with
SENATOR KATY GALLAGHER
SHADOW MINISTER FOR FINANCE
SHADOW MINISTER FOR THE PUBLIC SERVICE
SENATOR FOR THE AUSTRALIAN CAPITAL TERRITORY 

E&OE TRANSCRIPT
DOORSTOP INTERVIEW
PARLIAMENT HOUSE, CANBERRA
WEDNESDAY, 22 JULY 2020
 
SUBJECTS: Victorian outbreak; Budget update; Government debt; JobKeeper; JobSeeker; Mutual obligations. 
 
JIM CHALMERS, SHADOW TREASURER: Our thoughts are with Victorians today. It looks like being another incredibly difficult day in Victoria with hundreds of new cases. I think every Australian wants Victorians to hang in there, to get on top of this spread of this virus, to listen to the advice and take all of the best precautions so that they can limit the further spread of this virus which is having such an impact on our communities, particularly the communities of Victoria, New South Wales, and elsewhere. Our thoughts are with Victorians today, there’s a lot of uncertainty, and a lot of anxiety in Victoria but not just Victoria, about how this health crisis is playing out. We're not out of the woods when it comes to containing this virus and clearly there are devastating economic consequences as well.  People are worried about their jobs, putting food on the table, paying the rent, paying off the mortgage, and putting school shoes on their kids. There is a lot of anxiety.
 
The Government tomorrow will be releasing a budget update. That update has already been delayed twice and that has only added to the uncertainty that a lot of businesses in particular feel about trying to understand where this recession is headed and what's going to happen to their businesses, their workers, and their communities. These delays have only added to that uncertainty. 
 
We need the budget update to be a comprehensive update, and not just another marketing exercise. We need to see four years of numbers, not just two years of numbers. We want it to be a full budget update, not half a budget update. We need to know how bad the Government expects this recession to get, how high unemployment will be for how long, and how much extra debt has piled up in addition to the record debt which already existed before crisis. But we need more from the Government than just a sense of how bad things are going to get, we need to see a plan for jobs in the recovery. 
 
Australians already know that the economy is in bad nick. What they need to hear from the Government is what the Government is going to do about it. It's not enough on its own just to say how bad things will get, we need to know what Scott Morrison and Josh Frydenberg will do about jobs into the future. Where will the new jobs come from, how will they be created, what role will the Government have in leading the economic recovery? All of those details have been absent so far. 
 
Yesterday the Government extended two programs and we said that was better than turning off the tap for that welcome economic support. But extending two programs is not a comprehensive plan for jobs in the recovery. We need to see that comprehensive plan. We can't let the Government fail to get jobs back on track, the way they failed to get the budget back in the black. Tomorrow we need a comprehensive update, we need a plan for jobs, not just a sense of how bad things are going to get because Australians already know that things are very tough in the economy. They need and deserve and expect the Government to outline what the response is going to be. 
 
I'll throw to Katy and then we'll take your questions.
 
KATY GALLAGHER, SHADOW FINANCE MINISTER: Thanks, Jim. Well, tomorrow we'll see the size of this Government’s seventh and eighth budget deficit. This from a Government that promised us a surplus in the first year and every year after that, and a Government that promised to get debt under control. Tomorrow, we'll see the size of some of what's required in terms of borrowings going forward, but gross debt is already at $700 billion and two thirds of that was borrowed well before the pandemic hit. This Government would like you to believe that the shape, the state of the budget deficit, the debt burden is all because of the pandemic. But we know that two thirds of that Government debt was borrowed well before the pandemic hit, and in fact had doubled under their time in office. Since December, this Government has allocated $150 billion in direct funding into the economy. This is funding that on the large part the Opposition has supported and cooperated with the Government to get through. What we'll be looking at is to make sure that all of that funding is high quality spending. That is that every single precious taxpayer dollar goes into delivering an outcome that this economy needs and that is creating jobs, making sure people can keep their jobs, getting people trained into new jobs, and looking after families during this really distressing economic time. We don't want to see poorly targeted marketing slogans that are all about perhaps raising the profile of the Government but not actually delivering what we need on the ground and what Australians need in terms of certainty going forwards and support around jobs, creating jobs and training for new jobs. 
 
We don't want to see examples of rorting like we've seen and heard of this morning and I'll give you the example of the sports rorts. An example of how this Government's used taxpayer funds in the past. Well today, it was all blown open. The Prime Minister's right-hand man, the guy that was called in to cover up the pesky findings of the Audit Office that there had been distribution bias into Coalition seats and marginal electorates and electorates they were targeting at the last election. When that report came out, the Prime Minister commissioned his right hand man to come in and have a look at that to see whether there was any merit to what the Audit Office found and surprise, surprise, the Prime Minister's right hand man disagreed with the Audit Office. Well, today we found out that that report, which contested findings of the Audit Office didn't have all the evidence available to it, interviewed one person, rang another, looked at outcomes and not process, didn't test whether the funds were legally provided to organisations and basically found that there was nothing more to see here. Well, that kind of waste of taxpayers’ funds, that rorting of money is something that we do not support in any way. It's happened in the past under this Government, and it shouldn't happen again. There will be more work done on sports rorts but when we see spending going forward, that precious taxpayer dollar must go into high quality spending that delivers outcomes for the Australian people, not political outcomes for the Coalition Government.
 
JOURNALIST: Jim, you mentioned this requirement for a comprehensive prediction going forward. Isn't it hard to accurately predict what's going to happen when the actual health consequences of the pandemic are still so up in the air?
 
CHALMERS: It's really certain that unemployment is going to be higher for longer. That's the issue that we need to address. Of course, there will be outbreaks in different parts of the country, of course that will have economic consequences. But it's been very clear even before the most recent outbreak in Victoria, that unemployment will be higher for longer and it's equally clear that the Government doesn't have a plan to deal with that. The Reserve Bank was saying well before the outbreak in Victoria, as were the Labor Party, Deloitte Access Economics and others, that in the context of higher unemployment for longer we need to see something to deal with the near-term consequences, and a plan to deal with creating jobs, secure well-paid jobs in the future. That has been entirely absent from what the Government has been talking about. They talked about shifting the fiscal cliff from September to March next year, but they don't have anything to replace that. It's not good enough to expect the Australian people to wait until October to hear in the Budget what the Government intends to do about this substantial economic weakness. 
 
People are hanging out for a plan from the Government and they're not getting one. They need and deserve the opportunity to hear from the Government sooner rather than later what the Government intends to do about the fact that unemployment will be higher for longer. Even in the Treasury documents released yesterday, alongside the changes to JobKeeper and JobSeeker, the Treasury said that unemployment will rise to around 8 per cent in the September quarter and get higher in the December quarter after that. The Reserve Bank Governor was making similar points. What are these characters waiting for? We need a plan for jobs now. Australians are very anxious about what the future brings.
 
JOURNALIST: [INAUDIBLE] What do you think of the fact that the Government is forecasting that by January next year, 2.5 million Australians won't need to be supported by the JobKeeper wage subsidy? 
 
CHALMERS: Clearly it remains to be seen whether the forecasts that the Government released yesterday are accurate. Unfortunately, the Treasurer has had a problem in recent months in accurately forecasting. They would like us to forget the biggest blunder in the history of the budget by any Treasurer since the beginning of the Commonwealth, but that's the Treasurer that we have. It's hard to take seriously the numbers that he puts forward after that $60 billion blunder, after he turned away three million workers on the basis that the program was fully subscribed when it was only half subscribed. That's one issue there.
 
In terms of the specific forecasts, yes, the Government is expecting a couple of million workers to come off the JobKeeper program on the timetable that you nominated. It's not clear to us that those workers will go into employment. Clearly some of those workers will go on to the JobSeeker payment. It's not in my view entirely accurate to say that that's an optimistic prediction, because we don't know how many of those will find themselves out of work as a consequence of how the Government's implemented the JobKeeper package.
 
JOURNALIST: You talked about a plan. If you were Treasurer right now, what would be your plan?
 
CHALMERS: Clearly the Government needs to be looking at things like building more public housing, we've been saying that for some time. Clearly the fact that we don't have a settled energy policy has been a handbrake on growth, not just during this recession, but for the years leading up to this recession. If we had a settled energy policy along the lines that Anthony Albanese was proposing a couple of weeks ago to Scott Morrison then we would give ourselves a chance to get business investment going again, which is good for jobs and good for incomes. So, there's a range of things that the Government should be considering. They extended a couple of programs, that's a good thing if the alternative was to just to turn off the tap but it's not enough. We need to see a plan. Whether it's public housing, energy policy, or other ways to support the economy into the recovery and beyond, let's hear it. 
 
JOURNALIST: Do you think that the Government's tightening of the JobKeeper rules is a concession that there were flaws with the original program?
 
CHALMERS: There's absolutely no question that the announcement made yesterday was an admission from the Prime Minister that he got it horribly wrong to commit to a hard September snapback. It's a welcome admission, because if the Prime Minister's instincts had prevailed then heaps more businesses would have hit the wall at the end of September, and that would have had dire consequences for Australian workers. It's a welcome admission, but he has had it wrong for some time now. It's not just a consequence of the Victorian outbreak that some of this support needs to be extended. It's been clear to some of us for some time that that's been necessary. It's good to see that that support won't be turned off completely in the last weekend in September.
 
JOURNALIST: Just on the details of the announcement yesterday, one of the things that they talked about was that people on the lower rate of JobKeeper will be able to apply for JobSeeker as well. Do you think that that's a fair burden to place on some people in the middle of a pandemic who are anxious about their job, to say well you have got a job, but you also have to apply for unemployment [benefits]?
 
CHALMERS: These are the sorts of details that we will work through. Some of these concerns have been raised with us in the 24 hours or so since the Government made their announcement. We're working our way through that. We hope to have an opportunity to ask questions of Treasury officials about some of those issues about the interaction between the payments. On the broader issue of the so-called mutual obligation arrangements, we think it is appropriate for some of those requirements to be reintroduced, but they need to be reintroduced in a very careful way that's not punitive. They shouldn't be over the top. People shouldn't find themselves without support because of the failure to apply for opportunities which are not exactly thick on the ground at the moment. 
 
JOURNALIST: Just a Queensland announcement; Bob Katter wants an inquiry into foreign interference at universities using the Brisbane case as an example. Is it necessary? Would you support a move like that?
 
CHALMERS: Clearly there are issues there and those issues have been made public in recent months. It's something that we're concerned about. Our university sector as we know from recent months is so crucial to our economy, and our research reputation is a big part of that. We need to guard that very carefully. I haven't seen the detail of what Bob is proposing. No doubt we'll have a discussion about that within the Labor party and we'll come to a considered and informed view on it. 
 
JOURNALIST: Just on mutual obligations, sorry, you were saying that support them to an extent. So, the Government's proposing making JobSeeker recipients apply for four jobs a month from August. What do you think about that? Is that sufficient? 
 
CHALMERS: We've said that we're up for a measured reintroduction of mutual obligation arrangements. Linda Burney has made that point, and so have Brendan O'Connor and I earlier today. We don't want to see those arrangements policed in a punitive way. We don't want to see people who have not quite managed, in Victoria, for example, to apply for what are very scarce opportunities at the moment. We don't want the Government to go over the top in policing those arrangements. We're up for a gentle, responsible, measured, proportionate reintroduction of those arrangements, but don't go over the top with it because we need to recognise that for every job vacancy at the moment there's something like 13 people on unemployment benefits. We need to be conscious of that. There needs to be some leeway.
 
We'll just go to Jane - 
 
JOURNALIST: So, four is okay so long as they're not penalised for not reaching that [INAUDIBLE].
 
CHALMERS: Common sense needs to prevail when it comes to the policing of these arrangements. Clearly, it's appropriate for them to be reintroduced at some stage. We've said that we support in principle going down that path. But let's not go over the top in policing them because you can only imagine how much stress, for example, Victorian job seekers are under that at the moment. They should be trying to find an opportunity, but opportunities are not thick on the ground at the moment in Victoria and around Australia. We need to be conscious of that. 
 
JOURNALIST: Do you think there's capacity in the employment services to deal with the sheer number of people who have these obligations on them now?
 
CHALMERS: It remains to be seen, but there'll be enormous pressure on the job agencies. There already was before. This problem that we've got in the labour market has been turbocharged by the pandemic but not created from scratch by the pandemic. We've had some issues in the labour market for some time now; insecure work, underemployment, pockets of long-term unemployment including in communities like the one I represent. There's been a lot of pressure on the agencies for some time. That pressure will only accelerate as people try and find their way back into the labour market. We need to make sure that they have the capacity to respond. 
 
JOURNALIST: Now that the Government's committed to extending JobKeeper and JobSeeker is it your view that they're no longer engaged in a snapback strategy?
 
CHALMERS: It remains to be seen whether there'll be a snapback in March. The point that we're making is if the Government says that this support can't go on forever, and clearly it can't go on forever, then what's the plan to replace it with well-paid, secure, new jobs? It's remarkable that we've been in this situation now for some months. They keep delaying the budget. They keep delaying the updates to key programs. They've been almost entirely silent on where the new jobs will come from. If they intend to snapback these arrangements in March rather than September, then let's hear from the Government tomorrow in the budget update about how they'll replace that support with the creation of new jobs. Whether you're a job seeker, or whether you're somebody in uncertain employment already, people have a right to know where the jobs are going to come from. What's the plan to get there?
 
JOURNALIST: Do you accept the Treasury analysis that these payments were leading toward creating an adverse incentive to return to work?
 
CHALMERS: Obviously we take the Treasury analysis very seriously and we need to be conscious of not just the incentives there but the interaction between the payments as we were talking about a moment ago. We need to be careful about that. If that's the Treasury advice, then we take it seriously. I think that the main priority needs to be to keep as many people as we can attached to the workforce. The Government has said for all of the years that I've been knocking around this place that the best form of welfare is a job. If they're serious about that, then that means that JobKeeper needs to be a serious incentive for businesses to keep workers on.
 
JOURNALIST: The Government conceded yesterday that they imagined a lot of people would migrate from JobKeeper to JobSeeker, losing that connection. Are you willing to question that Treasury analysis, that there is this disincentive to work?
 
CHALMERS: No, I said that we take the Treasury advice seriously as we always do. The Government shouldn't be raising the white flag on people going from a job onto the JobSeeker payment. We've said that for some time. They need to be coming up with a plan for where the new jobs are going to come from to replace those that have been lost during recent months.
 
JOURNALIST: JobKeeper may have been extended and there's furphies being run about various arguments about incentives, but actually JobKeeper itself, the scheme hasn't been amended to include universities. What about the start-ups, that as people change the way they work, travel, eat, where's the plan to bring start-ups who can't meet revenue requirements - they don't make revenue yet - and yet they're perhaps the future of the economy?
 
CHALMERS: It's really important to recognise that all of the workers who missed out under the first version of JobKeeper are going to miss out on the second version of JobKeeper. Whether you're in the arts and entertainment sector, a casual who might only have had an employer for 11 months rather than 12, or an aviation worker, a whole range of workers will continue to be left out and left behind under the new arrangements announced this week by the Government. That is of concern to us. University workers too, as you rightly identify, and others. It's important to remember that. Our position has always been not to stand in the way of support getting out the door and into the hands of businesses and workers, but to point out where the obvious gaps are. Those obvious gaps which existed before yesterday will unfortunately exist after yesterday as well. 
 
When it comes to the start-up sector, and all of the dynamic and innovative parts of our economy, we need to do a much better job in this country of turning our ideas into jobs. That needs to be a key part of a jobs plan that the Government announces tomorrow. Skills are important; energy policy is important; research and development; the list goes on and on and on. The Government needs to have a view on these things because we don't want Australians to wake up after March or at some future point when the support in the economy has been turned off, but there's nothing to replace it. 
 
Might leave it there. Thanks very much.
 
ENDS