E&OE TRANSCRIPT
RADIO INTERVIEW
ABC RN DRIVE
TUESDAY 14 APRIL 2020
 
SUBJECTS: Virgin Bailout; Treasury’s unemployment forecasts; Coronavirus restrictions. 
 
PATRICIA KARVELAS, HOST: The Shadow Treasurer, Jim Chalmers, joins us tonight, welcome.
 
JIM CHALMERS, SHADOW TREASURER: Thank you Patricia.
 
KARVELAS: What kind of support do you think the Government should be offering [to Virgin]?
 
CHALMERS: We're not privy to the conversation between the company and the Government, but we've said that what we know is that there are 16,000 or so jobs at risk. We care about competition and we want to have more than one major domestic airline operating, for obvious reasons. If you care about those jobs, you care about competition and you recognise that Virgin is obviously in a very difficult spot right now then the Government needs to be examining all of the options which have been put forward publicly, whether it's some combination of loans, equity stakes or some other way to get the company through this very difficult period for them.
 
KARVELAS: You favour the Government taking a stake in Virgin rather than a straight up bailout, should it be permanent or just until the airline is profitable again? What is the suggestion you're making here? 
 
CHALMERS: We've made that suggestion as part of a suite of those measures that the Government could consider. If they went down that path the experience overseas during the Global Financial Crisis and at other times is that usually governments get in for a limited amount of time and they sell down again when it gets good value for the taxpayer. All of those sorts of considerations and predictions are things that the Government should be working through with the company. Again we're not part of that conversation. Other smaller steps have been taken to support aviation more generally and we've welcomed those. But they clearly haven't been comprehensive enough to prevent some of the difficulties that Virgin and others are going through.
 
KARVELAS: Would the Federal Government taking a stake in Virgin have implications for Qantas?
 
CHALMERS: In helping any company you've got to make sure that you consider the sector wide impacts of that as well. Qantas has made their views known about assistance for Virgin. There are other regional players to factor in too and no doubt the Government is doing that. There's an issue with aviation broadly, not just in Australia, but around the world. That's the inevitable consequence of some of the steps that have been taken to limit the spread of the virus. But Virgin in halting their trading today has indicated that they are in a more serious position than the others and that warrants the urgent consideration of the Government.
 
KARVELAS: If you're just tuning in, this is RN Drive, I'm Patricia Karvelas and my guest tonight is Jim Chalmers, he's the Shadow Treasurer. Treasury figures expect the unemployment rate in the June quarter to double to 10 percent. Do you think it will rise beyond that?
 
CHALMERS: We don't know yet whether the Treasury predictions will come true, Patricia, I think it's good that they've put them out in the public domain. We would like to see more information than that, we'd like to see more updates and forecasts of what's happening in the economy and what's happening in the budget, that would be useful. What those numbers showed today that the Treasury put out is that the unemployment rate, in their expectation, will likely double. That means hundreds of thousands of Australians added to the unemployment queues. For them and their families that will be a devastating consequence of this diabolical health crisis that we're all working through. There's another issue here as well, which is very important. The JobKeeper package that Labor called for and supported in the Parliament will prevent hundreds of thousands of Australians, by Treasury’s reckoning, from joining those unemployment queues. But the Treasurer has the capacity to make more people eligible for that payment, for example, more casuals and other workers as well. He has the power to do that. The fact that he hasn't picked up the pen and made the rules such that those workers can be included in JobKeeper means that whatever the unemployment rate peak will be, it will be higher than is necessary because the Treasurer didn't take that action. 
 
KARVELAS: But you say wherever it peaks at, is that your acknowledgement that the JobKeeper, by keeping the unemployment rate down, it's actually keeping theunemployment rate down. Those people would be on the unemployment queue if it wasn't for the JobKeeper right?
 
CHALMERS: That's exactly the reason we supported it enthusiastically Patricia, it's why we called for it even when the Government was resisting it, why we welcomed the Government's change of heart, because we want to make sure that more Australians remain connected to their employer through this really difficult period in the economy.
 
KARVELAS: But do you accept - okay that's JobKeeper’s objective. Do you think it will meet that objective for all of the people that go on JobKeeper or might they end up on JobSeeker?
 
CHALMERS: Well it remains to be seen. Certainly that’s the Treasury's expectation is that there will be hundreds of thousands of Australians who don't join the jobless queues. That is a very good outcome and that's what warrants such a big investment out of the Budget. That's why we supported it. The point that we're making is there are a whole range of people still excluded from JobKeeper who could be included with the stroke of the Treasurer's pen, and the fact that he's not doing that means the unemployment queues will be longer than they need to be.
 
KARVELAS: The infection rate in Australia has fallen from a peak of about 25 per cent to around 5 per cent. Is it reasonable for some states to at least be thinking about lifting some restrictions to get the economy moving, particularly for those many Australians that you're clearly concerned about who have lost their jobs?
 
CHALMERS: I think it's important that whether it's the state governments, the Commonwealth Government, businesses or members of the community are thinking ahead about what it might look like down the track when some of these restrictions begin to be eased. But equally important here is that we don't jump the gun. The health consequences of doing that and the economic consequences of doing that would be dramatic and drastic. We want to make sure that we don't get ahead of ourselves. We should be planning, we should be thinking through all the scenarios. But if we jump the gun, we do ourselves a really big disservice on the health front, but also on the economic front as well.
 
KARVELAS: It's likely that Australia will be able to reopen its economy well before we can think about reopening our international borders. What will that mean for the sort of recovery we're going to see? 
 
CHALMERS: I think the recovery is going to be really uneven when it comes, Patricia, I think the Prime Minister's language about a sort of miraculous snapback in the economy at the six month period is misguided. Some sectors will recover relatively quickly. I'm worried that the unemployment rate is notorious for rising quicker than it falls, and so I think there might be a long tail of unemployment unfortunately, I hope I'm wrong about that. Some sectors will be very profitable quite quickly. Some parts of the stock market will recover relatively quickly. But we need to care deeply about what recovery looks like. We need to make sure that people aren't left behind, that the Prime Minister's snapback doesn't just snap family budgets. That's why we want the Prime Minister to remain flexible on some of those arrangements so that there's not a rush to leave people in the lurch.
 
KARVELAS: Jim Chalmers, thanks for coming on.
 
CHALMERS: Thank you, Patricia.

ENDS