E&OE TRANSCRIPT
TELEVISION INTERVIEW
ABC INSIDERS
SUNDAY, 4 OCTOBER 2020
 
SUBJECTS: Apprentice wage subsidies; JobKeeper; Tax cuts; Labor’s jobs plan; Debt; Recession.
 
DAVID SPEERS, HOST: Jim Chalmers welcome to the program. So first up, do you welcome this wage subsidy for 100,000 apprentices?
 
JIM CHALMERS, SHADOW TREASURER: We welcome any support for apprentices and trainees, particularly for young workers, and any efforts to start to fix the mess that the Liberal Government has made of training over the last seven years or so. We can't afford a lost generation sacrificed to this recession. It is very important that we address some of the issues in training. Obviously it doesn't make up for the 140,000 fewer apprentices that we've seen over the life of this Government. There is no long-term vision for training so that people can grab the opportunities in the recovery or be trained up for technological and economic change. The Government has a lot of form in announcing big numbers and chasing big headlines but then not following through. We'll go through all of the detail. We'll do all of that work. Subject to all of that, we hope that it's something that we can support. 
 
SPEERS: Just on the specifics here, it's women who've suffered most so far in this recession. Apprenticeships are mostly young men. Does more need to be done for women in your view? What would you suggest?
 
CHALMERS: Absolutely, David. Very clearly women have been disproportionately impacted by this recession. We need to make sure that we have a proper, comprehensive jobs plan and not just bits and pieces. We've been saying for some time that we need more investment, for example, in the care economy. We've said that there are other things that the Government should be contemplating beyond the daily drip feed of announcements. What we need to see on Tuesday night in the budget is not just another marketing exercise, not just a lot of big headlines and big numbers and patting themselves on the back. We need to see a budget which deals with weakness in the labour market in particular, but also makes sure that we're building something that lasts, and that we're actually getting bang for buck for these trillions of dollars that the Government is borrowing. That means -
 
SPEERS: Let's talk about that. Let's talk about how to do that. Is a wage subsidy approach that they're announcing today for men and women across apprenticeships and traineeships, is that a model that should be adopted? You mentioned the caring sector - aged care, child care, disability care - would that be the right approach there too?
 
CHALMERS: Two things about that. First of all, there's an existing wage subsidy, JobKeeper, which is being withdrawn too fast for a lot of businesses in Victoria where you are, and certainly for a lot of businesses in Cairns in Far North Queensland, where I spent the first half of last week. We are concerned that the existing wage subsidy, which was introduced too slowly and too narrowly, is now being withdrawn too quickly and too bluntly. That's the existing wage subsidy. In terms of any new proposals that the Government might announce on Tuesday night, again, we're prepared to engage constructively on that. I think Phil Coorey made a good point a moment ago; there is some complexity there. We want to make sure that we're actually incentivising new jobs and not just paying people for the jobs that might be created in the recovery anyway. Subject to all of that, obviously, we'd be responsible, constructive, and open minded about any new proposals in this space, particularly if they help women.
 
SPEERS: That's what we'd expect from an Opposition. I'm just wondering, are you actually saying they should do this, they should go for a wage subsidy approach more broadly?
 
CHALMERS: First of all, we're saying reconsider the cuts to JobKeeper, to the existing wage subsidy. There's already a wage subsidy in the system which has the capacity to do a lot of good, but it's being cut too soon for a lot of businesses which aren't recovering fast enough. That means the unemployment queues will be longer and more small businesses will hit the wall because of that decision that the Government has taken. In terms - 
 
SPEERS: Just on that, as you know JobKeeper doesn't require a business to be open and operating. There is a danger that in some parts it's propping up so-called zombie businesses.
 
CHALMERS: It's also propping up businesses which have the capacity to succeed in normal times. That's the point of it. That's the reason why we proposed it. It's the reason the Government came around to our view. The point that we're making is don't withdraw it so quickly that otherwise good businesses hit the wall and the unemployment queues are longer than they need to be. You asked me about a future wage subsidy; that is something that the Government should be contemplating, but we need to know what else is in the budget to understand whether that's where we get most bang for buck.
 
SPEERS: Let me ask you about tax cuts because we are going to see tax cuts no doubt on Tuesday night. Labor last year ultimately passed the Government's three stage tax cuts in the Senate even though you didn't like the stage three tax cuts for high income earners. Are you still opposed to tax cuts for high income earners?
 
CHALMERS: Last time David we were forced to choose between expressing a view on stage three and holding up tax relief which was desperately needed for low and middle income earners, or the reverse. We said that the highest priority was getting that support into the economy as soon as possible and that's how we voted. The Government didn't give the parliament the opportunity to vote on the different stages, despite our best efforts. We've said throughout that stage three is the least affordable, it's the least responsible, it's the least fair, and it's the least likely to get a good return in the economy because higher income earners are less likely to spend in the economy and it's that spending power that we need in our shops and in our small businesses around Australia. That's been our view throughout. It won't surprise people to learn that remains our view about stage three, especially if it comes at the cost of other more important initiatives and more cost effective initiatives like social housing, and in other parts of the economy which need help.
 
SPEERS: On tax cuts, though, my understanding is the Government will put forward again a whole package, an omnibus bill, for tax cuts. In the event they do that as they did last year, will you follow the same approach and argue against the top-end tax cuts but ultimately pass the lot?
 
CHALMERS: We'll finalise our approach, David, when we actually see the package of tax cuts. We don't know what the timing is. We don't know if there are any additional measures that they intend to put up on Tuesday night. I think it would be unusual to come to a view on something we haven't seen yet.
 
SPEERS: Okay, but I'm just trying to get a sense; will you stand in the way of tax cuts if you're opposed to one component of it?
 
CHALMERS: Let's see what they propose, David. I honestly don't think it's reasonable for me to come to a view on a Sunday about tax cuts which will be announced a couple of days later.
 
SPEERS: Okay. But on the existing tax cuts that are in law, the top-end ones that are due to come into effect from 2024, is it still Labor's plan to repeal those should you win the election?
 
CHALMERS: We said at the time that we would look at those stage three tax cuts closer to the election. Remember, when they were originally legislated they weren't to come in until 2024, some years down the track. We said it would be more responsible to have a look then. If the Government changes the timing of those tax cuts or changes the mix of those tax cuts, we'll consider it then. We've been very clear that we're not against tax relief for low and middle income earners but we haven't been keen on stage three throughout for all the reasons I identified. Stage three is the least responsible, least affordable, least fair, and least likely to be effective in the economy. 
 
SPEERS: Alright. So you're still weighing up whether you'd repeal that. You're still weighing up a few things aren't you? Negative gearing? Franking credits? We're not going to see a decision from Labor on these things anytime soon?
 
CHALMERS: We'll make our tax policies clear closer to the election. We still don't even have an update to the budget yet. It's been a long time between budgets. We need to take into account all of the economic conditions. We won't take an identical set of policies to the next election that we took to the last one. Our economic policies and our approach to the budget will be carefully calibrated to the economic conditions. It will prioritise jobs above all else but also supporting communities and supporting people doing it tough during this recession -
 
SPEERS: So what does that look like?
 
CHALMERS: And investing in the future so that the only legacy of this Morrison Recession isn't higher unemployment for too long and a trillion dollars plus in debt.
 
SPEERS: I'm sure everyone wants to see jobs, but I'm just wondering right now about the Labor alternative path to recovery. You've mentioned you want more on social housing. You don't like the top-end tax cuts idea. A wage subsidy is something you're suggesting more broadly. Is that the alternative approach here?
 
CHALMERS: Think of it this way, David. We need to remember that every single dollar here is borrowed. We need to get maximum bang for buck for that. We measure that effectiveness by what it means for jobs. We should be thinking about support in the economy in three ways. First of all, how do we support jobs and incomes in the near-term? JobKeeper is part of that, local jobs programs, also potentially Government procurement. Secondly, how do we support the economy now but have a lasting benefit? Small-scale infrastructure is a good example there; social housing is probably the best example. Thirdly, how do we increase the speed limit of the economy over the longer-term? Cleaner and cheaper energy; getting more participation in the workforce; teaching and training our young people to grab the opportunities of technological change. These are the sorts of things that the Government should be contemplating. It needs to be a comprehensive plan for jobs in this budget, not another marketing exercise which treats people as mugs and not another headline grabbing, back slapping exercise, which leaves almost a million unemployed Australians in the lurch and leaves too many people behind.
 
SPEERS: Just on overall spending here, I mean, you have been critical about too much debt being racked up. At the same time you want the Government to spend more on JobKeeper, as you pointed out, JobSeeker, aged care, social housing, universities, and child care. Can you just clear up, do you want the Government to spend more or less?
 
CHALMERS: That's not an accurate description of our position, David. We've said all along and we've been consistent since the beginning -
 
SPEERS: Which bit is inaccurate?
 
CHALMERS: The position you put on debt.
 
SPEERS: You're not critical of debt?
 
CHALMERS: The point that we have made repeatedly for more than a decade now is when the economy is in this much strife as it is today, the priority has got to be jobs. We've said that all along. It is the Government -
 
SPEERS: Okay so you're not critical about debt?
 
CHALMERS: Let me finish, David.
 
SPEERS: No, no, no. I just want to make sure, you're not critical about the level of debt? I just want to be accurate about that.
 
CHALMERS: We're critical of the Government's spending in some areas, the rorts and the pork barrelling which has meant that with some of the spending, we've not been getting maximum bang for buck. We've been critical there. On the levels of debt, we have said now for more than a decade, I've probably said to you hundreds of times in different scenarios, that the priority has to be jobs. It's for the Government to explain their inconsistency. They said that debt a fifth of what it is now was a debt and deficit disaster. Now that it's many multiples of that, they say that it's manageable. We've been consistent, the Government has been inconsistent. What we're saying about debt and deficit levels more broadly, is that every single dollar of this is borrowed money. We need to make sure it's effective. We need to measure that effectiveness by what it means for jobs. Enough of the rorts, the pork barrelling, and the wasted money. Every single dollar is borrowed, let's get maximum value for it. That means ensuring that we're investing in social housing, cleaner and cheaper energy, local jobs programs and all of these sorts of things which will make a genuine difference to jobs in the economy. 
 
SPEERS: Just on the cause of this recession, Jim Chalmers, Anthony Albanese has started referring to this as the Morrison Recession. Can you just clear this up? Why do you think we're in recession?
 
CHALMERS: This is the Morrison Recession. Scott Morrison is the Prime Minister and Josh Frydenberg is the Treasurer. The deepest, most - 
 
SPEERS: Does that mean the last recession was the Keating Recession?
 
CHALMERS: That's how people generally refer to it. It's not unfair now, that being the case, that this is referred to as the Morrison Recession. It's the first one in three decades. It's the deepest, most damaging recession in almost a century. We've always acknowledged that this health crisis is having devastating consequences for the economy and for the budget. Equally the Government needs to acknowledge that some of the decisions they've taken around JobKeeper and their failures to get money out the door, having announced big sums, mean that the unemployment queues are longer than they need to be, the recession is deeper and will be longer than it needs to be because of some of the decisions that the Government has taken.
 
SPEERS: Okay. But decisions have been at a state-by-state level around closures, lockdowns, and restrictions. As we know, Dan Andrews in Victoria is responsible for the decisions that are being made there. Do you really think people don't know why we're in recession? There's a recession going on globally.
 
CHALMERS: I'm not suggesting that they don't know, David, I'm suggesting that the first recession in three decades is under Scott Morrison; it's the Morrison Recession made deeper and unemployment queues made longer by the fact that they have botched key aspects of their response. The state governments take responsibility for the decisions that they've taken. Scott Morrison wants everybody doing what you just did a moment ago, David, which is to pretend that anything that goes bad in this economy is a consequence of state leaders' decisions.
 
SPEERS: No, I'm not saying it's because of their decisions. Sorry, I'm saying that they are responsible for the decisions each state has taken on lockdowns and restrictions. I don't think that's in dispute?
 
CHALMERS: No, and neither should it be in dispute that Scott Morrison is responsible for the lateness of the response; the bungling of JobKeeper; the big announcements which aren't followed through on which means that money isn't going out the door and into the economy; the failures in aged care; the failures on the COVIDSafe app. All of these things are Scott Morrison's responsibility. We shouldn't fall for the trap as you seem to be doing of pretending that he's not responsible for anything that's gone wrong in the economy.
 
SPEERS: I'm not arguing about that. I'm just pointing out what the states are responsible for. Final one, do you agree with Paul Keating that the Reserve Bank should be doing more and should in fact be buying government bonds directly?
 
CHALMERS: I agree with Paul Keating that fiscal policy needs to do more of the heavy lifting here. I agree that we do have a full blown jobs crisis on our hands and we do need to avoid a lost generation of workers.
 
SPEERS: I'm asking about his comments on the Reserve Bank and whether it should buy bonds directly from the government?
 
CHALMERS: I think that the first responsibility is the Government's, as they borrow this money, to make sure they are getting effectiveness. I agree with Paul - 
 
SPEERS: So you disagree with Paul Keating on that?
 
CHALMERS: I agree with Paul that more needs to be done. The only difference between Paul's view and other views is where that debt sits, on whose balance sheet. It's been clear for some time that the Government hasn't done enough, not just during this COVID crisis but before that -
 
SPEERS: I'll just ask you about his view on whether the Reserve Bank should buy bonds. Do you disagree or agree?
 
CHALMERS: It's not something that I've have been calling for. But if anyone has earned the right to comment on the economy, it’s the architect of the modern Australian economy.
 
SPEERS: You haven't been calling for it. Do you disagree with it?
 
CHALMERS: My beef is not with the Reserve Bank, David. My beef's with the Government which hasn’t done enough, which ensured that we came into this crisis from a position of weakness not strength, and that's left us vulnerable.
 
SPEERS: Alright. Jim Chalmers, thanks for joining us.
 
CHALMERS: Thank you, David.
 
ENDS