E&OE TRANSCRIPT
RADIO INTERVIEW
ABC RADIO NATIONAL BREAKFAST
MONDAY, 25 MAY 2020
SUBJECTS: The Morrison Government’s bungling of the JobKeeper program; Border closures.
FRAN KELLY, HOST: Jim Chalmers is the Shadow Treasurer. Jim Chalmers welcome back to Breakfast.
JIM CHALMERS, SHADOW TREASURER: Thanks very much, Fran.
KELLY: A $60 billion saving for the budget; is that a blunder, or is that a welcome bit of good news for taxpayers?
CHALMERS: Not just any blunder, Fran. It's the biggest error ever made in a budget by any Government at any point in Australian history. And what that means -
KELLY: Yes, but it's a forecasting error, it's not the Treasurer's error is it? It's a forecasting error?
CHALMERS: It's much more than that, Fran. The JobKeeper scheme is a good idea being badly implemented, badly communicated, and now we know badly budgeted for as well. That's catastrophic for hundreds of thousands of Australian workers who were excluded from the scheme on the basis that the program was full when we now know that it was three million workers short. What Mathias Cormann just said then, and the Prime Minister yesterday, was that for a large number of these workers everything will be okay because they're off to Centrelink to get onto the JobSeeker payment. I think that's an admission of failure that the objectives of this program, to keep as many people attached to their employer as possible, are not being met. That's what this massive blunder in the budget has really shone a light on.
KELLY: Do we know that though? Do we know that the three million short of the estimates are still not attached to their employers? Couldn't the good news be, as the Finance Minister was pointing out, that the impact of the pandemic, the health crisis, on the economy is not as bad as first thought because it's a health miracle as the Treasurer has called it this morning, and that these employees could still be employed? Do we know this?
CHALMERS: What the Prime Minister conceded yesterday and the Finance Minister a couple of minutes ago, is that at least some of these three million workers are off to Centrelink. That shows that the original objective of this very good idea in these wage subsidies, the JobKeeper program which we proposed, has been so badly implemented that that connection is not being sufficiently maintained for enough Australian workers. This is much more than an accounting error. It has consequences for real people in real communities. It means that unemployment will be higher for longer than it would be otherwise if the Government had got this program right.
KELLY: Just on whose mistake this is; the Treasury Secretary has accepted that the 6.5 million people on JobKeeper estimate forecast which was made at the high point of the pandemic was based on health advice about the number of potential deaths which would not come to pass. Have you spoken to the Treasury Secretary? Have they told you the same thing? Are they blaming the Treasurer or are they blaming themselves?
CHALMERS: I had a brief conversation with the Treasury Secretary about 30 minutes before this information was made public on Friday. It was a short conversation and I don't intend to go into the detail of it. In our system, as you know probably better than anyone Fran, Ministers are responsible for stuff ups of this magnitude. What the Treasurer tried to do initially was to hide behind these public servants, and then he tried to point the finger at business and the way that they filled out the forms when the original blunder was made well before then. He should take responsibility for this. This is the biggest stuff up in any budget at any point in the history of this country. It has Josh Frydenberg's name on it and he needs to take responsibility for that error.
KELLY: Okay, so what does that mean? It was a Treasury forecast that was completely wrong, out by three million. It was an ATO problem in perhaps the way that they designed the form, they had 1000 businesses filling it out incorrectly, and certainly in how they processed and checked the data. What should the Treasurer do when you say he should take responsibility for it? What does that mean? How would you see that play out?
CHALMERS: He should take responsibility for the error itself, but also for the consequences of the error. Hundreds of thousands of Australian workers heard the Treasurer and the Prime Minister say that they couldn't possibly include them in the JobKeeper scheme because the scheme is full. We now know that it was about three million workers short and about $60 billion short of what they expected.
The other consequences of this error are clear. The ratings agencies downgraded Australia to negative watch last week on the basis of these numbers. The Reserve Bank and the International Monetary Fund made forecasts based on these numbers. People who were excluded from the scheme raided their own super with consequences for their retirement incomes because of all of this.
This is not something where the Treasurer can hide behind public servants, or point to businesses, or try to blame someone else. He's the Treasurer. His name will always be on this massive stuff up that has happened in the budget.
I'll tell you what else, Fran. We will no longer take lectures on fiscal responsibility from these characters who had already more than doubled debt before this virus, who delivered only deficits after promising only surpluses, and are now responsible for the biggest blunder in the budget in our history. The days of these guys being taken seriously on the budget or the economy are well and truly over.
KELLY: Okay. You mentioned deficits there, debt and deficit, and you've been critical of the Government for doubling the deficit. You mentioned the international ratings agency Fitch which has put the Government on a negative outlook. Given all that, do you accept and do you agree with the Treasurer and the Prime Minister that it's not prudent to start spending all this money? That it'd be prudent to hold off spending so we don't have the debt and deficit that are affecting our ratings? Do you agree with it?
CHALMERS: Our argument all along, even before this massive error was discovered and 'fessed up to on Friday, has been that we need to be spending this money more effectively. We've said all along that too many people have been excluded either accidentally or deliberately. That position has been vindicated by these revelations over the last couple of days. We've also said that there are areas where the Government could do a better job targeting these payments. For example, those workers who might have been earning $100 or $150 a week, all of a sudden earning $750 a week, there's an opportunity there to tighten things up.
We want to see the money more effectively spent. It is a massive amount of money. Even at $70 billion it's an extraordinary amount of money that has massive implications for debt. If you're going to spend this kind of money, spend it right, spend it effectively, and meet the original objectives of the JobKeeper program which is to try and keep people attached to work. If we get this wrong and unemployment is higher for longer, then that will have even greater implications for the budget down the track.
KELLY: Okay. All the signs are that the Government is going to try and fix some of those anomalies about the other payments. There's also hints that the Government might try and extend JobKeeper for some of the sectors hardest hit for a long time, like the tourism sector. Do you still want the Government to start paying JobKeeper to workers in the arts and entertainment sector, workers in universities, workers who are long term casuals but maybe not 12 months, overseas workers? And how much of this money would you ask the Government to spend on those groups?
CHALMERS: Our position all along has been that those groups were needlessly excluded, and also that the botched implementation of the scheme means that a lot of workers were accidentally excluded as well because businesses have given up or they haven't been able to bridge the gap between the announcement of the scheme and the payment of the money. That's been our position all along. If they don't want to do that on the basis that it costs too much, then tell us how much that costs.
I think there is a mixed message here as well, Fran. For political reasons the Prime Minister wants to say that it would be irresponsible to provide more support to the economy, at the same time as he briefs to today's newspapers that he intends to announce more support for the economy in his speech tomorrow. You can't have it both ways. He's got to ditch this excessively political and ideological approach to these things.
Our objective here has to be to avoid long term unemployment cascading through the generations, which is the big fear that most credible economists have about this crisis. We can't continue to have a Government take a good idea and badly implement it, badly communicate it, and badly budget for it. The consequences of those failures are higher unemployment for longer and that's what we're trying to avoid.
KELLY: You're listening to RN Breakfast. Our guest is the Shadow Treasurer Jim Chalmers. Jim Chalmers just finally and briefly, you are Labor's most senior Queenslander. Can your state afford to keep its borders closed until at least September, which is what the Premier is talking about at the moment?
CHALMERS: Queensland has been really successful at controlling this virus. That's a tribute to Queenslanders, but also to their State Government. It's come from the Premier making difficult decisions based on the firm advice of the medical community, in particular the Chief Medical Officer. I think all of us want to see the borders safely reopened when it's appropriate to do that. Something like every tenth job in my home state relies in one way or another on tourism, and even more than that in places like Cairns. We've got big population centres either side of that Queensland-New South Wales border in particular. We need to be really careful about it. We need to be cautious about it. The Premier has said that she will keep it under constant review. I know she's meeting the mayor of the Gold Coast this week to talk about it. I'm confident that she'll continue to base her decisions on medical advice. That's the right approach, and that's the approach that's been backed in by the mayors of some of our towns and regional centres as well, and some of them not necessarily Labor mayors.
KELLY: Jim Chalmers, thanks very much for joining us.
CHALMERS: Thank you Fran.
ENDS
