ABC BRISBANE DRIVE
MONDAY, 12 OCTOBER 2020
SUBJECTS: Federal budget; Debt; Hiring credits; Restart program.
STEVE AUSTIN, HOST: Jim Chalmers, does Labor support that amount of money? $74 billion, $100,000 per job, and a focus on young people to get us out of the difficulties of the pandemic?
JIM CHALMERS, SHADOW TREASURER: There are some things in there that we can support, Steve, but I think overwhelmingly it was a bit of a missed opportunity.
AUSTIN: Where was it a missed opportunity?
CHALMERS: Think about all that money that you just mentioned; I lose track of all the slogans but you want to call it JobMaker. Think about all that money that was in the budget. They've racked up a trillion dollars in debt for the first time in history; in terms of new announcements they committed about $98 billion in new policies, yet still they're expecting in the budget that unemployment won't get down to where it was even over the next four years of the forward estimates. If you test the budget by what it means for jobs, given we are in the teeth of a jobs crisis in a pretty deep and damaging recession, then on that measure alone it still doesn't get us back to where we were even after four years.
AUSTIN: I think Alan Kohler, the ABC's finance commentator, said it would be almost cheaper to employ people just as public servants rather than have the JobMaker program trying to encourage jobs or employment.
CHALMERS: I didn't see Alan say that or hear Alan say that, but I think it is true that when you're talking about massive amounts of money, you need to work out where you can actually get the best bang for buck. Every dollar of this is borrowed. There's a trillion dollars of debt which is "eye watering" in the Treasurer's language. You need to make sure you get bang for buck. You measure that by what it means for jobs. Some policies are better than others at getting employment. We're talking about childcare, social housing, cleaner and cheaper energy, getting more jobs and apprenticeships out of the hundreds of billions of dollars that government spends on defence, rail and in other areas. We think you get better bang for buck for some of those things than some of the things that were announced by the Government in the budget.
AUSTIN: Many of the announcements by Anthony Albanese were related to manufacturing, but it looked like it was manufacturing from the good old days, rather than acknowledging that most manufacturing today is actually automated, and that there won't be any good old days - we're actually going to have to really look ahead as much as possible?
CHALMERS: There are still a lot of jobs in things like rail. Think about the investment around Australia that's going into the rail network over the next few years; in our part of the world, obviously, Cross River Rail, but also metros in Sydney, Melbourne, Perth, and other big projects elsewhere. Train manufacturing is a relatively labour intensive pursuit. We should be getting more jobs out of that by building trains here. We need a national plan for that. One of the things that Anthony was talking about on Thursday night in his budget reply was when we're spending money on these things, whether it's trains, infrastructure, defence spending, or whatever it is, we need to make sure we're getting apprenticeships out of it. Every tenth employee on these big projects should be an Australian apprentice. On manufacturing more specifically, the Government had a little bit to say about manufacturing but I don't think it's going to make up for the damage done over the last seven years or so with the loss of cars and all the rest of it. One of the most important things you can do for manufacturing is get the energy mix right. One of the other big announcements that we've been talking about in the last few days is how we modernise the energy grid so we can get that cleaner and cheaper energy into the system.
AUSTIN: And you committed some funds to actually modernising the energy grid, which would mean it would be a smart grid or something else?
CHALMERS: It means it would be better at hooking up some of these big new renewable energy projects around Australia. The energy market operator, working with the states and with the industry, has identified something like $20 billion in projects that could really modernise the grid. We're talking about setting up an entity to do that investment at cost and pass on the savings to businesses and households. We think that will be good because it will get costs down and prices down. It will create a lot of jobs in the regions where they're building largely these transmission networks. It will really modernise the system.
AUSTIN: My guest is Labor's Jim Chalmers. Jim Chalmers is the Federal ALP Shadow Treasury spokesperson. This is ABC Radio Brisbane. The Federal Government also announced in their budget support for older Australian workers, it's called the Restart program, where they'll give a financial incentive of up to $10,000 to encourage businesses to hire and retain mature aged employees who are over 50. Your side has been a bit critical of this. Why, when the Government's trying to get older people into work as well as younger people?
CHALMERS: The Restart program is actually an old program. It wasn't new in the budget. It's been around for some years now and it's been spectacularly unsuccessful at getting older people into work. Consistently when we've been able to get numbers out of the Government, it's shown that the program is massively undersubscribed. There just isn't, for whatever reason, enough people taking advantage of this scheme.
AUSTIN: Maybe they don't know about it.
CHALMERS: Maybe, but it's been there for some years now, Steve. The Government occasionally will mention it in a press release but there doesn't seem to be much effort to actually get it to work. It matters in particular in this budget because there are some new hiring credits in the budget for younger workers and that means something like 928,000 Australians who are on unemployment benefits right now aren't even eligible for those new hiring credits. The Government says, well, hang on a minute, we've got something for older people too. But people aren't accessing that. There's something like 50 times less funding for hiring credits for older workers than there is for hiring credits for younger workers. We think that if you're going to design a multibillion-dollar employment scheme, as the Government announced in the budget, it seems strange in the extreme to exclude so many people from it.
AUSTIN: Because here in Queensland, under Annastacia Palaszczuk's leadership, there's nearly 20 per cent youth unemployment across the state. It's massive, and it's the young people, tomorrow's generation, who will be repaying this trillion-dollars of debt that this Federal Government's got, and $100 billion of debt the State Government's got. Young people are going to have to be working for the rest of their lives just to pay back all the debt that's being accumulated today?
CHALMERS: We've obviously said for some time that young people are at risk in this recession. I think you and I have spoken a few times about my fears that we lose a generation here, that we sacrifice a generation to the recession. But one of the things that's true of recessions past and unfortunately, I think will be true of this one, is that the workers most impacted are at the beginning of their work life but also towards the end of people's working life. Older workers in the 1990s recession, for example, many of them found themselves on the unemployment scrapheap and couldn't find their way back into work. We need to be conscious of that. The point I'd make about younger people is that the Government seems to have just discovered them. The idea that this hiring credit will make up for all the damage done, all the cuts to TAFE, universities, and penalty rates, the exclusion of casual predominantly young workers from JobKeeper, the damage done by early access to super to people's retirement incomes - all these sorts of opportunities thieved from young people over the last seven years, this won't make up for that. I get a bit frustrated when the Government pretends that they're all of a sudden on the side of young people. Their record over the last seven years tells a very different story.
AUSTIN: Jim Chalmers is my guest. Let me ask you finally about this debt issue again. The Federal Budget deficit will be around about $214 billion for 2021. We now have a federal debt ceiling of $1.1 trillion, and nearly 60 years of debt repayments to pay it back. I was around when Kevin Rudd was Prime Minister as you were. At that stage, you may recall that the Rudd Government sought to increase the Commonwealth debt ceiling to $75 billion and there were howls of outrage. Now hey presto, the very people who were denouncing Kevin Rudd - I think you were working in Wayne Swan's office at the time as an advisor -
AUSTIN: The people who are denouncing that are the people who have now just taken the debt ceiling to $1.1 trillion. I feel I have to give you a chance to comment on that, Jim Chalmers, since you are in the back room at the time.
CHALMERS: Yeah, I was Steve. There's been some stupendous hypocrisy on display in the 10 or 12 years since then a lot of the same characters who said that $150 billion or $200 billion of debt was a ‘debt and deficit disaster‘ now want to tell us that a trillion dollars, heading towards $1.7 trillion, is somehow manageable. We've been pretty consistent all along and said when the economy is weak, there might be a need to borrow to support people and support their jobs. The Government pretended that wasn't the case until now. Now we've got this really strange situation. But there's another way that it matters, Steve, if you think about the current policy argument; the Government announced $98 billion of measures on Tuesday night not offset by any savings or anything like that. By the time we got to Thursday night and Anthony Albanese was talking about a $6 billion childcare policy, there they were, the same characters going, you haven't told us how you'll offset it, you haven't told us how you'll pay for it. After the Government had done almost $100 billion of spending just 48 hours earlier! These characters have got no shame when it comes to debt and deficit. I think the days of them being able to bag us about this are well and truly over.
AUSTIN: What worries me is that everyone is just kicking the debt can down the road. The excuse is that interest rates are cheap now. But a couple years from now inflation will kick in, the laws of economics will no longer be defied, and all of a sudden the interest rate bills for everyone's going to start skyrocketing. Everyone seems to be kicking the debt can down the road, Jim Chalmers.
CHALMERS: There's definitely a lifetime of debt. You're right when it comes to deficits. There's at least another 10 years of deficit. The budget is in extraordinarily bad nick. I think it does matter. I think it especially matters who we ask to repay that debt over time. We want to make sure that it's not the most vulnerable people who are asked to carry the heaviest burden there, as they have before, including in that horror 2014 Budget. I think at times like these, the most important thing you need to do is you need to support people in their jobs and their communities. Every dollar of new spending is borrowed money. We need to make sure that that is as effective as it can be, that we get maximum bang for buck for it, and we measure that effectiveness by what it means for jobs. Later this week, I'll be talking in the National Press Club about this; how we get maximum bang for buck out of all of this money that's been borrowed, and how we make sure that we're actually building something that lasts so we don't wake up in two, three or four years' time and the only legacy of this period is a lifetime of debt.
AUSTIN: I'll leave it there. I'd like to talk to you further about debt and the state that Australia is in generally, Jim Chalmers. Thanks for your time.
CHALMERS: Sounds good, Steve. Thanks very much.