JIM CHALMERS MP
SHADOW TREASURER
MEMBER FOR RANKIN
E&OE TRANSCRIPT
RADIO INTERVIEW
ABC BRISBANE DRIVE
MONDAY, 15 NOVEMBER 2021
SUBJECTS: Inflation; Wages and the labour market; LNP’s political interference with the ABC.
STEVE AUSTIN, HOST: To talk about this with me in studio, Labor's, Jim Chalmers. He's the Shadow Treasurer and federal Member for Rankin. Thanks for coming into the studio, Jim Chalmers.
JIM CHALMERS, SHADOW TREASURER: Afternoon, Steve.
AUSTIN: Do you have a home mortgage?
CHALMERS: I do.
AUSTIN: Are you paying it off okay?
CHALMERS: As best as we can.
AUSTIN: What would it mean for you if interest rates started to go up due to inflation next year?
CHALMERS: I'm not pretending that I'm under the most pressure in the community, but I think the way that you introduced that is exactly right. A lot of people are living right on the edge. Whether it's housing costs, whether it's petrol prices that have gone through the roof, the price you pay for a tradie, there are a whole range of prices in our economy which are going up much faster than people's wages. I think that's a big reason why people feel like no matter how hard they work they can't get ahead, because the costs of a lot of the things that they're relying on are going up while their wages have been historically stagnant.
AUSTIN: As a former adviser to the world's greatest Treasurer, Wayne Swan, what is forcing things up? What are the forces behind people talking about inflation again?
CHALMERS: There's a range of things. In the economy, it's very rarely one thing. Inflation is not out of control yet in Australia. There are pockets of inflationary pressures, petrol is the big one. But at different times, it's been childcare, it's been construction, those sorts of things. In the US, it's really galloping. Inflation in the US is really galloping. In some cases, the global issues matter a lot. But here in Australia, our big problem is actually the other side of the equation. It's actually the wages side of the equation. So we've not actually had a government with a poorer record on wages growth than this one. Factually, wages growth has been historically low and that means that when prices do go up, people find it harder to keep up with that. That's the other side of the equation. If you look in the Commonwealth budget, for example, it says real wages will actually go backwards over the next four years. So prices will rise faster than wages. And that's, I think, the thing that really puts pressure on Australian families.
AUSTIN: They have crept up a little bit, haven't they? Wages in Australia have crept up a bit?
CHALMERS: A tiny bit, but still, historically low. Even the Reserve Bank, which has been in some ways relatively positive about the economy still says that wages growth won't be at the levels that we need it to be for some time.
AUSTIN: So the big potential problems for inflation is the price of petrol. There's not much we can do about that is there?
CHALMERS: The price of petrol is largely determined on the international market. There are some things around the margins that people can do. But if we went out and spoke to 100 people out the front here and said "what are the prices that worry you most?" I think petrol would be at or near the top of almost everyone's list. Certainly, in my community, people say they're just getting smashed by high petrol prices. It was in one sense, amusing, but in another sense, disappointing, that Scott Morrison was out there saying if you elect Labor petrol prices will go up. I mean has he been to a petrol station in the last little while? Petrol prices are going through the roof under Scott Morrison’s watch. I think that's the big one for people. But if you combine that with wages, and some of the other costs, which are growing, that's the big problem here.
AUSTIN: Household debt is 184 per cent as a share of income, according to the Bureau of Statistics, does that indicate that Australians have been unwise in the rush to housing now?
CHALMERS: Not necessarily. Inevitably, some people will have borrowed more than they can afford to repay. But what the regulators do, is they make sure that the banks don't assume that interest rates will stay this low forever, they actually do a calculation that says "could this borrower afford to repay it if interest rates were a bit higher?" The regulators, and I welcomed it when they did it, they came in quite recently and said we're going to bump that up a little bit to make sure that people have got more of a buffer. That doesn't mean that there aren't Australians still struggling to pay off the mortgage with all these other costs - whether it's petrol or construction costs, or at other times it's been childcare that’s been the big one – then we need to make sure that people can catch up. I think the best place to focus there, as I keep sort of coming back to deliberately, is wages growth. Unless we get wages growth going again people will keep falling behind.
AUSTIN: So you're Shadow Treasurer, if you are in power now as Treasurer, what would you do now? Would you instruct the Reserve Bank to start increasing interest rates? Now?
CHALMERS: No, the Reserve Bank is independent and so they don't take instructions from the government. Not for the 30 odd years or so.
AUSTIN: I know that, but they're not adverse to pressure here and now. There's been heavy criticism of the Reserve Bank, saying they should have upped interest rates a while ago.
CHALMERS: I think that's inevitable because interest rates are so crucial to how our economy performs, then they will be from time to time criticised for acting too late or too early, or whatever it might be.
AUSTIN: So what would you do now, Jim Chalmers?
CHALMERS: First of all, I think that we should have a review into the Reserve Bank. I don't say that necessarily critically of the Reserve Bank, but we haven't had one for a long time.
AUSTIN: To look at what?
CHALMERS: To look at the targets that they look at when it comes to inflation, employment, and the rest of it. To look at the interaction between what they do and what governments do. In the fancy term, monetary policy and fiscal policy, to make sure it's working coherently. All of these sorts of things. But our highest priority should be acting on addressing the stagnant wages growth. I think that's the big issue in the economy.
AUSTIN: So what would you do?
CHALMERS: There are two sets of things. Broadly, we need to make sure that the labour market is more secure. We've got a whole bunch of policies out there, industrial relations policies around casualisation and the like.
AUSTIN: It's a dream for workers at the moment. Companies are desperate for workers.
CHALMERS: It's a real mixed bag, Steve. There are skill shortages in the economy at the same time as we've got almost two million Australians who either can't find a job or can't find enough hours.
AUSTIN: This is your underemployment argument?
CHALMERS: Underemployment, insecure work, stagnant wages - they're all pieces of the same whole. It beggars belief in a way that we do have some of these skills shortages. I've just come back from the North West Minerals Province around Mount Isa, I've been in Cairns. It's a double whammy, where we've got skills shortages, at the same time as we've got a pretty weak labour market. The unemployment rate, which looks low on the surface, doesn't tell the full story of all of this insecurity in the labour market. A lot of the policies that we've announced already are about dealing with that uncertainty, whether it's via industrial relations, but also childcare. Making it easier for people to return to work. And skills are a big part of the story. There's three, or four, or five things that we should be doing simultaneously to strengthen our labour market, which is weaker than it should be. We've got skill shortages all over the place at the same time as we've got all this underemployment, and that doesn't make sense.
AUSTIN: So a Reserve Bank review and push wages up by improving skills in the workforce. They're all fairly medium to long term solutions aren't they?
CHALMERS: Not necessarily. Some of our industrial relations policies, which are about secure work and better pay and fair conditions, a lot of that is about turning unnecessarily casualised jobs into permanent jobs. That's part of the story when it comes to insecure work, a big part of the story. That needn't take forever. Some of the issues are slightly longer term, whether it's skills development and the like. But the Government's had eight years to deal with this. Insecure work isn't a function of the pandemic. It's been around for much of the last eight years. You and I've been talking about it for a really long time now. It beggars belief really, that we've come out of this pandemic - we've had a Government that's eight years old, about to go into its ninth year - and we've still got skills shortages at the same time as we've got people looking for opportunities. That's a big problem.
AUSTIN: My guest is Jim Chalmers. Jim Chalmers is the Shadow Treasury spokesperson for the Labor Party. He's also the ALP Member for Rankin, the federal electorate on the South Side. Before I let you go, as you'd be aware of, the ABC is running a review of it’s complaints process. But over the top of this, the Liberal Senator Andrew Bragg has convened a Senate Inquiry into how the ABC and SBS is handling complaints. This has led to the Chair of the ABC, an appointee of the Government, accusing the Government of political interference. Do you agree with Ita Buttrose?
CHALMERS: Of course I do. I think Ita Buttrose slotted the Government perfectly. You can't have a situation where the ABC says that they'll have an independent look into the complaints handling process of the ABC last month, and then over the top you get this attention-seeking, ideologically-driven madness, that says that they want to run a parallel process over the top of it. This is the usual political interference that we see from these characters. They can't decide whether they want the ABC to be a kind of a PR arm of the Government or whether they want to privatise it, which is what the Federal Council was talking about.
AUSTIN: I was surprised today to hear Scott Morrison describe the ABC as - it's not an exact quote - but "a government body". I was very surprised to hear that. He said it should be independent. It is independent, but he called it a government body, which, specifically, we have legislation that shows we are not.
CHALMERS: That gives the game away, doesn't it? I mean, they don't respect the ABC's independence in the way that we do. In the Labor Party, we don't agree with everything that gets said on the ABC, but we respect the independence of the place because it's important to a self-respecting democracy that it has an independent public broadcaster. The Morrison Government is always trying to undermine and diminish that, they want it to be a PR arm of the Government, or they want to privatise it. We want to respect its independence.
AUSTIN: So does that mean that the Labor Senators won't join this Committee that was set up by Liberal Senator Andrew Bragg?
CHALMERS: I don't think they have a choice about whether they join it, but they didn't support it. They didn't support the formation of this. There's already a process underway, there's already ACMA and other bodies that can deal with some of these sorts of issues. So this is unnecessary. It's just the same mad ideology that drives this Government trying to undermine the independence of the ABC.
AUSTIN: My wonderful producer has got the exact quote: "There's no government agency that is above the scrutiny of the Senate and I don't understand why that would be an extraordinary initiative to take", Scott Morrison. So the Prime Minister's point is that we're a government agency, and we're not above the scrutiny of the Senate.
CHALMERS: I think he's just givng the game away there. He thinks that the ABC should be an arm of the government. We think it should be independent. There's an important role for it in a democracy like ours, which shouldn't be diminished. What they're trying to do now is diminish that and undermine that independence. As Ita Buttrose said, this is political interference. I thought she got that bang on.
AUSTIN: Jim Chalmers, thanks for coming in.
CHALMERS: Thanks.
ENDS
