Interview with Adam Stephen, ABC Drive, Western Queensland

ADAM STEPHEN:

Treasurer Dr Jim Chalmers is with us this afternoon on Drive. Thanks for joining us.

JIM CHALMERS:

It's really good Adam of you to have me on the show and I liked listening to Ken talk about the America's Cup – that's one of the first memories of my life, was Australia winning the America's Cup in 1983. So it's a good thing to reminisce about.

STEPHEN:

If you're going to get three and a half in an exam, that's probably the best excuse for why you haven't done well. You did have serious matters to discuss at this National Drought Forum in Rockhampton today. What was the key message you delivered?

CHALMERS:

I have been in Rockhampton. The Minister, my colleague, my mate, Murray Watt pulled together a National Drought Forum with the National Farmers’ Federation in Rocky. And it was a really good opportunity to have the weather people there, the farming organisations, all three levels of government were there, and it was a good opportunity to compare notes about the difficult conditions a lot of parts of Australia are anticipating and to also make sure that whether it's the Future Drought Fund at the federal level or all of the other ways that we support communities, and especially farmers through drought. We've got to make sure that they're as good as they can be because as you rightly said in your introduction, governments are there for people when times are tough and it costs a lot of money, which is understandable, but we want to make sure we're getting maximum value for money. So that was a big part of the National Drought Forum that Murray and Tony Mahar and others put together today in Rocky.

STEPHEN:

And it was interesting that we quantified the expense to taxpayers of the Black Summer bushfires, because we often quantify floods or cyclones and storms, where we’re able to put a dollar figure on the damage. Droughts are harder typically to actually put a dollar figure on damage. So by putting a dollar figure to the bushfires that occurred and that El Nino weather pattern, was that what you were seeking to do there, just to give us an idea for some of the cost of prolonged drought and bushfires that follow up?

CHALMERS:

We were trying to give people a sense of the costs of these natural disasters, which are becoming more frequent as our climate changes. And another number that I talked about today in my speech was – if we don't do anything about climate change – we can anticipate a world where agricultural production drops really substantially over the coming decades and that will cost the economy a lot of money. So really what today was about was bringing together all that thinking, understanding the costs of natural disasters and drought and climate change, but also as well so that we can be a bit glass half full about the opportunities in regional Australia. I've just released this Employment White Paper in Adelaide yesterday and what it's really about is how do we make it easier for regional communities and industries like primary industries, how can we make sure that they continue to prosper and make big contributions to our communities and our country going forward, even as our economy changes. And so a really big focus of the White Paper on Jobs and Opportunities is what does it mean for our regions, how do we get the investment flowing, so that regional communities in primary industries can continue to make a really big contribution to our economy and our country.

STEPHEN:

Is there a role for Treasury here in helping us understand this situation as it plays out, the ongoing concern around drought and its potential impact on productivity?

CHALMERS:

Absolutely. And that's one of the big things I tried to change when I came into this job 16 months or so ago. I work really closely with Murray Watt, but also the climate minister and other colleagues. And what I've done is I've tried to really power up Treasury so that Treasury is doing the modelling about these climate change impacts and these drought impacts because if we get the best possible understanding of what it means for our economy now, but also into the future then from there, we can work out how do we help communities when they're doing it tough because of drought or for some other reason, how can we be there to support people but also how do we maximise the opportunities of the future so that we can make sure we're training people and skilling people for jobs in regional communities. And I've just touched down in Longreach. I'm in the main drag here outside Darcy's Diner, and I've been in at the mining school in Rocky CQ University, and we've been out to the Belmont Station, which does research into the drought and what really unites all of these things is people are working out whether it's science or ideas and innovation, how do we not just meet the challenges today but also maximise the opportunities of the future.

STEPHEN:

We're hearing here from the Federal Treasurer Dr Jim Chalmers, who is in Western Queensland this afternoon, having been in Central Queensland this morning where he was part of the National Drought Forum in Rockhampton. You're in Longreach now. It is said that you might be heading to Winton, Dr Chalmers, which would be – if you do end up there – it'd be the first visit by the first Federal Treasurer in nearly 100 years to Winton.

CHALMERS:

What a classic. When we were working out the trip to Winton we were talking about, I wonder when the last time a Treasurer went there, first of all we thought it might have been in the 1950s and we had people do a bunch of research for us and it turns out, we think it's 1928. So 95 years since a Commonwealth Treasurer has set foot in Winton, which is a pretty remarkable stat, but I'm looking forward to being there. We'll be there tonight and tomorrow. Great place Winton I'm told and I'm looking forward to talking with the Western Queensland mayors when we gather there later on.

STEPHEN:

It has some very impressive local watering holes as you'll see with your own eyes tonight. It's incredible Winton, blows people away, it's a beautiful little country town. One of the things that the Employment White Paper was looking to do is see how much latent capacity we've got within the workforce in Australia that we're not activating. There's been a big call for some time that we're not doing enough to entice retirees or people on a pension back into the workforce. And whilst there is a commitment to allow pensioners to work more hours without it impacting their pension, some are saying this just needs to be thrown out altogether. What's the case against just allowing pensioners to work as many hours as they want, with no massive impact on the money they earn and the tax that’s taken?

CHALMERS:

It's really about how much it costs – that's the main reason. But also we are pretty confident that the policy that we announced yesterday to allow people to work a bit more and keep their pension, if they want to work more, nobody's being forced to, we're pretty confident that that will make a difference to people – an extra four grand that they can earn before their pension is affected. We've had a look at this, we ran a trial on it. It did make a modest difference to the amount of older workers who wanted to do a few hours, pick up a shift here and there, maybe even on a trip. And so we think we've got the balance, right – what we can afford, but also what we think will work, and we've also done a heap of consultation with stakeholders and others as you'd expect us to do to make sure that we've got this right. But your broader point at the start of your question, I think is really important. I think people understand that unemployment is really low in national terms, in aggregate terms. But there's still a lot of what the economists call underutilisation in the labour market. And that really means people who'd like to work a bit more or people who are under capacity in one way or another. So, what we're trying to do with this Employment White Paper, which is called Working Future, and I encourage your listeners to check it out, is to say the labour market is about more than unemployment. Unemployment is foundational to it, but also underemployment, underutilisation, and making sure that people who want to work a bit more can.

STEPHEN:

Dr Chalmers, we'll let you get back to your Western Queensland tour. Thanks very much for joining us.

CHALMERS:

Really appreciate you having me on the show. Thanks very much.