ABC RADIO NATIONAL BREAKFAST
THURSDAY, 14 JANUARY 2021
SUBJECTS: Economic recovery; Household savings; JobKeeper; Wages; Superannuation; Foreign Investment.
SALLY SARA, HOST: The Morrison Government is increasingly confident that a fiscal cliff will be avoided when emergency stimulus measures such as the JobKeeper payment are withdrawn in March. It's released new figures showing that households and businesses have stockpiled more than $200 billion in extra savings during the COVID-19 pandemic. Treasurer Josh Frydenberg says it's a huge sum of money, which will be spent across the economy fuelling the recovery and helping to create jobs. I spoke with the Shadow Treasurer Jim Chalmers a short time ago.
JIM CHALMERS, SHADOW TREASURER: Good morning, Sally.
SARA: Households and businesses have amassed big savings over the past few months. Is the $200 billion a sufficient buffer for when JobKeeper and JobSeeker payments are withdrawn in a few months?
CHALMERS: Well it remains to be seen Sally. We
want the recovery to be really strong, broad and inclusive. We want to see more money circulating in small businesses and local economies around Australia. This will be really important to that - the extent to which households, families, workers and businesses spend down some of these savings will be really key. But there's no guarantees that that will happen. A reason that we've got these higher savings is because there's been so much uncertainty in the economy. That uncertainty hasn't disappeared entirely. So we shouldn't have a Treasurer congratulating himself while there's all these people unemployed and underemployed and wages are still stagnant. There are still people struggling in the economy, we need to be cognisant of that.
SARA: You've been arguing for measures to target specific areas of the economy, sectors that are still doing it tough, such as tourism. But when we see household savings jumping by so much, doesn't this mean that your warnings about the economy heading for a fiscal cliff haven't been borne out?
CHALMERS: No, it means that the recovery will be patchy. Some parts of the economy are recovering strongly, we welcome that, that's a good thing. But for a lot of workers and small businesses, parts of Australia, specific industries like tourism are still doing it tough and people are still struggling. What we’ve said, and what we want the Government to recognise, is to make sure that any support in the economy is tailored and responsive. That means considering options to provide targeted support to workers and small businesses in the hardest-hit areas.
SARA: What kind of targeted support?
CHALMERS: Well, they should be considering whether JobKeeper can be more effective. I'm off to North Queensland again today and clearly there are parts of Australia, up north in Queensland and other parts of Australia, where towns and industries are harder-hit. They warrant some special consideration whether it's in JobKeeper, or other kinds of arrangements. What we've got here is a government which racked up a trillion dollars in debt, there's been a lot of money wasted on taxpayer funded executive bonuses, there’s been rorts, there's been a billion dollars spent on advertising and at the same time we've got more than 2 million people unemployed or underemployed. So our argument is let's get more bang for buck for that government support. Let's make sure it's going where it's needed most. Some parts of the economy are going relatively well, but many parts of the economy are struggling. We need the Government to understand and respond to that.
SARA: Jim Chalmers, what about turning these savings into spending, we're seeing that house prices are holding up, retail spending rebounded to a very decent 7 per cent in November and importantly, another 254,000 job vacancies in November, do you think the better outlook will encourage people to start spending their savings, which is what the Government wants them to do?
CHALMERS: Well everyone wants that to happen, and not just the Government, but hoping for that outcome doesn't guarantee that outcome. We want to see more money circulating in local economies. That's going to be key to what kind of recovery that we have and you're right hat there were some encouraging retail figures, but we need to recognise that they were based largely on the reopening of the Victorian economy, which is a good thing, but it wasn't necessarily a broad-based improvement right around the country. We need to see more of that kind of improvement. But we equally need to recognise that some of these big aggregate numbers that describe the national economic recovery, don't pick up some of the difficulties for real people in real communities, workers and small businesses that are still doing it tough. There are millions of people who can't get a job or can't get the hours they need to support their loved ones on what are historically stagnant wages.
SARA: These temporary support programs JobKeeper JobSeeker, have they done their work now?
CHALMERS: Well, they've been really important, but I don't think we shouldn’t say mission accomplished yet when it comes to challenges in the economy. JobKeeper has been incredibly important. That's why we proposed it. That's why we welcomed the Government's change of heart when they implemented it. It has helped people maintain a connection with their employer. That's a good thing. JobSeeker has meant there is more money in the pockets of job seekers and circulating in economies. That's a good thing as well. But we shouldn't pretend as the Treasurer wants us to, that all of a sudden everything is fine in the economy. A lot of people are still doing it tough. A lot of small businesses are still struggling. The Government's recipe for, or agenda for the economy seems to cut wages, cut super, wind back protections in the banking system - all that will make things worse rather than better.
SARA: Small businesses is calling for a HECS-style loan scheme to help the sector survive when JobKeeper ends in March. Do you think that's a good idea?
CHALMERS: Well it should be considered, it's one of the range of things that should be considered. It comes back to what we were talking about a moment ago, Sally, which is recognising that some people are doing it tougher in some industries, some towns, some businesses and some workers. So if the Government is determined to pull that JobKeeper support from everyone in the economy in a couple of months’ time, then it's not enough to say that a hiring credit, which excludes a million workers over 35, and leaves them behind, is going to replace JobKeeper. For some industries they’ll require some ongoing support. If businesses is coming forward with this idea then the Government should consider it. There are other issues around JobKeeper and no doubt there are other ways that we could support the hardest hit workers, small businesses and industries.
SARA: Jim Chalmers, another quick couple of issues before we finish up. There’s more trouble brewing with China, we've learned that the Government has knocked back a bid by a Chinese company to build a new gas power plant in New South Wales. Are you concerned about that?
CHALMERS: I don't know the ins and outs of that specific proposal. We don't have, in the Opposition, a lot of visibility, we’re not briefed on the Treasurer's reasons for these decisions, it's for him to explain those where that's appropriate. Broadly, foreign investment is welcome and it's approved in the vast majority of cases, but it's entirely reasonable that a country like Australia screens that foreign investment against our national interest, including our national security interests. That's what's happened here and that's appropriate. But while we’re at it, Sally, we shouldn't pretend that the difficulties in the China relationship are just about one or two foreign investment proposals, the issues are much more broader than that as we know.
SARA: Let's finish up on superannuation. The Government is grappling with what to do with the rise in the superannuation levy. One option being floated is to give workers a choice between taking the additional payments as super or taking them home. What do you think about that?
CHALMERS: Well, first of all, workers already have the option to top up their super, and they shouldn't have to pay for their own wage increases. What's happening here, and you can see them coming from a mile away, is the Government is using the pandemic as an excuse to come after super and wages simultaneously. The last time they froze superannuation, they said there’d be a pickup in wages growth, instead, we got historically low wages growth. So they should stop pretending this is a choice between super and wages.
SARA: A lot of workers have gone after that flexibility to take out money when times have been difficult.
CHALMERS: Well, there's been two categories of people doing that. Some people are doing it especially tough, we don’t judge them for accessing their super, the Government has made that available. But we know that there's been a lot of rorting as well. Some people have taken that super out who didn't need it for emergency purposes and weren't in hardship. All that's done a lot of damage to people's retirement incomes, particularly for young workers. That's been the Government's intention all along. They don't believe in superannuation, they take every opportunity to try and diminish it. That's what's happening here and they're doing that at the same time as they're coming after wages with their industrial relations changes. The sum total of those two things, in super and wages, is workers will be worse off.
SARA: Shadow Treasurer Jim Chalmers, thanks for joining us on breakfast.
CHALMERS: Thanks very much, Sally.