ABC Insiders 27/03/22

SUBJECTS: 2022 Budget; Costs of living skyrocketing while real wages are going backwards; A decade of Liberal attacks on wages and job security; Labor’s plans for cleaner and cheaper energy and cheaper child care; Fuel excise; low and middle income tax offset; Penalty rates; Wage growth; Fair Work Commission process to get aged care workers a decent pay rise; Solomon Islands and aid for the Pacific; Ending the Morrison Government’s rorts and waste; Andrew Charlton.


SUBJECTS: 2022 Budget; Costs of living skyrocketing while real wages are going backwards; A decade of Liberal attacks on wages and job security; Labor’s plans for cleaner and cheaper energy and cheaper child care; Fuel excise; low and middle income tax offset; Penalty rates; Wage growth; Fair Work Commission process to get aged care workers a decent pay rise; Solomon Islands and aid for the Pacific; Ending the Morrison Government’s rorts and waste; Andrew Charlton.
DAVID SPEERS, HOST: Jim Chalmers, welcome to the program.

SPEERS: We'll get to debt and bottom lines coming up, but what sort of cost of living relief would you prefer to see in the budget?
CHALMERS: Well, the budget needs to help Australian families through difficult times and not just help the Government through an election. It should be a budget that secures a better future for Australians and not just a budget that secures a fourth term for this underperforming Government. We don't want this budget to be the political equivalent of spakfilla. You know, billions of dollars squirting and spraying around in the hope that nobody notices the cracks in the economy until after the election. And whatever the Government proposes on Tuesday night it won't make up for the fundamental reality that Australian families face, which is skyrocketing cost of living, falling real wages and Australians falling further and further behind. So we'll see what the Government proposes on Tuesday night. We'll be responsible about it. We'll be constructive about it, if we can, but nothing that they propose will make up for almost a decade now of attacks on take home pay and job security.
SPEERS: But will you wave through whatever they announce or are there things, ideas you would not support?
CHALMERS: Well, let's have a look at what they propose. It's hard to come to a concluded view before we see the budget but our record has been to be constructive. If there's genuine cost of living relief, and if it's responsible, we try and be constructive about it. But no amount of money sprayed around on the eve of an election will make Australians forget a decade of attacks on wages and job security. That is a big part of the reason why Australians have been under these cost of living pressures. It didn't just show up in the last few weeks. The cost of living pressures faced by Australian families didn't show up when Russia invaded Ukraine, they showed up when the Coalition attacked wages and take home pay. Nothing on Tuesday night will change that fundamental reality.
SPEERS: I'll come to wages. Fuel excise though for example is being heavily speculated, hinted at by the Government, would it be a good idea to cut fuel excise?
CHALMERS: Well, certainly Australians need some kind of relief from these costs of living pressures. Petrol is a big part of the story, as everybody knows, but it's not the only part of the story. We think that there is a place for cost of living relief in the child care system, we think there's a place for cost of living relief when it comes to power bills, and our policies go to those solutions. What you're really looking for here, in addition to some kind of help through a difficult and uncertain period, you're looking for ways to ease the cost of living pressures on working families that also have an enduring economic benefit. That's why cleaner and cheaper energy is so important. It's why child care is so important. It's why Medicare and the cost of health care is so important. We need to recognise these cost of living pressures are right across the board. They're not brand new, they've been building for some time. They flow from the Coalition's attacks on wages and job security and there's a range of ways you can deal with it.
SPEERS: You don't put fuel excise in that list that you just gave us there, Medicare, child care and so on as having a benefit?
CHALMERS: Look, to be upfront about it David, we fully expect the Government to do something about this on Tuesday night. We expect them to push this problem from one side of the election to the other. And so if and when that happens, you can expect us to be broadly supportive depending on the final details.
SPEERS: Does that make it the right thing to do though? This is what I'm getting at, is it bad policy though? And particularly if it's a permanent cut surely that would be a fiscal time bomb for an incoming government?
CHALMERS: Look let's see what they propose. I mean, the expectation I think broadly, as the colleagues on the couch were talking about, is some kind of temporary cut to the fuel excise. We're unlikely to stand in the way of that, of course, but that won't deal with on its own these costs of living pressures that have been building for the best part of a decade because the Coalition has a deliberate design feature in their policy to undermine wages growth. That is the primary determinant of the pressures on families.
SPEERS: I heard your point on that. The low and middle income tax offset, you've previously said working families would face a tax hike if this isn't continued, so you want it to continue?
CHALMERS: Look, again, we expect the Government to move on this on Tuesday night. The responsible thing for an opposition to do is to see what kind of situation, what kind of budget we would inherit, but we've made it clear for some time, David as you know, we've spoken multiple times about our preference for cost of living relief to be directed towards those who need it most. We expect some kind of change on the low and middle income tax offset on Tuesday night.
SPEERS: Do you want it extended?
CHALMERS: We've been supportive in the past and we'd be supportive again I would expect, but let's see how it all shakes out. I think across the board, the Government will look to do something on cost of living pressures in this budget, not because they understand those pressures, but because we're six or seven or eight weeks from an election.
SPEERS: Let's talk about wages then and things governments can do directly. Will Labor restore Sunday penalty rates for those in the retail and hospitality sectors, as you promised at the last election?
CHALMERS: Well look those cuts to penalty rates have hurt a lot of working people in this country and as the peak group for small businesses has said they haven't created a single job. So we fiercely resisted those penalty rate cuts, the Government was all for it. The situation has moved on a little since then in the sense that there is a minimum wage case at the moment underway. The position that we've taken, Tony Burke, Anthony Albanese, myself is to see what that minimum wage case throws up in the next few weeks actually, the next month or two, because once we know where the minimum wage lands, we can come to a view on some of those broader issues. I think Australians know, we want to see wages growth across the board, the penalty rate cuts have stung people. There's a minimum wage case underway, there should be justice for low wage workers. And there are other ways frankly, to get wages moving in this country. The contrast between the Government and the Labor Party is the last time Labor was in office wages grew by 3.6 per cent on average, under this Government 2.1 per cent on average, and that's why more and more working families are falling further behind.
SPEERS: Okay, I do think they were falling in your final year but I take your point on the average. But just back on this Sunday penalty rates, I mean, Labor talked a lot about, yes increasing the minimum wage is one thing, that losing your Sunday was a big blow for a lot of people, they should be properly compensated and so on. So you're saying you still might do this, you might restore Sunday penalty rates?
CHALMERS: We are saying that the next step is the minimum wage review David, which reports quite soon. It makes more sense now - this is the difference between 2019 and 2022 - is we've got that case underway right now, it makes sense to wait for the outcomes of that.
SPEERS: Alright, so Okay, we'll see. On aged care workers again, something the government can directly do, would you boost the pay of aged care workers?
CHALMERS: Well, it makes no sense to us David that aged care workers are some of the most important workers in our country, in our communities, but some of the worst paid. And so one of the recommendations out of the Royal Commission was that the government support the Fair Work Commission process to get a decent pay rise for these crucial workers. That's our position. We will support enthusiastically a pay rise for these workers. The reality is that whoever wins office in May will have to fund whatever the outcome of the Fair Work Commission process is. The difference between Labor and Liberal in this case is that Labor wants to see a genuine pay rise for these crucial workers. We've said that, for I think about a year now, that we would support that case. The total cost of that depends on what the Fair Work Commission recommends and over what timeframe but either political party if it wins office would have to fund that outcome.
SPEERS: Yeah you would have to fund it. The Aged Care Royal Commission did also recommended an aged care levy to help pay for these costs. Have you made a call on that one yet?
CHALMERS: Yeah, we've said that we won't be going down that path, David. We've got other priorities in the budget. But I think it speaks to the Government's priorities, that they spent $17 billion in the aged care system and did almost nothing for the workers. We don't think that's a good outcome. The workforce is absolutely critical when it comes to aged care. They need and deserve a decent pay rise to do such an important job. The Fair Work Commission is looking at that and will report before long. We've said we'll support that process. A government of either persuasion would have to fund the outcome.
SPEERS: What about some other spending areas. Foreign aid, Anthony Albanese in the last couple of days since the Solomon Islands struck this arrangement with China has talked about the need to do more on foreign aid in the Pacific. Would Labor spend more on foreign aid?
CHALMERS: Well clearly, we think it's no coincidence, David, frankly, that some of the places where the Chinese have been most assertive are areas where there have been the most significant cuts to foreign aid. You think about the Solomon Islands I think in the last few years foreign aid from Australia has gone down around 21 per cent. It's for the Government to explain the impact of those cuts on our foreign policy.
SPEERS: The Government says foreign aid has gone up for the Pacific.
CHALMERS: The Government's got this slogan about a Pacific step up. Since 2018-19 foreign aid to the Solomon Islands has gone down 21 per cent in the budget. That's a reality.
SPEERS: Would you boost it?
CHALMERS: We will do better than the Government when it comes to foreign aid. But we also need to recognise, in doing that responsibly, our relationship with our Pacific friends and neighbours goes much more broadly than foreign aid. That's the point that Anthony Albanese has made as well. It goes to our position on climate change. It's about being trusted in the region on policies like climate. It's about making sure that we're spending our defence budget effectively, not spraying around billions of dollars in waste as the Government has been doing. We need to take a broader look. The Government's got a Pacific step up which is effectively a slogan which has been exposed. We need to do better for our Pacific friends and neighbours. We need to do that responsibly.
SPEERS: You'll work it out in government, is that what you're saying, how much more you'll spend on foreign aid?
CHALMERS: No, we'll have a view on foreign aid David that people can assess at the election.
SPEERS: In the campaign, Okay.
CHALMERS: But what we've said is we weigh that up against all the other priorities, we'll be responsible about it and it's not the whole story.
SPEERS: Do you still plan to provide free rapid antigen tests to all Australians as well?
CHALMERS: Yep clearly Australians need access to those tests.
SPEERS: What's that going to cost?
CHALMERS: Well it depends on the need at the time when the budgets are handed down. But we've said for some time, one of the issues was access to tests. The Government's gone part of the way to dealing with that. The situation is evolving, as is the virus and so we'll have a responsible position on that. But we've said for some time that people shouldn't be deterred from taking a test and protecting their workmates because they can't afford one.
SPEERS: So look, we know Labor plans to spend more on child care, TAFE, University, social housing, the NBN, the electricity grid, rapid tests, foreign aid it seems, aged care workers. Are there any areas where you would spend less than the Government?
CHALMERS: Yes David, clearly. I mean in areas like, for example, we think there's billions of dollars being wasted on contractors and consultants in the public service. Katy Gallagher has made that clear for some time, as has Anthony Albanese, there's an opportunity there. Clearly there are lots of discretionary funds where ministers have been rorting funding for political purposes rather than for an economic dividend. So I think Australians should expect that we will look to trim the budget in areas where the Government's waste has been so egregious. Think of it this way David, you know if we win office in May we will inherit a budget with a trillion dollars in debt, barely anything to show for it. More than $30 billion of wastage. The Government has committed $70 billion since the mid-year update in December; $70 billion. And so there will be opportunities for us to trim spending. We will be more responsible than the Liberal and National parties have been because we would inherit such a dire economic and budget situation.
SPEERS: This second budget later this year if you win, you will be prepared to cut spending?
CHALMERS: Yes, David, we've made that clear. You know, there are clearly areas where the Government's wastage has been so egregious that we will look to trim spending. But we will also look to grow the economy in ways that we've talked about. We will also look to change the way that multinationals are taxed here, working with countries around the world. We will also look to reprioritise spending as John Kehoe was talking about on your couch a moment ago. You know, this is not just a task for a budget that we would deliver if we win later this year. This is the task for every budget to go through it line by line to make sure we're getting maximum bang for buck for taxpayers. That effort has been more or less missing for much of the last decade and Australians deserve better than that.
SPEERS: What about superannuation, will there be any changes to the superannuation rules?
CHALMERS: Look, we've said about superannuation that we would maintain the system. Our efforts have been directed towards saving the superannuation guarantee from the Government that was trying to prevent it going to 12 per cent. That's been our highest priority. We've been defending the system from Coalition attacks. Australians shouldn't expect major changes to superannuation if the government changes hands.
SPEERS: What does major changes mean? What about things like catch up contributions, would those still be allowed?
CHALMERS: We haven't proposed it. We haven't proposed any changes to that David.
SPEERS: You won't?
CHALMERS: Unlikely to.
SPEERS: Now you talk about the rorts and waste, you're often critical of the Government for pork barrelling as you call it through these grant schemes. What about Labor's, what is it about $750 million spent so far on Labor and marginal seats for swimming pools, basketball courts, other local projects? How much do you plan to spend on these grants?
CHALMERS: Well, we'll make all of our spending clear when we tally up our election commitments towards the end of the campaign as every opposition and every government does.
SPEERS: You must have it itemised though, an idea of how much you're going to spend here?
CHALMERS: Well, we'll make that clear before the election David, but the point I'm making is this: our guiding light will be the quality of our spending. And some of those commitments that you've just mentioned are a consequence of lots of work with state governments and local councils and local communities. The difference couldn't be starker between a Government which sits around poring over colour coded spreadsheets. It gives one amount to one seat because it's Liberal, another amount to another seat because it's Labor.
SPEERS: Are you giving any to safe Coalition seats?
CHALMERS: Yes we are David.
SPEERS: Which ones?
CHALMERS: We've made a range of commitments, things like community batteries for solar power we've made in Coalition seats. The difference is David, we're looking for maximum community benefit and economic benefit, the Government's looking for maximum political benefit.
SPEERS: Okay but I'm not sure which Coalition seat you're talking about there. I'm not sure if you can, you can tell us?
CHALMERS: Well I saw Chris Bowen in safe Coalition seats on the Sunshine Coast in Queensland announcing solar batteries for example, and I'm sure we could dig out more examples than that.
SPEERS: Let me ask you finally, Andrew Charlton is set to be named as Labor's candidate in Parramatta in the next couple of days despite some local candidates from diverse backgrounds preferring a rank and file ballot to give local members a say.  I know Andrew Charlton is a friend of yours. Why shouldn't branch members be given a say?
CHALMERS: Look, ideally, in the normal course of events, branch members get an opportunity. We're very close to an election and the National Executive has been asked to determine this one. I'm not a member of the New South Wales Branch, I'm not a member of the National Executive and I haven't been involved. But I will say this about Andrew Charlton. Andrew Charlton, if he's pre-selected this week and elected in May, will make an immense contribution to that community, to our party, to the Parliament and to the nation. He is someone of extraordinary capability. I support him 100 per cent and I will proudly campaign for him and with him to keep that seat of Parramatta in Labor hands and to make a contribution to an Albanese Labor government.
SPEERS: You actually wrote an article, a piece in The Guardian last year with Andrew Charlton. You put forward a bunch of ideas together including quote linking the tax and transfer system to ensure a minimum basic income for those who need it. So will you introduce a minimum basic income?
CHALMERS: Well, these are the sorts of issues that a Labor government would look at David. We've said that not just in that piece, which I enjoyed writing with Andrew, we’ve said that on a range of occasions. There is a medium term and longer term reform agenda but we've made our immediate priorities clear.
SPEERS: Alright. Jim Chalmers, Shadow Treasurer. Thanks for joining us.
CHALMERS: Thanks David.