ABC BRISBANE DRIVE
MONDAY, 7 SEPTEMBER 2020
SUBJECTS: COVID-19 deaths in aged care; Fringe Benefits Tax changes; JobKeeper; Federal and State Debt.
STEVE AUSTIN, HOST: Jim Chalmers how was your Father’s Day?
JIM CHALMERS, SHADOW TREASURER: I had a cracking Father’s Day Steve. I got some banana pancakes and lots of homemade presents. It was fantastic, it was my 6th Father’s Day and they get better every year.
AUSTIN: Is it true you are in quarantine?
CHALMERS: Yeah that’s one of the arrangements we had to make if we went to parliament, when we came back we had to stay home for two weeks so I’m midway through the first week of that, climbing the walls a bit but I think there are a lot of people around Australia doing it a lot tougher than I am.
AUSTIN: I was going to ask how do you while away the hours?
CHALMERS: I’m working my tail off to be honest with you. There’s a lot of zoom meetings and constituent work.
AUSTIN: Death by zoom meetings.
CHALMERS: That’s right and my better half teed me up a treadmill so hopefully I won’t put on 30 kegs, because I’ve been hitting the treadmill!
AUSTIN: Is she sending you a message?
CHALMERS: I think so. Pre-emptively I think but it’s a good set up in the garage I can go and watch the NBA playoffs while I have a bit of a gallop.
AUSTIN: Jim Chalmers is Labor’s Member for Rankin, he is also Shadow Treasury Spokesperson. This is ABC Brisbane. He’s just come back from a couple of weeks in Canberra. I just want to ask about a story that was on the front page of the Australian a story that I was a little surprised didn't get more coverage on Saturday. They got data and got it confirmed from the Federal Department that a surprising result of the coronavirus pandemic is that the overall number of deaths in aged care centres, has declined, not increased. What does this reveal?
CHALMERS: A couple of things about that Steve. First of all, I'm told that the amount of people going into aged care, for obvious and understandable reasons, has declined. This year it has gone way down because people are reluctant to choose now to go into aged care and families are making a decision to defer that. That's part of it but also I think I'm reminded as you would have seen those statistics a bit earlier on, the transmission of the regular flu has gone way down because of all the precautions we're taking and so I suspect that all of the other precautions are having an impact on the other types of ways that we unfortunately lose loved ones in in aged care. But having said all that –
AUSTIN: I noticed in my local supermarket, that the items that are on specials at the moment are all cold and flu tablets, they can't give them away at the moment which is a bizarre sort of outcome of the pandemic.
CHALMERS We're learning to be a bit more careful with how we transmit these things, we've got the personal hygiene, hand washing all of the other things as well. We're probably being a bit more careful. But we shouldn't move on from this without acknowledging that there've been 554 older Australians who passed away in aged care from COVID-19. That is a tragedy in itself.
AUSTIN: Just clarify something for me, a number of listeners have challenged me about this saying it's not necessarily from COVID-19, but rather the other illnesses, COVID-19 weakens their immune system so they might pass away from another condition, a precondition if you like.
CHALMERS: There's been some prominent contrarians out there on social media saying that, but the medical community has made it pretty clear that these 554 people have died of COVID-19, not with COVID-19. When this is all done and dusted, I mean we're learning a lot about the problems in the aged care system, when this is all done and dusted obviously the system's going to need a lot of change. We've already put out via our leader Anthony Albanese an 8 point plan for aged care, which goes to things like staffing, transparency, equipment, all of those sorts of important things.
AUSTIN: My guest is Jim Chalmers, it's 4:39pm, this is ABC Brisbane. Last week, Kate Carnell, the Small Business and Family Enterprise Ombudsman on Thursday, released a statement calling for the scrapping of the Fringe Benefits Tax in Australia, which brings back happy memories of the 80s to me when you could go to a restaurant, have a business lunch and claim it as a tax deduction, which was ended by Paul Keating I think if memory serves me correctly. But the benefit of it according to Kate Carnell is that it would actually seriously stimulate the hospitality and restaurant trade post the coronavirus lockdown and boost employment particularly for younger workers and women, part time workers. Did you see that call by Kate CarnelI?
CHALMERS: I did and even though Kate's from the other side of politics I try and take all of these sorts of suggestions at face value and have a think about them. There might be some issues with fringe benefits tax as they relate to the fact that more people are working from home and so there's a blurry line between some of the associated so-called perks of work and how they're taxed, but I'm not convinced yet or I'm not sure that spending something like $4 billion a year on her suggestion would get the most bang for buck. There may be other things that we could do in those sectors and amongst those workers to get a better result. $4 billion a year doesn't sound like much compared to some of the other spending that's been done in recent months, but I still think that's a hell of a lot of money so let's make sure that we can't do it better some other way.
AUSTIN: The hospitality restaurant trade has been probably one of the hardest hit. As a result of the coronavirus, and it does have a tendency to employ younger workers, and women in particular are also some of the hardest hit and you've actually highlighted that. There does seem to be some reasonable basis for this suggestion as a post coronavirus assistance for the restaurant and hospitality game?
CHALMERS: It definitely diagnoses the problem. I think as we've talked about before, we say the virus doesn't discriminate – that's true in health terms – but it certainly does in terms of economic impacts and women and younger workers have been the hardest hit, and that sector the hospitality sector amongst the hardest hit. I think the most important thing we could do is to make sure that more of those casual workers in that industry are able to access JobKeeper. That would be a far more effective way of supporting an industry and supporting those workers for one reason or another but the Government hasn't gone down that path.
AUSTIN: The difference is my mind is that for JobKeeper the people of Australia would be borrowing the money, whereas with scrapping the Fringe Benefits Tax we wouldn't have to borrow anything, it will be just tax forgone by the federal government.
CHALMERS: Which has the same impact on debt. You'd still have to make up that $4 billion by borrowing it.
AUSTIN: And pay the interest on it.
CHALMERS: For the purposes of the budget there would be no difference between a $4 billion tax cut or $4 billion worth of JobKeeper it has the same impact. It's all borrowed money at the moment, we've got record debt heading towards a trillion dollars. There was already recorded before the crisis. So, with all of these things which cost money it's important that we support jobs. We need to do what we can. That's going to be our highest priority, but we also need to remember it has to be paid back at some point, whether it's a tax break or whether it's money that we spend.
AUSTIN: So clarify for me, you'll have a look at the Fringe Benefits Tax suggestion, by the Small Business and Family Enterprise Ombudsman?
CHALMERS: I'll certainly have a look at it, I had a look at it when I saw it in the media and as I said I try to take all these suggestions at face value. The key test really is bang for buck and what's the best thing for jobs.
AUSTIN: And at this stage you don't consider it to have the best bang for the buck?
CHALMERS: I think the best thing we could do for hospitality workers particularly younger female workers would be to hook more casual workers up to JobKeeper. That would maintain a connection with their employer which helps the business pay their wages costs and survive through what is a horrendously difficult period.
AUSTIN: Jim Chalmers is the Shadow Treasury spokesperson for the Labor Party, the Federal Opposition in Australia. Let me move on, while in a similar theme. Andrew Leigh, one of your compatriots has been highlighting in the House of Representatives examples of where companies are giving their executives, either bonuses, or share bonuses, or dividend payments whilst putting staff off on JobKeeper. There's been a few Queensland examples, as well. Is this rotting if a company gives its executives, some sort of bonus or financial stimulus, while at the same time they're taking money from the taxpayer via the JobKeeper program?
CHALMERS: It's legal, that’s the problem.
AUSTIN: Then why is Andrew Leigh your partner highlighting it?
CHALMERS: Because he's pointing out, rightly, that the Treasurer, Josh Frydenberg sets all of the eligibility for JobKeeper and he's allowing this to go on. Nobody wants to see this borrowed taxpayer money, which is intended to keep workers on, go to executive bonuses. That’s the point Andrew is making, but not just Andrew, the head of the Business Council of Australia made that point yesterday on ABC TV that that's not the purpose of JobKeeper. So the reason Andy's raising it is to point to an issue there where we're not getting bang for buck, where the rules laid down by the Treasurer are not working as they should.
AUSTIN: And as a result, Australia company executives are gaming the system.
CHALMERS: Clearly we’re getting an outcome that the Australian public don't want to see.
AUSTIN: Do you agree Australian company executives are gaming the system?
CHALMERS: I'm reluctant to use those kind of labels only because…
AUSTIN: What label would you use Jim?
CHALMERS: Well these are the rules laid down by the Treasurer. My beef is not necessarily just with the companies and their CEOs I think it is a problem that we're seeing executive bonuses paid for with taxpayer money. I'd rather that not happen. The reality is, unfortunately, there's only one guy, not the parliament, not the legislation, who sets the eligibility for JobKeeper and that's the Treasurer and he's letting this happen.
AUSTIN: So what does the Treasurer, Josh Frydenberg need to fix?
CHALMERS: We've said all along that JobKeeper money should go to businesses that genuinely need it. This issue has popped up, Andrew has raised it, Jennifer Westacott from the BCA has raised it and others have. If there are ways that he can tighten up, if there are ways that we can exert public pressure on companies not to do this, then that's a good thing because we want to see this money, which is all borrowed money, tens of billions of dollars, in fact 100 billion dollars, we want to make sure it's spent where it can do the most good and clearly executive bonuses are not the best use of that money.
AUSTIN: This is ABC Radio. It's 4:47pm. JobKeeper 2.0 kicks in soon. There's been a lot of different issues raised about it but you guys have got a particular concern that it's dropping off, or it's reducing too quickly why?
CHALMERS: Well because when they announced that they would cut back on JobKeeper they did that on the assumption that the Victorian economy would be going fine and the international border would be opening up on the first of January, and things would be coming back to normal. Unfortunately that's not quite the case, clearly that's not the case. The problems in the jobs market are actually getting worse not better. Victoria's in store for a longer lockdown and so all we've said is, and we try to be pretty constructive about this, the JobKeeper amount should reflect the conditions in the economy and the economy's gotten worse, it's deteriorated, we’re in the worst recession that we've had for almost 100 years now, and unemployment is rising not falling. So we think they should reconsider those cuts. That would be a good thing if they did that. If the rate wasn't reduced at the end of this month then we would welcome it.
AUSTIN: Is the level of federal government debt, an issue? You mentioned it before, nearly a trillion dollars.
CHALMERS: It certainly is Steve, but in the near term the most important issue is jobs, and making sure that we can try and prevent those unemployment queues from getting ever longer than they are. But clearly, debt is an issue and it has to be repaid at some point. We already pay billions of dollars servicing the debt that was already at record levels before COVID-19. So we need to be conscious of that and what that means is it puts pressure on all of us to make sure that all of this money that's borrowed to deal with the crisis in appropriate ways, this welcome supporting in the economy, we have to make sure we're getting maximum bang for buck. We measure that effectiveness for what it means for jobs.
AUSTIN: Then is the $100 billion and counting state debt, also a problem?
CHALMERS: That's an issue that the states have acknowledged as well. Of course it is. Of course every state and the Commonwealth would rather have no debt because it costs money to service that debt, but you've got to work out what your highest priority is and the highest priority for the states and the Commonwealth right now is to make sure that we're supporting people and supporting jobs.
AUSTIN: The Commonwealth has taxation powers, the states don't. So the states will have to go to the Commonwealth and say give us more money, or else they're going to have to find ways of saving money.
CHALMERS: It's not entirely true they don't have taxing powers but they don't have as substantial taxing powers as the Commonwealth, that's true. They've got their own ways to raise revenue.
AUSTIN: Levies, fees, charges and uping royalties which they promised not to do.
CHALMERS: Royalties, stamp duty, payroll tax there are a range of state taxes.
AUSTIN: Payroll tax is a tax on employment they wouldn't won't do that surely?
CHALMERS: Your broader point that the majority of the taxes raised are raised by the Commonwealth is true. There's a system where the Commonwealth raises the GST and gives every single cent to the states so that's another really substantial way that the Commonwealth supports the states. But everyone and every budget right around Australia; state, territory, federal or local government, their budgets are being punished right now in this crisis but the most important thing is we support jobs now and have a credible plan to pay back the debt when that's appropriate.
AUSTIN: Appreciate your time I’ll let you get back to your quarantine.
CHALMERS: Thanks so much.
AUSTIN: Good luck on the treadmill!