E&OE TRANSCRIPT
TELEVISION INTERVIEW
ABC AFTERNOON BRIEFING
TUESDAY, 22 SEPTEMBER 2020

SUBJECT: Energy; Malcolm Turnbull; JobKeeper; Stage two tax cuts.
 
PATRICIA KARVELAS, HOST: Jim Chalmers is the Shadow Treasurer. Jim Chalmers, welcome.
 
JIM CHALMERS, SHADOW TREASURER: Hi Patricia.
 
KARVELAS: I'll get to your portfolio in a moment. But first, and you certainly no doubt heard my conversation with Malcolm Turnbull, what do you make of the priorities the Government identified? Hydrogen, carbon storage, capture and storage, soil carbon, low carbon steel, aluminium production; are these good priorities? Is that where it should be making investments?

CHALMERS: It was more of a vaguely interesting shopping list than it was a comprehensive plan for energy. I thought Malcolm Turnbull made a couple of extremely insightful observations a moment ago. First of all, he said that the way that Scott Morrison goes about energy policy is ‘crazy’. He also said that Morrison and Angus Taylor deliberately put the internal politics of the Liberal Party room before what's good for energy and what's good for the economy. But I think the most important point that he made, and I agree with him 100 per cent, is that the absence of a coherent, overarching energy policy is costing Australia jobs when jobs aren't exactly thick on the ground, but also costing us the opportunity to get more cheaper and cleaner energy into the system which would be good for the economy, good for employment, and good for investment; it ticks a lot of boxes.

KARVELAS: The Minister, Angus Taylor, indicated today that the Government would set post-2030 emissions reduction targets at the next round of climate talks. Is that fair enough?

CHALMERS: The most important thing when it comes to the setting of targets is unlike the business community, unlike the National Farmers Federation, unlike the experts and the economists; really right across the board the peak business organisations have all committed to net zero emissions by mid-century - I think that would have been an important step for Angus Taylor. He could have announced that today like Labor has announced. On their interim targets, I don't think anybody had a big expectation that he would announce those today. They're always looking for an opportunity to focus away from emissions. Even the rest of the world, the business community, and all those other players I just mentioned think that we need a target for mid-century. We need an overarching plan to get there. We need to give business the confidence that they require to invest in cleaner and cheaper energy, because once they have that confidence and they make those investments, that'll be good for jobs.

KARVELAS: Is ARENA the right body to be making decisions about investments in research and development?

CHALMERS: It's one of the important organisations and institutions. It's something that we are proud to have set up alongside the Clean Energy Finance Corporation. Both of those organisations have been really important. As Malcolm Turnbull pointed out a moment ago, the Government has tried to strangle both of those important bodies and tried to compromise their effectiveness because they don't believe in cleaner and cheaper energy. They don't want to talk about the success that those organisations have had.

KARVELAS: Let's move to another topic very much squarely in your area. ABS data shows payroll jobs fell 0.7 per cent in August, but Victoria accounted for most of that. Do you see green shoots in the economy

CHALMERS: In parts of the economy, certainly. There are some parts of the economy which are recovering. We expected that. We expected some businesses to do okay even during the COVID crisis and that some would recover faster than others. We've always anticipated that this recovery would be patchy, and that it will be a mixed bag. Victoria is obviously a concern but it's not the only concern. I'll be spending time in some of the tourism communities of Queensland next week, for example. Other parts of the economy are doing it really tough. Those figures which were released today really bear that out once again. We're talking about something like half a million jobs which have been lost in the last few months. That's incredibly concerning. It's one of the reasons why we think that JobKeeper shouldn't be cut next Monday when the Government intends to cut it. Some businesses are ready to survive on their own but many aren't. That has consequences for a lot of workers and pulling that money out of the economy prematurely on Monday will have consequences for workers, businesses, local communities and for the economy more broadly as well which still desperately needs the spending power that comes from those JobKeeper payments.

KARVELAS: Okay, so why did you previously Jim Chalmers argue for a tapering down of these payments, and then change your mind?

CHALMERS: No, that's entirely wrong, Patricia. I completely and utterly reject that. We -

KARVELAS: I've seen the quotes. You did say that it needed to be tapered. I've got the quotes in front of me.

CHALMERS: No you said that we changed our minds, Patricia. I have not changed my mind at all, not one bit. The same point that we've been making throughout still stands today. That point is that at some future point JobKeeper will be tapered away. Ideally, it won't be a feature of the economy down the track. But we've always said at every point that the JobKeeper payments need to reflect the economic conditions, they need to be tailored to what's actually happening in the labour market and in the broader economy. We have been entirely consistent on that point and in pointing out that we think next Monday, when all of this money is pulled out of the economy, that that will have very damaging consequences for workers, businesses and communities. Some of them have recovered sufficiently to survive on their own, but many have not. We've been entirely consistent on that point. We haven't changed their mind about that. There will be a tapering at some stage, but Monday in our view is too early.

KARVELAS: Okay on the timeframe, I take your points on the actual timing. Let's talk then about the reduction in those payments, because there is a reduction, which is what you're worried about. Have you asked the Parliamentary Budget Office to give you the figures on what it would cost not to take out those payments until March next year?

CHALMERS: All those figures already in the public domain. We know what the extension costs, we know what it costs per person, so we haven't asked the Parliamentary Budget Office to do that work. Those costings are -

KARVELAS: Okay so what is that figure of how much it would cost the budget if you were to keep it at that higher rate, rather than tapering it down?

CHALMERS: It depends how many businesses remain eligible for the payment, Patricia. That's a figure that only the Government will know after they cut JobKeeper and after the eligibility changes come into place next Monday. Those are not figures that are available via the PBO or otherwise because we haven't seen the reduction yet in the businesses which are eligible. The other important point here is that the JobKeeper legislation which extends the payment beyond that hard September snapback that we were worried about before, doesn't set the rate or the eligibility; that's entirely the preserve of the Treasurer, as are the costings of any changes that he might be considering. We've tried to be constructive about it, and the point we've made is to say yes, at some future point JobKeeper will not be in the economy anymore but don't be in a rush to cut it because you could cruel the recovery before it even gathers pace. It's entirely up to the Treasurer whether he reconsiders that payment and those cuts which he intends to make on Monday.

KARVELAS: Alright, my understanding is they're not reconsidering it. We'll see what impact it will have. The RBA Governor Guy Debelle says the economy might be through the worst, but the recovery could be a slow grind. What's the best way to stimulate growth going forward? What are the things you're looking at in terms of what will be delivered in this budget?

CHALMERS: First of all, Guy Debelle said that he expects unemployment to continue to rise, which should be a concern to all of us. He also flagged the other steps that the Reserve Bank might have to contemplate at some future point if the economy stays weak. Basically, the Government, the Reserve Bank, and all the credible economists expect unemployment to be unacceptably high for unacceptably long. We should be thinking beyond the support that's in the economy right now. We need to be thinking about ways to kickstart the recovery and to kickstart the economy. That means things like building social housing, which is nice and labour intensive, and has a lasting benefit. We need to be thinking about investing in the care economy; aged care has been getting the most attention in recent weeks, but there's also disability care and childcare. There's a need there and lots of jobs there that the Government should be considering investing in. There are a whole range of infrastructure projects, particularly the smaller scale ones delivered by local governments. We should be thinking about local labour market programs in the most adversely affected areas. All of these sorts of things would be sensible parts of a comprehensive jobs plan. The Government knows that they want to cut JobKeeper but they don't have a jobs plan to replace it. That's concerning when you consider that even as the economy recovers in parts of Australia, in other parts of Australia, for some businesses and for many workers, their recovery will be slower and more painful than that.

KARVELAS: Labor has previously called for stage two of the Federal Government's tax cuts to be brought forward. If the Government does that in the budget - and it looks likely that they will - do you think it's still a good idea?

CHALMERS: Let's see what they propose. We're getting mixed messages about what the Government might be considering here. They've said that they'll consider some aspect of the tax cuts. We don't know what the mix of those will be. We don't know what the new timetable will be for example. It's reasonable that we see what they propose before we come to a position on it. We have previously said that middle Australia needs help. There's not a lot of spending power or demand in the economy and that means that even before the COVID crisis, things were very difficult. But let's see what they propose. Even if they do go down this -

KARVELAS: Can I just to interrupt. I don't mean to be rude, but I do have to interrupt to ask this. Yes, I know what you've previously said. What I'm interested in is whether maybe that's changed, given we've seen figures of people who've got money, who've got jobs like you and I saving more, and others who don't have jobs who are having a very difficult time. We've got John Hewson, Professor Peter Doherty, there are others who of course have signed onto this campaign saying don't don't bring forward these tax cuts. They'd like to see money on social housing, like you've raised, but also even at the lower end, for money to be spent in the economy. Have you revisited that view? Do you think perhaps the money could be better spent at the lower end?

CHALMERS: I certainly think that just bringing forward the tax cuts wouldn't be a substitute for some of those proposals that you and some of those other respected commentators and economists have talked about. I think it would be very troubling if the Government thought that bringing forward some tax cuts was a substitute for a comprehensive jobs plan. It clearly isn't. You asked me about our previous view on stage two. We still maintain the view that people need help and that the economy needs spending power. Let's see what the Government actually proposes and whether what they're proposing is the best way to go about that. Where I think we have common ground with some of those people that you mentioned, is that there is a pressing need in other parts of the economy, including for people who don't have a job and wouldn't benefit from the tax cuts, to be supported as well. We need to be thinking about this along the lines of kick starting the recovery and kick starting the economy so that we are not just protecting the jobs that exist but creating new ones. We'll have a look at tax cuts if they propose them but that is not a comprehensive plan in and of itself.

KARVELAS: Just finally, what about the proposal to give more money to the states for infrastructure investment under a use it or lose it system? Is that fundamentally a good idea?

CHALMERS: I think certainly more investment in infrastructure is a no brainer really. In terms of how that's delivered, the Government's got form, unfortunately, in announcing big numbers when it comes to infrastructure, and then building very little of it and having trouble getting money out the door. If there are innovative ways to ensure these big announcements that they make with the hard hats and high vis vests turns into money actually getting out the door to create jobs in communities around Australia then that will be a good thing. Again, it's just some smoke signals at the moment in the newspapers. Let's see what they actually propose. It's absolutely crucial that any infrastructure money that is announced is actually invested because that's how we get jobs in real communities. That's how we get some of this weakness in the economy addressed.

KARVELAS: Just finally, it's been reported the Government would wind up JobKeeper in March next year. Is that appropriate given we're seeing the economy rebounding in states other than Victoria?

CHALMERS: What really matters is that it's tailored to what's happening in the economy. The Government knows that they want to end JobKeeper without knowing whether the economy will be ready for it in March and without knowing what the jobs plan is to replace it. We need to make sure that JobKeeper, which is a good idea being badly implemented, is available for as long as it's needed. We don't yet know whether it'll be needed beyond March. The Government shouldn't be in a rush to cut it next Monday and they shouldn't be in a rush to kill it in March. It needs to be responsive to the conditions

KARVELAS: Thank you so much for joining us.

CHALMERS: Thanks, Patricia.

ENDS