ABC Melbourne Mornings 05/05/20

05 May 2020

SUBJECTS: The impact of Coronavirus on the economy; JobKeeper; Australia’s economic recovery; Australia-New Zealand relations; Schools.


SUBJECTS: The impact of Coronavirus on the economy; JobKeeper; Australia’s economic recovery; Australia-New Zealand relations; Schools.

VIRGINIA TRIOLI, ABC MELBOURNE: Dr Jim Chalmers is of course the Shadow Treasurer. Let's get the Opposition’s point of view on just when and how to kick-start the economy, and the cost in the meantime. Dr Chalmers, good morning.


TRIOLI: You don't take issue with that general figure, do you, around about $4 billion for every week that restrictions stay in place?

CHALMERS: This health crisis is having a devastating effect on the economy and that means that there's a lot of anxiety in the community about people's jobs and their personal finances. All along the Government's had two very closely related tasks; to save lives in the first instance, but also to save jobs, and to try and make the right decisions to balance both of those considerations. The difficulty is that the Government has been trying to keep the economy going at the same time as its closing big chunks of the economy down. Our role as the Opposition is to be as constructive as possible, to support the welcome steps that the Government's taken, but also to urge them to make sure that they get the decisions about how they turn off the tap of support or reopen the economy right just as they needed to get the initial decisions to close it down right as well.

TRIOLI: Well if you were Treasurer right now then, what would you want to see, and what would you want to hear from health officials before you started talking to the states and saying get people back to work, loosen up those restrictions? Are you seeing what you would want to see right now?

CHALMERS: Clearly those conversations are already happening and they've been happening for some time. That's a good thing. At the National Cabinet level there has been a degree of cooperation as the Premiers, Chief Ministers and the Federal Government wrestle with these incredibly difficult decisions and weigh up the advice of the experts, which isn't always exactly the same advice. There are difficult decisions to be made. If we were in Government we'd be relying heavily on the same advice. We would be doing what we could in the first instance to save lives, we'd be recognising the progress that Australians have made together, and as we took steps to reopen the economy we'd be making sure that we relied on that advice then as well.

Being a good Opposition doesn't mean being silent. Being constructive means pointing out where there are issues. There's a big issue here Virginia in that the unemployment queues, which will get very long over the next few weeks, are longer than they need to be because the Government has botched the implementation of the JobKeeper scheme. They botched the communication of that scheme. There's too much uncertainty amongst the business community about how they make themselves eligible for it. As a consequence of that and in addition to the fact that too many Australian workers have been excluded from this scheme, the unemployment queues will be longer than they need to be. So when Josh Frydenberg gives that speech today as you mentioned in your introduction he needs to explain why he is excluding so many workers from the JobKeeper wage subsidies.

TRIOLI: Who is excluded from this scheme? And how much more debt should the Federal Government be prepared to take on in order to be supporting more workers, and which workers, Jim Chalmers?

CHALMERS: The Government's already made it clear that debt's not their highest priority in this stage of the crisis -

TRIOLI: So which workers then?

CHALMERS: For example just yesterday, 5,500 aviation workers who would otherwise be eligible for the JobKeeper wage subsidies were made unemployed because the parent company is owned by a foreign government, despite the fact that every cent of that wage subsidy would go to Australian workers here in Australia and maintain the link between those Australian workers and their employer. Josh Frydenberg has the capacity to fix that loophole that sees those 5,500 aviation workers excluded. He can do that with the stroke of a pen. He has the powers to do that, but he hasn't been willing to do it.

TRIOLI: We know that at the end of September we get to a big day of reckoning when the JobKeeper payment lapses and the JobSeeker payment is halved and goes back to what it was before. What do you say should happen?

CHALMERS: This is the second thing we need to hear today from the Treasurer when he gives his speech at the Press Club. There have been welcome steps taken to triage the economy when it's been at maximum risk, but there is as yet not a plan from the Government for what happens next and what happens to save jobs in the reopening stage of the economy. Most people including the Reserve Bank Governor recognise that what the Prime Minister said, that things will snap back to where they were before, is largely a myth. There will be a long tail to this for too many Australian workers and the recovery will be patchy. So we need to know what the Government plans to do when all of this welcome support finishes towards the end of the year. We need to be as careful about how we withdraw this support from the economy, and as considered about how we do that as we were when we were putting the support into the economy in the first place.

TRIOLI: Just a few quick questions just to wrap up this morning if I can Dr Jim Chalmers. The hits to the banks' profitability, those figures that they've been sequentially releasing, have been really quite shocking. What does this indicate for the economy coming out of COVID-19?

CHALMERS: This is across the board, not just the banks are taking an enormous hit from this primarily-health crisis with economic consequences. The banks haven't been spared that. They are still of course making relatively substantial profits, just down on what they've become accustomed to reporting. Right across the board, in almost every industry, there are substantial problems to be dealt with. That has consequences for employment and for people's financial security, and that's why there's so much anxiety in the community.

TRIOLI: The so-called "New Zealand-Australian bubble" that potentially is going to be discussed today at National Cabinet when Jacinda Ardern joins it, the New Zealand Prime Minister, what potential financial benefits in that do you see?

CHALMERS: It's a very good development Virginia, I think. For those of us who've been long-time supporters of closer relations between us and our brothers and sisters from -

TRIOLI: Just to jump in there, we've supposedly had that in place for quite some time, I think going back years and years to the so-called CER, the Closer Economic Relationship, between the two countries?

CHALMERS: Yes but there are still deficiencies in that relationship. In my personal view it can be even closer. In many ways it warms the heart to see Prime Minister Ardern involved in these discussions today. It's a very good development. New Zealand's done a good job as has Australia in dealing with the initial health aspects of this crisis. It makes a lot of sense for the two countries to speak about how we manage it, how we manage the recovery, and in the process how we can become even closer as friends and neighbours.

TRIOLI: And just finally this morning, the war of words that seems to continue between the Federal Government and in particular the state of Victoria over schools, distance learning and getting kids back to school. What's your view of that and if you were holding the levers of power, how would you be running that conversation?

CHALMERS: Clearly that's been a very unfortunate development. In the last couple of days in particular the escalation of language was unwarranted, in my view. A few weeks ago the Prime Minister said that schools were a matter for Premiers and Chief Ministers. We largely agreed with that, that the states should be relying on their own advice when it comes to reopening schools. But whether it's Scott Morrison or Dan Tehan, they seem to have spent the time since then sending all these mixed messages. I know as a parent, but also in talking to a lot of other parents, that this is a stressful enough time as it is without getting these mixed messages from the Federal Government, and without this unseemly war of words which has emanated largely from Canberra.

TRIOLI: Jim Chalmers, good to talk to you. Thanks for your time.

CHALMERS: Thank you, Virginia.