TOM CONNELL, HOST: Let's get back to the Budget coverage and go straight to the Prime Minister. Anthony Albanese, thank you very much for your time. I know you have a little bit on at the moment. Just starting off with the framing of the Budget.
ANTHONY ALBANESE, PRIME MINISTER: Good morning, Tom.
CONNELL: Looking through it, it seems to be one for those doing it toughest. Is this unashamedly focused on the lowest income households that are really getting hit by inflation?
PRIME MINISTER: Well, this is unashamedly a Budget to provide that strong foundation for a better future that we promised, by taking pressure off families who most need it, whilst not putting pressure on inflation.
CONNELL: Okay. And in terms of that inflationary pressure, though, what is the real test here? Because at the moment, predictions are, at the moment, interest rates stop at 3.85 per cent, they don't go any higher. If the RBA is forced to jack them up higher, will this Budget have failed?
PRIME MINISTER: Well, what this Budget does is hand down a responsible series of measures. The first projected Budget surplus that we've had in 15 years, we've made $40 billion of savings over the two budgets, last October and then last evening. We have put 87 per cent of the revenue gains straight to that bottom line, to reduce debt, to reduce the interest payments on that debt, to take pressure off inflation. This is a responsible Budget which at the same time has found space in order to provide support through measures like the Energy Price Relief Plan, together with our price caps on gas and coal we introduced in December last year, are estimated by Treasury to take three quarters of a per cent off inflation. So, we could have done what some suggested, which is to hand cash out to provide that support. Instead, we designed a mechanism to reduce people's power bills, that provides that support to families, whilst at the same time it therefore is deflationary as a measure. So, this is a well thought-out Budget. We've been working hour after hour, day after day, week after week to put together a responsible Budget that provides that support where it's most needed whilst not adding to inflationary pressure.
CONNELL: So, that figure was provided in the Budget, but obviously at least some of that extra money will be spent. So, too money for child care. So, yes, cheaper child care, but some of that money will be spent. And particularly welfare, that's not going to reduce anything, that will only put money in pockets. And we've got economists this morning, Prime Minister, sorry, just to get to the question, saying this could have an overall impact on inflation and increase the rate rises. If that happens, will the Budget be a failure?
PRIME MINISTER: Well, Tom, take one of the issues that you just raised, cheaper child care. Yes, that will assist families, but you know what it'll do? It'll boost productivity, it'll boost workforce participation, it will boost the size of the economy. And that's why it is an economic reform, not a welfare measure. That was the largest on-Budget commitment that I made as the Labor Leader in the lead-up to the election. It comes in on July 1, as we promised, and it will make an enormous difference. But it won't add to inflation because it will boost productivity, it will boost workforce participation. We're targeted in there as well and we make no apologies for making sure that we address that issue. The other issue the Reserve Bank have spoken about, of course, is supply chain issues. So, our fee-free TAFE, another example, something that will reduce the costs of people who are undertaking TAFE, but at the same time, boost the economy, provide the skills that are needed. A responsible measure that will make a positive difference to the economy and deal with those supply chain pressures that have been identified. Like our National Reconstruction Fund will do the same thing. Our Buy Australia plan will do the same thing.
CONNELL: Fair enough. So, that's what you've sketched out and that's what you're saying this Budget will achieve. If we do see inflationary pressure and rate rises happen, will the Budget have failed its most important test?
PRIME MINISTER: Tom, this is a responsible Budget which will make a positive difference to our economy, that looks after families that are under pressure. Now, which of the measures that we've put in place, the responsible measures, should we have not done? A modest increase in JobSeeker, support for rental assistance, a 15 per cent increase in recognition that rents are rising, the support that we have for single parents payments, lifting that up from the youngest child being eight to the youngest child being fourteen? All of those measures are responsible and will make a positive difference as well.
CONNELL: Are you reluctant to have the test of rate rises? Does that worry that they could be happening and you don't want that to be the test of the Budget?
PRIME MINISTER: Tom, the test of the Budget is, does it make a positive difference to our economy? The answer to that is yes. Does it make a difference and take pressure off those who are doing it tough? Yes, it does, in the finest Labor traditions. But what it does is do it in a way that doesn't put pressure on inflation. And Tom, there would be some basis if I was here talking to you, speaking about how big the deficit was. We've reduced debt. The former government handed down a Budget just a year ago. We haven't been in office for a year yet. So, a year ago, the interviews that you would have given, you wouldn't have had to ask about any savings because there were none, not a dollar. There was all dollar splashes before the election. There were a whole lot of increases in cash handed out and money splashed around. The deficits that were produced were enormous at that time. What we've done in the two Budgets we've handed down, within one year of us being elected, is the most significant fiscal turnaround in Australia's history in such a short period of time. And we've done that through hard work and responsible economic management whilst making sure that we're looking after people at the same time.
CONNELL: All right, I know you need to go, one final question on the stage three tax cuts. And I know they were not deliberated on this time around. Is it fair to say that unless there's a change to the economic situation, they will remain when you do the next Budget in a year's time? Is that where we're at?
PRIME MINISTER: We gave it no consideration, Tom. They're legislated. We haven't changed our position.
CONNELL: The question is, though, is the default that unless something changes, they're in the Budget next year? Unless there's a change in economic circumstances?
PRIME MINISTER: I can’t give a clearer answer than we haven't changed our position. We gave no consideration to that. The measures that we are interested in, we put into last night's Budget.
CONNELL: Okay, all right. And on the fairness of it, I know you've been saying this morning that it doesn't just go to the top end of town. Are you going to mount a fairness argument on stage three? That it does help lower income earners as well?
PRIME MINISTER: Tom, that was a debate that happened in 2018. What I'm interested in is the Budget that we handed down last night.
CONNELL: All right, well, we know you’re short on time. We'll leave it there. Prime Minister, Anthony Albanese, thanks for your time.
PRIME MINISTER: Thanks, Tom.