E&OE TRANSCRIPT
RADIO INTERVIEW
ABC DRIVE MELBOURNE
TUESDAY, 3 MARCH 2020

SUBJECTS: Impact of Coronavirus on the economy; Scott Morrison’s failure to provide economic leadership or a plan; National Accounts; Stimulus; Surplus; AAP journalists.

RAF EPSTEIN, ABC DRIVE MELBOURNE: Jim Chalmers, thanks for joining us. How bad is the economy right now in your assessment?

JIM CHALMERS, SHADOW TREASURER: We'll get a good sense of that tomorrow when we get some new numbers from the end of last year but what's already clear is we have rising unemployment, slowing economic growth, and stagnant wages. We've got issues with productivity, business investment and household debt. We've got a range of challenges in the economy. They've been hanging around since well-before the Coronavirus and the difficult summer we had with fires. This Coronavirus has the capacity to exacerbate those challenges.

EPSTEIN: We'd be worse off wouldn't we, if we spent more? You've been calling for stimulus over the last year or so, even since the election. If the Government had followed your advice wouldn't we be less able to respond to trouble now?

CHALMERS: I think that is completely and utterly wrong. We've always said that Coronavirus will have a substantial impact on the economy but that we enter this challenging time from a position of weakness rather than strength because there hasn't been a plan for the economy. Since it became obvious in the middle of last year that the economy was slowing we've been saying that something needed to be done. It's a point that the Reserve Bank, international institutions, business groups, and credible economists have all been making -

EPSTEIN: If we were more in debt, we’d be less able to fix it.

CHALMERS: If the economy was stronger coming into this this challenging period around the virus then we'd be better off. That's not just a political barney in Parliament House, it’s been the view of the credible economists for some time now but the Government has been sitting on its hands. That means that the economy is weaker than it should be going into the Coronavirus fallout.

EPSTEIN: You think it's a negative quarter of growth? Will the economy have contracted in the first three months of this year?

CHALMERS: We haven't yet got the numbers for the last quarter of last year. We'll get them tomorrow. We won’t get the quarter you are talking about until June and we've got a little bit left to go –

EPSTEIN: Bushfires, Coronavirus, a lot of commentators are saying it's inevitable the economy will contract in the first three months of this year. Do you agree?

CHALMERS: A heap of them are saying that. It wouldn't be a surprise if it did. I don't like to get into the prediction game. We've got this other quarter to get through first. Obviously the quarter we're in now will be quite weak. The point I'm making is that it wasn't especially strong before that either.

EPSTEIN: You were in Wayne Swan's office during the GFC. I know there's always a political conversation about whether you did too much in office. That's not a question that I want to address. The Government's considering stimulus right now. If I can pull back on the partisan stuff, what would work? Would it be as simple as, I've got people at home because of Coronavirus and therefore I qualify for a bit of Government assistance? Do you think that is necessary?

CHALMERS: It's a better idea to address some of those challenges that have been hanging around for a while which have been made worse by the Coronavirus. Not enough people are consuming enough. That's hitting retail and many of your listeners would be at the mall and be seeing a lot of For Lease signs.

EPSTEIN: So you're suggesting cheques for people?

CHALMERS: You could do something in the tax system or the Newstart system to boost consumption. Interest rates will help a little bit but probably not enough. The other challenge is business investment. Business investment hasn't been this weak in the 30 years since the early 90s recession so you could have a tax break for businesses to invest.

EPSTEIN: Can I just clarify, you would suggest the Government do things around tax like, you'd get a bit more of a discount on your tax and do that broad brush for people? That's the way you would do it?

CHALMERS: The idea that's appealed to me for a long time is to have a look businesses writing off some of their investments a bit quicker in the tax system. It's called accelerated depreciation but it means if you invest onshore in Australian kit and Australian jobs then you can get a tax break for that. That would probably do some good. We'll wait and see what the Government comes up with. They've finally started talking about a plan and if it's good when they announce it then we'll support it but if it's insufficient we'll make that point too. I know that you don't love a lot of partisan stuff on the program but it is a fact that we've been quite constructive and said that the economy has been floundering so let's do something about it.

EPSTEIN: Jim Chalmers, most people never run into journalists from the Australian Associated Press when they go to work. I'm sure that you do. There are 180 jobs there but I'm sure as Shadow Treasurer you have turned up to something and the only journalist asking a question was from Australian Associated Press. What difference do you think it makes if they're not there anymore?

CHALMERS: It's going to make such a big difference and not just to the day-to-day politics of the place, but the foundations of the democracy. A lot of things which are said might not be reported without them. I've been knocking around politics for a long time now, I've been dealing with AAP journalists and they are very dedicated. I’m thinking of a bloke called Colin Brinsden who is one of the best economic correspondents that I've run into in the last decade or two. The absence of those guys is going to make a huge difference. It's a horrible outcome not just because they're good people but because they're excellent journalists and they make a genuine contribution to the way the place operates. It's a horrible day. There's no sugar-coating that, it’s very disappointing.

EPSTEIN: Really appreciate your time, thank you.

CHALMERS: Thank you, Raff.

ENDS