JIM CHALMERS MP
SHADOW TREASURER
MEMBER FOR RANKIN
 

E&OE TRANSCRIPT
RADIO INTERVIEW
ABC BRISBANE DRIVE
MONDAY, 1 NOVEMBER 2021

SUBJECTS: House prices; Glasgow climate conference. 

STEVE AUSTIN, HOST: Jim Chalmers is the Shadow Treasurer and the Federal Member for Rankin. Welcome back to ABC Radio Brisbane.

JIM CHALMERS, SHADOW TREASURER: Thanks very much Steve.

AUSTIN: Where are you at the moment? Are you in Glasgow? Canberra? Or Beenleigh?

CHALMERS: No I'm in Logan Central Steve. I'm coming to you from the electorate office today.

AUSTIN: Let me ask you, 4 Corners tonight, Jim Chalmers, is taking a close look at housing. I want to know from you what you think is the main cause of an overheated housing market in Australia?

CHALMERS: I think it's great that this is getting a lot of attention, Steve, at the moment. That data that you mentioned a moment ago, about Brisbane house prices, the last month, actually shows that our housing market got the biggest increases in prices over that last month, the Brisbane housing market. So it's obviously front of mind for a lot of people. 

When you think about the pressures on middle Australia, this is one of the big ones. There's also childcare and a range of other pressures. But housing is obviously a really big one. 

I think we need to resist the temptation to think that there's one overwhelming driver of what we're seeing in the housing market. Historically low interest rates are a big part of the story. There are a whole bunch of other reasons too. When you think about what we might do about it, I think we need to be upfront with each other, and recognise that there's not one lever that you can pull to fix this problem and all of a sudden, people can more easily get a toehold in the market. It's a function of a lot of things. It's an issue that's been building for a long time, it's actually harder at the moment than ever to buy a house or to rent a house, and there's more homeless people than ever. So it's a big problem. We can't turn it around easily just by clicking our fingers.

AUSTIN: Is credit too easy to get? One of my listeners points out this, the Government deliberately asked banks to sort of loosen their lending standards to tickle the economy along when the pandemic hit. Do you think credit is too easy to get hold of now?

CHALMERS: That's part of the reason they did that. They came up with more accommodating repayments partly so that people had more disposable income, but more so that people wouldn't default on their loans in the most difficult parts of the recession. I thought that was understandable, I welcomed it at the time, and I welcome it now just to help people get through that really difficult period. But when it comes to lending more broadly, I think there is a role when the housing market is going as it is now, for the prudential regulators including APRA to tighten the lending arrangements. They've done that quite recently.

AUSTIN: They can't get any looser can they? They've got to tighten them up surely.

CHALMERS: No they've tightened them up quite recently and the way they did it, which again, let's see how it goes but I think in principle is worth supporting, is they said when you go for a loan, the bank assumes a certain interest rate, which is higher than it is now because obviously interest rates will go up again, from effectively zero. The bank makes an assumption about whether or not you can repay it at a certain interest rate. What APRA has said recently was, let's make that assumption a little bit higher, so that there's a bit less risky lending going on, and that will have an impact. It definitely won't fix all the issues in the housing market. But we think that's an important step to tighten up lending arrangements a little bit within the housing market.

AUSTIN: Is that enough? Because everyone I know, particularly on your side of politics, Jim Chalmers has been pointing out that the gap between the haves and the have nots is widening, the rich and the poor, the wealthy and the not wealthy, the middle class is disappearing. The best way for the middle class to improve their position is housing, but the middle class is being priced out.

CHALMERS: I wrote something on the weekend, Steve about how the middle class is shrinking around the world and especially in Australia. We've got a smaller middle class than in most of the countries in the OECD, which is a surprising stat for a lot of people, and it's been shrinking. One of the reasons for that is because there's so much pressure on middle Australia and housing costs are a huge part of that. There is a gap between holders of big assets like homes, and people who don't have those kinds of assets and that gap is troubling to us. It should worry us because it has all kinds of other impacts for people's capacity to work hard and get ahead and provide for their family. So it's a central concern for us. But what we've said is when you've got a problem this big and we recognise you can't click your fingers and fix it you’ve got to work out where's the most important place to start? That's why we've said it's a bigger problem than this but let's start with social housing and affordable housing. Let's have a policy so that essential workers can live a bit closer to where they work and provide their essential services.

AUSTIN: Jim, let me jump in there. If you build more social houses, which is what the state government says as well, the social housing waiting list is 12 years long here in Queensland. 12 years down the tracks is not going to fix anything.

CHALMERS: That's why we have to start addressing it Steve. That's a good reason why we should make social housing a priority. But not just that. I don't think there's been a federal government or opposition that's put forward as substantial a policy as we have on essential workers living near where they work. We've also got to recognise that during COVID, a lot of people worked out that they didn't have to live right in the middle of the CBD for some jobs, and they can live a bit further out from the major CBDs. So we want to take this opportunity to revitalise not just the outer suburbs, but the regions as well. That means getting the NBN right. It means getting the services right in some of these communities. So there's more than one thing that needs to be done. But if you're going to start anywhere, we think start with social and affordable housing and housing for essential workers.

AUSTIN: Why not only allow citizens and permanent residents to own or invest in residential property? In other words, stop foreign capital speculating on the Australian property market.

CHALMERS: I don't think there are any kind of serious proposals out there to stop it entirely. But there has been -

AUSTIN: That's the problem.

CHALMERS: I think there has been over the life of the last couple of governments of both political persuasions a tightening of foreign investment in property. That won't be enough for some people who think we should end it altogether. But I've always been supportive of making sure that there are fees associated with this, making sure there are tight controls and if there are ways that we should tighten them up further, then I think we should look at that. But I'm not sure that ending it entirely would be realistic.

AUSTIN: How much of a factor does Labor believe negative gearing is? You went to the last election with a raft of what people saw as many positive policies on housing. Because you lost you wound them all back and your only policy of the next election will be build more social houses over a decade down the track.

CHALMERS: Well, it's interesting you say that, Steve, I don’t remember there being a long queue formed of supporters for that policy necessarily…

AUSTIN: The debate was swamped by franking credits wasn't it? The debate was swamped by other things. There was a lot of widespread discussion that your policy in the previous time was pretty good, but the whole franking credit seemed to distract people.

CHALMERS: I think I've said this to you before Steve, every party takes a different agenda to one election than they did the one before. It's thoroughly unsurprising that we're not taking the same tax policies this time around. We don't think it's wholly and solely an issue about investors in the market and we've got other priorities in housing. We said we won't go down that path with negative gearing. It wasn't supported last time. We've had a good look at it, had a good think about it and decided to go down another track.

AUSTIN: Jim Chalmers is the Shadow Treasury spokesperson and the Federal Member for Rankin. I spoke to you the last couple of times, Jim Chalmers about why the Prime Minister should go to Glasgow. I note that Canada is not there. Japan is not there. I'm not sure if Russia was there, but I don't think so. China's not there. Why does Scott Morrison have to be there again, given all the major polluters in the world aren't there?

CHALMERS: Because doing something meaningful on climate change means more jobs and more opportunities for more people here at home in Australia. Those opportunities have been going begging for too long because Morrison has been part of the problem and not part of the solution. So we've got some ground to make up.

AUSTIN: Well, let's ignore Scott Morrison. Australia's chief scientist Alan Finkel says elimination of Australia's global emissions, which is only 1.3 per cent will have "virtually no impact" on the global climate.

CHALMERS: Australia has always, throughout our modern history had more to gain from engaging with the world on the big challenges facing the world than we've had to lose. That's especially true now when you think about the Business Council modelling that shows that doing something meaningful here means that it's good for our economy, good for jobs, good for working families, good for our regions. For too long now we've seen these opportunities go begging. The Prime Minister, take Scott Morrison out of it for a moment, any Australian Prime Minister, looking at that suite of opportunities before them has a responsibility to do what they can to be part of it and get us part of it. For too long, he hasn't been willing to do that. We want him over there talking about Australia's role in this energy transformation. Whether or not some of those other countries are there or not we should judge it by what's good for Australia. It's good for Australia for us to be involved.

AUSTIN: If Anthony Albanese had been the Prime Minister and went over, what would he have taken over that would have been different from Scott Morrison?

CHALMERS: Well if we were in government, obviously, we would have taken more substantial interim targets -

AUSTIN: Like what?

CHALMERS: Well the reason that I'm not going to say that today, Steve, and your question gives it away, is because we're not the Government. We didn't have the eight years of run up that Scott Morrison has had to take something meaningful there. We'll make our position known after Glasgow when we know what the situation that we would inherit would look like. But there's no excuses for the Government not to have that. The only reason Scott Morrison hasn't gone over there with something more meaningful is because he didn't get a permission slip from Barnaby Joyce, who is by the way, currently, the acting Prime Minister of Australia. Scott Morrison cannot do anything, he cannot go to the bathroom without a permission slip from Barnaby Joyce and the extreme elements of the National Party and that's what we're seeing in climate change. And the tragedy of that is not just that jobs and opportunities go begging in the cities, but they go begging in the bush as well, as the Business Council showed with their modelling. I think that that's an appalling situation. Australians deserve a lot better than that.

AUSTIN: Jim Chalmers, thanks for your time once again.

CHALMERS: Thank you, Steve.

ENDS