THURSDAY, 3 SEPTEMBER 2020
SUBJECTS: Recession; The Morrison Government’s lack of a jobs plan; JobKeeper; JobSeeker; Superannuation Guarantee; Tax cuts.
LEON DELANEY,HOST: Joining me now the federal Shadow Treasurer Jim Chalmers. Good afternoon.
JIM CHALMERS, SHADOW TREASURER: Good afternoon, Leon.
DELANEY: Thanks for joining us today. Now, nobody could have stopped this recession could they? We all knew it was coming, didn't we?
CHALMERS: We've always acknowledged that this diabolical pandemic brings with it devastating economic consequences that have pushed the economy over the edge. But we also need to recognise that the economy wasn't exactly purring before that; we had issues with weak wages, weak growth and weak business investment even before most of us had even heard of COVID-19.
DELANEY: Now, of course, the response to the challenge is the thing that matters. Largely the National Cabinet process has resulted in some pretty good bipartisan work, although there have been some cracks in the facade, haven't there?
CHALMERS: There certainly has. If I'm honest with you, Leon, one of the things that frustrates me is that there is a lot of marketing, slogans and spin about how well the Federal Government has been working with the state and territory governments, but they don't miss the opportunity to distract from what's happening in unemployment and the rest of it by trying to point the finger at the states and territories. That's disappointing. If this so-called National Cabinet is to work effectively, then they genuinely need to be all in this together. I don't think anyone who has been listening to Treasurer Josh Frydenberg in particular would think that he's got the memo about cooperation. He spent most of the week bagging the state governments and we know why he's doing that; he's trying to distract from his own failures.
DELANEY: Of course, the state governments might attract some criticism legitimately iIn some cases. Some people believe that there were mistakes made by the Victorian Government, for example, and at the moment there's a lot of criticism directed at the Queensland Government, with people believing that perhaps the hard border closure is a little bit too harsh and should be eased a little earlier than the Queensland Premier seems to be prepared to do. It’s hard to reach agreement on these matters, but is the Queensland Government right or wrong on that border closure?
CHALMERS: They've been right because they've been able to limit the spread of the virus. I think that those border closures have been a necessary step, but not an easy step to take and not a decision taken lightly. It's a difficult thing that Premier Palaszczuk has instituted. One of the reasons why a lot of my fellow Queenslanders are supportive of those border closures is because they know they are based on medical advice, and they're based on trying to keep people healthy and they are based on trying to save jobs. Nobody wants these borders closed for even a day longer than is necessary and responsible. But nor do people want to see another outbreak which would just be absolutely devastating to the workers, businesses and communities of Queensland. When it comes to Victoria, the Victorian Government themselves have said that clearly mistakes have been made. That's why they they've instituted an inquiry to get to the bottom of what's gone on there. The difference between what's happening there and what's happening federally is that Daniel Andrews takes responsibility for what's going on there. We ask Scott Morrison to do similarly, to take responsibility for the fact that the failures in aged care have led to more deaths and the failures in the economy have led to more jobs lost.
DELANEY: With respect to Queensland, are you completely satisfied that the Premier's announcement that there'll be no change to the border policy until after the October election is not motivated by that election date?
CHALMERS: I think it's motivated by the medical advice. We get the opportunity to be briefed from time to time by the Chief Health Officer in Queensland and I'm confident that Premier Palaszczuk leans very heavily on that medical advice. Look at the record. There have been people saying to Premier Palaszczuk for some months that the border should be opened, including the State Opposition, and the Treasurer Josh Frydenberg. He was calling for the border to be reopened shortly before the Victorian outbreak. If we'd had a similar outbreak as they've had down south, that would have been devastating for businesses in Queensland. Annastacia Palaszczuk has been right, resolute, careful and cautious. She's based her decisions on the medical advice and that's really all we can ask for.
DELANEY: Do you support the Government's apparent plan to bring forward those income tax cuts?
CHALMERS: We haven't seen what they're proposing yet. They've sent up some smoke signals in the last couple of days. We've said, if you've got a concrete proposal, come and talk to us about it. We'll discuss it at our end and we'll announce a position on it. We've been pretty open minded, constructive and responsible about these proposals in the past but we need to understand what they actually want to do here. It's not a blank cheque, nor is it a substitute for a comprehensive plan for jobs.
DELANEY: Some have suggested that bringing forward tax cuts will benefit only those who are already well off and those people are less likely to actually spend the money in the economy because they don't need to. But they would need to invest it somewhere, wouldn't they? Wouldn't that still help business investment?
CHALMERS: I think these are important considerations. It depends what they actually do; which tax cuts they bring forward, if any; how they're structured; whether they make any other kinds of changes. All the economists will tell you that the people most likely to spend in the economy are the people with the least amount of money. That's an important consideration, too. I'm reluctant to get into the ins and outs of what they may or may not propose. I've been asked during the course of today -
CHALMERS: - to sign up to something I haven't seen. So let's see what they propose. We'll engage with it constructively and we'll come to a view.
DELANEY: Something we have seen is the legislation to extend JobKeeper at a lower rate. You and others have been arguing that it should have been maintained at the current rate because circumstances have changed since that plan was first implemented. That's a battle you've already lost, isn't it?
CHALMERS: No, actually, Leon, it's not. The legislation that was passed through the parliament this week extended the ability for the Government to make that payment, which we think is a good thing. We didn't want to see the Prime Minister's hard September snapback. We thought that would have been very damaging. What went through the parliament with our support was an extension from the end of September to the end of March so that the Government can continue to pay it. One of the things that not everybody recognises is that the rate and eligibility for JobKeeper isn't actually set by the parliament. It is set by the Treasurer himself. At the stroke of a pen, he can change the rates and eligibility for it. The ball's in his court now, and what we say to him, respectfully, is that he should reconsider his plan to pull back on JobKeeper because the economy is still weak, and unemployment is still rising. It doesn't make a lot of sense when unemployment is rising for Government support in the economy to be falling. He has an opportunity to reconsider that cut to JobKeeper and he should take it.
DELANEY: And the same argument I would presume applies for JobSeeker?
CHALMERS: It's the same principle, which is that we want to make sure that government support in the economy is responsive to what's actually happening in the economy. When they announced those changes a little over a month ago, their assumption was that things were really starting to come good. We all know unfortunately that in parts of Australia things aren't coming good as fast as we would like. He should reconsider it. He should tailor the economic support to the economic conditions. That's all we ask.
DELANEY: You mentioned smoke signals coming from the Government a little earlier. Some of those smoke signals seem to be indicating that the Government may be considering the suggestion coming from their own backbench, that next year's scheduled increase in compulsory super contributions ought to be either delayed or perhaps even abandoned all together. It's not only Liberal Party backbenches; there's quite a lot of people in the community, business groups, and even some welfare groups suggesting that any increase in the super contribution figures would actually come at the cost of wages growth. Is that a legitimate argument? Does it have any validity?
CHALMERS: No it doesn't Leon, and I'll tell you why. The Government has already frozen the Superannuation Guarantee. What followed wasn't wages growth, it was stagnant wages. We know from recent experience that the link between freezing the Superannuation Guarantee and wages growth is simply not there. That argument carries no weight whatsoever. We all know what's happening here; the Liberals and Nationals in Canberra have never really supported super, they look for opportunities to diminish it, and they're using this COVID crisis as an excuse to do that. That will be absolutely devastating for people's retirement incomes. We don't want to see them thieve people's super in the way that they are gearing up to do. It will be bad for the economy, bad for the individual retiree, and it will diminish our superannuation system which is the envy of the world.
DELANEY: Now that argument seems to have been accepted by two-thirds, according to one survey, of prominent economists. It's also apparently been accepted by such groups ACOSS, the welfare organisation, who seem to have accepted the argument that any increase in super payments is going to come at the cost of wages and possibly even jobs. A lot of people have been convinced by that argument. Why not you?
CHALMERS: Because we've seen what happened when the Superannuation Guarantee was frozen. We saw it happen in 2014. Tony Abbott was Prime Minister, Joe Hockey was the Treasurer. They said the same thing that a lot of these characters are saying now, that if you freeze the Superannuation Guarantee we'll get all this wages growth. What followed instead was historically stagnant wages. We didn't get the boost to wages that they all anticipated and promised. We need to learn from that experience and recognise that if the Government comes after the legislated increase to the Superannuation Guarantee, all that will mean is that workers will have less super to retire on when they finish working and they won't see that in their pay packets week to week.
DELANEY: Jim Chalmers. Thanks very much for your time today.
CHALMERS: Thanks for having me on your show Leon.