PARLIAMENT HOUSE, CANBERRA
FRIDAY, 24 JULY 2020
SUBJECTS: Budget update; Victorian outbreak; Tax cuts.
JIM CHALMERS, SHADOW TREASURER: Yesterday’s budget update was a badly missed opportunity. After months of delays all we got was barely half a plan. The Government owes it to the 240,000 people they expect to lose their job between now and Christmas to come forward with a proper plan for jobs. The Government did not deliver that proper plan yesterday.
The Treasurer talks about eye-watering numbers in the budget update. The eye-watering numbers in the budget update were the unemployment figures. The Government expects unemployment north of 9 per cent by Christmas. The Government expects 240,000 Australians to join those unemployment queues between now and Christmas. They’re prepared to tell the people of Australia how bad things will get but they’re not prepared to tell the Australian people what they’re actually going to do about it.
We need to hear from the Government a comprehensive plan for jobs. It needs to go beyond the usual tired, old, narrow ideological obsession that the Government has with industrial relations. This recession is not an excuse to go after workers. This recession is not an excuse to indulge those ideological obsessions in the absence of a comprehensive plan for jobs. We say to the Government, don’t use this recession as an excuse to attack workers. It would be bizarre in the extreme if the Government thought the lesson from rising unemployment and insecure work was to make workers even more financially insecure in this country. Stop going after workers and stop going after their superannuation as well.
Today the Government has said that they will be receiving the Retirement Incomes Review. We call on the Government to release that review. That review should not be a stalking horse for attacks on super, or more cuts to the pension. This Government, in the depths of the first recession in three decades, when they look around and see rising unemployment they think the answer is more job insecurity. When they look around and see the way people’s retirement incomes are being eroded, they think the answer is to go after super. If only this Government spent as much time coming up with a comprehensive plan for jobs as they spend indulging their ideological obsessions, Australians, especially those facing unemployment, would be much better off.
JOURNALIST: Is there anything in the short-term, between now and Christmas, that could be done to stop unemployment reaching 9.25% or is that unavoidable?
CHALMERS: Obviously there needs to be a comprehensive plan but one aspect of that would be public housing. Investing in public housing can be done relatively quickly, it’s labour intensive so there’s lots of jobs associated with it, and we’re building something of lasting benefit for the most vulnerable people in our society so that ticks a lot of boxes. That’s something that we could have heard more about from the Government yesterday, but we didn’t. For too long now the absence of a settled energy policy means that business investment has suffered. One of the really stunning numbers in yesterday's budget update was the massive decline in business investment but that hasn’t just shown up with the virus, that’s been a problem for some time. It’s partly a function of the Government not getting its act together on energy. We say to the Government, we want to be constructive and responsible, we want to engage with you on a plan for jobs, but for that to happen they actually need to come forward with a plan that goes beyond attacking workers and their super.
JOURNALIST: In terms of the figures we saw yesterday they’re based on two pretty big assumptions. One, Melbourne will reopen within the next four weeks; and two, that international borders will reopen on 1 January. Neither of those things looked certain in any way, hours after those figures were released. Do you feel this is an overly optimistic assessment of where the economy’s heading?
CHALMERS: That remains to be seen, but there’s a lot of concern as people have gone through this half a budget update that was provided yesterday, that some of the assumptions might be optimistic. That remains to be seen. The Government doesn’t have a great record on predicting the rollout of programs and what’s happening in the economy. The point I would make about that is this; yes there’s a lot of uncertainty in our community and in our economy, but what is absolutely certain is that we’ve got a problem with jobs, unemployment will be higher for longer, and there’s a responsibility for Government to respond to that and to come forward with a jobs plan. Even with the assumptions the Government has adopted, we’re still talking about 240,000 Australians who will lose their job between now and Christmas. The Morrison Government owes it to those Australians to come forward with a plan, not to just raise the white flag on unemployment, not to just throw their hands in the air and say things are really bad but we’re not going to do anything new about it. That is the main hole in the Budget update which was released yesterday. They delayed it for months. They still only produced half of an update and there is not a plan in sight.
JOURNALIST: The other thing that’s been exposed is the economic inequality in Australia. Do you accept that not all Australians can afford to self-isolate for two weeks? Is Labor open to paid pandemic levies or assistance for people who, if they don’t work, can’t pay their rent, and can’t feed their kids?
CHALMERS: Yes one of the real concerns we have about this recession is its capacity to accelerate some trends that were already worrying us about inequality in our economy and our community. From time to time people will say that this virus doesn’t discriminate. Well the recession that is associated with it, does. It does discriminate; it hits our most vulnerable people the hardest. Some people can’t afford to isolate. Some people can’t afford to do some of the things we’re looking at. Clearly the Government needs to consider some of these proposals. They’ve been around for some time. The Victorian Government’s got a payment. We said before JobKeeper that we were worried about casuals who had to choose between being able to put food on the table and endangering the health of their co-workers. We can’t be in that situation. Some of the proposals which are around at the moment should be considered by the Government.
JOURNALIST: Do you think that’s been a factor - sorry - in Victoria, in terms of this outbreak? That there have been people who would like to do the right thing, but they can’t afford to do the right thing?
CHALMERS: Clearly. It’s not that hard to imagine that someone wakes up feeling crook in Victoria and we want them to isolate, but they’ve got to face the choice between feeding their kids or doing the right thing on the health front. We want them to do the right thing on the health front, clearly. One of the issues that’s been associated with what’s been happening in Victoria in recent weeks is people going to work crook. We want to prevent that. For a lot of people that’s a really difficult choice. We need to recognise that.
JOURNALIST: Do you think income tax cuts will be effective in this situation? And how substantial would they have to be to have an impact?
CHALMERS: I think that middle Australia is struggling, and there is a problem in the economy with spending power. We should be looking for ways to deal with that. The Government has sent up smoke signals in recent weeks about maybe bringing forward some of the tax cuts. We’ve said we’ve got an open mind to that, that it’s something they should be considering to try to address that problem with demand, that problem with spending power, and that problem with middle Australia struggling under the extreme financial difficulties of a recession. If they intend to do that, let’s see the plan. We’ll engage with it, we’ll have an open mind, we’ll talk through it, we’ll look through it, we’ll have discussions on our side. It’s something they should be considering but not just that; it needs to be a comprehensive plan.
JOURNALIST: What about a cut to the company tax rate? Is it time to revisit that?
CHALMERS: I’m sceptical about a broad cut to the headline company tax rate. My fear there is that a lot of that would spray around overseas and that Australians wouldn’t get the benefit of it. But if the Government wants to come to us with a proposal for some kind of tax break to incentivise business investment then we’re up for that conversation. We took to the last election a proposal like that, because business investment’s been a problem for some time. It’s not a new problem. We’ve said, we’ll engage with you on that; the BCA’s got some ideas, we’ve put forward some ideas and others have as well. That would be more effective than a company headline tax rate cut. Let’s have a conversation about that, but again, these are the sorts of things that we were waiting for in the budget update yesterday. We didn’t get a plan, we got a press release, with very few new numbers, no new insights, and no new ideas to respond to the fact that 240,000 fellow Australians are expected to lose their jobs by Christmas.
Thanks very much.