E&OE TRANSCRIPT
RADIO INTERVIEW
ABC RADIO NATIONAL BREAKFAST
THURSDAY, 13 FEBRUARY 2020

SUBJECTS: Economy and budget; climate change and cheaper, cleaner renewable energy.

FRANK KELLY, HOST: Australia is expected to record its worst economic performance since the Global Financial Crisis with a disruption to tourism, to education and to global supply chains punching big holes in government revenue. Jim Chalmers is the shadow treasurer. Jim Chalmers, welcome to Breakfast.

JIM CHALMERS, SHADOW TREASURER: Good morning, Fran.

KELLY: The Budget's been king hit by a triple whammy of drought, bushfires and now Coronavirus. What do you think? Will there be a surplus handed down at the Budget in May?

CHALMERS: We've said all along that the priority should be supporting communities affected by the fires and by some of these other challenges as well. It remains to be seen how big an impact those things will have on the Budget. The Budget surplus is really a test that the Government has set for itself. We won't know for a little while yet whether they have met that test.

KELLY: Given the test it set for itself in the face of plague and pestilence, would Labor excuse the Government if it fails that test this time, if it can't deliver surplus in May?

CHALMERS: A couple of things about that Fran. We've said that the priority should be communities affected by these challenges.

KELLY: So you'd rather spending and stimulus than a surplus?

CHALMERS: We've been very constructive about that. If the Government falls short of this test that they set for themselves it won't only be because of the fires, Coronavirus or drought. It will be a combination of things including a long period of economic mismanagement which has seen them fall well short of their forecasts for growth, wages and other things in the economy. We'll look at the numbers when they come out. We've been constructive about it. This is a Government that promised a surplus in its first year and every year after that but they haven't delivered a surplus yet and that's why they've more than doubled government debt.

KELLY: Labor suffered the same problem. Wayne Swan promised surpluses for many years and couldn't deliver in the Budget. The fact is the Budget is now basically in balance. Wouldn't Australia be in a worse position to deal with Coronavirus and bushfires if the Government hadn't got the Budget into balance?

CHALMERS: We approach these challenges from a position of weakness, not strength …

KELLY: But how, if we are in balance?

CHALMERS: Because we've had this long period of inaction, ineptitude and incompetence on the economy. The economy was already slowing before these fires hit and before anyone had even heard of Coronavirus. That needs to be recognised. One of the reasons why the Budget is not yet in surplus and the Government's more than doubled government debt is because we've had this long period where they haven't had an economic plan and that's had consequences for the economy. When there are consequences for the economy, there are consequences for the Budget.

KELLY: But the outlook is good. Not everyone sees it as you do. The Reserve Bank Governor, Philip Lowe, said last week growth will be 2.75 quarter per cent over this year, three per cent next year, which is well up on last year's GDP of 1.7 per cent.

CHALMERS: The Government itself has been downgrading its expectations for growth, as has the Reserve Bank, and the International Monetary Fund.

KELLY: Three per cent next year though, that's not bad?

CHALMERS: They downgraded their expectations, Fran. They've done that now three times since the election and that coincides with downgrades by the Government itself, which also said that unemployment would be higher and wages growth would be weaker. The economy was not as strong as it should be going into these challenges. We approach them from a position of weakness, not strength. That's a consequence of a long period of a Government which has a political strategy but not an economic plan.

KELLY: You were in the thick of it during the GFC. You were Wayne Swan's chief of staff when he was Treasurer. The Australian economy avoided recession, much to the surprise and praise of the rest of the world in part due to the billions of dollars pumped into the economy. "Go hard, go early, go households" was the advice from the head of Treasury at the time, Ken Henry. You've said you want the Government to pump more into the economy. Where do you want it to spend now? Have things changed in the wake of the drought and the bushfires? Where do you see it being most effective?

CHALMERS: Every Australian should be proud of what the country achieved during that period under Rudd and Swan's leadership. That was an extraordinary period of economic policy success.

KELLY: It left Australia with a massive deficit.

CHALMERS: What we've said is that times are very different now. We're not saying that what we're facing now is the equivalent of a Global Financial Crisis. You'll well recall that the Liberals, including some of those knocking around now, tried to deny the existence of that GFC and the impact on the Budget. What we've said this time is that there's been weakness in the economy, particularly when it comes to the wages that people are earning, but also weak growth, weak business investment, weak consumption, and record household debt. We've put on the table half a dozen suggestions, that I've talked about on this program before, whether it's infrastructure and incentives for business investment, something in the tax space …

KELLY: Newstart?

CHALMERS: Newstart, a whole range of ideas that we've put on the table. It's been very disappointing that the Government hasn't picked up and run with any of those ideas, but also haven't had any ideas or plans of their own. It's not just us calling for support for the economy, it's the business community, the Reserve Bank, the credible economists. Right across the board people are scratching their heads and wondering why when the economy is this weak Scott Morrison and Josh Frydenberg refuse to come up with a plan to deal with it.

KELLY: Okay just before I leave this, the Government will announce as early as today whether to extend the 14 day travel ban on Chinese visitors. Would you support an extension of that ban?

CHALMERS: I'll see what they announce today, Fran. We've got a good record of supporting the Government where we can and being very constructive about it. When the measures are based on good sound medical advice we've stood with the Government and given them the support that they need.

KELLY: You're listening to RN Breakfast. It is nine minutes to eight. Our guest is the Shadow Treasurer, Jim Chalmers. Coal and climate change are the fault lines running through both the Coalition and Labor at the moment. We now have former Prime Minister Kevin Rudd warning that the EU is actively considering tariffs on Australian exports unless more is done to cut carbon. He says this is on the drawing board big time. Does that add the pressure on both parties to get serious about stronger targets?

CHALMERS: I think so. In many ways it's not surprising that this is what Kevin's picked up in his conversations in the international community. There is a lot of interest in what Australia is doing or, in our case unfortunately, not doing. He's also right to point out that the Government under Scott Morrison is nowhere near close to meeting its climate targets. Its own data points that out. We need to do more and not just to avoid punitive measures by the international community, but because doing something about climate change is about cheaper and cleaner energy.

KELLY: Okay. Well, what about the alternative government? I mean, Labor is not even clear on whether it's going to downgrade its target from the one it took the last election. It could settle to something lower than the 45 per cent by 2030?

CHALMERS: I thought Anthony Albanese was very clear when he spoke to you on this program on Tuesday, Fran. He said that we won't be retreating on genuine action on climate change. We are the party of renewable energy because we understand better than the other mob that renewable energy is about cheaper and cleaner sources of power for our families and for our businesses. We'll take the time to come up with a detailed policy, as we have for a number of terms now. That policy will be based on our recognition that something needs to be done here. We can do something serious about climate change, get cheaper and cleaner energy in our economy and that will bring down emissions.

KELLY: And will it bring down Anthony Albanese, this pursuit of that? We now hear about a secret grouping of up to 20 Labor MPs and senators calling themselves the Otis Group. They want to push Labor to the right on issues like coal and climate change, no more pandering to the left was one quote. Anthony Albanese didn't know anything about this group until Peter van Onselen, who will be speaking to us shortly, told him about it. Did you know about it?

CHALMERS: I knew afterwards but I didn't know at the time, Fran -

KELLY: It's your faction, isn't it?

CHALMERS: I don't think it's a grouping like that. There's nothing unusual about colleagues catching up for dinner, and there's certainly nothing unusual about people getting together to talk about policy. I think this is getting a bit more attention than it deserves.

KELLY: Really? You think this group of people that Anthony Albanese didn't know about who are meeting to talk about coal jobs and who were wondering out loud that Labor might be pandering too much to the Greens, that that's not a problem for a leader?

CHALMERS: As I said, people catch up for dinner all the time. They talk about policy, they do that in groups of all sizes, and they talk about policies of all kinds so I don't think it's as big a deal as people are making out.

KELLY: Anthony Albanese on this program this week also said that he doesn't think quote there's a place for a new coal fired power plant in Australia. Full stop. You're a Queenslander. Will this make it harder for Labor to win back those coal seats up north?

CHALMERS: I don't think so, Fran. There's two parts to your question. The first bit - the point that Anthony is making rightly is that new coal fired plants are not a smart investment. They don't make economic sense when there's cheaper and cleaner renewable technology available and investors have made that clear for some time now. So that's part of your question. The other part about Queensland is really important. There is no prouder Queenslander than me. I don't like how Queensland gets caricatured on these issues by this simplified belief there is one homogenous view in Queensland and that Matt Canavan is somehow the arbiter of that view. There are a range of views in Queensland. There’s also a recognition that we can find a way to do something about climate change without abandoning some of our traditional strengths and while being cognisant of the impact on some of the communities, particularly in central and north Queensland. That is not beyond us, Fran. Queenslanders do want us to do something about climate change. They want us to be cognisant of those other issues. They want us to be sensible about it and that's what we'll be.

KELLY: Jim Chalmers, thanks very much for joining us.

CHALMERS: Thank you, Fran.

ENDS