E&OE TRANSCRIPT
PRESS CONFERENCE
CANBERRA
WEDNESDAY, 4 DECEMBER 2019
SUBJECTS: National Accounts.
JIM CHALMERS, SHADOW TREASURER: We know from the National Accounts that the Australian economy under the Liberals and Nationals is not delivering for ordinary Australians. It's not delivering for almost two million Australians who are looking for work or for more work. The economy is not delivering for all of those Australians who feel that no matter how hard they work, they just can't keep up with the rising cost of childcare, electricity and private health insurance.
These National Accounts today are a total humiliation for Josh Frydenberg and Scott Morrison. When last quarter's numbers came in, Scott Morrison said, "you'd expect that things would improve in the next quarter". They haven't. They've gotten worse. Growth is slower in the September quarter than it was in the June quarter.
Growth is far too weak and it's far too narrow. We've got below average growth from a below average Government. This growth is below average, below expectations, below forecasts, and below what the Australian economy needs to get wages growing again for ordinary working people in this country. Growth has slowed this quarter, it's slowed since the election and it has almost halved since Josh Frydenberg became the Treasurer. Consumption is the slowest since the Global Financial Crisis, private investment has gone backwards, the private domestic economy has gone backwards again, the biggest annual decline since the Global Financial Crisis.
These weak numbers are the inevitable consequence of a Government which has no idea what it's doing and no plan to turn things around. They’ve got the economy wrong at every turn and every juncture since the election. Over to you.
JOURNALIST: What do you think the Government should be doing to lift growth?
CHALMERS: This kind of economic weakness demands a proportionate, responsible and measured response. We've played a constructive role and proposed to the Government that they pick up and run with any of our suggestions. Business investment needs a tax incentive. They should be looking at Newstart and stage two of the tax cuts. The lack of a coherent energy policy is holding the country back. The lack of a wages policy means that Australians who work hard are not getting by, let alone getting ahead. All of these options are available to the Government.
The weakness in the numbers today justifies and vindicates Labor’s concerns that we have been raising about the economy since the election. It torpedoes the Government's economic credibility because at every turn Josh Frydenberg and Scott Morrison have been saying there's nothing to worry about here. A few minutes ago Scott Morrison said that he was “pleased” with these figures, which is an outrage to almost two million Australians looking for work or for more work. When Scott Morrison says that he's pleased with these figures, it shows that he is even more horrendously out of touch than many of us feared.
What's needed here is a plan to turn the economy around. What's needed here is a measured, proportionate, responsible response to these economic figures, which have come in below average, below expectations, below forecast and which are well short of what we need to get wages growing in this economy.
JOURNALIST: Do these sort of figures mean that the Labor Party has to recalibrate its own tax policy given we've actually had tax cuts and consumer spending is at its lowest since 2008?
CHALMERS: The tax cuts are not doing the job that the Government claimed they would. The combination of the tax cuts and interest rate cuts in the system and whatever else the Government has done has not been enough to get the economy growing substantially. Josh Frydenberg keeps lowering the bar and he keeps managing to trip over it. The test isn't whether there's any growth in the economy at all; the test is whether there's enough growth to boost wages so that people who work hard can get by and get ahead. The Government is failing this test at every turn. Labor's responsibility is to call on the Government to do the right thing. We've been consistent for some time now. We've been right at every turn when it comes to weakness in the economy and the government has been wrong.
JOURNALIST: Mining investment has fallen significantly. Should we be concerned about that? What effect is it going to have and what should the Government do about it, if anything?
CHALMERS: Across the board business investment has been quite weak for some time. There's no encouragement in these figures, whether it be mining or non-mining investment. What's needed here is a tax break for business investment. We took an accelerated depreciation policy to the last election, the Australian Investment Guarantee. The Government should be looking at those kinds of policies. Investment has been as weak as it was in the early 90s recession for some time. That's incredibly concerning so one of the things that the Government should be looking at is a tax incentive to get business investing again, because that will help productivity, employment and wages.
JOURNALIST: Going back to your own tax policy, will these sort of figures make you look at what might occur if you were to go down the path of housing tax reform or housing policy reform again?
CHALMERS: In the immediate aftermath of the election we shifted on our income tax policy and we said not only would we support Stage 2 of the Government's income tax proposals but that some of it should be brought forward. We have already responded to an economy which has gotten weaker since the election by putting that proposal on the table. As for our other tax proposals, we have said many times that they are under review. No party takes an identical set of policies to the next election that they took to the last election. We will work through the various proposals that we took to the last election. The challenges are still there but there may be better ways to address them. We will let our plans be known in due course.
JOURNALIST: Was it unwise to go to the last election promising bigger surpluses than the Coalition and are you going to avoid that mistake again next time around?
CHALMERS: We'll make sure that our fiscal policy is carefully calibrated at the next election. We have spent a lot of time talking about the lessons to be learned from the last election. We had a review into our policies and our performance at the last election. I don't intend to spend a lot of time going over that. We learned the lessons. We are developing policies for the next election. We're looking forward and moving forward. The last six months have demonstrated that the Government's economic credentials are in tatters, that Labor has been consistently calling the economy right and the Government has been consistently calling the economy wrong. You've got to wonder whether Josh Frydenberg is up to the task of being the Treasurer when he has so consistently and repeatedly got the economy wrong since he took on the job.
JOURNALIST: Should APRA and the Reserve Bank have concerns that Sydney house values are going up $1200 a day, and $770 in Melbourne?
CHALMERS: We have flagged concerns about the Government leaving all of the heavy lifting to the Reserve Bank. Interest rates are below one per cent and a quarter of what they were during the darkest days of the Global Financial Crisis. As the Governor and others have pointed out, interest rates that low can puff up asset prices, but they're clearly not doing enough to boost the real economy. This is one of the consequences of a Government which has dithered and denied while the economy has deteriorated. The Reserve Bank's been left to do all of the heavy lifting on its own because the Government won't get off its hands and do something to boost workers and pensioners in the economy, and that has consequences.
JOURNALIST: The Treasurer spoke about the good news story and looked at Australia compared to other countries, especially when GDP and so on. What's your response to that? Are we doing quite well internationally? And what about that good news story?
CHALMERS: There is no good news in the National Accounts that have been presented today. Josh Frydenberg and Scott Morrison's response that he was pleased with these numbers shows just how horrendously out of touch they are. If they walk through the shopping centres of any of our outer suburbs they'll see 'for lease' signs, or talk to workers who are working hard and not getting by let alone getting ahead, not keeping up with the costs of childcare, electricity and private health insurance. If he understood any of those things, he would understand that the economy is not delivering for ordinary Australians. It's not enough for Scott Morrison and Josh Frydenberg to wander around Australia pretending that they are good at managing the economy when facts like those which had been released today tell a very different story.
ENDS
