E&OE TRANSCRIPT
PRESS CONFERENCE
CANBERRA
WEDNESDAY, 4 MARCH 2020
SUBJECTS: National Accounts; Impact of Coronavirus on the economy; Scott Morrison’s failure to provide economic leadership; Stimulus; Newstart; Infrastructure.
JIM CHALMERS, SHADOW TREASURER: Today's National Accounts show that the economy grew more slowly in the last quarter than in the one before. Annual growth was well below trend once again and a full percentage point slower than it was before Morrison and Frydenberg took over as Prime Minister and Treasurer. Annual growth has slowed by something like a third since Morrison became the Prime Minister of this country.
If we look at the detail in the National Accounts we see that wages growth fell, consumption growth was weak, business investment declined for the third quarter in a row, and the private domestic economy didn't grow at all in the quarter. All of these things were happening before the worst of the fires and well before the Coronavirus hit. The numbers show that there's been substantial weakness in the economy before the virus and before the fires. The problems in our economy didn't just show up with the Coronavirus and they won't disappear when the Coronavirus does. We are in a weaker position as a country to deal with the serious challenges flowing from the outbreak of the Coronavirus because of the inaction and the incompetence of the Morrison Government.
These are serious times. We've repeatedly said that we think that the Coronavirus fallout will be substantial. How substantial remains to be seen but there will be serious economic implications of the outbreak of the virus and from the steps that Governments have taken around the world to respond to that. Australia is crying out for the economic leadership that Scott Morrison has been unable or unwilling to provide to deal with the challenges which are laid bare in these National Accounts and which have been around for a very long time now.
JOURNALIST: For my own state, there are some concerns out of there that state final demand is down 0.2 per cent. This is the second consecutive quarter of negative growth. There are calls and concerns about WA being in a domestic recession. What's your response to those concerns from my state?
CHALMERS: Growth has been uneven around Australia for some time now. Overall the West Australian economy has been really well managed in recent years but those state numbers are notorious for bouncing around and our economy is notorious for growing in uneven ways throughout the year. That's what that reflects. There are a bunch of serious issues in the national economy. I ran through some of those. It's a genuine concern that business investment's gone backwards for three quarters, that consumption and wages have been weak, and that quarterly growth went backwards nationally. These are our concerns.
JOURNALIST: What about wage growth being that weak? Are you hearing a lot of concerns from your average Australian about how they're going to go for the rest of the year, not just global headwinds now, we're talking about really slow, negligible wage growth?
CHALMERS: As weak as the economy has been Australians fear with some justification that things are about to get worse before they get better. That's an understandable and justified feeling in the community. For a long time now Australians have felt that no matter how hard they work they just can't keep up with the rising costs of childcare, electricity costs, health costs and all the rest of it. Australians don't ask too much of their Governments. They want the opportunity to get ahead and not just get by. With the way that the economy has been mismanaged by Scott Morrison and Josh Frydenberg that feeling that they can get ahead and not just get by is disappearing. That's been a feature of the economy since well before the Coronavirus hit. The Government should not try to excuse or explain the weakness in the economy which has been around for some years now by pointing to the Coronavirus. Yes the Coronavirus will have a substantial impact but this year's Coronavirus does not explain or excuse last year's economic weakness.
JOURNALIST: The Treasurer's talking about the bushfires and the Coronavirus having a major impact on the March quarter? Do you fear that we could see a negative number?
CHALMERS: There's a strong expectation that the March quarter will be weak. That expectation is well-founded. There have been serious challenges in the economy this quarter. The economy was weaker than it should be before we hit this quarter but many economists expect March to be remarkably weak. Just how weak remains to be seen.
JOURNALIST: The Government has said that the response to the Coronavirus will be a targeted and scalable economic stimulus. Given that there's a bipartisan approach in the Coronavirus outbreak will you be supportive of that stimulus package? What would you do differently? Have you made suggestions to the Government?
CHALMERS: The Government seems to have a new position each day and their language has certainly changed over the last week about the need for stimulus. We've been saying that something needs to be done to help businesses, workers and communities through the challenges of Coronavirus. We've also said for some time that there are broader issues in the economy which have been left unattended for too long. We've always been in the kart for the Government to come forward with a genuine economic plan to boost growth which is at risk during this period but which has also been remarkably weak for some time. Our preference is to be bipartisan when things are serious like they are right now. If the Government brings forward a good package then we'll support it. If it's insufficient, poorly designed or we think it's going to miss the mark we will make those points. Those are our responsibilities as the Opposition. There is a need for something to be done. The question is whether the Government has left things for too long. We will examine anything they bring forward in good faith and we'll support it if we can.
JOURNALIST: The Deputy Prime Minister has just called on the states and territories to bring forward any infrastructure projects to stimulate the economy. Do you second that call to the states and territories?
CHALMERS: There is capacity for more infrastructure investment to be brought forward and not just big projects either but maintenance projects in local communities that have the capacity to create jobs and give employment to communities that desperately need it. If the Government is responding to the calls that we've been making since the middle of last year then that's a good thing. We'll have a look at the final form of those efforts. It's a little bit concerning that it is only now that the Deputy Prime Minister is getting off his backside to do something about infrastructure. The need has been obvious for a very long time now.
JOURNALIST: Given the Government's language about a modest package of stimulus do you predict it's going to be sufficient? What would a sufficient stimulus in the Coronavirus crisis be?
CHALMERS: It remains to be seen what they'll bring forward and I don't want predict or pre-empt what they might do. They've obviously been signalling that they want to do something to help businesses in specific sectors. I spent a lot of time when Parliament wasn't sitting in North and Far North Queensland holding roundtables with the tourism, aquaculture, retail, hospitality, and education sectors. A lot of businesses are in for a rough period. They deserve support from the Government. We don't yet know what support the Government intends to come forward with. They haven't made it clear how big the plan might be. It’s only in the last few days that they've conceded that the economy needs stimulus. We'll examine all of those details and we'll come to a view. The concern is that the Government has been sitting on its hands for so long. We don't want to see them do too little, too late. We don't want to see them take so long to come forward with a plan that's been absent for so long that it doesn't reach businesses in time to get them through a difficult period.
JOURNALIST: The Treasurer seems to have ruled out any cash handouts to consumers. They had a dig at Labor's one in the meantime. Is that something that should be considered to get people spending and help retailers and others?
CHALMERS: There are ways to boost consumption in the economy which aren't necessarily cash transfers. There's a case that others have made and we agree with that Newstart could be responsibly increased because that would not just be good from a social justice point of view, but also good for the economy because every dollar would find its way into the shops and businesses of this country at a time when they desperately need it. We've got an issue with consumption. There are a range of ways you can deal with that. We've made some constructive suggestions over the last eight months. The Government should pick them up and run with them. Thanks very much.
ENDS
