JIM CHALMERS MP
SHADOW TREASURER
MEMBER FOR RANKIN
E&OE TRANSCRIPT
DOORSTOP
PARLIAMENT HOUSE, CANBERRA
WEDNESDAY, 1 DECEMBER 2021
SUBJECTS: National Accounts a story of a mismanaged pandemic and a mismanaged economy; Australia's economic performance last quarter the worst in the developed world; Morrison Government scare campaign about petrol prices and interest rates; Scott Morrison’s biggest lie is that he’s done a good job managing the economy; Morrison and Frydenberg always take credit but never responsibility; Coalition’s failure to tackle skills shortage at the same time two million Australians are searching for work or more hours; Omicron variant; Labor’s approach to the Budget; Housing affordability; Greg Hunt.
JIM CHALMERS, SHADOW TREASURER: This is a really important snapshot of the Australian economy. This is a story of a mismanaged pandemic and a mismanaged economy.
What it shows is that the contraction in the September quarter in Australia was the third biggest since these records were first kept. This shows that Australia's performance last quarter was the worst in the developed world.
Of the 28 countries from the OECD which have reported their September quarter figures, Australia ranks dead last. Australia under Scott Morrison and Josh Frydenberg, in the September quarter, has the worst performing economy so far. The worst in the world.
It didn't need to be this way. This is the downturn that we didn't have to have. It comes courtesy of Scott Morrison's failures on vaccines, and quarantine, and economic support, which led to the economic carnage that we saw in the September quarter. These are the costs and consequences of Scott Morrison's mistakes when it came to managing the pandemic.
This is Scott Morrison's fault but the bill is being paid by small businesses and working families in middle Australia. Throughout the September quarter, our economy was shedding billions of dollars a week because of the lockdowns made necessary by the failure to order enough vaccines and the failure to build purpose-built quarantine. This is the story laid bare by the national accounts today - a story of a mismanaged pandemic and a mismanaged economy as well.
Our economy has three defining features. First of all, the worst performing developed economy in the September quarter. Secondly, two million Australians unemployed or underemployed at the same time as we have skill shortages. And skyrocketing costs of living at the same time as real wages are going backwards.
So spare us this rubbish about Scott Morrison and Josh Frydenberg being good at managing the economy. Of all of the lies that Scott Morrison tells the biggest lie is that he's done a good job managing the Australian economy. The facts tell a very, very, different story. The 28th worst developed economy out of 28 in the September quarter so far. The Government is in a rush to pretend that the September quarter doesn't matter. It matters a lot to the small businesses and working families who pay the price for Scott Morrison's mistakes.
This September quarter should not be lightly dismissed by the Government for a range of reasons. First of all, these numbers show that we confront the uncertainty of a new strain of the virus from a position of weakness. It also shows that everything that Josh Frydenberg said this time last year, and last Christmas, and in the May Budget, about the economy coming roaring back has proven to be absolute rubbish. Josh Frydenberg said that the economy was roaring back and instead he gave us the third-worst quarterly contraction in the history of the National Accounts. We have heard all of this talk before about the recovery in the Australian economy.
We desperately want this recovery to be strong, and broad, and inclusive, and sustainable. We desperately want the economy to come back strongly so that working families around Australia get the opportunities that they need and deserve, but we can't be complacent about this recovery. We can't be complacent about a recovery when we've got the omicron strain threatening and where we've got a government which has done nothing to plan for the future. What we desperately need here is a broad, and inclusive, and sustainable, and strong recovery. We won't get that under this Government unless they pay attention to the defining weaknesses in the economy - real wages going backwards, cost of living skyrocketing, skill shortage at the same time as millions of people are looking for more work. We desperately want this national economy to recover. It's not a recovery if working families don't feel the benefits.
JOURNALIST: A 1.9% drop was a lot smaller than a lot of economists have predicted. I know it's still significant, but it's still a lot smaller than they had predicted. So do you think that the Government does have some credit that it hasn't been quite as bad as it could have been?
CHALMERS: Of course not. We are talking here about the third-biggest contraction in the history of the National Accounts. We're talking about an economy which is stone cold, motherless last when it comes to the OECD countries that have reported for September. The issue that you raised is cold comfort to all of those small businesses, all of those working families, who got absolutely pummelled by the mistakes that Scott Morrison made on vaccines and quarantine. The issue with this September quarter is it showed that the issues in the Australian economy are Scott Morrison's fault but the bill is being paid by small businesses and working families around Australia. Whether it is exactly what economists predicted or not, matters not at all to people who are doing it tough unnecessarily because of the mistakes that Scott Morrison made.
JOURNALIST: Jim, businesses say that the biggest issue they're facing is the lack of skilled workers - both through migration and through training. You've obviously criticised the Government extensively on wages but what would you do differently specifically to address the skilled labour shortage, in relation to migrant workers, and also to actually lift wages?
CHALMERS: The fact that we have two million Australians looking for work or for more work at the same time as we've got skill and labour shortages, doesn't just speak to the failures of the last two years - but the last eight years. What we've had here is a failure of the Morrison Government - and the LNP Governments before him - to train enough Australians for these opportunities as they emerge. We've got this big mismatch in the Australian economy. There are opportunities in parts of Australia, but what the Government hasn't been able to do is to match people who are looking for those opportunities with the opportunities themselves. Already, we've got policies out there on skills. Already, we've got policies out there on secure work. And you can expect in both of those areas to hear more from us.
JOURNALIST: Jim, just on the omicron variant. Josh Frydenberg in a press conference before to journalists said we have to say cool headed and learn to live with the virus. Do you think the Government is taking serious the economic impact future variants could have on our kind of recovery coming out of the pandemic?
CHALMERS: I think the Government is showing characteristic complacency about the economy and about the pandemic. This kind of complacency is what stomped on the green shoots of the recovery this time last year. This time last year they told us that everything would be fine, and the economy was coming roaring back, and they were patting themselves on the back, and then they delivered the third-biggest economic contraction in the history of the National Accounts and the worst in the developed world so far. It's this kind of complacency which is the enemy. If there's one thing that defines the errors that have been made on vaccines, and quarantine, and in the economy, it's this complacency. This Government is always in a rush to take credit for the recovery but they won't take responsibility for the downturn, even though it's the decisions that they made which caused the lockdowns, which caused this big contraction in the September quarter
JOURNALIST: Has Labor dumped its plan to introduce fuel standards and emissions?
CHALMERS: I saw that story today. Obviously, we've said repeatedly that in the coming weeks we will announce our comprehensive plan for cleaner and cheaper energy - so that we get more jobs and opportunities for more people and more investment. That is an ongoing process led by Chris Bowen and Anthony Albanese and the Shadow Cabinet. I'll make my contribution at the Shadow Cabinet, but our position is really clear. From Scott Morrison, when it comes to climate change, you get a pamphlet that he doesn't believe in. From Labor, you will get a comprehensive plan to get our emissions down but also to get our energy costs down - so that we can benefit from the booming investment, and jobs, and opportunities, which will flow from striking the right level of ambition here. Good climate policy is good economic policy. We will deliver both when we announce our comprehensive plan in the coming weeks.
JOURNALIST: Jim, today the Treasurer was asked about Dr Lowe's comments around how he wants to get interest rates up. And he said that under the Coalition mortgage repayments are $600 lower.
CHALMERS: (LAUGHS) Yeah. I saw that.
JOURNALIST: And we've also had the Prime Minister say that he thinks that interest rates will be lower under the Coalition. Are you concerned that the Reserve Bank and the Government are kind of pointing in different directions?
CHALMERS: This Treasurer has got a pathological need to take credit for everything and to take responsibility for nothing. The idea that Josh Frydenberg is now patting himself on the back for interest rates at 0.1% is laughable and I noticed that some of the journalists in the room when he said it laughed at him as well. It's a joke. Don't forget, when it comes to the Prime Minister's claims about interest rates under Labor, the last time they ran this ridiculous scare campaign interest rates went up six times after the re-election of a Coalition government.
So this goes into a pile with all the other lies that this Government has told about the economy. The biggest lie that they've told us if they've done a good job managing the economy. I think we'll hear more of this kind of rubbish between now and the election as we get this kind of bin-fire of dishonesty, and disunity, and desperation from Scott Morrison and Josh Frydenberg on the cost of living. On their watch the cost of living has skyrocketed while real wages have gone backwards, as a consequence working families are feeling the pinch. They've been in office now for almost a decade, they've got this pathological need to take credit for everything that's good and to take no responsibility for everything that is difficult. And I think Australians are onto them. They are leaking credibility every time they open their mouth.
JOURNALIST: Do you think that the Government bears some responsibility for interest rates being so low at the moment through their decisions on policies?
CHALMERS: Of course not. Interest rates are near or at 0% at the moment because of the decisions that the Reserve Bank took throughout the pandemic. The idea that Josh Frydenberg is sitting in his office pulling on levers that have led to these low interest rates is absurd. We all know why interest rates are low. He diminishes himself and his credibility claiming - or the Prime Minister claiming - that they've played a big role in this. I think Australians know it. They're facing skyrocketing petrol costs, skyrocketing rent, their real wages are going backwards, they're not dumb, they know that interest rates will go up at some future point no matter who is elected in March or May next year. I think it would be much better if Josh Frydenberg actually levelled with people about what's going on.
JOURNALIST: I think what I was referring to was before the pandemic there were many calls from the RBA to have Government policies that would get the economy moving so that interest rates didn't have to keep on being pulled down. So do you think that the lack of policies from the Government to get the economy moving before the pandemic hit in some way contributed to these record low interest rates?
CHALMERS: I would come at your question a little bit differently. I think there have been times in the last eight years where the Reserve Bank and the Government have been operating at odds rather than in concert and that is a concern. Obviously, the Government provided some support during the pandemic, and the Reserve Bank's provided some support during the pandemic, but there has been a mismatch at times, perhaps the Reserve Bank with its foot on the accelerator and the Government with its foot on the brake over the last eight years. Our job is to make sure that a future Labor government works fiscal and monetary policy in concert rather than in conflict, particularly as the economy recovers.
JOURNALIST: Australia's obviously racking up a lot of debt at the moment, the money is still flowing from the Government but we don't really have a sense of when that'll stop and when the austerity measures will start kicking in. When do you think they should begin?
CHALMERS: First of all, the Government has been saying that they will flick the switch to austerity but they'll do it after the election. And that should strike fear in the hearts of every Australian. This Government will have harsh cuts to Medicare, and in other areas, but they won't tell us what they are until after the election. Those are the strong signals that they are sending. We think that they should level with the Australian people about the cuts that they intend to make to essential services to start to address this trillion dollars of debt that they've racked up with not enough to show for it.
We've been very clear about our priorities in the Budget. We've said that the Government's racked up this trillion dollars - and the Budget is full of rorts, and waste, and mismanagement - and that part of the task would be starting to deal with those rorts and that waste. We need to grow the economy, we need to prioritise bang for buck, and make key investments. And we also need to look at things like multinational tax reform. These are the sorts of ways - in time, when the time is right - that a government of either persuasion should be looking to address this trillion dollar debt legacy that will be left by this Government. This is the most wasteful government since Federation, when it comes to the rorts, and the waste, and this mismanagement, which characterises Josh Frydenberg's Budget.
JOURNALIST: Obviously the Government's very excited about the level of spending that we might see over the next 12 months. But as you say, people aren't stupid, cost of living is becoming a bit of a pressure. It's a talking point for Labor. Are you concerned that that's going to damage the amount of spending we're going to see?
CHALMERS: I think more importantly, it's a talking point out in the community. I've spent much of the last year in regional Queensland for example, and they know that their real wages are going backwards at the same time as the cost of living skyrocketing. I think that that will be a key issue in the election. The Government wants to have it both ways. They want to pretend that they are responsibly managing the Budget at the same time, as we know, that they're spraying around all of this election spending in marginal seats. What we've said, as you know, is it's not just the quantity of spending that matters, it’s the quality of spending. And their biggest failures are when it comes to a lack of value for money in their spending. They spray around money in marginal seats when elections are in the offing. There'll be cuts that come after the election. I think there's a far more responsible way to manage the Budget along the lines that I've outlined.
JOURNALIST: So quality, not quantity. You'll be running deeper deficits then?
CHALMERS: We don't know what deficits we would inherit from the Government. We've still got the mid-year update on the 16th of December. The Government says they'll do a Budget in March. And then we'll have a pre-election update as well. So there's two or three more opportunities for the Government to update their Budget. What we've said is that we will have a more responsible approach then the Government. We'll focus on quality as well as quantity of spending but we don't yet know what the Budget position will be that we inherit, except that we know there'll be a trillion dollars in debt and the country doesn't have enough to show for it.
JOURNALIST: Jim, just one last question. You represent a seat in the country which is a high-growth corridor. How concerned are you around kind of housing affordability, particularly around that South East Queensland area?
CHALMERS: When it comes to rent, when it comes to home ownership when it comes to social housing - really, right across the board - the housing market is tougher for people now than it was when this Government came to office. What we've said, is our first priority is social housing, building tens of thousands of new homes. We've said that we'll have more to say in a policy sense between now and the election. People are finding it incredibly tough to get into the housing market at the same time as their other costs of living are skyrocketing and making it harder to save for a deposit. Their real wages are going backwards and they feel like they're going backwards, and with good reason too. What we would like to see from this Government is some recognition that after almost a decade in office, it's harder and harder for working families to make ends meet, and that includes in the housing market and it includes saving for a deposit.
JOURNALIST: Just quickly. There are reports that Greg Hunt is resigning. Do you have any comments on his role as Health Minister during this pandemic?
CHALMERS: I'm not sure if Greg is resigning, but it seemed like Josh Frydenberg kind of gave the game away a little bit in his press conference. If Greg Hunt is resigning, I would say this. It ought to be possible for us - on either side of the political divide - in recognising that we've had substantial differences over policy, to also recognise the substantial role that Greg has played in this Coalition government and for twenty years in the parliament. Twenty years in the parliament, including the last eight years in the cabinet, is a substantial sacrifice. And I'm sure that if he is resigning his family is looking forward to seeing more of him. I don't love all the decisions that he's made, I don't support all the decisions that he's made. We can have an argument about how effective he has been as a Minister but he has been a big, big, part of cabinets in this place. I'm sure he's done his best, I'm sure he's put a lot of effort and a lot of time into that. And so, if he is resigning, on a personal note, I wish him well. Thanks very much.
ENDS
