Television Interview, Sky News First Edition

Release details

Release type

Related ministers and contacts

The Hon Matt Thistlethwaite MP

Assistant Minister for Defence

Assistant Minister for Veterans’ Affairs

Assistant Minister for the Republic

Media contact

Ben Leeson on 0404 648 275

Release content

13 May 2024

SUBJECTS: Budget; Inflation; International education reforms.

PETER STEFANOVIC, HOST: Well, Federal Treasurer Jim Chalmers is taking a major punt on the economy, predicting, with the help of Treasury analysis, the inflation fight will be over by Christmas. Joining us live is the Assistant Defence Minister, Matt Thistlethwaite. Matt, good to see you. Big call. Not all economists are convinced that will be the case.

MATT THISTLETHWAITE, ASSISTANT MINISTER FOR DEFENCE: Well, we believe that we're running the right strategy to ensure that inflation moderates, and that is principally running a budget surplus. We managed to achieve that last year. When you run a budget surplus, you save more than you spend, and that allows you to take pressure off inflation through fiscal policy. Then, of course, you have the independent Reserve Bank running monetary policy through interest rates, and that's been occurring as well. So, you've got those two prongs of government aimed at policies that will achieve moderation in inflation. When we came to government, inflation was at 6%. It's now down to about 3.8%. But we've got more work to understand that, and that's what policies that will release will be about.

STEFANOVIC: As we know, it’s always the last stretch that’s the hardest. The big point here that's been raised, you know, quite often this morning is this huge discrepancy, though. I mean, you're saying, and we hope you're right, that the inflation fight's over by Christmas, but the RBA reckons it's going to be another year.

ASSISTANT MINISTER: You are right, Pete. The last furlong is often the hardest. The difference in the forecast is that the RBA doesn't take into consideration the policies that will be released in the budget tomorrow night. They haven't had access to them yet, but our policies are aimed at ensuring that inflation moderates further. It's a lot like Australian households. Australian households are doing it tougher the moment and many of them are saving more than they're spending to get by. That's the same approach that the Australian government will be taking, saving more than we're spending to ensure that we can get inflation, inflation back in that 2% to 3% target.

STEFANOVIC: If it doesn't work out, though, and a rate rise happens sometime after Tuesday night, will Jim's and your economic credibility of your government be harmed?

ASSISTANT MINISTER: Rate rises are determined independently by the Reserve Bank. We can't determine those. All we can do is put in place the measures to assist and ensure that we get inflation down as quickly as possible. And so far it's been working. And credit to Jim and Katy for the policies that they're putting in place. But we know that there's further work to do. And some of those policies that we will announce tomorrow night will be aimed at ensuring that we get that from final conquered and that we get back into that 2% to 3% target.

STEFANOVIC: One of the big problems is migration. At the moment, too many people coming in. Universities have been asked to do their bit to cut migration, cutting overseas intakes by up to 10%. So, basically going from 15 to five, it is one of our biggest exports. Will the sector be harmed, though, as some in the university sector have suggested today?

ASSISTANT MINISTER: Well, we're not eliminating student migration, we're putting caps on it, and caps that we believe are reasonable and achievable given the economic circumstances. It's taken us a fair bit of time to get a handle on what's been going on with the migration system. Basically, the former government talked to a tough fight, but the borders were essentially open, for one and all, and we've had to put in place measures. There's been a number of reports and we're now putting in place those measures to get some of that migration back under control. And we can control the numbers that are coming so that we can use that as a policy lever to ensure that we achieve that moderation in inflation over time.

STEFANOVIC: Matt Thistlethwaite, good to see you. Talk to you soon, Matt.


Other related releases