E&OE TRANSCRIPT
RADIO INTERVIEW
ABC DRIVE WITH RAFAEL EPSTEIN 774 MELBOURNE
MONDAY, 24 OCTOBER 2016
SUBJECT/S: Housing affordability, Solicitor-General resignation
RAFAEL EPSTEIN: Jim Chalmers joins us. He is the Acting Shadow Treasurer. His regular portfolio is Shadow Minister for Finance – part of Bill Shorten's Opposition. Jim Chalmers, good afternoon.
JIM CHALMERS, SHADOW MINISTER FOR FINANCE: Good afternoon, Raf.
EPSTEIN: I'll get on to the news of the day, the Solicitor-General, later. This is a good thing though, the Treasurer Scott Morrison, he acknowledges there is a difficulty and he is tackling one of the areas and that is the supply of land. They're looking forward, aren't they?
CHALMERS: I think any of your listeners Raf, who heard that clip that you just played, would be excused for thinking these guys have been in Government for more than three years now and they've all of a sudden discovered there's a housing affordability crisis in this country. They've had ample opportunity to so something real and meaningful about this for some time and instead we get, after more than three years, a bit of a suggestion about tweaking the state regulations around supply.
EPSTEIN: He's right, isn't he? If there's more houses available and you free up the urban in-fill, which is basically units replacing homes, that's part of the solution. He's correct.
CHALMERS: Supply is part of the solution, but there's a whole range of things you need to do. One of the reasons why our negative gearing policy focuses as it does on new properties is to try to boost supply and also create construction jobs at the same time. I think what your caller from a few minutes ago, John, said was spot on: If you really want to deal with housing affordability, you need to deal with negative gearing, because it does unfairly skew the market. And what it does, is it subsidises property speculators at the expense of people trying to get a foothold into the market for the first time. That's why Labor's got that policy on negative gearing and why we're so proud of it.
EPSTEIN: How much of a solution is negative gearing? Because even the Grattan Institute, who are big fans of your policy it's got to be said – and we had them in during the campaign – they think house prices will only drop by two per cent. Now every dollar matters if you're trying to save for a home. But a two per cent drop is not significant if they've gone up 30 per cent in the last three or four years. It's not going to have a massive impact on house prices, your policy, is it?
CHALMERS: I think it is the single most important thing you can do if you want to make house price increases sustainable in this country and in this economy. All of the experts that have modelled it, including Grattan but some of the others from the universities and elsewhere – all of the objective ones without skin in the game – have come to the conclusion that if you deal with negative gearing, you do level the playing field between first home buyers and people who might have six or seven or eight properties. And that's really the most important thing you can do. Some of these other things that Scott Morrison's talking about today are fine as much as they are, but if you were serious about tackling housing affordability, you've got to fix negative gearing.
EPSTEIN: But that two per cent drop – do you agree with Grattan's assessment: your policy would only lead to a two per cent drop?
CHALMERS: There are all kinds of other modelling out there from different experts. It's not for me to referee between the different models and the different conclusions, but I think everybody agrees, who comes at this in an objective way, that our negative gearing policy would see house prices rise but in a more sustainable way. That's an important step. There are a whole range of things that we need to do, but that's really the key thing that demonstrates whether you're serious or not about getting to the bottom of this housing affordability crisis in our suburbs.
EPSTEIN: It got a bit of an airing during the election campaign, Jim Chalmers. You did lose the election narrowly, but you lost –
CHALMERS: (laughs) That's just rubbing it in now, Raf!
EPSTEIN: Well, that the way it works, right? That's the way the system works. That’s the verdict on your policy, isn't it?
CHALMERS: No, I heard you make that assessment when you were speaking to John a bit earlier on. I don't think anyone looking at that election result would think that we underperformed in any way or that one policy or another was the difference between winning or losing. We're very proud of the effort and the result. We didn't get over the line, that's true. But I don't think anyone could put that down to our negative gearing policy. In fact, on the contrary, I think one of the things that people really appreciated around the country was that Labor was having a serious dig at proper forward-looking policy; not rolling ourselves up into a little ball, but coming up with ideas to tackle things that really matter to people like housing affordability.
EPSTEIN: I think people do appreciate that and I'm not sure if negative gearing's the one that you drop, but if you lose an election, you got to drop some of them, don't you? You got rejected narrowly, but you got rejected. You've got to drop some of your policies, don't you?
CHALMERS: I think after any election outcome, you look at your suite of policies and you look at what you want to keep and what you want to drop. We're very proud of the negative gearing policy and we intend to stick with it. I think right around the country, people appreciate that we're having a proper go at housing affordability; not this sort of half-hearted, half-arsed attempt that Scott Morrison put in today.
EPSTEIN: If I could just ask you about the breaking news this afternoon. Previous Solicitor-Generals have said it was like having a dog on a leash, ensuring the Solicitor-General only gave advice after getting permission from the Attorney-General. But either way, the Solicitor-General has resigned. He also had a conversation with your cabinet colleague Mark Dreyfus, the Shadow Attorney-General, during the election campaign without telling his boss. That was a mistake, wasn't it? During caretaker period, you kind of need to tell both sides about a significant meeting like that, don't you?
CHALMERS: The wrong man resigned today. If the Attorney-General had any decency or integrity, it would have been him who resigned today, not the Solicitor-General. George Brandis is not known for possessing either of those qualities – decency or integrity. I think ideally George Brandis would have resigned today and, if not, then Malcolm Turnbull would have sacked him. I think it's a very unfortunate turn of events that the Solicitor-General felt that he needed to resign today, having done nothing wrong, but having been treated in the way that he has by George Brandis. Ideally it would have been the Attorney-General who tapped the mat today.
EPSTEIN: I don't think that's going to happen, but thank you for your time.
CHALMERS: Thanks very much, Raf.
