THURSDAY, 10 SEPTEMBER 2020
SUBJECTS: Australian and WA economies; State borders; JobSeeker; Superannuation Guarantee.
GARETH PARKER, 6PR: The Shadow Treasurer is Jim Chalmers. Good morning.
JIM CHALMERS, SHADOW TREASURER: Good morning, Gareth. How are things?
PARKER: Pretty good. Thanks for your time and your company. How do you assess the state of the Australian economy at the moment?
CHALMERS: It's still pretty weak, Gareth. It's patchy. Some parts of the country are obviously doing better than others, and some industries are doing better than others but overall I think it's still pretty grim. The most important way to understand that is what's happening in the jobs market in particular. We've still got rising unemployment; we've got about a million Australians already unemployed and about 400,000 expected to become unemployed between now and Christmas.
PARKER: Is WA immune from that?
CHALMERS: It's certainly not immune from it. WA is doing a bit better than some of the other states and that's obviously a good thing. But there's still weakness in parts of the WA economy as well and we need to be conscious of that because unfortunately the Federal Government is in a bit of a rush to pull some of this support out of the economy. We think that's premature when we're in the deepest national recession we've had for almost 100 years and unemployment is still rising.
PARKER: So you think that JobKeeper and JobSeeker are helping to prop-up the WA economy?
CHALMERS: Of course. JobKeeper is doing the job that we intended for it. The reason we called for wage subsidies is because we feared mass unemployment. JobKeeper is keeping more people attached to their employer than would be the case otherwise. That's a good thing. We think there are issues with how it's being implemented; it's not broad enough, and it's being withdrawn too quickly. But there's no question that it's been helpful.
PARKER: Do you think that hard borders are positive or negative for state economies?
CHALMERS: Nobody wants to see borders closed in normal times but we're in the teeth of a pretty confronting crisis. I've been listening to the business community around Australia in the various states and territories. We understand that people would rather borders be open rather than closed when it's responsible and the right time to do it. But we need to acknowledge that the decisions taken by Premier McGowan over there, and other premiers around Australia, have protected businesses and protected communities from the sorts of outbreaks that we’ve seen in Victoria in recent weeks. They've been an important part of protecting your economy from an even deeper downtown.
PARKER: No one's gone harder on that question than Mark McGowan, who's basically walled off Western Australia from the rest of the country, regardless of their community transmission rates. Do you think that that's a superior model or would you prefer to see all of the country work towards hotspots?
CHALMERS: Eventually there will be a transition out of some of these relatively drastic measures. That's inevitable. The Premiers themselves would say that. They don't want the borders closed forever or closed for no reason. We need to acknowledge that what Mark McGowan has done over there has been a successful model. It has meant that the WA economy has more-or-less been protected from the sorts of outbreaks we've seen in Victoria. The economy is performing a little bit better than some of the other states and territories. We need to recognise that. It's not a permanent state of affairs, but it's been a model that has worked so far.
PARKER: The budget is coming up next month. All of the tea leaves seem to suggest that tax cuts which were previously legislated to kick-in in 2022 and 2024 may well be brought forward to this year. Is that something the Labor Party will support?
CHALMERS: We'll have a look at it if they propose it. There's been different versions of this floated in the last couple of weeks. We're reluctant to give the Government a blank cheque and sign up for something that we haven't seen. We've said we've got an open mind to it, and we'll be responsible and constructive as we have been throughout. But equally, just bringing forward some tax cuts which were already legislated wouldn't be a substitute for what is really needed here, which is a comprehensive jobs plan. We need something to respond to our high and rising unemployment, and to create new jobs in the future, otherwise the unemployment queues will be longer than they need to be and the downturn will be deeper and longer than it needs to be as well.
PARKER: It was interesting, Paul Zahra yesterday, the boss of the Retailers Association, said that he would prefer to see the Government extend JobSeeker, that is Newstart, the unemployment payment. He'd prefer to see that kept at a higher level rather than tax cuts. Do you agree with him?
CHALMERS: I think there's definitely a case. Paul's made some really important contributions in this regard because he recognises, as we do federally in the Labor Party, that when the economy's not traveling as nicely as we would like it to around Australia, it's not the best time to pull support out of the economy, particularly when there's not a plan to replace that support. That contribution he made about JobSeeker is pretty well right. We don't have enough disposable income circulating in our economy. People aren't spending across the board. They're worried about doing that but they're also worried about their future incomes. Now is not the time to cut JobSeeker or JobKeeper for that matter because it is propping up the economy. Without it, it would be in even more strife.
PARKER: Do you agree with the idea that an increase in superannuation will be paid for by a decrease in pay rises?
CHALMERS: No. That hasn't been the case in recent years. You might recall Gareth, that when the current Government froze the Superannuation Guarantee in 2014, they said that there would be a trade-off, that there'd be higher wages. But all we've seen since then is actually historically stagnant wages, since it was last frozen. I think that link is more or less broken. I don't think that the Government coming after super is because all of a sudden they have discovered how important it is to get wage rises in the system. I think they're coming after superannuation because they've got an ideological aversion to it and they're hoping they can use this crisis to come after people's retirement incomes. We won't have a bar of that.
PARKER: Some small business people have told me on this program that they just couldn't find the extra money, or if the choice was between hiring a new worker and meeting their superannuation obligations, it would be likely that the new job wouldn't be created.
CHALMERS: I've heard that argument. I've heard it made before. The truth is that the very small increase in the Superannuation Guarantee which is slated for July next year would have a negligible impact. Besides that, if we're talking about supporting businesses in the near-term, the best thing we can do is maintain JobKeeper. In the medium- and longer-term, the most important thing we can do is sort out things like energy certainty, to build infrastructure, to invest in the care economy. All these ways would be far superior than rolling over to some of these views on the Superannuation Guarantee.
PARKER: Do you reckon that superannuation fees industry-wide are too high?
CHALMERS: Obviously in some parts of the superannuation system we would prefer fees to be lower. Again, I see in the newspapers today and certainly in the last few weeks, this is just one of the excuses bowled up by the Federal Liberals for coming after super. I don't think it's the main issue in superannuation. The main issue in superannuation is that because of early access to super, people's retirement incomes have taken a massive hit. We need to be replenishing that rather than further cutting people's retirement incomes which is what the Government seems to be gearing up to do.
PARKER: Jim Chalmers thanks for your time, appreciate it.
CHALMERS: Thanks for your time, Gareth. All the best.