JIM CHALMERS MP
SHADOW TREASURER
MEMBER FOR RANKIN

E&OE TRANSCRIPT

TELEVISION INTERVIEW
ABC CAPITAL HILL
WEDNESDAY, 30 MARCH 2022
 

SUBJECT: Federal Budget. 

JANE NORMAN, HOST: I'm joined in the studio now by the Shadow Treasurer Jim Chalmers. Jim, thanks for your time.

JIM CHALMERS, SHADOW TREASURER: Afternoon Jane.

NORMAN: Alright. Well, let's start with the cost of living package. About $8.5 billion dollars there. It includes the two cash payments and the halving of the fuel excise. Will Labor be backing these measures when it comes to parliament as early as today?

CHALMERS: We will, Jane. They're actually going through the parliament right now. Our Shadow Cabinet met this morning and, as we've foreshadowed for some time, we won't stand in the way of cost of living relief for working families who are facing another year of real wage cuts under this Government. On average, an Australian worker is behind about $26 a week because of the real wage cuts in Josh Frydenberg’s Budget last night. We will support that cost of living relief through the parliament. It will not make up for almost a decade now of Coalition attacks on wages, job security, pensions, and Medicare.

NORMAN: Should the payments have been higher, given what you're saying about how much workers are losing because of rising inflation, rising cost of living pressures?

CHALMERS: You've got to be responsible about it and we can only play the cards we’re dealt. So we're asked whether or not we support this election-eve cost of living relief, and we will support that. But the onus is on us to point out that in so many cases, all this does is push a challenge from one side of the election to the other. The Budget is a very short term document. It's got a shelf life of six or seven weeks. It's a Budget written as an act of political desperation, and I think people are seeing through it the way that they see through the Prime Minister.

NORMAN: Then I guess, if you’re calling it a pre-election cash splash - we heard Anthony Albanese saying it's like stapling cash to a how to vote card - how do you then support it? If you're indicating that it's reckless spending, why support it?

CHALMERS: Because Australians are doing it incredibly tough, they've got another year of real wage cuts under this Government, about $1,355 a year. The cost of living pressures are worth about $3,600 on average. So we will do what we can to provide some cost of living relief, but this is not the only defining feature of the Budget. The Budget’s got a trillion dollars in debt and not enough to show for it. It's got those real wage cuts once again from a Government which has made an art form out of that. It's also got $3 billion in secret cuts to the Budget, which the Government will not come clean about, buried in the pages of the Budget. Those are the defining features of the Budget. It is a plan to get them through an election but not a plan for a better future for the country. That's the difference between Labor and Liberal. We have a plan for the future of the economy - to make sure that the economy and the recovery works for everyone - the Government's just got an election campaign.

NORMAN: Okay, there's a lot in that answer there and I want to pick apart some of it. When you're talking about the cuts, this has been put to the Government. The Government, on the record, has said that there was money set aside in the Budget update for decisions taken and not yet announced. The Budget has now been updated last night, and in that Budget, in the same column, it's taken the decision. So, therefore, the money that was in the update is not in the same column in the Budget.

CHALMERS: It's been updated in the sense that they've cut $3 billion.

NORMAN: Have they cut? Or have they moved the money into actually spending?

CHALMERS: They've cut $3 billion from the Budget in the last three years of the Budget. So, after the election - and they won't come clean on this - there's $3 billion of cuts there. We've asked them repeatedly, your colleagues and counterparts in the press gallery have asked them repeatedly, and they haven't told us what the difference is in that spending and why they've cut $3 billion and what's missing.

NORMAN: Alright. The Government has said that the money has been accounted for, but there are questions obviously to put to the Government. But in responding to this this morning, the Finance Minister Simon Birmingham said Labor is either being stupid or misleading. That you can't read Budget papers, that this is a simple accounting measure, it's simply been reconciled, the spending?

CHALMERS: You know that the Government's Budget is underwhelming at best or unravelling at worst. When Simon Birmingham, and now Josh Frydenberg, for the best part of an hour, want to talk about the Labor Party, the Budget can't be that good. It's not even 24 hours old yet and they're banging on about the Labor Party. The Treasurer, even in his Budget speech, mentioned Labor repeatedly. I think that says a lot about them.

NORMAN: He certainly did mention the Labor Party a lot. Now, you're talking about this being a short-term Budget with issues on the other side of the election. Should Labor win the election in six months’ time, will you restore the fuel excise, effectively hiking it back up to 44 cents a litre?

CHALMERS: Obviously, we take no outcome in the election for granted...

NORMAN: But you are the alternative Treasurer.

CHALMERS: …if the government changes hands, then the legislation that will go through the parliament today will have a fuel price hike at the end of September. That's the reality of the legislation which will be passed. I suspect that's how the Government wanted it. They wanted to take this fuel price pressure from before an election and put it to after the election. That will have to be dealt with either by a re-elected Coalition Government or by a new Labor Government. That's the reality of what we're dealing with. I don't think a party of either political persuasion - and I heard Josh Frydenberg talk about it a moment ago - I don't think it will be easy to extend that petrol excise relief beyond September. I think the expectation is that no matter who wins the election it's likely that that won't continue.

NORMAN: It costs $3 billion.

CHALMERS: I think the expectation is that no matter who wins the election, it's likely that that won't continue.

NORMAN: Alright. Now the other question I had was on the Low and Middle Income Tax Offset. It's basically worth about $1,080 to people on low and middle incomes. It’s a tax offset at tax time. It will finish at the end of this financial year. Does Labor believe that it should actually be extended given, as we've been discussing, cost of living and inflation are all on the rise?

CHALMERS: I think you make Budget decisions based on the economy and what the priorities are in the Budget, and so I don't want to pre-empt some of those conversations that we'd have with colleagues if we won the election. Clearly, under the Government's legislation, that tax relief ends, when people get their tax return the next time and then it doesn't happen again. So people will be paying more tax after that ends than they were before. That's how the Government intended it. We will weigh that up against all kinds of other priorities. We would inherit, if the government changes hands, a trillion dollars in debt with not enough to show for it. We'd have to weigh up our priorities. There’s not even enough room in the Budget for all of the good ideas, so we'd have to work out what we prioritise most.

NORMAN: Okay, in terms of priorities, one of the other announcements last night was about Paid Parental Leave. The government's merging Dad and Partner Pay with Paid Parental Leave. So it's 20 weeks for single parents and 20 weeks for couples they can divvied up however they choose. It's being sold as a sort of a fairness and flexibility measure. Is this a measure that Labor believes is necessary?

CHALMERS: We're up for a conversation about improving Paid Parental Leave, and I'll consult really closely with Tanya Plibersek, and Linda Burney, and our team more broadly, to make sure that this is the right way to go about it. But obviously, Paid Parental Leave can be improved. It may be this way, but I want to have the proper consultation and conversation with colleagues before we land a concluded view.

NORMAN: We're actually running out of time because parliament's about to rise, and then of course we're expecting an election any time. So are you sort of saying that you don't know where the Labor will back these measures before the House rises tomorrow?

CHALMERS: I think we're likely to, but I'd like that view to be concluded by Tanya and Linda, rather than by myself.

NORMAN: And just more broadly on Paid Parental Leave, Labor before the last election effectively committed to adding superannuation to it. It's seen as a measure that could be added. Does Labor still stand by that? If you were to be elected, would superannuation be added to the 20 weeks of pay of government-funded paid parental leave?

CHALMERS: We're consulting with stakeholders about that, that's why you may have read about it in the papers. We're having conversations right around the country to try and work out whether that's the best way to improve.

NORMAN: Do you reckon it would make much of a difference to people's retirement incomes?

CHALMERS: It has the capacity to but it comes with a cost as well, and you've got to weigh it up against all of the other ways that we want to enhance economic security for Australian women. We've got a big child care policy out there, we've put other measures out there about pay transparency and the like. We want to boost investment in industries dominated by women, especially the care economy. We've got a whole range of policies out there, whether or not that one will be part of our final election pitch is still to be determined.

NORMAN: I guess you've committed to it previously. So I'm just wondering what's changed? Did you not consult stakeholders before the 2019 election when it was the commitment of Labor's, what has changed?

CHALMERS: No, of course we did. The fiscal situation has changed. The way that we would pay for our commitments has changed between the last election. You might have noticed that and so we've got to be responsible. We've got to weigh up, as I said before, there are more good ideas than there is money to responsibly provide for them. That may be one of the things that we want to do, but we haven't concluded a view on it yet. We're still having conversations.

NORMAN: Would you be more sort of leaning towards actually extending the 20 weeks? Because I know that 26 weeks, for example, is seen by some economists, by some of your colleagues, as an ideal figure. Would that be the direction that you might be heading in that would make more of a difference for parents?

CHALMERS: I certainly understand the arguments, and as a parent of three young kids, I've seen - kind of up close - how hard it is to juggle when kids are newborns. Obviously, that's one of the options on the table, but again, we would only commit to that if we were confident we could afford it, we could do it responsibly. We're not there yet, it's not our policy, but we will continue to have the right conversations with the right organisations to make sure we land a good policy.

NORMAN: You have children. I’m just wondering, were you able to take Paid Parental Leave - whether it’s government funded or otherwise - when you had your kids?

CHALMERS: I was able to have a couple of weeks of leave, maybe doing some light duties in between all of the other responsibilities, but I know that's not available to everyone. What we want to do is to make sure we strike all of the right balances and provide an opportunity for parents to be with their kids, especially when they're little. It may be what the Government's proposing is a good idea, I'm inclined to support it, but we have to conclude a view on it that involves other colleagues too.

NORMAN: Yeah, of course. Now, let's talk about wages because we're heading towards forecasts of having the lowest unemployment rate in 50 years, and yet the real increase in wages is pitifully low. It's like a quarter of a penny.

CHALMERS: Well, real wages go backwards this year.

NORMAN: And next financial year they go up, but only by a quarter of a percent. And so I'm just wondering how low do you have to drive the unemployment rate to actually start seeing a real increase in wages? What has gone wrong in the system?

CHALMERS: Yeah, that's the right way to think about it. The Government's got unemployment heading down in welcome ways. We've got skill shortages in the economy and we're still not seeing the wages growth we need to keep up with the skyrocketing costs of living and real wages going backwards.

NORMAN: What would it take?

CHALMERS: Well, it's a range of things. You need to train more people to grab higher wage opportunities. You need to fix child care so that people can work more and earn more if they want to. You need to deal with the gig economy. You need to deal with labour higher, which is undercutting wages. You need to empower Fair Work Australia to turn casual jobs into more secure jobs. There's a whole range of things that we should be doing, but the Government says that stagnant wages are a deliberate design feature of their economic policy. That's why we're seeing real wages falling once again. Costs to the average worker on average about $26 bucks a week, which is not a small amount of money. If you compare the wages outcomes under this Government - 2.1% average wage growth, versus the last Labor Government 3.6% - you can see why average working families in this country are falling further and further behind under this Government.

NORMAN: It’s pretty clear this election will be fought on a few issues, but wages particularly. So can you guarantee that under a Labor Government real wages will be higher, or at least higher than forecast right now?

CHALMERS: Yes, wages outcomes will always be stronger under a Labor Government that cares about it and has a policy agenda to deal with this issue. This is one of the defining features of the Government's economic mismanagement, the fact that we've had stagnant wages since well before the pandemic. That's why people are falling behind. We've got a good record on wages growth compared to the current government, and we would expect that to continue.

NORMAN: Okay, minimum wage. The Fair Work Commission right now is figuring out what to do about the minimum wage this year. July 1's the sort of deadline. Last year, there was a 2.5 percent increase, so it's sitting at about $772.60 a week. Will Labor be making a submission to the Commission and what are you going to ask them to do?

CHALMERS: Obviously, I'm not going to talk about any submission that we might provide. That's principally for Tony Burke to consider and we've had some preliminary conversations. So much in our economy hinges on that minimum wage, and so we want to see a decent increase, which recognises that people are doing it tough because the cost of living is skyrocketing. If we've got more detail to add to that, then Tony will do that.

NORMAN: Do you reckon an increase is necessary though again this year?

CHALMERS: Of course, we need an increase in the minimum wage, you've got inflation going through the roof. People are falling further and further behind. The profit share of income is getting bigger, the wages share for the best part of a decade now has been woeful, so we need to do something to address that. The best place to start is the most vulnerable, lowest paid workers.

NORMAN: 2.5 per cent last year. Since then cost of living has gone up, inflation is rising faster, so would you be pushing for an increase?

CHALMERS: I know where you’re heading, Jane. I’m not going to nominate a number on your show.

NORMAN: Should it be higher than what it was last year, given the economic circumstances have for many people declined, because the cost of everything is going up.

CHALMERS:I’m not going to nominate a number but clearly the costs of living are skyrocketing. People are falling further behind. The minimum wage needs to reflect that reality.

NORMAN: Alright, Jim Chalmers. Thanks for your time today.

CHALMERS:Thanks, Jane.

ENDS