JIM CHALMERS MP
SHADOW TREASURER
MEMBER FOR RANKIN

 

E&OE TRANSCRIPT
TELEVISION INTERVIEW
ABC INSIDERS
SUNDAY, 24 APRIL 2022


SUBJECTS: Federal election; Solomon Islands; Foreign aid; Multinational taxation; China; Budget; Debt; Climate policy; Labor’s Powering Australia plan; National Reconstruction Fund.
 
DAVID SPEERS, HOST: Jim Chalmers, joining us from Brisbane, welcome to the program.
 
JIM CHALMERS, SHADOW TREASURER: Looks like a great morning in the terrific Queensland town of Gladstone. I'm very envious.
 
SPEERS: It is a terrific Queensland town. I will not argue with that at all. Look, let's start on the Solomon Islands. Labor has argued that this is the greatest foreign policy failure in the Pacific since World War Two. What's happened here? How exactly could it have been avoided?
 
CHALMERS: Well David, for all the Government's chest beating about China, the net result of that is a region which is less secure and a nation which is less safe, and clearly, this is the consequence of a Government which has cut foreign aid spending, they've mocked our Pacific friends when it comes to climate change, and they've dropped the ball when it comes to our national security, and that's what we're seeing now. Our country is less safe as a consequence of the mistakes that they've made on foreign policy. That is the net effect and the consequence of all of this chest beating. Now, this is a Prime Minister that went to the wrong island, you know, he went to Hawaii during the bushfires when his focus should have been on the Solomon Islands. The fact that they have failed so substantially here is a direct risk to our national security. The Chinese are setting up a military base on our doorstep, and the Government needs to take responsibility for that rather than try and blame everyone else.
 
SPEERS: Alright, well, a couple of things. Firstly, Prime Minister Sogavare says no, they're not setting up a military base. So, are you, you don't believe him on that?
 
CHALMERS: Well, the final text of the agreement is not yet available and as your introduction rightly pointed out, there is the prospect here of basing military, Chinese military assets, in the Solomon Islands. Let's see what the final agreement says. But it's not contested amongst anybody who knows this issue that this failure is the biggest foreign policy failure in the Pacific since the Second World War. It has made Australia less safe and less secure, despite all of the chest beating.  What Scott Morrison and Peter Dutton ...
 
SPEERS: So, coming back to what could have been done, you mentioned foreign aid and climate change. So are you suggesting that if we'd spent more on foreign aid, done more on climate change, the Solomons would not have signed this agreement they've clearly been working towards?
 
CHALMERS: I'm saying that we need to earn the trust, and we need to earn the friendship of our Pacific neighbours, and we need to rebuild our diplomatic capacity. Part of that relies on being credible partners on climate change. Part of that relies on being meaningful partners when it comes to development assistance. I don't think it's contested that the Government has dropped the ball on both of those areas, in addition to the mistakes they've made when it comes to getting defence investments away. And all of these things together have meant that our national security has been undermined by this Government. The consequence of their mistakes is a nation which is less safe in a region which is less secure.
 
SPEERS: Alright, well let's talk about what you would do, if elected in four weeks’ time. What would Labor do to make us more safe on this front?
 
CHALMERS: Well, we need to rebuild those relationships. We rebuild those relationships by being...
 
SPEERS: What does that mean?
 
CHALMERS: ...well, by being a credible partner on climate change, having a credible climate change policy, and we do. It means investing in development assistance, in foreign aid, and we'll have more to say ...
 
SPEERS: So, you'll boost foreign aid?
 
CHALMERS: ...we'll have more to say about that during the course of the election, as Penny Wong has made clear. That's an important part of the story, but it's not the whole story. How we manage our defence investments, how we be a credible partner on climate, and how we manage our foreign aid responsibilities. All of these things are important parts of the puzzle.
 
SPEERS: Okay, more on foreign aid and more on the Foreign Affairs Department as well? You did mention diplomacy, will you boost spending there?
 
CHALMERS: We'll have more to say about this, David, via Penny Wong at the appropriate time during the election campaign. But we need to rebuild our diplomatic capacity, particularly amongst our near neighbours. That much is clear and foreign aid will be part of it. Being a credible partner on climate is part of it, and in other ways as well.
 
SPEERS: Alright, well, we'll stand by for those “more to come” announcements. The Prime Minister today is making what he's calling an “ironclad guarantee” that he won't raise taxes in the next term of parliament. Can you do the same?
 
CHALMERS: Well, first of all, David, you can't believe a word that Scott Morrison says about the economy and especially about tax. This is the second-highest taxing government of the last 30 years. The highest taxing government was John Howard's. On every available measure, whether it's total tax, tax as a proportion of the economy, tax per person, tax adjusted for inflation, this Government is taxing more than the last Labor government did.
 
SPEERS: Let's try and steer to your plan if we can then, Jim Chalmers. Let's talk about Labor, okay? Let's talk about Labor. Can you give that guarantee?
 
CHALMERS: Well, we have said that we're not proposing any tax reforms beyond the proposals that we will shortly make about multinational tax reform. Now, the Prime Minister today in making this commitment appears to be walking away from a deal that Australia said that we want to be part of, 130 countries around the world who recognise that we need a fairer way to tax multinationals so they're paying their fair share in the countries where they make their profits. When the Prime Minister stands up later today, he needs to make it clear: Is he sticking with this commitment that he's made by a press release this morning, or is he sticking to the commitment that he made to 130 other countries, that Australia would take meaningful steps on multinational tax reform? We've said that we want to be part of that conversation.
 
SPEERS: Okay, your plans then, so, your plans on multinational tax. I mean, there are a lot of multinationals that are big employers in this town where we are: Rio Tinto, Shell, Anglo Coal, Peabody Energy and so on. Will they pay more tax under Labor?
 
CHALMERS: Well, most of the global developments on multinational tax reform are focused on the changes in the digital economy. But what we will be proposing and making clear before election day, is not targeting one sector of the economy or another. Clearly ...
 
SPEERS: Sure, but will the big employers here have to pay more tax? 
 
CHALMERS: Well, to the extent that some of them are multinationals, obviously, our multinational tax reform impacts multinational corporations. But what we will be pointing out is that our proposals aren't directed overwhelmingly at one sector or another. It's a broad plan which adopts the global principles that the Government says that they have adopted as well. Part of that ...
 
SPEERS: What does it mean for these employers here, how much more tax will they have to pay?
 
CHALMERS: Well, we'll make that clear when we make our announcement, David. But what I'm trying to say is that there are global developments at the OECD level. The OECD, led by Mathias Cormann, has made proposals around digital tax reform. They've made proposals about how businesses account for their profits. There are OECD principles when it comes to how debt is accounted for so that multinationals pay their fair share of tax. There's a whole agenda around transparency and there's an agenda around tax havens and intellectual property. Now, the whole world is moving in this direction, and Australia should be part of it. Scott Morrison and Josh Frydenberg have previously said that they want to be part of it. He needs to make clear whether he's ditching that commitment.
 
SPEERS: Okay, I just want to stick to Labor's plans here if we can. On top of that multinational tax changes, you've got your safeguards mechanism changes under your climate plans and you and Richard Marles were asked about this yesterday. So can you explain what that means? The 215 companies who will face tighter safeguards mechanisms under your plans, what does that mean for the employers here in the energy sector?
 
CHALMERS: Well you’re right that there are 215 entities which will be subject to the safeguard mechanism. That's as it is right now. Their obligations will be determined by the Clean Energy Regulator, which factors in things like international competition and the technological possibilities that each entity has. So, each of those 215 entities will have their obligations determined by the Clean Energy Regulator, as we said yesterday when we were asked. The best outcome from our point of view is that entities reduce their emissions in line with their obligations. Something like two out of ...
 
SPEERS: And if they don't, what happens?
 
CHALMERS: Well, something like two out of every three of those 215 entities have already got emissions reduction plans consistent with net zero by 2050.
 
SPEERS: The rest of them, if don't meet that, if they don't meet that target, what happens? Do they have to pay?
 
CHALMERS: Well, they have two options. They can reduce their emissions, which is our preference. Or they can buy carbon credits. That has been clear in our policy. It's also clear in the Government's policy since the beginning.
 
SPEERS: So, what will that cost the employers here under your plans?
 
CHALMERS: Well, the assumptions in our modelling are identical to the assumptions in the Government's policy, which is that the current cost of carbon abatement is something like $24 a tonne. But again, that's not the only option for businesses and entities trying to reduce their emissions. There are technological possibilities as well. Our preference is that they reduce their emissions in line with the obligations determined by the Clean Energy Regulator. That's the point that we make ...
 
SPEERS: Alright, but you’re tightening the obligations is the point. Okay, look, we're also focused a bit on, here, while we've been here, on what comes next, right, as we move on this pathway to net zero emissions. There's a lot of talk about a green energy hydrogen future for this part of Queensland. People want to see the plans though. What are Labor's plans to help that transition along and help the workers here?
 
CHALMERS: Well, I'm absolutely convinced that cities like Gladstone and right around regional Queensland can be the powerhouses of the modern Australian economy. I think the future is brighter than the past when it comes to places like Gladstone. I've made 64 visits to 29 different regional Queensland towns this term alone. Twenty-nine visits to 12 mining towns and five visits to Gladstone itself ...
 
SPEERS: That's a lot but what is your plan? 
 
CHALMERS: ...and after all of that consultation, I am convinced that regional Queensland can be a bigger part of the story as the national economy recovers. And the reason why I'm convinced about that is we are the only party in this election with a modelled jobs policy for regional Queensland. And in our modelling for our Powering Australia plan, 604,000 new jobs created, five out of six of those are in the regions. And the reason that Gladstone and towns like it around regional Queensland can be such a big part of the story of our economic success into the future is because they've got so much of what we need. You know, I've already been in Gladstone during the course...
 
SPEERS: So, what will you do? If we can just get an idea of what your plan means, are you're going to invest in hydrogen power here?
 
CHALMERS: Yeah, we've made that clear, our plans for cleaner and cheaper energy. Whether it's the Powering the Regions Fund, whether it's the National Reconstruction Fund, there are exciting possibilities in hydrogen...
 
SPEERS: Does that mean you are underwriting, or investing in, or how does it work for building new hydrogen here?

CHALMERS: We've made that clear already, that our National Reconstruction Fund will make something like $3 billion available to the sorts of industries that Gladstone will be really successful into the future. Gladstone's got all the ingredients that make our plan work. You know, a deep-water port, lots of skills, heavy industry, the possibilities for manufacturing. I was there already during the course of the election campaign, with the State Government of Queensland making big investments in hydrogen and ammonia in particular. They've got all the possibilities of battery manufacturing, all of the investments made by Twiggy Forrest and others. It is a really exciting place. And my fear is that the Government sees places like Gladstone as a source of votes, but not as a source of jobs and opportunities.
 
SPEERS: Alright, let’s stick to Labor if we can here, okay? We get the sledges on the other side. Coal. We heard Anthony Albanese this week when asked about the prospect of new coal mines in Queensland say look, as long as the approvals stack up, the finances stack up, no problem. How do you achieve net zero emissions if new coal mines are being opened?
 
CHALMERS: Well, first of all, the point that Anthony made is entirely right, and just a common sense approach to take. If it stacks up environmentally, and if it stacks up commercially, it will go ahead, but the market at the end of the day will determine that. What we've shown in our modelling …
 
SPEERS: Well, the market doesn't have to determine whether you achieve net zero emissions, you would. So how does it fit with achieving net zero emissions?
 
CHALMERS: Because the modelling of our safeguard mechanism and all of our associated climate change policies makes it clear, we can get to net zero by mid-century, we can get to 43 per cent by 2030 ...
 
SPEERS: With new coal mines? 
 
CHALMERS: Well, our modelling assumes the same as the Government's modelling when it comes to new coal mines. And what we've said about that very clearly, is that that will be determined in the appropriate way across multiple levels of government. But what our modelling shows, the most detailed modelling that anyone's put out from opposition when it comes to climate change, is the combination of our safeguard mechanism that we spoke about already and all of our associated policies will get our emissions down. Most importantly, it will mean cleaner and cheaper energy. More investment, particularly in the regions. And more jobs, particularly in the regions.
 
SPEERS: Alright, but does your modelling allow for new coal mines?
 
CHALMERS: Our modelling assumes the same as the Government when it comes to new coal mines... 
 
SPEERS: Which is what?
 
CHALMERS: ...our expectation is...
 
SPEERS: Which is what?
 
CHALMERS: ...our expectation is that any new proposals will be evaluated in the usual way. That's what our modelling accounts for. Now, we have said repeatedly that there is a future for coal for the time being because there is an appetite for coal around the world. But over time our energy mix will change. That's what our modelling makes clear.
 
SPEERS: Okay, look, we've heard from you this morning that there will be further announcements on things like foreign aid, on the diplomatic service. There'll be further announcements, we know, on health as well. We still don't know whether Labor's going to spend more on hospitals and schools as you have in previous elections promised to do. We do have a structural deficit, though, in the Budget stretching for the next decade. And I know you've said later in the year if you're Treasurer, you'll hand down a new Budget for this year. Will that have to include some spending cuts?
 
CHALMERS: We've made it clear, David, that we do need to trim spending in areas like the Commonwealth's spending on consultants and contractors and labour hire. We think that there are substantial savings to be made there. We would be inheriting, if we're successful on the 21st of May, a trillion dollars in debt and not enough to show for it. And that means we need to come at this challenge from a variety of different perspectives. First of all, we need to reorient the Budget towards quality spending. We need to invest in the drivers of growth and that's what our five-point economic plan will do. But we also need to trim spending where the wasteful spending has been the most egregious. And we also need to look at multinational tax reform, as we discussed earlier. This Budget is the worst Budget that any Government has ever taken to an election, the most wasteful government since Federation, and so we take that challenge seriously.
 
SPEERS: Okay, so let's try and stick to Labor's plans here if we can. We've heard your points about the other side. Look, finally, Anthony Albanese. He's on day three of COVID isolation. Is his absence helping or hurting the campaign for Labor?
 
CHALMERS: We'd rather have him on the park, David, obviously. But the pandemic has taught us to prepare for every eventuality, and that's what we've done. It does give us the opportunity to showcase our team. Now, one of the things about Anthony which we all appreciate, and I think the Australian people will appreciate, is he puts a lot of effort into building up his team. That's a key element of his leadership. Leadership is also about dealing with adversity and playing the cards that you're dealt, and that's what we're doing right now. But most importantly, when it comes to leadership, it's about being there for people. It's about taking responsibility. It's about working hard every day to bring people together. You can't say any of those things about Scott Morrison.
 
SPEERS: And for you and your other senior colleagues who are stepping up to fill the void, it is, I guess, a potential test, isn't it, for who should be, could be the next leader?
 
CHALMERS: We don't see it that way. We want the next Prime Minister of Australia to be Anthony Albanese. We're working our butts off to make that a reality.
 
SPEERS: Jim Chalmers, Shadow Treasurer, thanks so much for joining us.
 
CHALMERS: Thanks, David.

ENDS