E&OE TRANSCRIPT
PRESS CONFERENCE
CANBERRA
WEDNESDAY, 2 SEPTEMBER 2020

SUBJECTS: National Accounts; JobKeeper; AFL Grand Final; Wages.

JIM CHALMERS, SHADOW TREASURER: This is the darkest day in the Australian economy for almost a century. This Morrison-Frydenberg recession is deep and it's devastating for millions of Australians and their families. But not even the worst numbers on record can do justice to the human cost of this recession. Recessions destroy jobs and they destroy opportunities for real people in real communities. We need to avoid at almost any cost a lost generation of Australians sacrificed to the worst recession in almost a century.

You've seen the numbers by now; the record quarterly contraction in the economy, the deepest recession on record, the deepest recession for almost a century. There are very troubling developments when it comes to living standards, wages, business investment, and especially consumption. The consumption numbers are so weak because people are scared. People are scared to spend because they're worried that they'll fall through the cracks, worried that they'll fall through the safety net, and worried that this Morrison Government will leave them out and leave them behind.

It's not a surprise today that Australia is in a deep recession; the surprising thing is that the Government seems to have absolutely no idea what to do about it. Australians know that the economy is weak, but they don't know what the Morrison Government intends to do about it. The worst recession in a century, a million unemployed and rising, and still no jobs plan from Scott Morrison and Josh Frydenberg. 

We have always acknowledged the devastating economic consequences of this diabolical pandemic. The Labor Opposition in the federal parliament has tried to be responsible and constructive, to agree where we can and disagree where we must, to try and improve the support being provided in the economy where that's possible. But there is absolutely no doubt that this recession is deeper, and the recovery will be weaker, because too many Australians are being left behind. The cuts to JobKeeper, the cuts to wages, the cuts to super, and the freeze on the pension will make a bad situation worse, not better. It makes absolutely no sense when unemployment is rising for government support in the economy to be falling, as it is today under this Morrison Government.

The main take out from today's figures is that we have the deepest recession in almost a century, a million unemployed and a number which is still rising, but still no jobs plan from the Morrison Government. Josh Frydenberg a few moments ago said to the million unemployed Australians and the 400,000 that he expects to become unemployed between now and Christmas that at least we're doing better than the Americans and the other countries with which we compare ourselves. That comparison is absolutely meaningless to the million people in Australia who are unemployed. That comparison is cold comfort to the 400,000 Australians he expects to lengthen the unemployment queues between now and Christmas. 

Josh Frydenberg once again told Australians that things were bad but they already knew that. What he didn't tell Australians is what he's going to do about it. Cutting pensions, cutting wages, cutting JobKeeper, cutting JobSeeker, pointing the finger and shifting the blame is not going to grow the economy and create jobs for more Australians. What we desperately needed to hear today from Josh Frydenberg was a plan for what he's going to do about it and once again it was a missed opportunity for him to tell us.

JOURNALIST: Jim, the economic effects of this pandemic were pretty much impossible to avoid. Shouldn't the Government's performance be judged on how quickly we recover from this recession rather than [the fact] that we're in a recession in the first place?

CHALMERS: The recession is deeper and the recovery will be weaker because the Morrison Government's left too many people behind. We asked in the parliament yesterday how much of this so-called $314 billion that the Treasurer talks about in economic support has actually been provided by the Morrison Government and he could only get to $85 billion. The consequence of that over-promising and under-delivering is that more Australians lose their jobs. The consequences of the Treasurer deliberately excluding casuals, aviation workers, university workers, and arts and entertainment workers from JobKeeper is that the unemployment queues which are already long will become even longer. We have always acknowledged the economic consequences of this pandemic. It's time for the Government to acknowledge that how they've gone about responding has meant that the recession is deeper, the recovery will be weaker, and the unemployment lines will be too long for the foreseeable future as the Reserve Bank has said as recently as yesterday. The onus is on the Government. Having failed to respond adequately to this recession they need to tell us what they intend to do to create jobs in the recovery.

JOURNALIST: The fact that Australia is doing better than countries such as the US and UK - you say that that's cold comfort to people. That might be so, but does it not suggest that the measures the Government has put in place thus far have been effective?

CHALMERS: The numbers that we're seeing today show that the recession is deeper than it needs to be because too many people have been left out of what is otherwise welcome support from the Government. We know that casuals and some of the other workers that I was mentioning a moment ago, they make up a large component of the record one million unemployed Australians and the 400,000 we expect to lose a job between now and Christmas. If you've lost a job, if you're one of that record one million Australian, or you're one of the 400,000 expected to lose their job, it doesn't matter at all to you whether our situation as a nation is slightly better than some of the other countries we compare ourselves to. It is cold comfort for Australians who've lost a job, cold comfort for the Australians who have been deliberately excluded from JobKeeper in particular.

JOURNALIST: Is extending nationwide programs like JobKeeper and the Coronavirus Supplement the best solution given that the third quarter is expected to show Victoria doing much worse than the rest of the country?

CHALMERS: Clearly in the future Victorian businesses and Victorian workers will make up a bigger component of some of these national programs. That's how the eligibility regime works. Now is the worst time for the Government to be winding back JobKeeper while unemployment is still rising. The Reserve Bank yesterday said that the economy needs more support, not less. The Morrison Government is heading in the other direction. That will prolong some of this economic misery and it will mean that the unemployment queues are longer than they need to be for longer. 

JOURNALIST: Is there a case to be made if some of these companies are not going to be here at the end of this recession no matter what, they're zombie companies, is keeping them artificially alive for longer, really just delaying the inevitable?

JOURNALIST: No I think the most important thing is what it means for jobs and what it means for employment. At the beginning of this when we proposed wage subsidies to the Government they initially said it was a bad idea. We welcomed their change of heart when they came around to our view. They said that the reason for having these wage subsidies was to keep as many people as possible connected to an employer. I think that that still should be the guiding principle. It's easy for people to get lost in the big numbers and it's easy for people to swim in the big, complicated spreadsheets but at its essence what recessions are about is joblessness. Our big fear for the economy is that this spike in unemployment concentrates and cascades through the generations in a way that sacrifices a whole generation of Australian workers. If we are to prevent that, we need to get serious about it. That means ensuring that JobKeeper is tailored to the economic circumstances which have got worse since the Government announced their changes. But just as importantly, if the Government's in such a rush to pull back on JobKeeper, where's the jobs plan to replace it? It makes no sense for them to be in such a rush to pull back JobKeeper, especially when they have absolutely no idea what they're going to do to create jobs once that welcome support is withdrawn. 

JOURNALIST: Is Labor's offer for bipartisan support to bring forward the second and possibly the third phase of income tax cuts still on the table? Is that something you'd like to see in the October budget? 

CHALMERS: We've said for some time that we'd have an open mind to the Government bringing forward parts of stage two of their proposed tax cuts. We've said that for some time because we think that middle Australia needs help now rather than down the track. We need to be conscious of all of the fiscal consequences of doing that. But the Government has not come forward with a proposal. There have been smoke signals about this for some time. If and when they do bring something to the table then we'll discuss it in our usual forums, in our usual way, come to a position and announce it then.

JOURNALIST: Jim how do you feel about the AFL Grand Final being taken out of [INAUDIBLE]?

CHALMERS: As a proud Queenslander I'm absolutely delighted, especially in the year when the Lions are going to win the flag, that they'll be able to win one at home. I think it's a tremendous outcome. I want to pay tribute to Premier Palaszczuk and Sports Minister Mick de Brenni for encouraging and ensuring that the AFL made a really good decision today. I know that a lot of people who live in Brisbane and the surrounding areas will be really excited about that outcome. It's a really good thing. We haven't had a heap of good news this year, like all Australians, but I think it's going to mean a lot to footy fans and to the city more broadly to have the Grand Final in Brisbane. I'm looking forward to it.

JOURNALIST: Jim in terms of Labor's preference for stimulating the economy going forward, would you rather see tax cuts for those middle income earners or would you rather see things like infrastructure project work or greater services to keep the economy moving?

CHALMERS: We want to see a comprehensive plan for jobs. All along we've been saying that the Government should be considering a range of things. First of all, get JobKeeper right so that we're responding adequately. In terms of labour-intensive projects, whether it's infrastructure or social housing, we've said for some time that those kind of projects make a heap of sense when we've got the unemployment crisis that we're facing. We've said that we need to get energy policy right. You look at the business investment figures is in the National Accounts today; they're very worrying but they've been worrying for some time. Business investment was really weak even before COVID-19 so we need to get energy policy right because business tells me that's a handbrake on investment, a handbrake on growth, and a handbrake on jobs. There are a whole range of things that the Government should be considering. When Josh Frydenberg was asked, he didn't mention a plan or put forward any ideas in his introduction a moment ago. Mark Riley asked him if he had a plan and as always he falls back on harsher industrial relations. He said he draws his inspiration from Margaret Thatcher; that will send a shiver down the spine of every Australian worker. We need a comprehensive jobs plan, not cuts to wages, to pensions, to super, or to JobKeeper.

JOURNALIST: The ABS found compensation of employees fell below 50% for the first time since 1959. Does this tell us anything about whether the economic supports have been too much in favour of business and not enough in favour of workers? How should that be adjusted going forward? 

CHALMERS: The Government needs to be supporting workers and businesses. In lots of ways it's two sides of the same coin. We need to support businesses that hang on to their workers. We need to see those things together. The wages story which is obviously incredibly troubling in these National Accounts, has been troubling for some time now. I know that you've written about that before, Paul. We've had a wages crisis, a crisis of insecure work and underemployment in this country since well before COVID-19. This crisis has accelerated and exacerbated some of those things which worry us most about the economy. Weak wages, underemployment, and insecure work have been the defining features of the economy under the Liberals for the entire duration of the Government and not just the last few months.

I'd better leave it there. Thanks very much.

ENDS