Ok, David Littleproud is now speaking to the ABC pretending he has an economic plan, so perfect time to take a break ahead of question time.

This is it pretty much. The senate shifts to estimates tomorrow (with another day scheduled for Friday) and then we are in the official election campaign, so we have two question times left in this parliament.

Yesterday was a complete fizzer. Let’s see if there is any energy today. After coffee.

And then on the prospect of an election debate with Angus Taylor, Jim Chalmers says:

I’ve actually written to Angus with all of the requests that we received for debates. I think there are probably 10 different requests for debates. Why would happily debate the at least weekly during the election campaign. They mean that seriously. I think that would be a good thing. And a lot of you put forward suggestions about the best forum for that was if there is a neutral forum, an appropriate forum we should do it. I’ve made myself available for Q&A on Monday night to do an economic debate. Unfortunately he declined the opportunity and that’s for him to explain why he did that. But I would certainly be very, very happy to fulfil what I think should be an obligation on a Treasurer to front up to the National Press Club and do an economic debate and I hope he agrees your kind invitation.

Asked about four year terms – something Anthony Albanese has publicly and privately supported for some time, and also has the in-principle support of the opposition, but would need a referendum, Jim Chalmers says:

I’ve always been a believer in 4-year fixed terms. I can’t imagine that we would put that to a referendum ahead of some of the other referenda options that are available to us, and so I don’t want to say where that belongs in the queue. That would be better for long-term economic decision-making. They don’t think anybody seriously contest that. What would contest, respectfully, is this idea that 3-year terms prevents economic reform.

Q: In just over a week from today it’s Liberation Daily in the US, when US President Donald Trump will announce his new tariff regime. They wanted to check, in advance of that, and just now Donald Trump has said there will be very limited exemptions to the tariffs that are due to come into place, in advance of that day have you had any conversations with your counterpart, has the Government had any conversations with the Trump Administration to try to secure one of those exemptions and have you been given any guarantees?

Chalmers:

No, is the answer to the last part of your question. We take no outcome or no option for granted, but we are engaging, as you would expect us to, wherever we can, we are engaging. And we’re speaking up for in standing for Australia’s interest. You know, there are two kinds of concern associated with these escalating trade tensions for us. The direct impact on our industries and workers and businesses, obviously a big concern, we want to make sure we don’t trade away or give away the sorts of things that we cherish.

The previous is obviously a good example of that. But more broadly as well these escalating trade tensions are very substantial concern. You know, trade tensions, as you know and as your news organisation knows risk high inflation and slower growth at a time when the world is just coming to the good and of these inflationary pressures and we’ve had a period and expect a period of slow growth, so growth has not been thick on the ground in inflation has been a challenge and so we don’t want to see these escalating trade tensions make things worse.

We will continue to engage where we can, will continue to speak up instead stand up for Australia’s interest, and I’m sure that the outcome of President Trump as my deliberations will be known before long.

Q: Treasurer, you’ve said one of the priorities in the Budget is about lifting the productive capacity of the economy and you’ve also talked about the importance of small business, something the Coalition is clearly focused on. I wondered if you could clarify the status of the instant asset write-off? As I understand it, if legislation already before the Parliament is not extended by the time we leave here this week, the write-off level will remember revert to $1,000 for smalIer businesses. What’s your plan for that? And what’s your plan for the future?

Jim Chalmers:

The extension for the instant asset write-off we’ve already budgeted for has been held up in the Parliament. I think that’s, frankly, shameful that it’s been held up, held hostage to some Senate shenanigans. We want to see that passed. We’re talking with the crossbench about that right now and I don’t want to drop them in it but I had a conversation with a crossbencher this morning about it and we know it’s an issue.

In case we run out of parliamentary runway, we want to see that extended. That’s been our goal all along. We tried to pass it through the Parliament. Katy speaks fluent Senate. I don’t. She’ll have a better sense of the mechanics there.

We want to see that passed and as the Prime Minister indicated earlier today we’ll have more to say about the future of the instant asset write-off in addition to that. We want to dot right thing by Australian small businesses. We think it’s a great thing that something like 25,000 new businesses have been created on average every month for the life of our government, which is a record. We’re doing what we can to support them – energy bill relief, this instant asset write-off, supporting the hospitality sector with a tax break, extended practices for the ACCC to level the playing field. What we’re doing in Mergers and Acquisitions, that’s all about supporting small business and would like to pass the instant asset write off as part of that as well.

Q: I want to ask about tobacco excise. Over the past five years, Treasury forecast that you’d raise something like $77 billion and it’s now under $50 million. Somewhat of somewhat of a public policy disaster given smoking hasn’t really shifted in rates in recent years. And you’ve got a bit of a triple disaster in a bottom line falling out of tobacco, which was once the fourth biggest revenue source. Health outcomes not shifting and the creation of a multibillion-dollar industry for organised crime. So my question is what consideration has been given to reducing tobacco excise to attack the financial incentive that is so attractive for crime gangs?

Jim Chalmers:

Look, we’d rather give tax relief to every Australian taxpayer than to provide tax relief for smoking. We don’t think that’s the best way to go about this problem that we acknowledge. There is a substantial problem in the Budget when it comes to tobacco excise. There are two ways it comes down. One is a good way and one is a bad way. The good way is more people give up the darts. We want that. The bad way is that more people avoid the tax and we’re seeing in organised crime and other ways there’s been an increase in that kind of often violent tax evasion. And so what we’ve done in the Budget, recognising and acknowledging that problem, there is a serious problem when it comes to that revenue line is to invest another $157 million in enforcement and compliance. We think that’s a better way to collect more revenue in recognition and acknowledgement of that problem.

There was $188 million in resourcing for compliance and enforcement in January of 2024. We know we’ve got a problem there. We know we’ve got to do something about it. We’re not convinced that by cutting taxes for smoking we’ll get the objective we want. We think the better way is to invest in enforcement and that’s what we’re doing.

Q: I think the public are probably a lit by more concerned about how much tax they’re going to be paying when they’re 55. So I went back through some of the budgets. In your first budget I added up all the extra tax upgrades, tax revenue upgrades you’ve got from the first budget to this one and it comes to about $392 billion. So in that first Budget, you also predicted that fiscal ’26 deficit would be $42 billion. Last night, $42 billion. So that means that over those four years, you’ve had this extra unexpected $400 billion worth of tax revenue and yet you haven’t been able to reduce that fiscal year deficit. So I don’t – I mean, the public, the general voting public wouldn’t know those figures, so my question to you is why are you exploiting the lack of awareness from the voting public about where and how all that extra revenue you’ve got is being spent, not saved?

Chalmers:

OK. There are a few elements to that. Let me pull out the most important ones. What matters when you get revenuup grades in the Budget and they were more substantial at the of our term than in the Budget last night. There was a small revenue change in the Budget we put out last night, what matters is what you do with the upgrades and very, very unusual in historical terms if you want to make comparisons with the past, we’ve banked most of those upward revisions. Our predecessors use to spend most of them. We’ve banked $7 in every $10 in the course of our government. We recognise one way to get the Budget in better shape and one way we have been is to bank the upward revisions to revenue. I think if you’re going to quote the big number that you’ve quoted that the Liberal Party uses as well, you need to recognise…

Q: That’s my number.

Chalmers:

Understood. I’m not saying you got it from them, I’m saying it’s similar – you have to recognise that we’ve banked 7 in every 10 of those dollars because we understand the important role that that plays in Budget repair. I suppose the question is you’ve still got 70% that public don’t realise that that is being spent, not saved. Every Budget you make a series of decisions about revenue and investments in the future and cost-of-living help and in this case, tax cuts. It is historic ally unusual for a government to bank 70% almost of these upward revisions to revenue. Our predecessors and not just our immediate preyed setters but the Howard Government as well, used to spend almost all of it. We’ve saved the majority of it, almost three-quarters of it.

Q: In terms of what’s been announced so far in the lead-up to this election, we’ve seen billions in spending measures and not much on the savings side. Will you commit that before the election, you’ll reveal any additional savings that Labor would plan to make if it returned to Government? It won’t be something people find out from a Budget document if you’re re-elected?

Sigggghhhh.

Chalmers:

That’s our economic plan. We made that clear last night. And if there are additional savings we’ll detail them at the appropriate time. Before the election? If they’re decided before the election we’ll reveal them then. The Budget is not 20 hours old yet. The best sense of what we plan to do in the economy is what’s in the Budget. A couple of billion dollars of savings already. It’s normal in the course of an election campaign for there to be subsequent announcements and subsequent decisions taken and we’ll outline them in the usual way.

Q: On top-up tax cuts, once they’re fully in place they cost $7.4 billion every year. But there’s no saving of $7.4 billion a year in that year when they started so they’re unfunded. Why is that? Did you think you didn’t need to fund them by finding savings to offset tax revenue foregone?

Chalmers:

First of all, we’ve found $95 billion in savings over the course of our four budgets. I’d say again and I hope I’m not labouring this point it’s pretty unusual to have billions of savings in a Budget on the eve of an election. That’s unusual. There wasn’t many savings in the March ’22 Budget. As Katy said more eloquently than I do, the best way to think about Budget repair is not in any one specific moment in time but the progress that we’ve made over four budgets and But the previous savings… that… The improvement in the Budget is about making room for these sorts of things which are tax cuts, cost-of-living relief.

Q: But is that double counting? You’ve made savings in this term of Parliament but that doesn’t necessarily give you a new saving to fund a new initiative and here you’ve foregone the tax revenue without any additional saving to cover the cuts.

Chalmers:

The $207 billion improvement in the Budget is net of those investments we’re making in the tax cuts in addition to tax cuts we’re providing. Now, we think it’s a very important, very worthy objective to return bracket creep where you can and do it in the most responsible, cost effective, efficient way you can and that’s what the tax cuts represent. They’re modest in isolation but substantial with the rest of the tax cuts and cost-of-living help and they come in conjunction with this history-making improvement in the Budget more broadly, net of that, in addition to that.

Q: If you think back to where you were in 2022 and now, with no surpluses for the decade, was that the plan?

Chalmers:

You’ve deliberately ignored two surpluses we delivered. When we came to office, it was only deficits and we turned two into surpluses. You’d expect me to say in and maybe Katie will agree with me – we think that is too easily dismissed and diminished. We wouldn’t have had those if we’d not taken the responsible approach to banking and saving and the spending restraint we’ve shown. Let’s not lightly dismiss those surpluses. They’re hard to get. We haven’t seen back-to-back surpluses in this country for almost two decades so let’s not try and whitewash that from history. It’s part of our record and we’re proud of it and it meant there’s a structural benefit too because those two surpluses and smaller interest bill this year is paying dividends for us.