FRIDAY, 16 JUNE 2017
SABRA LANE: Later today Australia's gross debt figure will be updated and it's expected the nation will notch up half-a-trillion dollars. The Coalition, when it was in Opposition, mounted a powerful campaign against the previous Labor Govenrment's record on debt, labelling it an "emergency", "frightening" and "inconceivable" when it approached $300 billion, so what does Labor think now? Shadow Finance Minister Jim Chalmers joins us from Brisbane. Mr Chalmers, welcome back to AM.
JIM CHALMERS, SHADOW MINISTER FOR FINANCE: Good morning, Sabra.
LANE: The Treasurer's tried to deflect criticism of the new debt figure, insisting that from next year, "good debt" will be used to fund infrastructure and not recurrent spending like welfare payments. Does he have a point?
CHALMERS: Today will be the first time that an Australian Government of either political persuasion will crash through that half-a-trillion dollars in debt figure that you mentioned. Scott Morrison has come up with all kinds of excuses for that and tried to set up all kinds of smokescreens for that. But what that half-a-trillion dollars in debt will show today is that Scott Morrison and Mathias Cormann and Malcolm Turnbull are spectacularly failing the test that they set for themselves.
LANE: Labor can't argue though that it's got nothing to do with the party, given a large chunk of that debt was racked up under the Rudd and Gillard governments. How do you defend that?
CHALMERS: I'm glad you raised that Sabra, because there are three important points for your listeners to understand. The first one is that the debt that was accumulated under Labor was a consequence of the sharpest synchronised downturn in the global economy since the Great Depression. We had the Global Financial Crisis to deal with and the OECD has come out this week and said with their factual analysis that our intervention was spectacularly successful in keeping unemployment down. Now despite the current Government having much rosier global conditions, they're actually racking up debt at a faster pace under the Coalition than was racked up under Labor. They're racking up debt something like $1.65 billion a month quicker than was accumulated under Labor. And the third point is that after four years of being in Government, you'd think that it is long past time for the Turnbull Government to take responsibility for the mess they are making of the Budget.
LANE: But Mr Morrison also points out that much of that money was wasted under Labor as he says, building overpriced school halls and the much-maligned housing insulation program. Those policies were not gold-standard public policy.
CHALMERS: Well I'd prefer to take the OECD's word for it than Scott Morrison's word for it. The OECD and a number of respected international commentators, including Nobel laureates in economics have said that Labor's stimulus was spectacularly successful and well designed and very effective, and kept the unemployment queue shorter than it would be otherwise. So I think they have far more credibility than Scott Morrison, particularly when you consider that part of the problem and part of the reason the Government is crashing through half-a-trillion dollars in debt is because they want to give a $65 billion tax cut to the biggest corporations in this country, they want to go soft on multinational tax avoidance, they want to give millionaires an income tax cut. And these are all the reasons why when it comes to skyrocketing debt, the Government is part of the problem and not part of the solution.
LANE: The vote to set up a parliamentary commission of inquiry into the banks failed yesterday by one vote. Do you concede that it's unlikely to get up in this term?
CHALMERS: It's crucial we get to the bottom of these issues in our banks and we want to see a royal commission. But as you say, we tried to get up a commission of inquiry into the banks yesterday. The Senate, with Labor's support, supports a commission of inquiry. The House considered that yesterday. The main reason why that failed yesterday was because George Christensen, who likes to wander around regional Queensland saying he'll cross the floor and support a commission of inquiry, he dogged it. He likes to talk a tough game in regional Queensland, but he goes to Canberra and he does whatever Christopher Pyne tells him - he gets a little pat on the head from Christopher Pyne - and so we don't get to the bottom of these serious issues in our banks.
LANE: To the nub of the question though, Mr Chalmers - do you concede that it's unlikely now that this idea of a commission of inquiry, it's unlikely to get up in this term of Parliament?
CHALMERS: We're not prepared to give up on it Sabra. We think it's important that we get to the bottom of these issues. We will continue to fight to get the bottom of these issues, to get justice for banking customers who have been treated appallingly in some cases by some of our financial institutions. And we don't think that that should wait for a Labor Government. If there has been no justice and no royal commission or a commission of inquiry by the time we get to Government, we will institute a royal commission.
LANE: OK, so just off that point. No matter what happens now with the new bank tax and even if the banks lift their game, Labor will hold a royal commission if you win the next election, regardless of what happens?
CHALMERS: Too right we will. We will take to the election a royal commission into our banks and in the interim we will continue to fight for justice and to get to the bottom of these serious behavioural issues in some of our banks, because people deserve to know what's going on and they need to have confidence in our banks that we can fix up and clean up some of these issues.
LANE: There'll be a parliamentary hearing today into the Government's new bank levy. The banks have argued it should apply to foreign banks. What's your view?
CHALMERS: One of the reasons we support the committee that's underway today is because we want to consider some of those issues, including the possible inclusion of foreign banks. The Government's made a mess of this from the beginning. We've said all along that we support in principle the bank levy, but there are serious questions to be asked about how that will be implemented. And today's a terrific opportunity to discuss some of those issues.
LANE: And how much sympathy do you have for their case that the levy should be waived on banks that come under duress?
CHALMERS: It's not about having sympathy for the argument. It's about understanding the argument and getting to the bottom of it, trying to fix up some of the implementation issues that the Government has created for themselves in their characteristic way. We're prepared to listen and we're prepared to support good policy and we think the committee gives us a better chance of getting some good policy out of this.
LANE: OK. The high-income deficit levy expires next month. Labor wants it kept. If you win the next election, will you reinstate it, because it will expire in July.
CHALMERS: That's our policy. That's the policy that Bill Shorten announced in his Budget reply. We think that's a fairer way to fix the mess that the Government's made of the Budget. We think that's better than having a new income tax on workers earning less than $87,000 a year. And so that's the policy we'll take.
LANE: Jim Chalmers, thanks very much for talking to AM.
CHALMERS: Thank you, Sabra.