E&OE TRANSCRIPT
RADIO INTERVIEW
ABC RADIO NATIONAL BREAKFAST
THURSDAY, 5 DECEMBER 2019

SUBJECTS: National Accounts; Medevac; Angus Taylor.

HAMISH MACDONALD, ABC RADIO NATIONAL BREAKFAST: Jim Chalmers is the Shadow Treasurer. Good morning to you, Jim.

JIM CHALMERS, SHADOW TREASURER: Good morning, Hamish.

MACDONALD: Has the economy turned the corner in your view?

CHALMERS: No, the numbers yesterday were pretty troubling, Hamish. Quarterly growth slowed from the June quarter to the September quarter. Annual growth still has a 'one' in front of it, which is well short of what we need to see wages growing again in this country. It's much lower than it was when the Government changed hands. It's much lower than it was when Josh Frydenberg took over as Treasurer and much lower than it was at the election. There's enough in what we saw yesterday to be very concerned, not just in those overall figures about GDP growth but all the components of that too. Consumption was weak. Business investment was weak. The private domestic economy actually went backwards. There's not many credible economic commentators who would agree with Josh Frydenberg’s assessment.

MACDONALD: If we believe what you've been saying for months, that the Government simply was not doing enough, was simply not playing its part, then we wouldn't be in this position would we?

CHALMERS: We've been right at every juncture for the last six months. All of the things that we've been raising concerns about we saw in yesterday's numbers. We said that consumption will be too weak, that the private economy was in strife and we have been concerned about business investment. All of those things have turned out to be true. The Government has said all along, if we sit on our hands, things will pick up. What we saw yesterday is that those things didn't pick up. When we got weak figures last quarter, Scott Morrison said that the numbers will pick up this quarter and that didn't happen. They actually slowed.

MACDONALD: How then do you explain the return to growth in the housing market, for example?

CHALMERS: There's different components of the housing market. Prices in the housing market are a feature of remarkably low interest rates. Again, we've been saying for some time that when you leave all of the heavy lifting in the economy to the Reserve Bank and to interest rates, that will puff up asset prices, but not necessarily do enough to boost the economy elsewhere. That's what we're seeing when it comes to housing. Prices are going up in some of the big markets but we're not actually seeing a lot of approvals. We're not seeing a lot of building. The housing market is a bit of a mixed bag, but those prices you referred to are there because we've got interest rates at a quarter of what they were during the GFC, but which are not doing enough on their own to boost the rest of the economy.

MACDONALD: You can't look at these things in isolation. Notwithstanding the details that you've outlined as being the negatives, we have the housing market rebounding, the current account back in surplus for the first time in 40 years, debt being paid down by some Australians, Australia maintaining its AAA credit rating and the budget returning to surplus. If we believe the forecast next year, it doesn't look that bad?

CHALMERS: I don't agree with you. Household debt is at record highs. Wages are stagnant. Wages are barely keeping up with the cost of living - certainly not keeping up with the costs of childcare, electricity and private health insurance. Even that list that you just rattled off, I would contest. If you speak to Australians in the outer suburbs of this country, they know that when they walk through their shopping centres that there's "for lease" signs everywhere. They know that their wages aren't keeping up with some of those costs that I just identified. The economy is much weaker than it needs to be to get people's living standards up again.

MACDONALD: But the Treasurer is making the point that whether spent or saved, the tax cuts that people are taking and using to pay down their debt may not ultimately be a bad thing, that it does put Australians in a stronger position?

CHALMERS: Australians will make their own judgments about the best destination for those tax cuts that we supported in the Parliament. That's fine.

MACDONALD: So you accept what Josh Frydenberg says on that?

CHALMERS: No the point I'm making and the point that all of the credible economic commentators have made about this is that the tax cuts are not helping enough. Same with the interest rate cuts. More and more people in the business community, the Reserve Bank, and the credible commentators now share Labor's view that something more needs to be done in the economy to get it going. We shouldn't accept annual growth with a 'one' in front of it. We shouldn't accept that quarterly growth has to slow. While the Government has been sitting on its hands, the economy has deteriorated since the election.

MACDONALD: With respect, I just want to draw you back to that question because I'm trying to understand whether you disagree with Josh Frydenberg's argument. I'll read it to you. He says, "Whether spent or saved, the tax cuts have helped put households in a stronger economic position, making them more financially secure with more money in their pocket, and this will support the economy." Do you actually disagree with that?

CHALMERS: Obviously more Australians have more money in their pocket. That's why we voted for the tax cuts when they came into the Parliament. That's self-evident. The point that he's making is that some people are saving and some people are spending. That's also obviously true. The point I'm making is that the tax cuts on their own have been not been enough to boost the economy. That's a fact as well.

MACDONALD: But if that money does start to flow back into the economy in the near-to-medium term, then that might put those growth figures on an upward trajectory.

CHALMERS: We all want to see the economy pick up, Hamish. It remains to be seen whether it will. The business community, the Reserve Bank, the commentators, experts and economists largely agree with what we have been saying for six months now that they have not done enough to boost the economy when it comes to those tax cuts and indeed the interest rate cuts and anything else that might be in the system. More needs to be done.

MACDONALD: But if your argument is that the tax cuts haven't done what they were supposed to, why argue to bring forward the second round?

CHALMERS: Because something additional needs to be done here, Hamish. It's not just that that we've proposed. We've proposed bringing forward additional infrastructure. We've proposed a tax break -

MACDONALD: Before you move away from the question, why make the argument to bring forward the second wave if the first wave, as you're saying, isn't really working?

CHALMERS: What's been done so far hasn't been sufficient to get the economy going again.

MACDONALD: And is there any evidence that the second wave would?

CHALMERS: There's evidence that the more people have to spend in the economy, the better chance that we have of getting consumption up. Consumption in yesterday's numbers was the lowest it's been since the Global Financial Crisis. What we've done in a constructive way is say that more needs to be done and here are some ideas. The tax cuts are just one of those ideas, tax breaks for business investment, getting energy policy right, infrastructure, a whole range of things that the Government should be doing that they're not doing and we see the price that ordinary Australians are paying for that in the numbers which were released yesterday.

MACDONALD: The big news out of Canberra overnight was the repeal of the Medevac Bill. Do you think that if the outcome is those refugees in Manus and Nauru or in Papua New Guinea end up in New Zealand, is that a good outcome?

CHALMERS: We think it's a good outcome if we can negotiate settlement outcomes in third countries for some of the people on those islands. We've been saying that for some time. We've been calling for the Government to engage with New Zealand on this. But we don't know if it's part of the secret deal that was agreed between Senator Lambie and the Government yesterday because they won't tell us. It remains to be seen whether any progress will be made there.

MACDONALD: Is it fair enough for Jacqui Lambie to strike an arrangement?

CHALMERS: Australians have got a right to know what the arrangement is. It's pretty bizarre that you had Government Cabinet Ministers walk into the Senate yesterday and vote for a deal that they didn't know the contents of either. I think people have got a right to know what deal's been struck here. It's a very important issue. We're talking about people's health and people’s lives. I's not really a time for secret deals and political games.

MACDONALD: Obviously, still a lot of attention on Angus Taylor. There is just one more Question Time before Parliament rises for the summer. He has plans to head off to the climate summit in Madrid next week, as I understand it. Some details have emerged about this document that was published in a Sydney newspaper. Do you think at this point the pressure has been alleviated or are there still questions that need to be explained?

CHALMERS: I think the pressure on Angus Taylor is increasing. Whether people want to talk about staffers and all that sort of thing, I think Angus Taylor is the issue here. He's the one peddling dodgy documents. He's the one who's been sprung misleading the Parliament. He's the one who hasn't been disclosing his private business interests. There are other scandals involving meetings he's had about his private business interests. He even lied in his first speech about his time at Oxford University. I think the pressure on Angus Taylor and the Prime Minister is increasing. I think it's a black mark against Scott Morrison that he put a guy like this into the Cabinet and that he hasn't asked him to stand aside while the police investigate what's gone on here.

MACDONALD: And then if the police investigation clears Angus Taylor and people in his office, is that the end of the matter as far as you're concerned?

CHALMERS: My fear about the police investigation is that we've had the Prime Minister and the Attorney-General trying to influence the outcome of it. I wonder whether Australians can have confidence in the outcome of the investigation when the Attorney-General has already said it's a waste of time.

MACDONALD: Are you seriously doubting the ability of the New South Wales police to conduct the investigation fairly?

CHALMERS: No, my issue is with the Attorney-General and with the Prime Minister. The Prime Minister made a phone call about the investigation. He said that he talked with the Police Commissioner about the substance of it -

MACDONALD: It's only pertinent if the investigation's affected, right?

CHALMERS: I don't think that the Prime Minister or the Attorney-General should have put the police in that position by making an inappropriate phone call and by describing it in the Parliament as a waste of time. I think those were very unfortunate developments. I don't have any issue whatsoever with the police or how they conduct their business professionally. I do have an issue with the Prime Minister and the Attorney-General. We've been asking questions about this in the Parliament for the last week or two because we do think it's inappropriate for those senior players in the Government to be talking in the way they have about an ongoing police investigation into one of their own Cabinet colleagues.

MACDONALD: Jim Chalmers, thank you very much.

CHALMERS: Thank you, Hamish.

ENDS