E&OE TRANSCRIPT
RADIO INTERVIEW
ABC RN BREAKFAST
THURSDAY, 18 APRIL 2019
SUBJECTS: Liberals’ climate change scare campaign; Labor’s ambitious policy agenda; PEFO; Liberals’ tax cuts for top end of town; income tax; Labor’s indigenous health announcement
FRAN KELLY: Jim Chalmers is the Shadow Finance Minister and Labor's Campaign Spokesperson. He joins us from Brisbane this morning. Jim Chalmers, welcome back to Breakfast.
JIM CHALMERS, LABOR CAMPAIGN SPOKESPERSON: G'day, Fran. Thanks very much.
KELLY: So you heard Mathias Cormann there who said you're trying to sneak in without telling us the cost of your climate policy. Will Australian businesses be forced to spend more than $25 billion on international permits under your emissions reduction plan?
CHALMERS: Well, Mathias had the cranky pants on earlier! I'm not sure what he's so upset about. Even he had to admit in his answer to your questions that they were plucking numbers out of the air, and like all the other scare campaigns that the Government has run on climate change and on other areas, this one doesn't withstand scrutiny. It's the usual -
KELLY: OK, well let's go to that scrutiny now, because you're the real deal. You presumably know the cost. Mathias Cormann says $25 billion is the best available estimate. That's based on an average of $50 a tonne for those international permits over the next decade. Is that number wrong?
CHALMERS: They're making that number up, Fran.
KELLY: So what's the real number?
CHALMERS: We've said that we'll sit down and consult with industry on the implementation of our safeguard mechanism. That's entirely appropriate. I'm hoping that the Government's not arguing that we shouldn't consult with business. We're relying on the same modelling that the Government relies on, and that modelling shows that the economy will continue to grow under our climate change plan. It will grow the economy, it will create thousands of new jobs. It'll lower power prices and lower pollution. Those will be the consequence of our plan. All of these scare campaigns that the Government runs from time to time, I think Australians are tired of them. They know that dealing with climate change is good for the economy and good for the environment at the same time.
KELLY: Yeah, but don't you think Australians might want to know the impact of Labor's policy on the economy broadly. I mean, surely you must be able to give them a sense beyond waiting until you're elected to sit down with business?
CHALMERS: We've said multiple times this week and before that that we rely on the same modelling by Warwick McKibbon that the Government relies on.
KELLY: Yes, but that McKibbon modelling is four or five years out of date now. The international permit price is very different then than now.
CHALMERS: It's the most recent available modelling and if it's no longer up to date, the Government shouldn't be relying on it either. We're relying on the same modelling. The Government conducts this sort of unhinged crazy scare campaign about climate change based on numbers that they make up and apply to that modelling. What we've said is that our climate change policy is good for the environment, good for the economy. That's what the modelling shows. There'll be no difference in economic growth under our plan or the modelling of their plan, because we allow international trading because that's cheap and it saves people money.
KELLY: OK, but the thing is we don't know how cheap it is because the Government says that the projections are it'll be over $60 a tonne. The international permits by 2030, they're being conservative with $50 a tonne, so that's quite expensive.
CHALMERS: That's important, Fran. As I understand it, and there's not a lot of detail in the usual stitch up on the front of The Australian today; but as I understand it, they're basing these assumptions on a per tonne carbon price which covers the whole economy. And that's not our policy.
KELLY: No, no, I don't think they are actually. I had a look at what Angus Taylor is doing. They're looking at 500 million tonnes of your 1.3 million tonnes of emissions reduction coming from that. How much of the 45 per cent cut would be delivered through international permits. Can Labor tell us that?
CHALMERS: That will be part of the consultation with industry. I think that's entirely fair for us to say that. We have released more detail in our climate policy than is usual. We've put out a very, very detailed policy, not just on climate change specifically, but on energy, on electric vehicles, right across the board. We've put out a heap of detail and we have been consulting with business. But we've said that will continue if and when we win office. That's entirely appropriate, because we want to do this in consultation with business. They understand that if we want to have investment certainty in this country, we want to deal with climate change, get pollution down, get energy costs down, then we've got to all work together. That hasn't been the approach of the last six years.
KELLY: This could all be academic, because you're likely to need the Greens if you win Government to pass your 45 per cent emissions reduction through the Senate. The Greens won't back anything that involves these international credits. The quote from the Greens is international offsets are like paying someone to go on a diet for you while you stay at home eating burgers and pizzas. So if the Greens block, it's 2009 all over again, isn't it?
CHALMERS: That assumes the outcome of the election, which we're not really prepared to do. We've been upfront and said that we think international trading is important. It's cheaper, it saves people money. We're confident that with the extension of the safeguard mechanism, which is the centre of our climate change policy, that we can get pollution down, we can get energy costs down, and we can continue to grow the economy and create jobs.
KELLY: Labor often boasts that it's released more policy than any other Opposition in recent memory. Now that we've got the pre-election update out, you've got the numbers, you've got the forecasts. When will we see you policy costings?
CHALMERS: We'll release them in the usual way during the campaign. It takes a little while after the finalisation of the economic parameters, which we saw in the release yesterday. It does take some time for us to have all of our costings updated in the standard way with the new parameters. And so we'll work with the Parliamentary Budget Office. We've also got a costings panel of eminent Australians who go through all of our methodology and check and endorse that.
KELLY: But are we going to have to wait until the final week of the campaign as we always have to do and have this boring costings argument right up until then or are you going to give it to us earlier?
CHALMERS: I think we'll release our costings in plenty of time for people to assess them. We haven't decided on the day we'll do that. That depends in part -
KELLY: One week out? Two weeks out?
CHALMERS: It depends in part on some things which are out of our hands, Fran, which is to go through this process that I've just outlined.
KELLY: OK.
CHALMERS: But certainly our intention is to release them in plenty of time for people to judge them.
KELLY: Labor's been really hammering the Grattan Institute claim of $40 billion in spending cuts in the Government is planning to pay for its stages two and three of its tax cuts. Page 11 though of PEFO, the pre-election update, says the fall in spending to 23.6 percent of GDP, which is a forecast, assumes no policy change. That's the words in the PEFO document. Does no policy change, as the Finance Minister told us, mean that Treasury doesn't see a need to cut health, cut spending, cut other essential services to pay for the tax cuts?
CHALMERS: Not at all Fran. If you look at the graph on the same page that you referred to, it confirms that in the last year there we'll have $40 billion of cuts to the Budget. It also confirms that -
KELLY: No, it confirms that spending will go down by $40 billion.
CHALMERS: Correct.
KELLY: That doesn't say cuts. As the Government says, they're saying that $40 billion is going to be saved by less people taking welfare and less money paying down debt.
CHALMERS: It's a fantasy, Fran. And we've heard the Government promise before elections before that there won't be cuts to hospitals and schools and then after the election, we've had billions of dollars cut out of both. I don't think the Australian people believe them. I certainly don't believe them.
KELLY: But Treasury believes them. It says assumes no policy change.
CHALMERS: The reference that the Treasury makes there is an entirely standard reference that they put in there. The point we're making is that there's $40 billion of cuts in the Budget, confirmed in the pre-election outlook, which proves that the Government cannot pay for their tax cuts for the top end of town without $40 billion of cuts.
KELLY: You're listening to RN Breakfast. Our guest is the Shadow Finance Minister, Jim Chalmers. A couple of things to get through - there's a report today that Labor's decided not to offer any further tax relief to people earning between $90 and $120 thousand a year. You won't match the Government there. The money saved would instead be pumped into building the Budget surplus. Is that correct?
CHALMERS: It is true, Fran, in the context of debt which has doubled under the life of this Government that we do need to take a more responsible approach. We will target our tax cuts for people on low and middle incomes. And the difference between us and the Government when it comes to tax is that we don't need to cut hospitals and schools to pay for it. And there's another story out there Fran, which is very important. I think it says everything about the Liberals and this election. There's a story out there today which says that the lion's share of Scott Morrison's tax cuts will go to the wealthiest 20 per cent of people in this country; the biggest earners in this country. And that can only be paid for by cuts to schools and hospitals. And so the election will be about whether Australians want the majority of the benefits of Scott Morrison's tax cuts to go to the biggest 20 per cent of earners, and whether they want those paid for by more cuts.
KELLY: Well the Government's answer to that, and we heard it earlier, is that we have a progressive tax system. At the moment the small number of top income earners pay the majority of the tax. Doesn't that make it inevitable that tax cuts will flow through to those at the top end of town? That's how it works.
CHALMERS: The difference between the Liberal approach and the Labor approach is when the Liberals have got tax cuts, 54 per cent of the benefit goes to the top 20 per cent of earners. What we're saying is if there's tax cuts to go around, they should be prioritised for low- and middle-income earners, and they shouldn't come at the expense of hospitals and schools, which is the Liberals' approach.
KELLY: OK, just back to the issue before, in terms of Labor not matching those middle income tax cuts because you want to put it to the surplus - how much of a surplus buffer would a Labor Government want to see before it would offer more tax cuts.
CHALMERS: That would be part of the release that Chris Bowen and I make in the next few weeks. But we have made it very clear that we will have a more responsible bottom line. That's because debt has doubled under the life of this Government. We want to target our tax cuts to people who need them most, and we don't want to target hospitals and schools to pay for them.
KELLY: OK, and just finally, you're also the Labor Campaign Spokesperson and today Labor will announce money for an indigenous health plan - $115 million. Can you give us some details on that? I know there's some money in there for indigenous youth suicide, which the Government has also announced a policy on in this campaign.
CHALMERS: A very, very important announcement by Bill Shorten in the Northern Territory today. It's really based on one thing – that every Australian, whether they're Indigenous or non-Indigenous, should have access to decent health services where and when they need them. So we'll be announcing a $115 million package with a number of components. Importantly, to deal with youth suicide, which is something in these communities which should trouble every Australian.
KELLY: How will that money be spent? Will it be spent on directing services right to those place where youth suicide has been such a shocking issue in recent times.
CHALMERS: Absolutely, and we need to make sure that Aboriginal and Torres Strait Islander people are at the centre of decision making in health. So we're talking about funding them through Aboriginal community-controlled health services. We're talking about paediatricians, psychologists, social workers, mental health nurses, Aboriginal health practitioners and the like.
KELLY: OK, Jim Chalmers, thanks very much for joining us.
CHALMERS: Thank you, Fran.
ENDS
