TUESDAY, 28 JULY 2020
SUBJECTS: Regional Queensland listening tour; Central Queensland economy; JobKeeper; Business investment; Government debt.
PAUL CULLIVER, HOST: Jim Chalmers, good morning.
JIM CHALMERS, SHADOW TREASURER: Good morning Paul, how are you doing?.
CULLIVER: Very well indeed, now tell me where are you this morning?
CHALMERS: We've started the day in Emerald, we're going to talk to some apprentices at the workshops here, some future diesel fitters and electricians, and then we'll be heading to Biloela, then on to Bundy tonight and Hervey Bay tomorrow. We’ve come from Roma, where we spent some time yesterday at the sale yards learning a bit more about the beef industry and what the outlook is like there.
CULLIVER: And what did you learn?
CHALMERS: It's been a difficult period obviously because of the drought, there’s a lot of demand for our beef around the world but the drought has been difficult so a lot of people destocked, now they're restocking and that can't happen quickly, or quickly enough. So they've got some challenges, but compared with some of the other industries around Queensland and around Australia they're not as bad-off as others.
CULLIVER: Did the subject of the Federal Government's decision not to appeal the decision over live export bans come up at all?
CHALMERS: Not in our discussions yesterday but I know that's an issue. Clearly we support the decision of the court. The decision not to appeal is a matter for the current Attorney-General. It didn't come up yesterday but I know it’s an issue for the beef industry around Australia.
CULLIVER: Obviously, you'll also be traveling through some mining regions, in the economic outlook from Treasury they made assumptions that base coal prices are staying stable. The problem is coal prices are at almost 10 year lows at the moment, are you worried about further jobs being lost in the coal sector here in CQ?
CHALMERS: I'm certainly worried about jobs more broadly, and the whole reason that we're traveling through Central Queensland with Senator Chisholm, is to understand the impacts of this recession and the impact on what's happening around the world on our local industries. This trip will be particularly about agriculture, mining and tourism. There are challenges in each of those sectors. One of the interesting things about that budget update that you mentioned last week that the Government handed down is that mining investment hasn't turned down like the rest of investment has or hasn't turned down as badly. But you're right to point out that because some of the global demand is a bit softer, the rest of the world is in recession too, that has implications for prices and that has implications for jobs.
CULLIVER: I just want to clarify that you said you're worried about job losses more broadly, but you're not concerned about mining job losses?
CHALMERS: No I am, I mean I'm concerned about job losses in every industry. This is the first recession we've had in Australia for almost three decades, there are job losses in mining and they are concerning. There are job losses in other industries too. The whole reason that Anthony Chisholm and I are taking the time, driving about 1800 kilometres, through five towns in three days, is to try and get a better handle on what's happening in mining, what's happening in agriculture and when we get closer to the coast we'll be holding tourism roundtables as well.
CULLIVER: I mean at the end of the day, part of the reason that we've got lower coal prices is partly lower demand but also Australia is producing quite a lot of coal to meet global demand at the moment. Should we be approving more coal mines at the moment?
CHALMERS: The future outlook for mining and particularly coal mining will be determined in lots of ways by global demand and by global markets. I've always said that as long as mines meet the relevant approvals and there's enough demand around the world for it then we'll continue to sell into those markets. We should also be able to at the same time, build new sources of energy without abandoning those traditional strengths that we have here in Central Queensland.
CULLIVER: A big part of getting out of this recession, potentially will be industrial relations reform, this is something the Federal Government flagged some months ago that they are working on what do you want to see happen in that space?
CHALMERS: We haven't seen what they're proposing yet but we've been responsible about some of the temporary arrangements that were struck to respond to the big downtown that a lot of businesses had and they're trying to manage their workers the best they can. So we've been pretty constructive about that but we said we didn't want it to be the thin end of the wedge. We wanted to make sure that some of these short term temporary changes didn't become permanent. We're a bit wary, we don’t want the Government to use this downtown as an excuse to do some of the things in industrial relations that we haven't supported traditionally but that they have been keen to do. Let's see what they propose, we haven't seen anything yet. We'll be responsible about it, but we are a bit wary about it.
CULLIVER: I suppose it's a question of what can get done quickly as well, and what the path of least resistance will be, so is the ALP putting up any kind of policy measures that you would like to see?
CHALMERS: We've been making positive proposals and suggestions. The JobKeeper payment for example was originally a Labor proposal, we said that there should be wage subsidies so that businesses can try and keep workers on. What JobKeeper means in Central Queensland is something like 5,700 businesses and almost 22,000 workers are on JobKeeper so that's been a really important thing. More than $30 million a fortnight has been pumped into the Central Queensland economy because of those wage subsidies So that's probably the best example of where we've been positive and put a suggestion on the table. We welcomed it when the Government had a change of heart, picked up and ran with those wage subsidies and that's been a good thing for CQ.
CULLIVER: The other thing of course is growing the economy as the Treasurer said is what he wants to do, we grow the economy we can start to pay back the debt that of course we're incurring. And what do you think of what the US has talked about with the Green New Deal which calls for massive investment in renewable energy to spark job creation. There has been some modelling here in the last couple of weeks showing there are thousands and thousands of jobs that could be created in Queensland by doing that.
CHALMERS: There are big opportunities. As I said before, it shouldn't be beyond us to grab those opportunities without abandoning some of those other traditional strengths that we've had, particularly in this region. There are big opportunities. Clearly, there are jobs to be created but the first thing we need to do, no matter what the source of energy is, is we need to get a bit of energy policy certainty. That means agreeing on the framework for energy policy. We haven't had one of those for a long time now and businesses through this region, and right around Australia tell me that's one of the big reasons why they're not investing. So let's get a stable policy framework for energy investment and I think that we can grab some of those opportunities that are before us.
CULLIVER: Jim Chalmers is my guest he is the Shadow Treasurer. He's actually right now in Emerald traveling to Biloela today or over the next few days as part of a regional listening tour. I'm also curious because we'll get the budget from Josh Frydenberg, the Treasurer in October and there's a question of what measures will come down there, will you support bringing forward the tax income reductions that have been flagged?
CHALMERS: We've got an open mind to that. We said it’s something the Government should consider. We haven't seen the cost of that and we haven't seen some of the other details but we've been saying for some time that middle Australia is struggling. There's a problem in the economy where people don't have enough spending power and that's why so many of our shops are closing down in our main drags of towns and cities around Australia. So it is something they should look at, there's not a proposal on the table yet. If they put something on the table we'll engage with it. We're keen to do that in a responsible and constructive way once we know all the details.
CULLIVER: How else do you think we can incentivise businesses to be spending into the economy?
CHALMERS: Even before this Coronavirus the economy had a big problem with business investment. So there might be ways that you can provide targeted tax breaks to incentivise businesses to invest. The Government might be looking at that, certainly the Business Council and others have put proposals on the table, the Australian Industry Group and others, we took a policy along those lines to last election so it's something that should be considered. The issue that we have with all of these ideas - income tax cuts, business tax breaks, all the other things which are floating around is it’s been quite clear for some time now that unemployment will be higher for longer. So we don't want the Government to wait till October to bring forward a proper plan for jobs. That was a big missed opportunity in that budget update. They told us how bad things were going to get, but they didn't really tell us what they were going to do about it. They need to do that sooner rather than later.
CULLIVER: The final thing I want to ask you about, 12 years ago we had the Global Financial Crisis. It was an ALP Government then and we saw massive debt and deficit that the Liberals or the LNP criticized Labor for literally a decade to come. We've now got $852 billion of gross debt tipped to arrive by the middle of next year. Will the ALP abstain from using that for political point scoring?
CHALMERS: We're within our rights to point out that the Government said that debt when it was $150 or $200 billion was a disaster but now $850 billion it is manageable. It's important that people understand the hypocrisy that underlies that. At the same time we said that the priority has to be jobs. We’ve been consistent on that, whether it's during the Global Financial Crisis or now the most important thing is that we step in and protect people's jobs and create new jobs into the future. That will come with a price tag. We need to make sure that every dollar that's borrowed to spend in this recession is spent effectively and we measure that effectiveness by what it means to jobs.
CULLIVER: Thanks for your time and enjoy your time in the region today.
CHALMERS: Thanks for the chat Paul.