JIM CHALMERS MP
SHADOW TREASURER
MEMBER FOR RANKIN
E&OE TRANSCRIPT
RADIO INTERVIEW
ABC NEWSRADIO BREAKFAST
THURSDAY, 16 DECEMBER 2021
SUBJECTS: MYEFO; Unemployment, underemployment, insecure work and stagnant wages; Coalition has failed to meet its previous wage growth forecasts; Almost two million Australian looking for work or more hours at the same time we have skills shortages.
THOMAS ORITI, HOST: The Treasurer Josh Frydenberg will give an update on the federal government's Budget this afternoon. The mid-year Budget update will forecast falling unemployment and stronger wages growth but economists are warning it all rests on the pandemic remaining under control. For more Labor's Shadow Treasurer Jim Chalmers joins us now. Good morning, thanks for your time.
JIM CHALMERS, SHADOW TREASURER: Thanks for your time, Tom.
ORITI: So, we'll get to an update this afternoon from the Treasurer. We've already seen some of, perhaps, what to expect - he's flagged stronger than expected economic growth post-lockdown. I mean, surely that's something you welcome, Jim Chalmers?
CHALMERS: Obviously, we want the economy to recover strongly. I think most economists expect that it will. That's thoroughly unsurprising when you consider we had one of the worst downturns in the advanced world in the September quarter, most people expect the economy to recover strongly. That's not especially surprising, but we can't be complacent about it because we heard all the same sort of spin and marketing a year or so ago and in the May Budget. And instead, because the Government didn't do the right thing on vaccines and quarantine, we had another downturn. We want to make sure that we're not complacent about it. We do have some cause for concern with the omicron strain of the virus. Most importantly, when Australians listen to the Treasurer giving himself a big pat on the back today, they'll have two reactions, I think. First of all, it's not a recovery if people are still getting absolutely smashed by the rising costs of living combined with falling real wages. And secondly, why does the Government want Australians to think that anything good that happens in the economy is all Scott Morrison and Josh Frydenberg's doing while anything bad that happens in the economy is somebody else's fault? I think that'll be people's reaction.
ORITI: Okay, so what do you think the budgetary focus should be then? Because the Treasurer has flagged - and we hear this phrase, budget repair - post-election. I imagine that means at least aiming to look at some semblance of a surplus at some point in the, you know, the future. Of course, it has been tough times. But, I mean, given the uncertainty at the moment, given omicron, do you believe that should be the priority at the moment?
CHALMERS: Not immediately, no. When they say that there'll be budget repair after the after the election, what they mean is there'll be cuts to the Budget but they won't tell you what they are until after the election. That's always, with these characters, code for coming after super, coming after Medicare, coming after the essential services that people rely on. I think that is a really important part of it. But in the near term, what people want to see addressed in this mid-year Budget update today is the skyrocketing costs of living pressures that they're facing. The skill shortages which have held the economy back for much of the last decade. And stagnant wages, which have been the defining feature of this Government's economic mismanagement.
ORITI: Okay, so let's look at that then. Because that's an issue many people are concerned about, their pay packet, of course. We're hearing today MYEFO will reveal that wage growth from now until 2024-25 will be 11%. So we are hearing about forecast wage growth. Is that good enough?
CHALMERS: Well, they've been in office now for almost a decade and in all of these Budget updates they say, 'oh, don't worry, wages are about to pick up' and instead we've had historically stagnant wages growth. That's because - as they have admitted at various times - that's a deliberate design feature of the Government's economic policy. They want the profit share to be higher and the wages share to be lower, and for much of the last decade, that's what we've seen.
ORITI: Are they not forecasting wage growth now, though? Isn't that what we're hearing now?
CHALMERS: Yes, but the point I'm making is they do this every time, Tom. Time and time again, for their decade in office, they say wages growth is about to pick up and instead real wages go backwards. Over the course of the life of this Government, we've seen this over and over and over again. They always overpromise on wages and always underdeliver. We hope that they will actually achieve these forecasts this time around, we want wages growth to grow strongly again, but it hasn't for the last decade.
ORITI: And 11%, just on that note, is that a rate that you would like to see? Is that something that you'd aim for as well? Is that the appropriate target, so to speak?
CHALMERS: We want it to be as strong as possible, consistent with all the other economic objectives. The biggest issue for this Government's time in office, in the economy, the defining feature of the economy, has been that stagnant wages growth. It's meant that there hasn't been enough money circulating in our small businesses and local economies. It's meant that no matter how hard people work, they feel like they just can't get ahead. And it means that they haven't been able to deal with the skyrocketing costs of petrol, and rent, and some of life's other essentials. What the mid-year update needs to do today, is deal with the skyrocketing cost of living pressures, have an actual plan to get wages growing again, and also to deal with the skill shortages which are holding the economy back. We've got almost two million people in this country either unemployed or underemployed at the same time as we've got skill shortages, and that's not just been a problem of the last two years of this pandemic, it's been a problem throughout the eight long years of this Government.
ORITI: Okay, you do talk about a downturn and skill shortages, but unemployment has continued to stay low, below 5%? I mean, do you acknowledge that, what do you put that down to?
CHALMERS: We want it as low as possible, but it doesn't tell the whole story of the jobs market. Even when the unemployment rate looks relatively low, we've still got these issues - whether it's wages, whether it's underemployment, whether it's insecure work, whether it's skills shortages. The story of the labour market is a much broader story than the unemployment rate. The unemployment rate matters obviously, we watch it very closely, we want to be as low as possible but it doesn't tell the whole story. If it did, we wouldn't have these millions of Australians who can't find the opportunities or the hours that they need, even at a time when we've got these skills shortages and labour shortages around the country. Whether it's this issue, or some of the other issues that we've talked about, the Government wants to pretend that anything bad in the economy is just a function of the pandemic, but most of these issues have been around for the last decade. So the idea that all of a sudden, after a decade of failing on wages and underemployment and insecure work, all of a sudden they're going to get it right, I think is just laughable.
ORITI: Okay, are you saying that if Labor was in government, you wouldn't be spruiking the unemployment rate?
CHALMERS: I'd say that the unemployment rate is part of the story but it's not the whole story, there are other issues that matter as well. That's why we've got policies around free TAFE to try and deal with the skill shortages. We've got policies around the NBN and cheaper and cleaner energy, trying to get investment flowing in this country again. We've got policies around insecure work, all of these issues which have been neglected. If you want someone to pop down to Canberra and give themselves a pat on the back then Frydenberg's your guy, but if you want to get wages moving again, or skill shortages dealt with, or investment flowing in the economy to get the economy growing the right way, then these guys have shown for a decade that they're not up to it.
ORITI: Okay, I'm afraid we're out of time, but thanks very much for joining us.
CHALMERS: Thanks for the opportunity, Tom.
ORITI: That's Labor's Shadow Treasurer, Jim Chalmers joining us there.
ENDS
