E&OE TRANSCRIPT
DOORSTOP INTERVIEW
CANBERRA
TUESDAY, 25 FEBRUARY 2020
SUBJECTS: Impact of Coronavirus on the economy; Scott Morrison’s failure to provide economic leadership or a plan; Ben Wyatt’s retirement.
JIM CHALMERS, SHADOW TREASURER: The economic impact of the Coronavirus will be substantial; just how substantial it will be remains to be seen. Labor stands ready to be as constructive as possible in proposing ways to deal with the economic fallout from this substantial economic challenge.
Scott Morrison shouldn't pretend that the weakness in the economy is wholly and solely the product of the Coronavirus. Scott Morrison desperately wants Australians to forget that the economy was already floundering badly on his watch before most of us had even heard of Coronavirus and before the fires hit. Scott Morrison desperately wants Australians to forget that growth was slowing, consumption was weak, wages were stagnant, public debt had more than doubled, household debt was at record highs and that productivity and business investment were going backwards.
We cannot have a Prime Minister who uses this substantial economic challenge as another reason and excuse to not have a plan to address the longstanding challenges that we have in this economy. Coronavirus on its own doesn't excuse or explain economic weakness which has persisted on Scott Morrison's watch. Since Scott Morrison took over economic growth has almost halved, wages have been stagnant, business investment has been weak and public debt and household debt has been at record highs. Scott Morrison should acknowledge that because of his economic mismanagement we approach the substantial challenge of the Coronavirus from a position of relative economic weakness and not strength.
The nation is crying out for economic leadership and an economic plan but Scott Morrison is giving people neither. We desperately need the Government to come to the table with a plan to deal with longstanding weakness in the economy and a plan to deal with the fallout from this Coronavirus and the summer of fires. We cannot have a Prime Minister who behaves more like a salesman than a leader at times when the nation needs economic leadership from Canberra. We call on the Prime Minister to come up with a plan to deal with longstanding weakness in the economy to deal with the challenge of the Coronavirus and the fires. It's well past time that he provided that leadership.
Just before I take your questions, I want to say something briefly about Ben Wyatt who is a friend of mine and a friend to many of us here in this building. Ben Wyatt was a big reason why the West has been so well governed in the last three years. He has been an extraordinary Treasurer for the West. While he's been such a good Treasurer he's also been a humble, warm and engaging friend to many of us in politics right around Australia. I think Ben Wyatt will be sorely missed from the political scene in the West. We understand his reasons and we wish him well but we'll also miss him from the political scene. Ben is all class from top to toe. Ben Wyatt is a class act and an extraordinarily successful Treasurer. We wish Ben and his family all the very best for whatever comes next.
JOURNALIST: There's been a huge economic impact on global supply chains as a result of the Coronavirus. Is it reasonable to expect that that would have impacted the Australian economy somewhat?
CHALMERS: The impact of the Coronavirus will be substantial on our economy and the global economy; just how substantial it will be remains to be seen. We'll learn that in the coming months and years. The Coronavirus is not the only reason why the economy is weaker than it should be. The economy has been weak in Australia for some time now. We've got a Liberal-National Government in its third term and its seventh year which still doesn't have a plan to deal with that economic weakness.
I wrote to Treasurer Josh Frydenberg twice in recent weeks on behalf of local businesses in Australia who had relayed to me their concerns that they weren't getting the advice and support that they need in these difficult and challenging times. Disappointingly but not surprisingly the response I got from Josh Frydenberg was inadequate. It was long on rhetoric but it was short of a plan. What the country, employers and employees of this country desperately need is economic leadership and an economic plan from the Prime Minister but he's providing neither of those things. It's one thing to acknowledge the substantial impact of the Coronavirus on our economy as he does and as I do. It's another thing entirely to come up with a plan to do something about it and to support Australians through these difficult times. Australians are looking to Scott Morrison for leadership and he has been incapable of providing it when it comes to the economy.
JOURNALIST: What are the specifics of what you want the Government to do for businesses during Coronavirus?
CHALMERS: We've been very constructive for some time now. We've not just pointed out where the economy is floundering under the Liberals and Nationals. We've also said here are some ideas that you could pick up and run with which would support the economy at a difficult time. In the broader economy, the absence of a settled energy policy is making it harder for business to invest. That can be fixed. There's room and a need for a tax incentive for business to invest. Business investment hasn't been this low since the recession of the early 1990s. We've put some of those solutions on the table. I went to North Queensland and Far North Queensland with Senator Nita Green last week and spoke to businesses there about what their concerns, needs and hopes were from the Federal Government. Local councils have proposed and come up with solutions around rate relief and there's a lot of State Government effort being put into making life easier for business. Absent from that conversation is the Federal Government. The first step would be for them to engage with governments from other levels and engage with the business community. I engaged with tourism and agriculture in North and Far North Queensland to talk to them about the opportunities from Austrade to provide more advice and support, what can be done in the tax system, what can be done elsewhere with the substantial levers that are available to the Federal Government. It's one thing to point to the issues in the economy but Scott Morrison and Josh Frydenberg have a responsibility to lead and plan, and they're failing Australians on both counts.
JOURNALIST: The Prime Minister has given his strongest indication yet that there won't be a surplus in the next Budget. What's your response to that?
CHALMERS: The surplus is a test that they set for themselves and it remains to be seen whether they will meet that test. We won't know until the end of September whether there has been a surplus for the year that we're in now. The Government promised a surplus in its first year and every year after that. So far they've only delivered six deficits. They are yet to deliver that first surplus they promised all those years ago. The priority should be supporting bushfire affected communities, businesses and workers and families. We've said for some weeks now that that should be the highest priority. The surplus is a test that they set for themselves and it remains to be seen whether they will meet it. I listened carefully to what the Treasurer and Prime Minister said today about the Budget. I think what we're seeing is the usual predictable, clumsy, ham-fisted expectation management from the Treasurer who seems to wander around expecting a pat on the back for an outcome that has not yet been realized. We will see if it's realised in September.
JOURNALIST: Jim, does the Coronavirus bolster the case for fiscal response from the Government?
CHALMERS: The challenges of Coronavirus and the bushfires which preceded it call for a proper economic plan from the Government. In all of these difficult times and difficult days in Australia over the summer the nation has been crying out for leadership and crying out for a plan and getting neither. The Government should come to the table and say the economy has weakened substantially since Morrison and Frydenberg took over and since the Budget. Since the election growth has slowed. There are substantial risks and challenges posed by the difficulties of this summer. It's long past time for the Government to recognise the economy is much weaker than they promised it would be. They went to the election saying they'd make the economy even stronger and instead it's gotten even weaker, and not just because of Coronavirus and the fires but for all the other reasons that I've identified. The Government needs to come up with a plan. They need to show some economic leadership. Australians are crying out for that. They need and deserve some action from their Government.
JOURNALIST: Given the economic slowdown last year and the multi-hazard environment you're describing are you offering bipartisan support for giving up on the dream of a surplus?
CHALMERS: We think the priority should be supporting communities who have been so badly affected over the summer. Anthony Albanese, myself and other colleagues have all made that pretty clear. The Government committed to a $5 billion surplus in December. It remains to be seen how much of that remains when we get the final outcome in September. The surplus is a test that they set for themselves. We don't know yet how close they'll get to meeting it. They have made a lot of political hay out of something that they've not yet achieved.
JOURNALIST: Don't you accept that while you can make a promise and when situations change that dramatically that outcomes can also change dramatically?
CHALMERS: The economy has deteriorated substantially. The Government downgraded its own forecasts for growth, for wages and for unemployment before the fires hit and before most of us had heard of the Coronavirus. The Government has conceded that the economy was much weaker than they thought before this difficult summer. That should force a rethink from the Government about their policies. We have been as constructive as we possibly could be. We've put ideas on the table. We have said if the Government pick up and run with those ideas then we'll support them. The role of the Opposition is to help where we can and to point out where there are challenges which aren't being addressed.
JOURNALIST: Just to be clear are you advocating for a discretionary fiscal boost from the Government as opposed to just letting the automatic stabilisers work through the Budget?
CHALMERS: Since August last year we've been saying that the Government should deploy the Budget to arrest what was a very concerning slowing of growth which eventuated because the Government didn't have a plan to respond. If you go all the way back to August and you check our statements you will see that we have been arguing for the Government to do more. The Government's left all the heavy lifting to the Reserve Bank. They've got interest rates at record lows. That's had consequences for asset prices but it hasn't substantially boosted the real economy. There's a role for Government there. The Government is abrogating their responsibility to Australian workers who have faced stagnant wages, slowing growth and record household debt. The Government needs a plan. They need to show leadership. They're doing neither. Thanks.
ENDS
