent of the economy to 2.3 per cent of the economy by the early 2030s represents a very substantial increase in our budget for defence spending.

I try to read as much as I can of all of the commentary about national security and defence funding, and I think that’s one of the things that’s often missed, is that we are already making what would be seen in any other time a really substantial increase in investment in defence. Personally, I do that enthusiastically. I understand the risks and the threats.

It’s a really important, warranted thing that we are doing as a government, and it’s substantial. Now, of course, our partners would like us to spend more on defence. It’s not unusual, even people I have a lot of time for, the whole time I’ve known Kim Beazley, decades now, he’s said that we should spend more on defence. And so it’s not uncommon or unusual for there to be a constituency for more defence spending. It’s not unusual for there to be a constituency for less defence spending at the same time.

When it comes to our American partners, again, that’s the message they’re taking to all of their friends in the world, not just us. They’re saying that in Europe. They’re saying that in our own region, they’re saying that in our instance as well. Over the life of the next 10 years, it may be that governments are not necessarily just about political persuasion. It may be the governments make different decisions about defence spending, but let’s not dismiss the very substantial increase that we’re already making.

Connell:

Katina Curtis from the West Australian.

Curtis:

Thanks, Treasurer, just picking up on that defence theme, what you said just before about getting maximum value for money, and at the start of your speech, about your obsession with delivery. If there’s a submission comes to the NSC later this year that says, for example, we want to buy these frigates, we can get them for cheaper and faster if we buy one off the shelf being made overseas, or we can get them a bit more expensive, take a bit longer if we built them in Australia. What is your thinking in approaching those kind of trade‑offs as you talked about, and how much perhaps, has this been shaped by discussions, previous discussions with Steven Kennedy?

Chalmers:

First of all, I try and avoid hypotheticals at the best of times, but I think especially when it’s about defence spending and national security and issues which are obviously very sensitive. I think more broadly, what the government has shown a willingness to do and an ability to do is to engage in some of those difficult decisions about sequencing. I pay tribute to Richard Marles for the way that he’s come to us collectively, and Pat Conroy as well, to make sure that we can sequence this defence spending in a way where we do get maximum value. Richard does way more work at that than I think he is acknowledged for. I acknowledge him for that. Katy and I have worked with him very closely on that, and Pat Conroy as well. And I forget the last part of the question.

Curtis:

Just, how is your thinking being shaped?

Chalmers:

Well, Steven is an influential fellow, and I loved working with him, and I’m excited about working with Jenny, and we get the best of both worlds because Steven and Jenny, their colleagues, they think deeply about the economy, but also about the national security environment. It’s no coincidence that I’ve tried to tell you that the next 3 years of my life are going to be about 3 things – productivity, budget, sustainability and resilience.

In the face of global uncertainty, not every Treasurer over the last recent decades would have brought something which has a national security element to it on their list of 3 highest priorities, I think that reflects the world that we’re in. I hope Ken doesn’t mind me saying that when we were talking about a draft of the speech earlier in the week, we were really talking about this kind of permanent state of churn and change in the world. The fact that it would be a heroic assumption to pretend that 4 big economic shocks in less than 2 decades with national security elements to them that this is just some kind of bizarre period that we’re living in, and that we’re going to go back to this period where we have decade long periods of calm like we had after the end of the Cold War, and that would be a heroic assumption to make, almost certainly wrong and not especially wise when it comes to thinking through our options.

And so you asked me about Steven and Jenny and the advice that we get, really the whole government, I think, thinks very deeply about the fact that we’re in this period of extraordinary churn and change. From my point of view, my reason for being is to make sure that our country is a beneficiary of that churn and change, not a victim of that churn and change. We were huge beneficiaries of that great moderation that followed the end of the Cold War between then and whether you mark the end of it as the beginning of the war on terror or the GFC, Australia did so well out of that period of moderation and calm. And now we need to work out a way to do really well out of this world of permanent churn and change. And the advice that we get from very smart people who we respect greatly in a public service which is very well led, reflects, I think, the nature and the magnitude of that challenge.

Connell:

It’s only a month and a half after the election. You’re talking big changes in reform. Would talking about that during the election scare voters off.

Chalmers:

Well, I think we took a substantial agenda to the election.

Connell:

We’re talking new changes today.

Chalmers:

Well, what I tried to say today is that, from the Prime Minister down and again, talking out of school a bit, but all of the kind of collective conversations that we have as a government led by Anthony are about making sure that we deliver the things that we took to the election. And most of my time has been spent working with Clare and her staff, Chris Bowen’s got a big challenge to roll out the things we took to the election, Mark Butler’s got a huge portfolio and a huge opportunity, and so our obsession is with delivery, but we’ve also got, in addition to that responsibility to deliver, we’ve got an obligation to include people in a proper national conversation about what comes after that, and I think that’s consistent with the way that we talked to during the first term of our government.

One of the things that has kind of surprised me on the upside is that, when I rolled in bleary eyed to the Insiders studio the day after the election and David Speers said to me, what’s the priority? And I said, well, we spent a big chunk of the first 3 years trying to beat inflation, and now we’ve got to spend the next 3 years trying to get on top of this productivity challenge, I’m absolutely delighted with the way that the place responded to that, and that, I think reflects, again, going back to Tom’s I think first question, other Tom’s first question, it goes to the level of ambition that people have. It’s consistent with the way that we govern, which is to say, here is how the world is changing, these are the things that we need to do to be beneficiaries, not victims, of all of that change. We’ve got an agenda that we took to the people, we will deliver that agenda in the most efficient way that we can. We’re obsessed about delivering that, but we also need to work out what’s next, that’s what my speech was about, that’s what the roundtable is about, and it’s what the second term will be about.

Connell:

Just about time, are you happy for a couple more?

Chalmers:

Yes.

Connell:

All right, Michael de Percy from the Spectator Australia.

Michael De Percy:

Michael de Percy, Spectator Australia. Treasurer, the UK was decisive in increasing the defence budget. They did this in a budget neutral way by reducing or cutting the foreign aid expenditure. So it’s pretty obvious on what’s happened in Canada in the last few days, if Australia wants a seat at the table, we’re going to have to ramp up our defence spending. If we don’t, we won’t have access to the US. If we don’t, we’ll need to ramp up our expenditure. So if that’s the case, will you cut spending, increase taxes, accumulate more debt, or are you going to leave defence spending as it is right now?

Chalmers:

Thanks Michael. I think my answer to your question is a bit like the answers to some of the other defence‑related questions. I think Nicola and Katina and others. We are already substantially increasing our defence investment, and we’re talking about tens of billions of dollars in extra investment in the coming years because we recognise how important it is, we work with our partners to invest in our own security, and so those extra billions of dollars reflect that we’ve made room in the budget for that.

When it comes to foreign aid, I know that this is sometimes a contentious issue, but we don’t see it that way. The way that we invest in our region in particular is an important investment in our national security and I think in some ways it would be to cut off our nose to spite our face if we were to go after aid funding in the interest of making ourselves more secure, I think the outcome of that we would be less secure, and so I have always been within reason – my colleagues have backed me up – an enthusiastic supporter of investment in our region, particularly our Pacific neighbourhood, because if you genuinely understand the risks in the 2020s and the 2030s, a lot of those risks can be best addressed by genuine engagement and the aid budget’s part of it.

Connell:

Final question, Jacob Shteyman from AAP.

Jacob Shteyman:

My question is about the carbon tax, but not whether you’re going to rule it in or out. You had a front row seat the last time Labor tried to implement it and my question is, what have you learned from that experience about how to implement contentious tax reform and to make it stick?

Chalmers:

I think whether it’s that episode or – I have been around for a little while, not very long as Treasurer, but I’ve been knocking around with a lot of you for a very long time. So Misha Schubert, , now I’ve known Misha for probably 20, 25 years and so have been associated with a lot of the policy deliberations that we’ve gone through. I think, like anyone you learn from all of them, not just that one. I’m sort of reluctant to pull out a specific lesson from that period, but I think whether it’s in climate, whether it’s in tax, some of the other areas that we’ve grappled with as a country, not just as governments, I think inevitably, you learn from all of that.

What we’re trying to do here is we’re trying to say we have a big, ambitious agenda. We’re going to roll that out as we said we would, but we’re going to test the country’s appetite for more than that. And reform succeeds when you can bring people with you. It requires courage, but it requires consensus as well. And if you go through the reform experience of this country over a long period of time, you can isolate the lessons, but I think that’s one of them. Having a government prepared to make the necessary trade‑offs is really important. We will provide the leadership, Anthony will provide the leadership, and we will provide the opportunity and we need everyone to play their part.

And there will be some things that people can’t agree on. Of course, it would be a strange country if there was unanimity about some of these big challenges or what we need to do to address them, that would be a strange place but what we’re trying to do here is to learn from Australia’s reform experience, overwhelmingly, a proud experience of change and reform that delivers dividends, often decades down the track. And so let’s see what we can achieve together if we genuinely listen to each other, we genuinely try and find the common ground, we genuinely try and engage in some of these difficult trade‑offs. I’m realistic about that, but I’m optimistic about it too. I think there is the right amount of appetite. I think the problems are well understood and identified, and I feel confident, cautiously confident, that we can make some progress together.

Connell:

Treasurer, you’ve been generous with your time today.