E&OE TRANSCRIPT
TELEVISION INTERVIEW
ABC AFTERNOON BRIEFING
THURSDAY, 23 JULY 2020
 
SUBJECTS: Budget Update; Victorian lockdown; mutual obligation.
 
PATRICIA KARVELAS, HOST: My next guest this hour is the Shadow Treasurer, Jim Chalmers. Jim Chalmers, welcome to the program.
 
JIM CHALMERS, SHADOW TREASURER: Thank you, Patricia.
 
KARVELAS: Do you give the Government credit for how it's responded to the economic hit of the coronavirus?
 
CHALMERS: Look, there have been aspects of the response that we've called for and welcomed when the Government has shared our view about the importance, for example, of wage subsidies. And it's good to see a connection maintained between workers and their employer. To the extent JobKeeper has provided that connection, then that's a good thing. But today in this Budget update, the defining feature was the fact that the Government expects an extra 240,000 Australians to lose their jobs between now and Christmas but there wasn't a single element of any kind of plan to respond to that situation. In lots of ways, today was a missed opportunity. The Australian people already know that things are grim in the economy. People are worried about their jobs. They have a right to expect from their Government a plan to respond to that and they didn't get that today.
 
KARVELAS: Okay. You say they didn't get one today. Mathias Cormann spoke to me earlier and made it clear that JobKeeper is one of those plans, instant asset write-off and went through the Government's policies, and said the plan is to get business in shape to create the jobs. Isn't that right? Business does create the jobs in this country. That's what happens in this kind of economy. Isn't it about getting those policy settings right so that business can reopen and make those jobs again?
 
CHALMERS: We're not contesting the important job-creating role of business.
 
KARVELAS: What are you saying then? Should the Government be making the jobs? Who is going to be making these jobs?
 
CHALMERS: In the first recession in three decades, when already hundreds of thousands of Australians have lost their jobs and the Government expects another 240,000 between now and Christmas, there is a role for Government intervention. The Government has conceded that point, having spent most of the last decade contesting it. They now are intervening in the economy in one way or another. And the point that we're making is I don't think it is too much to ask of the Government to go beyond just telling us things are bad in the economy. We already knew that. They need to tell us what they're going to do about it, in addition to the measures that are already in place. The JobKeeper extension, the JobSeeker extension, we've said that's important that those important methods of supporting the economy don't end at the end of September. That's been extended this week. But that's not a plan to create jobs into the future. Australians are understandably anxious and worried about where the jobs will come from. The Government had an opportunity today to present a plan for that. They missed that opportunity. What Australians have got today instead of a plan was half a Budget update. And that's not good enough.
 
KARVELAS: Okay. When asked about the level of debt today Mathias Cormann said, ‘What is the alternative?’ Does he have a point? Would you have done anything different if Labor was in Government?
 
CHALMERS: Obviously, in times like these there is a need for the Government to intervene, to spend, to support jobs in the economy. That is something that we agree with. And clearly, this crisis is having an impact on the Budget and on the economy as well. The point that we've been making consistently, and my colleague, Katy Gallagher, has been doing this over the last couple of days as well, is the Government shouldn't pretend that all the difficulties in the Budget and the economy are solely a product of COVID-19. Debt had more than doubled before this virus showed up. At this time last year, we were talking about slowing growth and weak wages and weak business investment and productivity and record high household debt. The economy had a series of problems even before this crisis. What we're saying is don't go back to the same recipe that you had before which was a recipe for stagnant growth and stagnant wages and insecure work. What we need to see is a new plan which recognises unemployment will be higher for longer and it is a responsibility of Government to respond to that.
 
KARVELAS: Mathias Cormann made clear in the interview with me that the Government was prepared to go even further into debt if the economy needs it, the health crisis will be the priority and dealing with the fallout economically of that health crisis will be the priority. Is that the right approach?
 
CHALMERS: The priority has to be jobs. When you're talking about Government programs, every dollar is precious. So, it needs to be effective spending and needs to get bang for buck. That's measured by the Government's ability to prevent unemployment rising unnecessarily. So, that's why the defining feature of today’s update was the fact that unemployment which is already high is going to get higher in the coming months. That's the thing the Government needs to respond to. And we have been saying all along the Government's plans need to be responsive of what's going on in the economy. For some months now, the Reserve Bank, Labor, Deloitte Access Economics and others have been saying unemployment will be higher for longer. The economic policies need to respond to that reality.
 
KARVELAS: There's a few other things that people have questioned today, built into today's numbers and I did put it to Mathias Cormann. One of them is it assumes a six-week lockdown in Greater Melbourne and the Mitchell Shire. And if you look at today's numbers, 403 new cases, there are questions about whether that's really likely. Mathias Cormann's answer was interesting on this. He said ultimately you print the advice you have at the time. Do you accept that? That things are moving so quickly that the Government has to make assumptions like this?
 
CHALMERS: Obviously, the Government needs to make assumptions. But I don't think the volatility in the economy should be an excuse just to provide less than half an update which is what they did today. Just over 10 years ago in the depth of the global recession, in the GFC, Labor produced three sets of full four-year forecasts in a six-month period to accompany the big announcements around stimulus. The Reserve Bank in recent weeks has released full years of forecasts. Deloitte Access Economics and others too. It shouldn't be beyond the Government to release a proper set of forecasts, so the Australian community can understand where the Government thinks that this is headed.
 
KARVELAS: But on that assumption about the lockdown, what's your analysis about what's happening, for instance, in Victoria, which is really of course important to the whole nation's economy? We all know how key it is for a state like Victoria to be successful. The whole country is successful if Victoria is successful, or New South Wales. Do you fear that this lockdown will be longer and that the economic ramifications will be harsher as a result?
 
CHALMERS: Well, clearly, that's a chance, Patricia, if we're honest about it. Clearly, the numbers we've been getting out of Victoria in the last couple of days are incredibly confronting. Clearly that has implications for the economy. We don't know yet what the future of that lockdown is. The Government wants to talk about the uncertainty there and there is some in the economy. But what is absolutely certain is that there is severe weakness in the labour market. That means the Government needs a plan for jobs. We didn't get that today and that's what matters.
 
KARVELAS: Let's talk about mutual obligation which is also being reintroduced as of next month. Labor supports that right?
 
CHALMERS: We said we would look at some proportionate reintroduction of some of those requirements. But they shouldn't be punitive. The Government shouldn't go over the top in enforcing them. Even as it stands, there's something like 13 people on unemployment benefits for every job vacancy. So, the opportunities for jobs are not exactly thick on the ground at the moment. The Government shouldn't go over the top in policing it. It's easy to understand in some cases, whether it's Victoria or other parts of Australia, that it's very difficult to try and hunt down the job opportunities at the moment. The Government needs to be cognisant of that.
 
KARVELAS: The Treasurer and the Finance Minister also say Australia's economy is in relatively good shape compared to nations around the world. Do you accept that argument?
 
CHALMERS: I think that argument is cold comfort for the 240,000 Australians that they have said today expect to lose their job between now and Christmas.
 
KARVELAS: I agree. If you surveyed those people, they would say, ‘I don't have a job and feel upset about that’. But that's not the question. The question is about the shape of the economy and the state of the economy. Do you accept we're doing better than other comparable nations?
 
CHALMERS: Well, it remains to be seen whether we end up doing better than other countries. Clearly, some countries are in all sorts at the moment. But I don't think that that is something that washes with people who have lost their job or who might lose their job in coming months. If only the Government spent as much time coming up with a plan for jobs as they spend trying to rationalise these job losses and comparing them elsewhere, I think Australians would be better off. I don't think the most important thing is that comparison. I think the most important thing is people whose jobs are precarious, they need and deserve from their Government a plan to deal with that and they didn't get one today.
 
KARVELAS: Will Labor be critical at all if the Government goes further into debt? Or do you think that the kind of conversation now around debt and deficit should be completely off the table? Out of the political cycle, smashed, gone, goodbye, no sort of plan or push for paying down debt?
 
CHALMERS: Well, the best way to pay down the debt is to grow the economy. That's the point Deloitte and others have made. If you want to fix the Budget, you need to fix the economy. The economy has got to be the priority, especially jobs in the economy. If that means the Government comes to the table with more spending, then we'll assess that. You want to get maximum bang for buck in any new dollars which have been committed. The way to measure bang for buck is what it means for unemployment.
 
KARVELAS: Thank you so much for joining us, Jim Chalmers.
 
CHALMERS: Thank you, Patricia.
 
ENDS