ABC RN BREAKFAST
FRIDAY, 18 DECEMBER 2020
SUBJECTS: Mid-Year Economic and Fiscal Update; China; JobSeeker; JobKeeper; Vaccines; Mathias Cormann.
NORMAN SWAN, HOST: For more I'm joined now by the Shadow Treasurer Jim Chalmers. Welcome back to RN Breakfast.
JIM CHALMERS, SHADOW TREASURER: Good morning, Norman. Thank you.
SWAN: It looks like a good set of results. Could you have done better?
CHALMERS: We can always do better. Obviously we welcome any improvement in the budget and in the economy. The economy is a little bit stronger than many had feared but it's still much weaker than we need it to be. The best evidence of that is that we still have almost a million unemployed, something like 2.2 million Australians can't find work or enough work to support their loved ones. The Government has a real blind spot when it comes to those people-facing parts of the economy. That's where we think the focus should be.
SWAN: But there is a $16 billion improvement to the budget bottom line, though?
CHALMERS: Yes, and now the deficit is $200 billion, which is still a record by some multiples. The budget is slightly improved from what the Government thought it might be a couple of months ago, but there's still a trillion dollars of debt, and record deficits. For all of those investments to be worth it, that investment needs to be effective. We measure that effectiveness by what it means for jobs. There's still a lot of people unemployed and underemployed so it’s too early for the Government to be saying "mission accomplished".
SWAN: What would you have done differently if a Labor Government had been in power?
CHALMERS: There have been some issues with JobKeeper. JobKeeper has been successful in many ways. Hundreds of thousands of people have maintained a job because of JobKeeper. That's why we proposed it in the first place and welcomed the Government's change of heart when they came to our view. But many people have been excluded from it; many casual workers, university workers, aviation workers, and others. There have been some issues there. There have been some other issues with the design of programs. There's been failure by the Government where they have announced programs, to actually deliver and get the money out the door. That has been another issue. But on the whole, our critique of the Government, while we welcome a bit of an improvement in the budget and in the economy, is to say, don't forget more than two million Australians who are still struggling, still at risk of being left behind. It's too early for the Government to be declaring "mission accomplished' when so many people are struggling.
SWAN: You are arguing for an extension of JobKeeper beyond the end of March?
CHALMERS: Our position on JobKeeper hasn't changed. The Government should be flexible enough so that JobKeeper responds to conditions in the economy. One of the really interesting numbers out of yesterday's budget update was that the Government expects now for unemployment to peak a little bit later than they had earlier thought. They thought that it would peak in December; now they think it will peak in March, which is when they plan to pull JobKeeper out of the economy. If the economy needs it, and particularly if the labour market needs it, don't be pigheaded about JobKeeper. If it needs to stay in for a little bit longer, and that's appropriate, then they should do that.
SWAN: So what's a little bit longer, what are your criteria for ending it?
CHALMERS: It depends on the conditions in the labour market. Again on that, Norman, we've been consistent for months and months now. JobKeeper has the capacity to do some good in the economy and it shouldn't be withdrawn too quickly. One of the really interesting things about how the Government is describing the economy at the moment is they're trying to have it both ways; they're saying the economy is going so well that we should pull JobKeeper out of the economy at the same time as saying it's going so badly that people have to cop a pay cut and a cut to their super. They can't have it both ways. Our view has been consistent which is if the labour market and people need it to support their jobs then it should stay in for a little longer. Once it's not needed it should come out.
SWAN: On Jobseeker, the Treasurer wouldn't say if JobSeeker would return to Newstart Allowance levels of $40 a day, but Labor isn't saying what they want the minimum to be?
CHALMERS: We've been very clear and said that it can't go back to the old $40 a day rate which wasn't good for job seekers and wasn't good for the economy which is struggling for spending power. We think yesterday's budget update was a missed opportunity to tell more than a million people in Australia on this payment -
SWAN: Why haven't you nominated a number? $100 a day or whatever?
CHALMERS: It's very simple Norman. We don't know what rate we would inherit if and when we came to government in a year or more. There's still another budget between now and the election, at least one budget, possibly two. The right and responsible thing for us to do is to say that we support an increase in the permanent rate and we'd like the Government to do that. If the Government doesn't do that, then we'll take into consideration the budget that we inherit, the rate the we inherit, and we'll come to a considered view well in advance of the next election.
SWAN: So you are already lining up for an August election, are you?
CHALMERS: Certainly there's a chance of an election really anytime from September or October onwards. We'll be ready for that. Obviously that's for the Prime Minister to decide. We do know there's at least one more budget between now and then. There might be another one. There might be another mid-year budget update but we don't know. We need to do the right and responsible thing, weigh up the budget that we will inherit, and the things that we want to do, including increasing the base rate of the JobSeeker payment.
SWAN: Where do you see this difficult trade situation with China going? I mean a lot of the budget position depends on iron ore, and that could be switched off overnight just like coal?
CHALMERS: Iron ore is really important to us, obviously. A big driver of the improvement in the budget yesterday was that we're getting more than $150 a tonne for iron ore when the budget assumes it goes from $120 down to $55 a tonne this year. One of the big drivers in the budget improvement has been that iron ore price. There's a lot of anxiety and a lot of concern justifiably amongst our exporters. I talk to a lot of them about the difficulties we are experiencing in that China relationship. We don't yet know what the future holds for the iron ore industry, but we do know that a number of our important export industries have already been affected. We need to see the Government prepared to work with our exporters and come forward with a plan to deal with this difficult period and diversify our markets. If the Government comes forward with a good plan that we can support, we'll do that.
SWAN: One of the risks that the Government mentioned yesterday at the press conference was vaccine rollout. How confident are you that the vaccine will roll out as predicted?
CHALMERS: I'm conscious that I'm speaking to an expert in this field, Norman. I've been listening to you all year talking about these issues! It would be better if we had more irons in the fire. We've got three remaining options, and a lot of countries have got more like half a dozen options. We're not exactly at the front of the queue when it comes to the roll out of the vaccine. But having said all that, hopefully we can get this thing deployed as quickly as possible to as many Australians as possible. It will have economic consequences, but more importantly, the more people we can get vaccinated safely and sooner, the better chance we have of limiting the spread of this virus.
SWAN: Just briefly because we've only got a minute to the news, you're still maintaining support for Mathias Cormann for the head of the OECD. Bob Carr issued a letter to world leaders yesterday complaining about his record on the environment, and the British Labour Party isn't supporting him. Why are you?
CHALMERS: We took a principled decision Norman that it is good in principle to have Australians deeply involved at the top tables of global institutions like the OECD. We haven't been involved in decisions like the Government's decision to fly Mathias around in a private jet around Europe when there's so many stranded Australians who can't get home who could have used that jet. But in principle we support Australians in these big jobs. We made that clear. We know that not everybody loves that position but that's our position. And we’ve made it clear over some years now that we don't support Mathias' views on climate change.
SWAN: We have to leave it there. Sorry, Jim Chalmers but thank you for joining us.
CHALMERS: Thanks very much.