Interview with Patricia Karvelas, RN Breakfast, ABC

PATRICIA KARVELAS:

For the third month in a row the Reserve Bank has held rates in what will be a relief, I think, for many, including of course the government. But the turbulence for Labor around Qantas and Qatar is only becoming more intense with the Senate yesterday voting for an inquiry into the decision to bar Qatar from running those extra flights. Jim Chalmers is the Treasurer, he's my guest this morning. Treasurer, welcome.

JIM CHALMERS:

Thanks very much, Patricia.

KARVELAS:

Your government came into power promising transparency last year. This inquiry is good for transparency, isn't it?

CHALMERS:

I think this is the usual game playing in the Senate, Patricia. What we've seen is a decision taken in the usual way by the Minister in the same way that ministers of both political persuasions have taken these kinds of decisions in the past, and so it's a matter for the Senate how they do these sorts of things, but the decision was taken consistent with the usual way that these sorts of decisions have been taken by Liberal and National ministers in the past.

KARVELAS:

But if it's consistent, why shouldn't you open the door and be very transparent about the process?

CHALMERS:

Well, I think by answering questions about it in the public domain, like I am now, like the Prime Minister has and the Transport Minister has, we have explained that at the same time as our international capacity is actually expanding, that from time to time governments make decisions in the national interest about proposals put to us by other countries. And as I said before, this isn't inconsistent with the sorts of decisions taken, for example, by Minister McCormack in the past from the National Party. These decisions are taken by ministers in the usual way. The Senate will do what the Senate does. Our job is to make these decisions, but also to work more broadly, as Catherine King is, to try and make sure that our aviation sector, which is a key part of the economy is as strong and as competitive as it can be, and that's the focus of the Green Paper that she'll be releasing before long.

KARVELAS:

The Prime Minister says he didn't know that Qatar had been knocked back these extra flights. How could he not know?

CHALMERS:

Well, I'm not sure how I can answer a question about the Prime Minister in this instance. He has, in Question Time and in media interviews, he has explained what's happened here – consistent with the way that Transport Ministers have taken these decisions in the past. He has explained from his point of view how this decision was taken by the Minister in the usual way.

KARVELAS:

So your former boss, Wayne Swan, says this decision should be reviewed. Why don't you agree with Wayne Swan?

CHALMERS:

Well, because we've taken the decision the way that these decisions are taken – the appropriate way – and we've got to focus more broadly on the aviation sector, making it strong and competitive in the future. Wayne is entitled to his view, obviously, and has expressed a view. The government's view is that the decision was the right one, taken in the usual way, and our focus – my focus certainly – is on trying to make sure the economy is as productive and competitive and dynamic as it can be. Aviation's got a role to play there, and that's why I'm looking forward to the work that Catherine has been doing when it comes to the aviation sector more broadly, you'll see that in a Green Paper before long, and in a White Paper next year.

KARVELAS:

Did you speak to Wayne Swan after he made the comments?

CHALMERS:

I speak to Wayne all the time. I speak to him often, multiple times a week.

KARVELAS:

But he couldn't convince you?

CHALMERS:

I don't think he was trying to. We talk about other things largely, and -   

KARVELAS:

Like what?

CHALMERS:

[Laughs]. Well, we sometimes talk about superannuation, and we talk about the economy more broadly, we talk about the Chinese economy and prospects there, we talk about monetary policy, we talk about the prospects for the domestic economy and the National Accounts, all kinds of things. As you'd expect I speak to more than one of my predecessors –

KARVELAS:

Yes, you speak to Paul Keating all the time. When's the last time you spoke to him?

CHALMERS:

I have spoken to Paul in the last week or so, I think, or two weeks. I was with him in Sydney a couple of weeks ago, I've spoken to him on the phone a couple of times since then.

KARVELAS:

Okay. What did you talk about?

CHALMERS:

This is becoming a very strange interview, Patricia [laughs].

KARVELAS:

It is. Well, I've seen you talk to everyone this morning, Jim Chalmers, and I just – I want to know -  

CHALMERS:

You're looking for an edge.

KARVELAS:

I'm always looking for an edge. But I'm also looking to find out – I think it is interesting who our leaders speak to actually for advice – it's actually not a silly question in my view.

CHALMERS:

No, I don't think it is either. I speak to those two, I speak to a range of people, in business, in the union movement, I speak to a couple of my predecessors, I value those relationships. I don't think anybody's got all of the answers on their own and the key is to have people you trust who you can consult who give you advice and give it to you straight, and I think in Paul's case, and in Wayne's case, they are very valuable to me, as is their advice.

KARVELAS:

Let's just talk about Qantas and the reset that your government hopes they'll take. Is the best way for a reset that they pay back JobKeeper? Would you like to see it paid back?

CHALMERS:

Look, we've made it clear that we understand that people are angry at Qantas, and they're angry at Qantas because the country has done what it can to support Qantas through a difficult period during COVID, and I think the least that Qantas can do is to recognise that anger and respond to it. I've seen Vanessa Hudson, the new CEO at Qantas, acknowledge and accept that her main priority needs to now be to regain and maintain the trust of their customers, but also the country more broadly. No doubt they are looking at ways to do that and that's a good thing, because people are angry at Qantas for good reason, for justifiable reason, and we need to see Qantas in one way or another address that and respond to that in a meaningful way.

KARVELAS:

RBA Governor, Phil Lowe, held rates in that final decision of his tenure, but you know, he did say there could be more. Do you think there will be more interest rates, Treasurer, rises, rather?

CHALMERS:

Yeah, I'm not going to make a prediction about that. I think the statement that the Reserve Bank Board released yesterday was really important, and really interesting, because it pointed to what I think are the two main issues, the two main factors or forces which are buffeting our economy right now. First of all, the global uncertainty, which is represented, I think, most sharply by the slowdown in China, which we monitor very closely, combined with the financial squeeze on people as a consequence of these interest rate rises which are already in the system. Now, we'll get National Accounts data later this morning at 11.30 and we'll see what that says at the time, but we already know that the combination of those two things, China and interest rates, is slowing our economy quite considerably. We've seen that in the data already which is already public. People are under pressure, and the global economy is a pretty uncertain place right now, and China is the sharpest representation of that. And so we saw both of those things in the statement yesterday. Obviously we welcome the third interest rate pause in a row because people are already under enough pressure, but they're still under pressure, and that's why the government's highest priority is to roll out cost-of-living support in a way that takes the edge off inflation rather than add to it, and we're making welcome progress on that front.

KARVELAS:

We've talked about China before, but you say the sharpest representation is China. How sharp is it getting? What is the latest advice you have?

CHALMERS:

Well, I guess the point I'm making there, Patricia, is we've seen this global economic uncertainty for a little while now, and we haven't been immune from it, but I think the most pressing part of that, the most troubling part of that, frankly the most concerning part of it is developments in China – that's the part of the international scene that I monitor most closely right now. We've seen particularly in their property sector, but also in relation to their retail, in relation to their exports, that the Chinese economy has been slowing quite considerably, and that's obviously important to us when our own economy is slowing considerably as a consequence of some of these other forces, the war in Ukraine is part of it, domestic factors as well, inflation and higher interest rates, and so China really is something that we watch incredibly closely. I think most advanced economies are watching with great interest the developments in China. The authorities there have flagged some kind of response to that slowdown in China. That's important for us as well. We don't yet know what the numbers will say at 11.30 for our own economy, but our expectation from the data we've seen already is that the combination of China and higher interest rates are putting serious pressure on our economy. We've got some things going for us though; the labour market's strong, services exports, education and tourism have been strong, we've got the budget in much better nick in case we need to respond at some future point. So we've got things going for us, but the challenges to our economy are substantial.

KARVELAS:

Just another question, Treasurer, before I let you go. The Greens want you to pay superannuation on paid parental leave. This is something you've said you want to do, but they actually say they want to link it to your super tax concessions bill. Do you plan to do something on this soon?

CHALMERS:

We have said publicly and repeatedly that we intend to pay the superannuation guarantee on paid parental leave when the budget circumstances permit, and we've made some good progress on that, on getting the budget in much better nick so that we can fund our priorities, and one of our priorities which we've already funded is a substantial expansion of paid parental leave, and that's important too. So, yes, we intend to act on this, we've said that publicly and repeatedly already. The Greens know this –

KARVELAS:

But when?

CHALMERS:

Well, that's to be determined.

KARVELAS:

But why do we have to wait?

CHALMERS:

Well, what we did at the start of the government is, we had a choice to make, given the budget constraints. We had a choice to make – do we expand paid parental leave first, or do we pay the super guarantee on paid parental leave first. We went for the expansion in paid parental leave as part of a massive agenda of women's economic participation, led so ably by my friend Katy Gallagher. We've got a big agenda here – early childhood education, paid parental leave, so I don't accept your characterisation. We said that we will do this when we can afford to do it – the Greens know this. They are just looking for excuses to vote with Peter Dutton's Liberal Party, as they have been doing across a range of areas. This is their latest excuse. They know that we intend to act on this front, and we will when we can afford to.

KARVELAS:

Treasurer, thank you.

CHALMERS:

Thanks, Patricia.