E&OE TRANSCRIPT
PRESS CONFERENCE
BRISBANE
WEDNESDAY, 3 JUNE 2020

SUBJECTS: March National Accounts; Recession; Recovery; Delayed budget update and JobKeeper review; Industrial relations; Social housing; Labor’s constructive approach.

JIM CHALMERS, SHADOW TREASURER: Australia is in recession. We now know that the March quarter shows that the economy shrank over the first three months  of the year and we know that things got much worse in the June quarter as well. 

Australia’s remarkable run of three decades of continuous growth has come to an end. This unparalleled period of continuous growth which was set up by Labor and defended by Labor when it was last most at risk, has now come to an end under the Liberals as a consequence of this pandemic. Hundreds of thousands of jobs have already been sacrificed to the first recession in 29 years, and the recovery will be patchy and will take some time.

While the pandemic came without warning, long-standing weakness in the economy did not. Even before the virus, even before the bushfires, we had issues with weak growth, stagnant wages, weak business investment and productivity, and net debt in the budget had already more than doubled. We entered this very difficult crisis from a position of weakness, rather than strength.

In many ways, today's numbers confirm what Australians already knew, that this health crisis brings with it devastating economic consequences. Much of what we're seeing today is an acceleration of challenges that have been in the economy for some time; weak growth, a stagnant private economy, sluggish consumption, declining business and dwelling investment, and weak wages growth. 

In terms of wages, we're conscious that the industrial relations processes that the Government has set up begins today. It shouldn't have taken a once-in-a-century pandemic for this Government to realise the benefits of bringing business and unions together to try and find some common ground. That should be thoroughly unremarkable. We want to see this process work. We want to see sensible outcomes come out of it. If they do, we will support those outcomes. But we don't think that the answer to years of insecure work and stagnant wages is even more job insecurity or even more downward pressure on wages. It would be disappointing in the extreme if at the end of this process the Government says to all those Australians who've made so many sacrifices and dealt with stagnant wages for so long that the answer to all of this is more of the same.

We're also conscious that in the coming days the Government will be making some more announcements about the arts sector, the building industry, and childcare. After dismissing our calls for more support for the economy we know that the Government will be making additional spending commitments in the coming days. We need to see in that at least these three things; we need them to fix up their blunders with JobKeeper so that fewer workers are unnecessarily excluded; we need to see social and public housing as a key part of any package of measures to support the building industry; and we need to see a comprehensive plan for jobs in this long and patchy recovery. Australians will take a dim view of a package that's announced in the coming days that doesn't at least deal with the fact that too many workers have been excluded from the bungled JobKeeper scheme, the fact that social housing needs to be part of a package of support for the building industry, and the fact that there is not now currently, a comprehensive plan for jobs in the recovery. 

The Treasurer says that Australia was headed for a cliff. What he fails to recognise is that Australians are headed for another cliff in September when this support that's in the economy is withdrawn suddenly by the Government. Having introduced the support for the economy too narrowly and too slowly, Australians can't afford the Government to withdraw that support too quickly or too bluntly. 

In this context, it is absolutely unacceptable to hear today, buried in an answer from a question, that the Treasurer does not intend to keep his commitment to update the budget in June. It is an absolute disgrace that the budget update has been delayed once again in these uncertain times. It shows that this Treasurer and this Government wants to keep Australians in the dark about what's happening in the economy, what they expect to happen in the coming months, and what the impact has been of all the blunders and bungles that the Government has made so far with JobKeeper and other key programs. I think many Australians will be suspicious that their intention is to drop it out again late on a Friday afternoon like they did with the JobKeeper debacle and like they did with Robodebt in the hope that nobody notices. 

We need the Government to level with people for once. There is a lot of understandable anxiety in the community about this recession. It's not just about the numbers on a spreadsheet though. This is about people's jobs, it's about their capacity to provide for the people that they love, it's about all of the uncertainty that people will face in this recession in the coming months and in the coming years. In these serious times, the same kinds of slogans and marketing terms that we get from Scott Morrison and Josh Frydenberg just won't cut it. 

This long run of growth was created by Hawke and Keating, it was defended by Rudd and Swan, and it ends under Morrison and Frydenberg. We need them to do a much better job managing their response to this crisis and its aftermath than they have done managing the economy in the recent years before that. Australians can't afford any more of the serial incompetence which led to the JobKeeper shambles, the Robodebt debacle, delays in bushfire relief, sports rorts, and the way that early access to super has seen fraudulent activity. If the Government continues to fumble their approach to this recession, the impact of that will be that the downturn will be deeper than it needs to be, the unemployment queues will be longer, the recovery will be that much more difficult and that will have implications for the budget in the longer term as well. 

I'll take some questions from people here in the room and then I'll go to people on the line.

JOURNALIST: Josh Frydenberg says the budget would deliver a surplus even after the bushfires. Can I ask you, is that an accurate and a viable statement? What is the value of a surplus in the context of a recession, queues for welfare, and help needed in the economy? And do you think that is perhaps an obsession that should be let go at this point in time?

CHALMERS: The Treasurer was at it again today trying to pretend that he had already delivered a surplus when obviously we now know that wasn't the case. This is a Treasurer who printed the mugs saying the budget was back in black when the reality proved to be something very different. In times like these there is a role for the Government to intervene in the economy in the ways that we've seen in the last couple of months so that the highest priority is people's jobs rather than clinging to the arbitrary and political goal that the Government announced some time ago. I think it's humiliating for Josh Frydenberg as the first Treasurer in nine Treasurers to oversee a recession, the only Treasurer to print mugs saying the budget was back in the black well before it was. The Prime Minister too claimed during the course of the last election campaign that he'd already delivered a budget surplus. This Government's record on managing the budget even before this crisis, if you look at the facts, has been a failure. They'd more than doubled debt even before the crisis. They'd delivered six deficits after promising only surpluses. Now that we enter difficult times where there is a case for Government spending, and there is a case for Government intervention, where our highest priority is jobs in the economy and doing what's necessary there, we approach that from a position of weakness rather than strength because of what the Government has failed to achieve over the last seven years. 

JOURNALIST: Mr Chalmers, what do you make of the Treasurer's words "remarkably resilient" when he talks about where the economy was with the trifecta of COVID, fires and drought?

CHALMERS: I think that kind of spin would be cold comfort for the 800,000 Australians who signed up for unemployment benefits in the last couple of months. I think the Treasurer was at it again today trying to pretend that slogans and marketing is a substitute for quality economic management in uncertain times like these. 

JOURNALIST: So it's far from resilient, obviously.

CHALMERS: It's not resilient for the Australians who've lost their jobs. It's not resilient enough for those Australians who've joined the unemployment queues, especially those who've been unnecessarily excluded from the JobKeeper payments. What the Treasurer fails to understand, as the first Treasurer in nine to oversee a recession, is that a lot of people are doing it tough and his spin and his slogans about resilience and all of the other things won't put food on the table for a lot of people. They won't put people back to work. Only a comprehensive plan will do that. Only an end to the blunders and bluster that we've seen in the last few months will put an end to that uncertainty and the financial insecurity which flows from Australia entering recession for the first time in 29 years.

JOURNALIST: You've spoken about the rhetoric and the slogans that you say are used by the Federal Government. Does the Opposition struggle to cut through that message from the Government that they are better economic managers? How would you tackle that now in the current circumstances, and specifically how do you think things should be done differently?

CHALMERS: A lot of that is for the commentators to decide and for the Australian people to decide. I would direct people to the facts. Probably the biggest con of the most recent federal election campaign was that the Government was doing a good job managing the economy. If you look right across the board at stagnant wages, weak growth, serial underemployment, record household debt, public debt more than doubled, really on all of the key indicators the Government was failing on the economy even before the bushfires and even before the Coronavirus. Our job as the Opposition is to be as constructive as we can be in pointing out where the Government can do better. It’s also being upfront with the Australian people in a way that the Government is not, about the state of the economy heading into this crisis and what we need to do to get out of it in as good a condition as we can. 

Our beef with the Government is really three things. First, the mismanagement that led to that position of weakness leading up to this crisis. Second, the blunders when it comes to JobKeeper and the like which have compromised our ability to respond to the crisis. Third, the almost total absence of a plan for jobs in the recovery. We need to see that from the Government. For too long now they have skated on this undeserved reputation as good managers of the economy when the facts tell a very different story. But more importantly, people's experience in real communities in the real economy differs from the Coalition's rhetoric.

JOURNALIST: Josh Frydenberg says that things are expected to get worse in the coming months and obviously you are talking about that now. What specifically would the Opposition like the Government to do or where would you like them to come to the table in terms of trying to avoid that getting worse and worse and worse as September approaches?

CHALMERS: Every reputable economist, including at the Reserve Bank, in the Treasury, and right around Australia, expects the June quarter to be worse than the March quarter. That's how we know that Australia is already in recession. The key now is making sure that we respond to this crisis more effectively in the near-term. That means including more people in the JobKeeper payments so that they don't make the unemployment queues unnecessarily longer. It means a plan for jobs to bolster the recovery time, things like social housing are important in that context. But in the longer-term, a plan to grow the economy when the worst of this crisis subsides means doing something about energy policy, about skills and training and commercialisation, and all of the things which will make growth in the economy more sustainable, more durable, broader, and more inclusive after the crisis than it was before.

JOURNALIST: Mr Chalmers some analysts are saying economic Armageddon. When you look at what your fears for September are, are we heading towards that?

CHALMERS: My fear is that the Government doesn't yet understand that when they talk about the economic cliff that Australia was approaching in recent months, that all they have done is create another cliff on the last Monday in September when all of a sudden they want to withdraw this otherwise-welcome support from the economy. A lot of Australians are very anxious about what the future might bring. They're worried about how they put food on the table when the JobKeeper payments and the increases to the JobSeeker payments end. The point that we're making is that the Government, having introduced this support too slowly and too narrowly, they shouldn't withdraw it too quickly and too bluntly. That means being smart about how they target it, how they taper it, and what the future brings. We need to hear about that sooner rather than later. It's very disappointing to hear the Treasurer say that he intends to delay updating the budget. We need to see what the Government's expectations are for the economy. They shouldn't keep Australians in the dark about those expectations because amidst all of this anxiety, which is understandable in the Australian community, people shouldn't be kept in the dark.

JOURNALIST: If I could ask you briefly about industrial relations, Christian Porter said today that he doesn't want to engage with Labor on that sort of reform. What's your response to that?

CHALMERS: It just shows how hollow their rhetoric is about trying to find common ground. We've said from the beginning that we want the industrial relations processes that the Government has set up to succeed. We want them to come up with sensible outcomes that people can sign up to. We've been very constructive about it from the beginning. There's scepticism in the community about a Government, which has spent seven years attacking the unions, all of a sudden wanting to listen to them. We have put that to one side because the most important thing to get here is good outcomes. What the Attorney General and Minister said today about Labor is really a bit of a slipping of the mask, because it shows that they're not fair dinkum about trying to find genuine common ground about the future of industrial relations.

JOURNALIST: What do you see as the potential disadvantages or risks associated to their being a lack of conversation or dialogue between the two parties around that?

CHALMERS: In the last few months, in being constructive and responsible but not being silent, Labor's approach has been vindicated by events. We said too many people were excluded from the JobKeeper payments and that turned out to be the case. We said that there were issues with the construction sector and particularly social housing, that unfortunately looks like it will be the case. We've said that there was a reason to increase social security payments. In many cases, what we proposed, the Government initially dismissed, including some of the things that we think that they might be announcing in the next day or two. The country would be better off if the Coalition matched their rhetoric of cooperation with reality, because we have had a constructive role to play. We have pointed out where there might be issues, including in superannuation early access, but in other areas as well. In every case, as far as I'm aware, the warnings or the suggestions that we have made have proven to be sensible. 

JOURNALIST: Just one last one from us and then I'm sure you can open it to the other journos. Question from Canberra, talking a lot about the June contraction. How big do you fear it could be? Are we talking three, four, or five per cent?

CHALMERS: The professional forecasters think the June contraction will be much bigger than that. It remains to be seen. I don't get into creating our own forecasts. 

JOURNALIST: So from 0.3 to potentially more than 5 per cent?

CHALMERS: Some of them are talking about 8 per cent. There are other numbers floating around. There'll be a diversity of views about how big it is, but what everybody agrees on is that the June quarter contraction will be bigger than in March. That's certainly what the Reserve Bank expects, it's certainly what the Government has said that they expect.

JOURNALIST: They're scary numbers.

CHALMERS: Yes and there's a lot of anxiety in the community for good reason. A recession is not just about the numbers on a spreadsheet. It is about what it means for jobs and providing for loved ones. People are scared about the future and that's why it is disappointing that the Government won't give them more information about how they expect this to pan out. They're going to delay the budget update once again. There's a lot of anxiety about the end of JobKeeper and the end of the increase to JobSeeker. When it comes to that anxiety in lots of ways the Government's been part of the problem rather than part of the solution and we need that to change. 

Have we got anybody on the line who would like to ask any questions? Sounds like we're covered it comprehensively. Thanks very much.

ENDS