E&OE TRANSCRIPT
TELEVISION INTERVIEW
ABC AFTERNOON BRIEFING
WEDNESDAY, 3 JUNE 2020
 
SUBJECTS: March National Accounts; Recession; Recovery; Delayed budget update and JobKeeper review; Social housing; State borders; United States crisis.
 
PATRICIA KARVELAS: Labor's Treasury spokesman Jim Chalmers joins me this afternoon. Jim Chalmers, welcome. 
 
JIM CHALMERS, SHADOW TREASURER: Hi Patricia.
 
KARVELAS: Josh Frydenberg says Australia's negative March quarter shows the resilience of the economy through the Coronavirus pandemic, as economists at the time were forecasting Armageddon. Do you accept that the economy has been resilient through this crisis?

CHALMERS: Whatever he wants to call it, Patricia, I think that'll be cold comfort for the 800,000-or so Australians who have joined the unemployment queues in the last couple of months. His argument appears to be that our recession's a bit better than the American recession, which doesn't really cut it for a lot of people who are worried about how they'll put food on the table.
 
KARVELAS: Look, I think that that's right. There are many people who've lost their jobs but Australia's result stands in contrast to G7 and ASEAN nations who have experienced much bigger falls in GDP. Isn't that something that we should we should still be pleased about by comparison?
 
CHALMERS: It's one thing to not be in as bad a condition economically as some of those other countries that you nominate, including the US but some of the others. I guess the point that I'm making, Patricia, is that we've always said that this health crisis will have diabolical economic consequences. We are seeing those consequences now with Australia in recession. The point that I'd make to the Treasurer is that however he wants to explain it, describe it, or spin it, the main game now needs to be to respond to this crisis more effectively, to come up with a plan for jobs in the recovery, to put an end to the implementation bungles which have meant that the unemployment queues are longer than they need to be and the downturn deeper than it needs to be. The recovery will be that much harder because we have seen a series of missteps in the last couple of months when it comes to implementing what would otherwise be good ideas like the JobKeeper program.
 
KARVELAS: You've called on the Government to expand and extend JobKeeper, that subsidy, past that September end-date to prevent any further shocks to the economy. The Government's already announced a review. Shouldn't that review be key here so that whatever happens with that particular program is actually very much about responding to the economic conditions at the time?
 
CHALMERS: A couple of things about that, Patricia. First of all, we hear today in response to a journalist's question that the Treasurer is now delaying the release of the outcomes of that review, and also delaying the budget update that he promised would come this month. A couple of those important steps which the Government does need to take have been delayed, which leaves people in the dark for longer. I think that is extremely disappointing. When it comes to the design of the JobKeeper program, the real fear that a lot of people have is that the Government having implemented it too slowly and too narrowly is at risk of removing that welcome support from the economy too quickly and too bluntly. We need them to be a bit smarter about it. There have been a lot of people either deliberately or accidentally excluded from the JobKeeper payments and they've had to go off to Centrelink to get on unemployment benefits. That's just one of the ways that we think the Government could have done a much better job responding to this crisis. We acknowledge that the impact from the health crisis is substantial but the Government's response has been found wanting. We can't allow that to continue if we are to deal what will be mass job losses in our economy. 
 
KARVELAS: How about tailoring the extension of JobKeeper for industries that are still struggling? Wouldn't that be appropriate, rather than the blanket nature of the scheme at the moment?
 
CHALMERS: Yes I think that is an option that they should be looking at.
 
KARVELAS: They are though. Do you concede that that is what they actually put on the table? You say that they're talking about snap back but they're not, they're talking about expansion in particular areas.
 
CHALMERS: They haven't put anything on the table, Patricia. They said that they would do that in June. Now we know that they'll do that in July. There's no proposal on the table for how they would go about it. The Treasurer was talking about the economy heading for a cliff today in his press conference. I think the real fear is that unless they do a good job dealing with these JobKeeper payments beyond September, then all they would have done is shifted the cliff from March-April towards September-October. They need to get it right. We'll continue to make a constructive contribution towards them getting it right. We've been saying for some time, better target it, taper it, focus it on the people who need it the most, but don't just remove it on that last Monday in September because that would pull the rug out from the recovery before it even gathered pace. 
 
KARVELAS: So the Treasurer says we've avoided economic Armageddon. Do you agree? Have we avoided economic Armageddon?
 
CHALMERS: We haven't avoided recession. I don't know what he means by economic Armageddon. That's a very subjective, very emotive term - 
 
KARVELAS: Would you call what we're in economic Armageddon?
 
CHALMERS: We're in a recession for the first time in three decades. That's bad enough, Patricia. As I said his argument seems to be that our recession's not as bad as it might have been, or that our recession's better than they're having in the United States. I don't think that cuts it for people who are watching this show who are really anxious; they might be on JobKeeper and worried about losing it in September; they're worried about how they'll put food on the table; whether they’ll have a job by Christmas-time. The semantics that the Treasurer engages in are not the most relevant thing. However he describes it, how he spins it, or how he justifies it, what really matters is that the Government does a much better job dealing with these crisis and its aftermath than they have in managing the economy for the last seven years which meant that we entered this crisis from a position of weakness rather than strength.
 
KARVELAS: The Treasurer acknowledged as you just referred to that we are in a recession, and said the June quarter contraction will be much worse than March. I think that's fairly obvious. What sort of numbers are you expecting?
 
CHALMERS: It's certainly the universal expectation that the June quarter will be much worse than the March quarter. I'm reluctant to put a number on it myself. I'm not a professional forecaster. You hear numbers, big numbers, bandied about. I know that the Reserve Bank and the Government themselves have talked about numbers as high as 10 per cent. Others have talked about eight per cent or so. It's not really for me to try and make a forecast or a guess. I think it's universally accepted, unfortunately, that the quarter we're in now is much worse than the quarter we've just been hearing about today in those National Accounts. Australia is in recession for the first time in three decades. That was a record that we were really proud of; the fact that we grew during the Global Financial Crisis; the fact that we had had a period of unbroken economic growth that was envied the world over has now come to an end under the Liberals. We need to make sure that the response to this crisis is better than their economic management has been to date.
 
KARVELAS: Later this week we expect that the Government will announce a stimulus package for the housing construction sector. I know Labor has been agitating for social housing to be key here. If social housing is a key part of this package, are renovation grants a good idea?
 
CHALMERS: The way we'd come at that, Patricia, is to say that it would be really disappointing if they found a billion dollars for the building industry but not a cent for social housing within that. We've been very open minded and quite constructive. Anthony Albanese and Jason Clare have put a range of ideas on the table and said that if the Government picks up and runs with them then obviously we'll support them. We've got an open mind to grants, but we want to see social housing as part of the mix. It seems remarkable that the Government is not talking about building social housing. That would be really good for jobs now but it would be really good for the longer term prospects of people who are doing it tough in our society. I can't imagine why, when they're looking to spend big dollars on welcome support for the construction industry which is about to go through a very difficult time, they wouldn't find room in that for public housing. We've got an issue with public housing already. It seems to tick a range of boxes; we could get some good investment into the sector; we could create good jobs for tradies and the supply chains which feed them; and we could do some good in our society. I don't know why they don't want to go down that path. We want them to do it, it's not too late.
 
KARVELAS: In terms of the grants - we won't know until it's announced the way that this stimulus will go out to homeowners, people who might renovate, to try and stimulate the economy in that particular sector. Should that be means tested and at what level would you means test it, because it seems like you might need to be careful about shovelling out money to people who have it anyway?
 
CHALMERS: You do need to be really careful. We're talking about massive amounts of money in these various packages. I'm reluctant to nominate a number for the means testing, but my principle always is that you provide support where it's most needed, where it can do the most good, and where you can get maximum bang for buck for taxpayers dollars. Again that's why we keep coming back to public housing. The returns on public housing in an economic, employment, and also social sense are immense. If they're looking for a big return on an investment of taxpayer money then they should really include social housing as part of the mix.
 
KARVELAS: You've already raised this today but this issue around JobSeeker, the old Newstart payment - clearly there are some people on the Government's side agitating for it to be at a higher level than the old Newstart level. What does Labor think should happen? Some of the welfare groups have been quite specific about what they think should happen. Do you have an idea about where you want that payment to be?
 
CHALMERS: I think it's understandable that some of the groups, ACOSS and others, have put specific figures on it. From our point of view, we need to be really responsible with the budget. We don't know what the budget looks like. We've just heard today that the update will be delayed another month, having already been delayed by more than a month. The responsible thing for Oppositions to do is to declare their principles, which is that JobSeeker shouldn't go back to the old Newstart rate, that $40 a day was inadequate. We need to see the state of the budget to see what can be affordably and responsibly done. But JobSeeker, at the end of this period in September, can't just snap back to the old rate because we already knew that that was bad for people, made it harder for them to find work, and was bad for the economy as well because we're struggling for consumption which we saw again today in the National Accounts.
 
KARVELAS: But is any rise good enough beyond that $40 a day? Is anything good enough, or do you think it needs to reach a certain threshold?
 
CHALMERS: It needs to be a reasonable increase. It can't just be a token increase. It can't snap back to what it was, and it can't just be some kind of sop. We need to come at this from what's reasonable, responsible and affordable, but the most important thing is to be able to support people enough through a difficult time now and also when they're looking for work. It's been clear for some time and we've made it known for some time that $40 a day is hard enough to just survive on, let alone look for work on. We need to do better.
 
KARVELAS: Just finally the state's borders have been a big issue as you know, a bit of an argument about that. As the Federal Shadow on the Treasury side, what do you make of keeping those borders closed? I mean as a Queenslander, do you think it's smart for the economy to keep them closed?
 
CHALMERS: The first priority is to listen to the expert medical advice. That's what Premier Palaszczuk here across the river has been doing and that's what some of the other Premiers have been doing as well. That's absolutely key. The worst thing for the economy would be if you did something which encouraged a second spike in infections. That would be really damaging for confidence and for the economy. We all want to see businesses reopen. We all want to see people get back to work. Here in Queensland something like every tenth job relies on tourism and so we know how important it is. But we need to keep listening to the advice; we need to reopen the borders and reopen our businesses when it's responsible and appropriate. We also need to do what Anastasia Palaszczuk is doing which is to keep these things under constant review, so that if the advice evolves or the circumstances change, then the position on the borders can change to.
 
KARVELAS: Finally, are you alarmed by the images we're seeing coming out of the United States, our closest ally? 
 
CHALMERS: I am. It's heartbreaking to see what's happening in the United States. Some of those images make it look like America's society is in lots of ways falling apart. I think every friend of America, everybody who's seeing these things unfold on our TV screens wants there to be some kind of peaceful resolution, not just to these extraordinary events now but to the underlying causes of them. The other important point, which you've understood for a long time Patricia to give you your due, is that we can't pretend that racial injustice is something that just exists on our TV screens or in other countries. We've got work to do here in Australia as well.
 
KARVELAS: Jim Chalmers, thanks for your time. 
 
CHALMERS: Thanks Patricia.
 
ENDS