ABC RADIO NATIONAL BREAKFAST
WEDNESDAY, 7 OCTOBER 2020
SUBJECT: Federal Budget.
FRAN KELLY, HOST: The Shadow Treasurer, Jim Chalmers, is in our Parliament House studios now. Jim Chalmers, welcome back to Breakfast.
JIM CHALMERS, SHADOW TREASURER: Thanks for having me on your show, Fran.
KELLY: The Treasurer says this budget will give people hope. Does it do enough to set the nation on the road to recovery, in your view? Do you like this blueprint?
CHALMERS: No, it doesn't Fran. The best way to think about this budget is that the Government's managed to rack up a trillion dollars in debt, and still unemployment is too high for too long, still too many people are left out and left behind, and there's still no vision for the future.
KELLY: What did you want to see in this budget that's not there? I mean there is a lot of money being spent to try and get jobs growth, and according to Treasury estimates in this budget, these measures will create one million jobs.
CHALMERS: There are a lot of obvious gaps in the budget, but you want to talk about unemployment, Fran, before we get to those. The Treasurer was just talking about unemployment getting to 5.5 per cent by the end of the four-year forward estimates; that's still higher than it was before COVID-19 -
KELLY: Yes, but we're in the worst recession we've seen in 70 years.
CHALMERS: In four years' time, Fran, after racking up more than a trillion dollars in debt we're still going to have higher unemployment than we did before the crisis. As you rightly pointed out, 160,000 Australians are expected to lose their job between now and the end of the year. The point we're making is that having racked up a trillion dollars in debt, they haven't made enough inroads into that unemployment, and there are still people left out from the blueprint that they released last night. I know there are a lot of numbers flying around but consider this number, Fran; 928,000 Australians who are on unemployment benefits are not eligible for the hiring subsidies in what they announced last night. That's an obvious gap -
KELLY: I just put that to the Treasurer, and he said there's other measures in their budget spending and in their general post-pandemic spending splash for them, including training positions and free courses?
CHALMERS: Fran, there's almost a million of them, and even if you added up all of the numbers that he quoted to you, it still doesn't get anywhere near providing the sort of opportunity the Australians have a right to expect from a trillion dollars of debt and all this spending that's going around. There's hardly anything for women, nothing for childcare, nothing substantial for public housing, nothing substantial for cleaner and cheaper energy, and nothing substantial for aged care. It really beggars belief Fran that you can spend that much money and rack up a trillion dollars in debt and still not address some of the obvious challenges in our economy now and into the future.
KELLY: The Government is arguing that the key to the economy coming back, and to providing the surpluses - ultimately, someday in the distant future it would seem, at least 10 years away - is confidence and being able to get the economy moving again in order for people to feel confident. Do they need the Opposition in this country to be backing the Government here and in that vein, will Labor back the legislated tax cuts and big tax incentives for business when they're introduced first thing this morning?
CHALMERS: Central to having confidence in the future is having a Government that has a plan for the future, and a vision, and can explain to people where they fit in that vision. That's where the budget fell down last night. In terms of the tax cuts, we've been saying for some time, and I've probably said to you many times on this program Fran, that we are up for income tax cuts for low- and middle-income earners. We called for stage two to be brought forward, so obviously we will be supporting that. There are lots of other tax measures in the budget. We're inclined to support those as well but I think your listeners will understand when even one initiative costs $27 billion that we want to make sure we go through the detail and make sure that that money is being responsibly spent. We're inclined to support the tax package. We want to work through all of the complexity and all of the big dollars associated with it, but subject to that we're inclined to support it in the parliament.
KELLY: The Government's going to have all these measures - five of them, I think - wrapped up in one omnibus bill. Given that you want to examine more closely a lot of these measures - some of the business incentives, for instance, and the R&D changes - would you urge the Government to separate the tax measures and just put them into a bill that you could give the tick immediately?
CHALMERS: Ideally, but in terms of the income tax cuts, the Tax Commissioner can have the confidence to implement those new tax scales. We've indicated publicly that we'll be supporting the income tax cuts component of it. That's all the ATO really needs to implement it. Ideally the Government would be looking for an economic outcome here but typically they're looking for a political outcome. They wrap it all up; they show us these tax cuts worth tens of billions of dollars at 3:30 in the afternoon and demand an answer by 7:30 on the same day. We want to be responsible about it. We've said we're inclined to support it, but I think we owe it to the Australian people to go through it and make sure that the details check out, particularly when we've got a Government which has form in making big announcements and big claims and falling over on the implementation. It's our job to make sure that we do that work.
KELLY: Labor didn't support company tax cuts proposed a few years ago. The Government's got a big spend for business here nevertheless, but it's in the form of an instant asset write off with close to $27 billion in tax relief over the forward estimates for businesses and there's another $5 billion through a temporary loss carry back provision. Do you support those pretty generous measures for business?
CHALMERS: They're really the ones that we're talking about Fran. We're inclined to support them, but we want to have a look at them. In principle, those are better ways of going about boosting investment in the economy than the company tax cut would have been. We've been making that point for some years now. We've got a business investment problem in the economy, and it didn't just show up along with COVID-19. It's actually been a problem for some time. Businesses haven't been investing as much as we'd like. It's partly because there's been a paralysis around energy policy and a lack of certainty around energy policy, but more broadly as well. We've said for some time this needs to be addressed. Ideally these measures will be a good way to address them, but when you are talking about some of these sums of money that you just identified, it's responsible for us to go through it.
KELLY: And is Labor still calling for the Government to extend JobKeeper even as the Government has announced this $4 billion job hiring subsidy we've spoken about already, with employers is being paid $100-$200 a week to place younger job seekers into jobs. Given that, is Labor still calling for JobKeeper to be extended? We've got to get people off these government support lines at some point, don't we?
CHALMERS: Yes, at some point Fran. But we are calling for the Government's cuts to JobKeeper to be reconsidered. When you think about businesses in Victoria, and Cairns where I was last week talking with small businesses, there's a lot of weakness in the economy right now, the economy is not ready for hundreds of millions of dollars to be pulled out. There's no guarantee that those workers who are facing JobKeeper cuts and eventually will be kicked off JobKeeper will find their way into some of these other programs. Think about the tax cuts too Fran, an average worker will be getting something like $50 a fortnight from these tax cuts. If you're one of the couple of million people on JobKeeper losing $300 a fortnight right now given those cuts at the end of last month, you can see that a lot of people will be worse off.
KELLY: Jim Chalmers, thank you very much for joining us.
CHALMERS: Thanks so much, Fran.