JIM CHALMERS MP
SHADOW TREASURER
MEMBER FOR RANKIN
E&OE TRANSCRIPT
TELEVISION INTERVIEW
ABC BUDGET SPECIAL
TUESDAY, 11 MAY 2021
SUBJECTS: Budget 2021; gap between announcement and delivery; full employment; Budget reveals decline in real wages; one trillion dollars of debt with not enough to show for it; budget repair; labour market challenges.
LEIGH SALES, HOST: For the Opposition’s view of the Budget I’m joined now by the Shadow Treasurer Jim Chalmers in Canberra. Jim Chalmers, this is a Budget one can imagine Labor delivering. Government spending going to aged care, childcare, the NDIS, mental health. It doesn't leave you anywhere to go with your economic policy in an election year?
JIM CHALMERS, SHADOW TREASURER: Well their heart's not in it Leigh. I think the Australian people have learned not to take too seriously what the Government announces on Budget night. They know that there's barely a relationship between what they announce and what's actually delivered.
SALES: Whether their hearts in it or not that's what they've announced, all of that spending.
CHALMERS: Well they've done that for political reasons Leigh. They've done that to cobble together these political fixes to try and get them through an election before they revert to type. There are still important differences between Liberal and Labor when it comes to the Budget. We've still got a higher priority on cleaner and cheaper energy, social housing, proper investment in good, secure well-paid jobs and all the rest of it for all the reasons that Casey just ran through. So, I think there are still important differences between the parties.
SALES: Unemployment is forecast to fall to 4.75 per cent. What target does Labor think the economy should aspire to?
CHALMERS: Well first of all that target's largely disappeared from the Budget papers. It was a speech that Josh Frydenberg gave a couple of weeks ago about getting closer to full employment. It's almost entirely absent from the Budget tonight. I'm not sure what happened to it. We've said for some time that part of the task here is to get closer to full employment, whether that's 4 or 4.5 per cent, whatever the economic consensus is. But there's a bigger story there as well and that's underemployment and that's been a problem in this economy for eight long years of this Coalition Government. If you don't address underemployment you won't get people back into work sufficiently to get those wages growing again. Wages growth has been missing from the economy for eight long years and the Budget today actually has real wages going backwards despite $100 billion in new spending and a trillion dollars in debt. I think that's an admission of failure.
SALES: Given where the economic indicators are at, better than expected, does Labor think that the current magnitude of government spending is appropriate?
CHALMERS: Well there's two aspects to that. Of course, the economy is recovering, that's a good thing. It's a credit to the Australian people who did the right thing by each other and limiting the spread of the virus. We've been entirely consistent throughout and said when the economy is weak there's a role for government to step in, even if that means some additional debt. We've been responsible constructive and consistent about that throughout. But you need to have actually something to show for that debt. Our concern is that this Government's racked up a trillion dollars in debt and they don't have enough to show for it.
SALES: Oh come on, nothing to show for it? The economy's performing better than any country in the world and we're basically COVID-free.
CHALMERS: That's overwhelmingly, the credit for that overwhelmingly belongs to the Australian people. I know Josh Frydenberg and Scott Morrison will try and claim credit for it, but Australians did the right thing to limit the spread of the virus. That's overwhelmingly why the economy is recovering. That's a good thing but there's still 2 million Australians either unemployed or without enough hours to support their loved ones. So the Treasurer might want to talk about the economic engine roaring back to life but Australians know that that engine has a number of gears and almost 2 million Australians are still stuck in reverse.
SALES: What's going to be the path out of debt for Australia?
CHALMERS: Well there's a combination of things. Leigh. Principally, first and foremost we need to get the economy growing so that we can get that debt as a proportion of the economy down, that's important. At some future point a government of either political persuasion will need to think about Budget repair and absent from the Budget today is any sense of how this record trillion dollars in debt - many multiples of what the Government inherited from Labor - there's no sense of a plan about how the Government will get that back under control.
SALES: What do you mean by Budget repair? Do you mean increased taxes or cutting spending? What do you mean?
CHALMERS: Well I think it's broadly acknowledged there are three ways to repair the Budget - growth, spending and revenue - some combination of that. Governments of either persuasion will have to contemplate that at some point. The Government's gone silent on it, not because they don't want to cut back the budget but because they don't want to tell us how until after the election.
SALES: Is it fair to say that you don't believe that that debt will be entirely paid back by purely relying on economic growth?
CHALMERS: Well I think that's the first task. It remains to be seen what kind of budget we would inherit and the best way to get that debt to more manageable levels when that's appropriate. We've said, obviously right now there's a case to support the economy, jobs need to be the priority over debt, but we will be left with an extraordinary amount of debt, many multiples of what the Coalition inherited. At some future point governments will need to think about how that is paid back. First priority there is to get the economy growing, but governments of other persuasions will have to consider other measures too. I think the Government has in their back pocket a plan to cut the budget severely but they won't want to talk about it until after the election.
SALES: Do you think that Australia is going to have enough workers and the workers with the right skills to fill, you know, to achieve what you said would be ideal, four, 4.5 per cent unemployment or as the Budget papers forecast 4.75 per cent?
CHALMERS: Well, we've got two sets of issues there. Obviously unemployment and underemployment is too high to get that wages growth but there's also some structural issues which are preventing people from taking up those opportunities. At a time when we don't have the skill system right there have been big cuts to apprenticeships over the last eight years. We've got skills mismatches, the adaptation of technology, concentrated and cascading disadvantage and long term unemployment, issues around childcare. There's a whole range of issues which are preventing people from grabbing those opportunities in the economy. Those structural issues have gotten worse over the last eight years of this Government. They need to be addressed.
SALES: Jim Chalmers, thanks very much.
CHALMERS: Thank you, Leigh.
ENDS
