Interview with Sarah Dingle, ABC Radio National Breakfast

SARAH DINGLE:

Beijing says it may take countermeasures against countries which impose these COVID screening requirements. The measures have been in response to China's significant spike in COVID cases and concerns over transparency on reporting figures. This current COVID wave in China is also having broader implications for the Australian economy. To talk us through these challenges you're joined by the Federal Treasurer Jim Chalmers. Welcome back to Breakfast.

JIM CHALMERS:

Thanks very much, Sarah. Good morning.

DINGLE:

Good morning. Treasurer, before we get to the economic implications, what's your response to Mao Ning's comments overnight?

CHALMERS:

I think countries will make their own decisions about travel arrangements and how they manage COVID more broadly. We've been pretty clear, we've taken this decision out of an abundance of caution. I don't think it's an especially onerous requirement to be frank and it's consistent with the steps being taken in other countries. If you consider what's happening – the US, Japan, India, South Korea, Malaysia, Italy, Spain, England, France and others are all taking these kinds of steps. And so it's consistent with some of the concerns that you just raised about transparency of data, it's about taking a cautious approach and it's about being consistent with a lot of countries with which we compare ourselves.

DINGLE:

Well, they might not be onerous requirements in Australia, but they probably are rather onerous in China – taking a RAT under the supervision of a medical professional in a country where the hospital system, the health system in general has been absolutely smashed and run over is not going to be easy. China is threatening countermeasures. Does that worry you?

CHALMERS:

Not especially. Again, different countries will make decisions about how they go about this. Now, there is a big wave of COVID in China at the moment, every country is still managing in one way or another this pandemic and so they will take a decision based on their own considerations just as we have on our own considerations and a lot of countries around the world are imposing these kinds of tests. And so again, our job in government is to make a decision which balances all the various factors and considerations. That's what we've done here. It's consistent with what a lot of countries are doing and it's erring on the side of caution.

DINGLE:

Your Government, in particular Anthony Albanese and of course Foreign Minister Penny Wong have made great strides in an attempt to repair relations with Beijing. Are you concerned that this could set back those efforts? And what do you think any countermeasures could consist of?

CHALMERS:

If they take any steps in response to the responsible steps we've taken, then that will be a matter for them. I'm not going to pre-empt or guess what they might do. I think there has been a welcome level of dialogue between our country and China. I pay tribute to Anthony Albanese and Penny Wong and others who have made that possible. We've said for some time that we think it's in Australia's national interest to stabilise that relationship. There's been some welcome developments on that front, but we're realistic about it too. Managing the relationship with China is a complex task, it's a difficult task, nobody pretends it's easy, there will be bumps along the road but our objective remains pretty clear and consistent and that is a more stable relationship with China and a more peaceful and prosperous region.

DINGLE:

The Australian Financial Review is reporting this morning that Australia's restrictions on travellers from China is part of a coordinated move to pressure Beijing to share more information on its COVID outbreaks. Is that correct? Is this an internationally coordinated move between the countries that have imposed these restrictions?

CHALMERS:

I don't see it precisely like that but there certainly is a lot of concern around the global health community and the global economy about the transparency and quality of data that we see out of China on COVID. I think that's very clear. If you look at what the World Health Organization has been saying about the sorts of steps that countries have been taking to manage travellers out of that part of the world. They said that these kinds of steps are understandable and that's because they have a concern, we share that concern about the quality and transparency of the data. We do need to make sure that we've got the best possible surveillance of strains as they emerge but also waves as they emerge and become more difficult to manage. And so that's really one of the key considerations here as we put these responsible restrictions in place.

DINGLE:

Chinese scientists have in the last few hours briefed the World Health Organization on the situation in China. Is that good enough for you given that this has apparently arisen out of a concern that China is not being forthcoming with data?

CHALMERS:

I haven't seen that briefing. No doubt my colleague Mark Butler and others will get themselves across any of those kinds of assurances that the Chinese make to the global health community. I haven't seen that, but my view broadly is the more transparency that we can have in these areas, the better. As you rightly introduced a moment ago, this has crucial health implications which are the most important but there's also big economic consequences for this COVID wave in China as they transition from COVID zero into a different style of managing the virus. And so in my part of the shop, considering the economic implications, we do expect there to be big pressure on the Chinese workforce, big pressure on supply chains as a consequence, that will flow through to the global economy and we won't be immune from that either. And so, all of these issues, it's really important to get as much transparency as we can so that we can understand the implications for us here in Australia.

DINGLE:

We will get to the economy in a second. The Chinese briefing of the WHO is not – I believe the content of that briefing is not public yet, but they are talking. Given that they are talking to the WHO, when will you lift these restrictions on travellers from China? This is a temporary measure, isn't it?

CHALMERS:

Well first of all, dialogue is good. If there's a conversation happening between the Chinese and the relevant global health authorities, that's a good thing, obviously we welcome that. And when it comes to the duration of these restrictions, obviously we keep that under review. One of the things that we need to do – as the pandemic, as the virus evolves and changes, different waves of the virus come and go – is to make sure that we're being responsive to that. That's really what we're doing here when it comes to this COVID wave in China. And so we keep our settings under review, we try and make sure that they evolve in sensible and responsible ways as the virus itself evolves, that's what we're doing.

DINGLE:

This decision on restrictions for travellers from China is not based on the health advice. That's been very clear over the last few hours with the release of the health advice from Chief Medical Officer Paul Kelly. We just heard Mao Ning saying it's discriminatory. It is discriminatory, isn't it? It's just about one particular country where there is not even a confirmed instance of a new variant.

CHALMERS:

Well, it's about a part of the world where we've got concerns about transparency that we've talked about, you and I've just talked about now. And it's in a part of the world where there is really quite an extraordinarily large wave of COVID cases right now. We welcome the fact that international travel is happening again and our job is to try and manage that as responsibly as we can and that's what we're doing. The chief medical officers have previously raised their concerns about how do we find better ways to keep an eye on the spread of this virus internationally? How do we get the surveillance right? How do we get the data right? And our approach that we're taking here responds to that. It's one of the reasons why the World Health Organization says that these kinds of steps that we're taking are understandable.

DINGLE:

Sure, but you know, if we're talking about the quality of data, Australia also doesn't have mandatory reporting of positive rapid antigen tests at the moment, we ended that months ago. Is it a bit hypocritical to be worried about Chinese data?

CHALMERS:

I don't think so, obviously. Our job, again, and when it comes to reporting here, when it comes to the status of our various testing arrangements is consistent with what I said a moment ago which is that our approach evolves as the virus evolves here in Australia. We've been living with this virus for years now and at every stage governments of both political persuasions have tried to make sure that our arrangements are keeping up with the development of the virus, that we strike the best balance between the health considerations and all of the other various considerations. I'm confident that ours does that. But again, you keep them under review for a reason. It hasn't been a static state of this pandemic for the last 2 years or so or more. And so, you keep everything under review. But our job is to try and make the right decisions for the right reasons. We're confident we've done it in this case and we will continue to be vigilant to make sure that the arrangements that we have here in Australia, suit the status of the virus and the pandemic.

DINGLE:

Treasurer, going to the economic impact of the COVID outbreak in China, you have identified this as a key economic risk for Australia in 2023. Have you done any sort of rough estimates? How much could this cost the Australian economy?

CHALMERS:

We haven't put a dollar figure on it but we are monitoring very closely what's happening with these supply chains which are impacted and will be impacted by this COVID wave on the Chinese workforce, on supply chains, on the global economy and on our economy as well. We expect it will be a substantial impact but that full impact is unclear. They're still managing that transition from COVID zero to another way of managing the pandemic but still got this big wave which has a little way to run yet and so there will be consequences for us. It won't be the only risk in the global economy for us this year, I think it's going to be a difficult year in the global economy. I'm optimistic about the future for our country and our economy, but I'm realistic about what's going to happen in the global economy. What's happening in China is a big part of the story but a war in Ukraine, obviously the prospects for the US, UK and Europe, and here at home the implications of the rate rises, plus the uncertainty around natural disasters. Those are the 5 big things, I think, which will be the big determinants of how our economy fares in 2023.

DINGLE:

It's also been reported that you're looking at overhauling the Productivity Commission, what needs to change, what is not working?

CHALMERS:

I am interested in trying to find a way to maintain a focus on productivity at the Productivity Commission as the key driver of growth in our economy but also look for ways to broaden and deepen its focus on prosperity and progress more broadly. And there is a real appetite in the Government to renew and revitalise our economic institutions and processes in ways that strengthen our economy and strengthen our democracy. We've been doing a lot of work on this, I've been doing a lot of thinking and writing about this over the break for a piece I've got coming up in the Monthly magazine. We've got a Reserve Bank review, we've got a Women's Economic Statement about our well‑being agenda, we're taking a different approach to the intergenerational report. And all of that is about this sense of institutional renewal in one way or another. So I do think we should be working out ways to renew and revitalise the Productivity Commission as a powerful and prominent source of independent advice to government. And I have been having conversations with various experts over the course of the last couple of months about how we go about that, I think it's an important thing for us to consider this year.

DINGLE:

So the Productivity Commission will maintain its independence and its ability to publish its reports independently?

CHALMERS:

That'd be my intention. I think its independence is a source of strength. I think it's focus on productivity is a source of strength, but that doesn't mean that we couldn't make it better necessarily. I think we should be engaging right now in this big process of institutional renewal and democratic renewal. A big part of that is making sure that all of the various agencies and processes that feed into our economic policy decisions are the absolute best they can be. And that's why we look around the world for lessons and we have the conversations with experts and economists here at home, so that if there are ways that we can make the PC even better, then I think I've got a responsibility to do that and I'm going to grab it.

DINGLE:

And just finally, the head of the Productivity Commission, Michael Brennan, it's been reported that you have a good relationship with him. He has, of course, been there for some time doing a reasonable job, many believe. Will he stay?

CHALMERS:

I've got a lot of time for Michael, I think I've made that pretty clear in various ways, and the work of the commissioners as well. This is not about any one person, it's not about a set of commissioners necessarily, it's about the institution itself. I think from memory, Michael's position comes up towards the end of the year, that would mean that Cabinet would ordinarily consider around the middle of the year what we would like to do with that position. But this isn't about Michael. This isn't about any one person or another. It's about making sure that we renew and revitalise our institutions and the Productivity Commission is a really important one. And that's why we'll be considering how we can make it better.

DINGLE:

Treasurer, thank you for joining me this morning.

CHALMERS:

Appreciate your time, all the best.