WEDNESDAY, 15 APRIL 2020
SUBJECTS: IMF World Economic Outlook; Impact of Coronavirus on the Australian economy; JobKeeper; Unemployment and underemployment; High Court decision on Annika Smethurst’s case; Press freedom; Renters; President Trump’s decision to halt WHO funding; Schools; Government plans for tracking app.
JIM CHALMERS, SHADOW TREASURER: Thanks very much for coming out to Logan today. I want to touch on the consumer confidence figures and the IMF forecasts for the Australian economy and the global economy, and then there are some other issues to cover off as well.
The consumer confidence numbers today were very disappointing, but not especially surprising. Australian consumers know what international organisations know, and that's that this diabolical health crisis will have devastating impacts on jobs and on growth in our economy here and in the economies right around the world.
The IMF forecasts are incredibly confronting. They expect Australian economic growth to take a bigger hit than other comparable countries; a bigger hit than the US, the UK, Canada, Japan, Korea, and other countries as well. They expect that average unemployment will be higher next year than it will be this year, that the peak will be some way down the track. They also expect that the Australian economy will be smaller at the end of next year than it was at the beginning of this year.
The IMF doesn't share the Prime Minister's assumption that the Australian employment market will all of a sudden snap back to normal on his six-month deadline. The IMF doesn't share the Prime Minister's assumption that people will just miraculously snap back into jobs to meet his six-month deadline for support in the economy.
There are two other important issues associated with these IMF forecasts. The first is to understand that the unemployment queues, which will get much longer, will be even longer still because Josh Frydenberg refuses to exercise his powers to include more workers, especially casual workers, in the JobKeeper program. When unemployment spikes in this country in the next few months, everyone should remember that Josh Frydenberg currently has the power to prevent many of those job losses with the stroke of a pen to include workers who have been deliberately excluded from the otherwise welcome JobKeeper program. That's the first point.
The other point is about the position of the Australian economy going into this crisis. This is not the first time that the IMF has downgraded their expectations for Australian growth. The IMF was already downgrading their expectations for global growth and for Australian growth in particular before anyone had even heard of this Coronavirus. Australia entered this crisis from a position of relative economic weakness, not strength. Before the fires and before the virus, Australia had slowing quarterly growth, below-trend annual growth, declining business investment, stagnant wages, and record household debt. Before any of these stimulus measures, the Morrison Government had more than doubled public debt as well. Most of the debt in the Budget before the crisis hit was actually Liberal debt. For all of these reasons Australia enters a difficult period from a position of relative economic weakness after seven or so years of economic mismanagement, which is costing us dearly right now.
I'll take some questions and then I've got some other issues I've been asked to cover.
JOURNALIST: Jim, the IMF estimates that Australia's unemployment rate will average about 7.6 per cent this year and be even higher next year at 8.9 per cent. The average unemployment rate is worse next year. That suggests the labour market will be in an extremely weak condition in 2021, far weaker than the Treasurer has been saying. It suggests that the Treasurer's argument that the labour market will snap back quickly after the shutdown is lifted might be wildly optimistic. What do you think about that?
CHALMERS: It remains to be seen whether these IMF forecasts or indeed the Treasury's forecasts for unemployment will be right. It remains to be seen what unemployment will peak at and how long it will take to go back to more normal conditions. We are very concerned that in crises like this typically unemployment rises much faster than it falls on the other side. One of the really troubling aspects of these IMF expectations is that the peak of average unemployment in their expectation will be next year and not this year. What that tells us is that they expect there to be a long tail of unemployment from this crisis.
There has been really welcome progress on the health front and we've welcomed the fact that new infections seem to be at levels which are exceeding even our best expectations but we can't be complacent about that. Nor can we fail to understand that the warranted steps taken to tackle this health crisis have had extremely dire economic consequences. Those economic consequences will take some time to play out. The Prime Minister shouldn't just assume that the jobs market will miraculously snap back to normal on his six-month timeframe. We would be very concerned if the Treasurer and the Prime Minister, on the basis of that assumption about a six-month snap back period, ignore what will be a very difficult recovery for a lot of Australians. The recovery when it comes will be patchy and uneven, and we need to make sure that people aren't left out or left behind.
JOURNALIST: The IMF's report today points to Australia needing ongoing stimulus in the labour market beyond six months. Do you think the Government needs to be prepared to keep intervening to support the labour market beyond 2020?
CHALMERS: The Government certainly needs a plan to support the economy if the recovery doesn't come on their six month timeframe. The recovery will be patchy. It will be uneven. There will be parts of the economy which will still need support towards the end of this year and certainly into the next year as well. They have had welcome changes of heart when it comes to the need to stimulate the economy, to provide cash payments. Those changes have been welcome and we've supported them in the Parliament but it's highly likely that the job is not finished yet for the Government. If the expectations from the IMF are right, and if the expectations from the Treasury are right, there will be a lot of people who lose their job because of this crisis who take longer than is ideal to get a job again at the end of it. We need to care about those Australians who have joined the unemployment queues who may not have opportunities provided to them in the near-term. We need to care about them and about the ongoing state of the economy. How this support is turned off is just as important as how it was turned on.
JOURNALIST: The Treasurer yesterday was asked about underemployment and didn't really give a clear answer. What have you seen of Treasury modelling and what do you think that's telling us about underemployment estimates for this year and next?
CHALMERS: Underemployment has been a cancer on the Australian economy for some time now. The unemployment rate doesn't capture more than a million Australians who need more hours of work and can't find them. Work in Australia, and not because of this crisis but for many years before that, has been too insecure and too precarious for a lot of Australians to get by, let alone get ahead. Underemployment is a massive challenge. We have not seen from the Treasury or from the Government their assessment of what this crisis means for underemployment, for job security, or for hours worked.
That's one of the reasons why we've been calling for more substantial and more comprehensive numbers to be provided about the Government's expectations for our economy. The Government should be providing more comprehensive numbers in addition to what they provided this week. They could do that in lieu of a full Budget on the original Budget timeframe. In the next month or so the Government should tell the Australian people what their own expectations are for employment, underemployment, growth, the impact on the Budget of what we're seeing during this crisis, and the [impact of] necessary steps which have been taken to respond to it.
JOURNALIST: Just finally Jim, if unemployment is going to be sitting at around nine per cent next year, that would suggest that underemployment will be far, far higher. Is that case?
CHALMERS: Certainly in the lead up to this crisis we had something like two million Australians who either couldn't find work or couldn't find the hours that they needed to get by. That has been a problem for some time now, certainly for some years. Any increase in the unemployment rate is clearly going to have flow on impacts for the broader labour market. We know that one of the consequences of this crisis is that for many people, their hours have dried up either completely or almost completely.
That's why the JobKeeper package is so important. It's also why it's absolutely crucial that the Treasurer expands the JobKeeper scheme so that more than a million casual workers who are currently deliberately excluded by him can be included. Every day that Josh Frydenberg doesn't include those casual workers and other workers in the JobKeeper scheme means that the unemployment queues will be longer than necessary and will mean that unemployment will spike higher than would be the case than if he'd done the right thing by more than a million Australian workers.
I've just been asked to cover off on a couple of other issues and so I'll do that now.
The first one is the High Court decision about Annika Smethurst. Labor enthusiastically welcomes the decision taken today by the High Court in Annika Smethurst's case. This decision strikes at the very core of the Morrison Government's attacks on press freedom in this country. Press freedom and the public's right to know are absolutely crucial pillars of any decent economy, any decent society, and any decent democracy. We need to see press freedom and the public's right to know defended, protected, and advanced as well wherever that is possible. This judgement shows that this Government, which occasionally talks the talk on press freedom, has not been prepared to walk the walk. It is a stunning rebuke of the Morrison Government's attacks on press freedom. We will work our way through all of the implications of this decision and no doubt my colleagues will have more to say about this at a subsequent opportunity.
I've also been asked about the very welcome steps taken to address concerns faced by renters and tenants in this country. We do welcome progress which has been made by the states when it comes to supporting renters and tenants right around Australia. My colleagues Anthony Albanese, Jason Clare and others have been calling for some time for substantial assistance for renters and tenants and so we welcome the steps which are being taken right around Australia. This is a very difficult, very stressful time for a lot of renters, and it's crucial that they receive support. A lot of these renters are casual workers, and many of them might not have been working for the same employer for more than 12 months. The next step that Scott Morrison and Josh Frydenberg need to take for the renters and tenants of this country who are excluded from the JobKeeper payment is to pick up the pen, do the right thing by those workers, and give them access to the JobKeeper payment so that they don't have to join unemployment queues which are already unnecessarily and tragically long.
I've also been asked to cover off on the American President's decision on the World Health Organisation membership. This is a matter for the United States and for the President of the United States. From an Australian point of view, we think it's absolutely critical that we work with international organizations as every nation tries to get on top of this diabolical health challenge with devastating economic consequences. Our approach all along has been to look for outcomes and not arguments. Part of that means working with international partners, working with other countries, and working with multilateral institutions to see what we can do together to get on top of this health crisis in the interests of all the citizens of the world.
I'll just check if there are any others. Two other issues, first of all on schools.
This is a stressful enough time for Australian parents without having these mixed messages from the Morrison Government on the return to school. I know that a lot of Australians are very stressed about what's happening in their kids' schools, if they need to home-school, and what arrangements they need to make to be there for their kids at a difficult but important time in their kids' education. We all want our kids to be able to go to school when it's safe to do so. This is a stressful enough time already without mixed messages from a Prime Minister who one day says it's a matter for the states and another day says things which are contrary to what the states have communicated to parents. We say to the Prime Minister, enough of these mixed messages. Parents are stressed enough as it is. Some of the contributions from the Prime Minister have raised more questions than answers. We need those questions answered properly. We need clear communication. We need an end to the mixed messages because parents are doing it tough and they're stressed enough as it is.
Just finally on prospects for an app which tracks the movement of mobile phones. The Government needs to provide more details of what they are proposing to do here. This is not something that the Government has engaged with the Opposition on. Australians are always understandably nervous about an extension of surveillance and tracking in the community. In uncertain times like these if the Government does want to change the arrangements, if the Government does want to put in place some sort of advanced system here, then they need to take the Australian people into their confidence. They need to say what they're planning. They need to say what they'd be planning in terms of safeguards for all of this vital and sensitive information. The Government has not yet engaged with us on it. If they do then we will engage with it in a constructive and responsible way that we've approached all of the other issues during this health crisis.
Thanks very much.