JIM CHALMERS MP
SHADOW TREASURER
MEMBER FOR RANKIN
E&OE TRANSCRIPT
RADIO INTERVIEW
MONEY NEWS
WEDNESDAY, 1 DECEMBER 2021
SUBJECT: National Accounts.
BROOKE CORTE, HOST: Jim Chalmers, welcome to the show.
JIM CHALMERS, SHADOW TREASURER: Thanks for having me on your show, Brooke.
CORTE: All things considered, this GDP report is a pretty impressive outcome, isn't it?
CHALMERS: Not at all. I mean, this is the third worst downturn we've had in a quarter in the history of the National Accounts and it's the worst performing economy in the OECD. There have been 28 economies that have reported for the September quarter and our performance is the weakest of the lot. We want the economy to recover strongly, there have been some encouraging signs in the last couple of months , but the numbers that we got today were diabolical. They are the consequence of the mistakes that the Government made on vaccines, and quarantine, and all the rest of it and small businesses and working families are paying the price for that.
CORTE: I don't understand the point of comparing this quarter by quarter to other countries in the OECD though, just for July to September. There's so many variations, different fiscal responses, death numbers, case numbers, we chased elimination others didn't, winter versus summer. What is the point of trying to make that comparison?
CHALMERS: Well, the Government uses that comparison all the time. And they want to pretend that our economy's doing better than the rest, but what these numbers showed today was that out of the 28 countries ours was the worst performing. That's not an opinion from me - that's not a Labor Party view - that's a fact that was in the National Accounts today. The international comparisons are used all the time by economists and by the Government itself and this comparison today is not a favourable one.
CORTE: But if you do zoom out, the economy expanded 3.9% over the year. And if you look pre-pandemic to now we are one of the best performers in the OECD.
CHALMERS: Our economy is smaller now than it was in 2019. The numbers that we got today unwound the growth of the two previous quarters before it. We are realistic about the economy. We want it to recover strongly. There have been some aspects of it that have been pleasing, but some aspects which have been very troubling. There have been 200,000 jobs lost in the last two months alone. We've got two million people either unemployed or underemployed at the same time as we've got skills shortages. We've got real wages going backwards. There's a whole range of indicators which teach us and tell us that we can't be complacent about this recovery, particularly as we think about confronting the uncertainty of the omicron strain from a position of weakness in the September quarter. Again, that's not an opinion. Our economy was remarkably weak in the September quarter, that's what today's numbers show.
CORTE: I don't think you will find an economist in the country that won’t say the economy is roaring back though, the economy is recovering. All the figures show that we're already recovering from those September numbers.
CHALMERS: I've just said two or three times Brooke, that I think the economy is recovering and there are pleasing aspects to that. Everybody hopes and expects the economy to recover from the very, very low base established in the September quarter that were in these numbers today. That's what we want, but we can't be complacent about it. There's a new strain of the virus out there. Also, we've heard all this before. A lot of the things that the Treasurer was saying today about the recovery he was saying twelve months ago, he was saying in the May Budget. What happened was a bunch of mistakes were made, we had these lockdowns, and we had this big downturn in the September quarter. So my point Brooke, I'm realistic about it. My point is the economy is recovering. That is a good thing - unquestionably - but we can't have a recovery where people left behind. We can't be complacent about the recovery, because we've been here before twelve months ago. What we know about this virus is it can be unpredictable, it causes a lot of uncertainty. The fact of the matter is that in today's National Accounts, we know that we're confronting this uncertainty from a position of weakness.
CORTE: Well, we cannot have lockdowns again. I think, absolutely, these figures show that today. And you're right, real wages have been going backwards, and that's why we will have cost of living pressures front and centre in the in the federal election campaign that that's coming up. The economic picture is definitely moving very quickly.
CHALMERS: Yeah.
CORTE: Of course, the Coalition Government recently said that power, petrol and rates will be higher under a Labor government. How prepared are you to fight an election on the cost of living?
CHALMERS: I'm itching for a fight on the cost of living because, as you rightly point out, what matters here is people's capacity to pay for the rising cost of living and real wages are going backwards. You've got petrol going through the roof. You've got rent going through the roof. A lot of the other costs of essentials are rising on this Government's watch. If they want to highlight that in an election campaign, I say that's a good outcome. We can talk about how people are falling behind as a consequence - not just of skyrocketing costs of living, as important as that is - but combine that with real wages going backwards and you can understand why people are falling behind.
CORTE: Yeah, having said all of that, the one thing that was, I mean, so interesting and very important in the release today, was the household savings rate.
CHALMERS: Yeah.
CORTE: It's basically gone from 11.8% to close to 20%. Households have amassed this massive war chest of savings, and actually, that sets us up for a good December quarter. And a very strong 2022. The difficulty, potentially, for you is that when we get December quarter figures in say early March, that's going to show economic growth running at, you know, 2% to 4% in that quarter. So if today you blame the Government for September's falls, you'll have to credit them for December's gains in a couple of months.
CHALMERS: Think about it the other way, Brooke. If the Government wants to take credit for the recovery, they've got to take responsibility for the downturn. That's how I see it. You're right that the household savings rate was a really interesting part of the numbers today - very important part of the numbers, I agree with you 100% there. We do want to see some of that money - or as much of that money as possible - find its way into the small businesses of our economy. I think that is one of the things that we've got going for us, I agree with you there. Obviously, every economist thinks that when you have as downturn as big as we've just been through in the September quarter, there will inevitably be a bounce back. I want that bounce back to be really strong - not just strong, but broad and sustainable, and I want it to be the kind of recovery where people aren't left behind. The size of the recovery matters a lot but the type of recovery matters too. That's why we've got to fill those skill shortages. We've got to put opportunities within the reach of more people. We've got to get energy policy right. There's a whole bunch of things that we should be doing if we're not going to be complacent about this recovery. The economy will recover. The economy will bounce back. We want it to do that. But we have to decide what kind of recovery and we can't be complacent about it because we know from the last twelve months just how easy it is to be knocked off course.
CORTE: Well, we thank you so much for your time. Jim Chalmers, Shadow Treasurer, thanks for joining Money News.
CHALMERS: Appreciate it, Brooke.
ENDS
