E&OE TRANSCRIPT
TELEVISION INTERVIEW
CNBC SQUAWK BOX ASIA
WEDNESDAY, 3 APRIL 2019

SUBJECT/S: 2019-20 Budget; living wage

MATTHEW TAYLOR: Let's get more and bring in Jim Chalmers. He is the Shadow Finance Minister for Australia, of course on the Labor side of politics, joining us now live from Canberra. We've been talking, Jim, over the last day or so about how this is essentially the kick off to the upcoming election campaign. We expect that the Prime Minister may announce the election perhaps on Friday he'll go to the Governor-General or at the weekend. You've seen the Budget now, you've had about 12 hours to mull over everything. Is Labor now worried about its chances at the upcoming election given that there are $158 billion in tax cuts being offered out there to some of those undecided voters.

JIM CHALMERS, SHADOW MINISTER FOR FINANCE: Good morning, Matt, and I think that you're spot on. This is more of an election document rather than an actual plan for the future of the economy. There's no plan in there to turn around what has been floundering economic growth, no plan to turn around wages, no plan to deal with energy costs or climate change. So I think it is fundamentally a bit of a document about getting the Government through the next six weeks to try and distract from the last six years of cuts and chaos. We're not at all concerned about engaging on the economy in this election campaign. We're actually spoiling for a fight when it comes to the economy here because the last six years have been six years of failure when it comes to growing the economy in a sustainable and inclusive way. We want to go about it differently. The reason we want to do that is because we want to make sure that more people can share in the benefits of growth in this country.

SRI JEGARAJAH: Jim, let's talk about that, because I think you're quite right. It's not all hunky dory in the Australian economy. You've got a negative wealth effect, potentially from plummeting house prices. How is Labor going to fix that?

CHALMERS: There's a whole range of concerns, even in the Budget's own figures that were released last night Australian time. We've got actually a downgrade to economic growth, a downgrade to wages, a downgrade to household consumption. And any of your viewers who watch the Australian economy closely know that the biggest problem that we have here is in the people-facing part of the economy. It is around wages, consumption, household debt, all of those related indicators. So what we've said is we need a plan for wages, we need a plan for the cost of living. We need to make sure that those tax cuts that were mentioned in the introduction are tightly focused on people who are more likely to spend in the economy, people on low and middle incomes. That's how we turn around some of the challenges that we have here in Australia. 

JEGARAJAH: Jim, you just mentioned there that we need a plan for wages, and if the problem is an income recession and if this really is no longer the land of the fair go anymore, then is an increase in the minimum wage - should that be part of the conversation?

CHALMERS: Our great fear is that the fair go in this country will be something that people talk about or read about in the history books and not a feature of the future. I think the election campaign next month will be fundamentally about the future of the fair go. We are rightly known around the world and around the region as a country that cares deeply about how all of its citizens fare and we are in a per capita recession on the most recent economic data that was released. So a key part of the wages policy does need to be making sure that our minimum wage is more like a living wage. But not just that. We need to restore penalty rates for weekend work. We need to make sure that our migration settings when it comes to skilled workers are right. We need to make sure that we crack down on labour hire practices which are undermining wages and conditions. Right across the board, we think if we can get the wages story right in this country, we can get consumption going again, which is 60 per cent of our economy, and if we do that we can turn around what has been slowing growth here in Australia the last couple of quarters. 

MANDY DRURY: Hi there Jim. Will Labor match the Government's promised tax cuts if you win the election?

CHALMERS: The key part of the tax cuts which were announced last night here in Australia were essentially a copy of what Labor had proposed at this time last year. So to the extent that the Government is playing catch up with Labor's tax policies for low- and middle-income earners, we will support that aspect of it. We have said that since last night. We are prepared to support that. We think we can do better for genuinely low income earners in Australia. If you earn less than $40,000, you basically missed out last night. You got a small amount of tax relief, but in our view not enough. So our focus is in fixing up the $2 million Australians who earn up to $40,000. But yeah, fundamentally we will also propose the same tax cut for middle-income earners that was proposed last night.

DRURY: And how do your economic projections compare with what the Government has just put out in regards to this fiscal year and next? Or do you think they're still being too optimistic?

CHALMERS: I think Matt in his introduction was absolutely spot on to say that the surplus that was talked about in the Budget here is only a forecast surplus. Whoever wins the May election will inherit a Budget in deficit. The Budget is in deficit right now and if the surplus does eventuate, we won't know that until September 2020, so not for another more than 12 months down the track. What we have said in the Labor Party, because we've done a lot of work and made a lot of announcements on closing down tax loopholes and other changes in the Budget, is we will go to the election with a stronger set of books than our opponents. That is because we are concerned the surplus for next year, the forecast surplus for next year, is built on a couple of things - it's built on fairly substantially underspends for people with a disability. It's built on still quite heroic forecasts for wages, which have been repeatedly downgraded over the last few years. So we think we can do a better job, a more responsible job, with the Australian Budget. But when it comes to the surplus that the Government is claiming to have delivered, all they've done is forecast or projected that surplus.

TAYLOR: Very quick Jim, we're almost out of time and I know you've got to go as well, but Labor when you were last in Government promised a surplus several times and you never managed to deliver. How can the Australian people believe you this time around?

CHALMERS: True and in the subsequent Government, Joe Hockey promised a surplus in the first year of the Liberal Government and every year thereafter. That really makes the point that I was making a moment ago. We'll know if it's a surplus in 2019-20 after the end of that financial year. We'll know in September 2020. It's just a forecast now, it's just a projection. Our job is to go to the election with a stronger set of books than our opponents, to demonstrate to the Australian people that we will manage the economy in a more responsible way, a way that gives us more of a chance of growing the economy sustainably.

TAYLOR: Jim, thank you very much for joining us this morning. Jim Chalmers, the Shadow Finance Minister of Australia there.

ENDS