E&OE TRANSCRIPT
DOORSTOP INTERVIEW
BRISBANE
FRIDAY, 25 SEPTEMBER 2020
 
SUBJECTS: Dean Jones; Proposed lending changes; Final Budget Outcome, Debt and Deficit; Cuts to JobSeeker and JobKeeper.
 
JIM CHALMERS, SHADOW TREASURER: Dean Jones was an iconic Australian. He was full of character, courage and confidence. He was a really important part of those gutsy Australian teams with Allan Border, David Boon and the others that so many of us grew up admiring. Dean Jones has his admirers right around the world so it's a really sad day, not just for cricket fans, not just for Australians, not just on the subcontinent but indeed, right around the world. Dean Jones will be sorely missed.
 
There are a number of developments in the economy, in the financial system and in the budget today and I wanted to take some time to touch on each of those.
 
The first one is the Government's announcement around lending standards in the financial system. We want people to be able to access finance and we want small businesses to be able to access finance so long as they can afford to pay it back. These important protections that the Government is talking about unwinding are there to ensure that lending is responsible. The Royal Commission actually recommended that these protections not be wound back and not be watered down, as the Government seems to be proposing to do. We want to make sure that people don't get in over their heads. We want to make sure that people don't find themselves in a debt trap. We don't want to see important consumer protections wound back for no reason. We don't want to see the balance tip too far in the direction of the banks and the lenders. Unfortunately, this Government has a lot of form when it comes to siding with the big banks, dodgy lenders and loan sharks over the interests of ordinary Australians. This is a Liberal Government notorious for putting the interests of banks and shonky lenders ahead of the interests of Australian working people. They've got form when it comes to siding with the banks. We want to make sure that this is not just another attempt to tip the balance towards banks and lenders and away from ordinary working Australians. So we will take the time to go through what's being proposed here. We'll take the time to look at the legislation when it's available and we'll come to a considered view. We will look at this in light of a Government which has typically sided with the banks against people and we want to make sure that the balance is not tipped too far. We want to make sure that people don't get in over their heads. 
 
The Government's also released a new record deficit for the financial year that has just concluded. This Government has the highest debt ever, they’ve got high unemployment, and they still don't have a proper jobs plan to turn things around. We have always acknowledged that this COVID-19 crisis is having an impact on the budget and on the economy. We've acknowledged that from the beginning. It's time now for the Government to acknowledge that this is not the first deficit handed down by the Liberals and Nationals, it's the seventh deficit handed down in a row. Debt was already at record highs, a multiple of what they inherited when they came to government, well before this COVID-19 crisis. This Government shouldn't be pinning seven years of deficits on the last year of the coronavirus. It is time for them to acknowledge that they have failed their own tests when it comes to budget management and economic management. It's hard to take them seriously on their new so-called budget strategy when they failed so spectacularly on the last one. This Government said that there would be a surplus in its first year and every year after that, instead we got seven deficits. They claimed that the budget was back in black already. They posed with the back in black mugs and instead we see today the biggest deficit in the history of this country and record and rising debt associated with that.
 
It’s for the Government to explain why they said for much of the last decade that debt, a tiny fraction of what we're seeing today, was a debt and deficit disaster but now that it's many multiples of that is all of a sudden manageable. Labor has been entirely consistent on our view in the budget. We have said, when the economy is struggling, there is a role for the Government to step in and to support people and their jobs. That's been our position during the Global Financial Crisis, since then and certainly during this COVID-19 crisis. It's the Government that's been inconsistent here and it's for the Government to explain that inconsistency and that hypocrisy. It wasn't Labor that printed the back in black mugs, posed with them, and said that the budget was already in surplus. It was the Liberals. It's for them to explain what's happened here. We've acknowledged all along the impact of the crisis, it's time for the Government to acknowledge the seven deficits which have now been confirmed by the Government today.
 
At times like this when we're in the teeth of the deepest recession in almost a century, the priority has to be supporting people, and particularly supporting their jobs. We've said that all along. We need to recognise that every dollar spent by the Government at the moment is borrowed money. We need to make sure we get maximum bang for buck for that borrowed dollar and we measure the effectiveness of it by what it means for people, jobs and supporting the aspirations of Australians right around Australia. This is the deepest recession in almost a century. This is a full blown jobs crisis. At risk here is a lost generation of Australians sacrificed to this recession. 

The Treasurer in his contribution earlier today said that we had somehow come into this crisis from a position of strength which is absolute and complete rubbish. The Treasurer has said that the Reserve Bank didn't have the room to cut interest rates any further, which is true in one regard: the reason why they don't have room to cut interest rates further, is because this Treasurer let the economy languish even before COVID-19. The Reserve Bank was forced to act in the absence of a Government prepared to promote growth and support employment in the economy. We did come into this crisis from a position of weakness, not strength. We saw that across the board; below average growth; weak investment, stagnant wages; insecure work, and all the rest of it.

Treasurer Frydenberg talked today about investing in the economy. This Final Budget Outcome today actually confirms yet another underspend in infrastructure. What that means is we have a Government which is good at announcing infrastructure projects, but very poor at actually building them. So we have yet another underspend in infrastructure in these documents released today.

Perhaps most importantly, this Government was talking today about boosting support in the economy on the very day that they're actually cutting support in the economy. Today JobSeeker is cut. On Monday JobKeeper is cut. Today's JobSeeker cut means $680 million a fortnight is being pulled out of an economy which still desperately needs it. It makes absolutely no sense for the Government to be cutting support to workers, communities, businesses and local economies when the economy is still as weak as it is today. The Government likes to pretend that they're supporting people in their jobs while at the same time as they're actually cutting support. It makes no sense for the Government to be cutting support when we've got unemployment unacceptably high, the economy is unacceptably weak, and they still don't have a jobs plan to replace this support that they're withdrawing from the economy today.

JOURNALIST: Is it wise to be relaxing lending rules at a time when more consumers are likely to be vulnerable? 

CHALMERS: There's a lot of concern on behalf of vulnerable borrowers, that the Government is in a rush to relax lending standards in a way that tilts the balance in favour of the banks and the loan sharks against ordinary working people. The Royal Commission recommended that these protections not be wound back or watered down, we need to take that recommendation seriously. We want to make sure that people who have the capacity to pay loans back get access to finance. But equally we need to make sure that people don't get in over their head, don't find themselves in a debt trap or don't find themselves with loans that they can't afford to repay. We will look at what the Government's proposing today we'll look at the legislation when it's available. But I think most Australians would agree that this is a Government notorious for putting the interests of banks and dodgy lenders ahead of the interests of the broader Australian community.

JOURNALIST: The Treasurer says this is about customers not the banks, do you really buy that?

CHALMERS: No. Unfortunately, whether it's Josh Frydenberg, Scott Morrison, or their predecessors, this is a Government that resisted the Banking Royal Commission for two years and voted against it 26 times. This is a Government, which uses this COVID-19 crisis as an excuse to do the sorts of things that they've long wanted to do, and the Government has form here. We want to ensure that any changes are in the interests of customers. We want to make sure that customers are protected. When it comes to any changes we'll look at these proposals in that light but I think a lot of Australians will be sceptical.

JOURNALIST: Will you support the legislation? Or is that still too early?

CHALMERS: We haven't seen the legislation yet. We've seen the announcement made today. We've expressed an initial view. We've expressed the principles that we will judge that legislation against, but we will take the time to consult, go through it carefully and come to a considered view. Australians can rest assured that when it comes to the Labor Party, we will always put the interests of consumers and ordinary working Australians ahead of the interests of big banks and the loan sharks. You can't say the same thing about the Liberals.

JOURNALIST: One of the arguments put forward is that the laws were introduced after the GFC but weren't really enforced until after the Banking Royal Commission. Was that the case?

CHALMERS: The laws were conceived during the Global Financial Crisis when there was an obvious need to make sure that people were only able to borrow money when they could afford to repay it, which is a very sensible development. Obviously, there was a period of consultation and implementation. Regardless, that would not be an excuse for the Government to water things down unnecessarily. It remains to be seen whether what they're proposing today does that. Our view is, the Government has some form here. Our view is that we need to look after consumers. We need to make sure they don't get in over their head and that's the principle we will apply as we work through the detail.

Thanks very much.

ENDS