Press conference, Canberra
JIM CHALMERS:
I wanted to pay tribute to Mikhail Gorbachev first, and then I'll say something about the Jobs and Skills Summit, and then happy to take your questions. The curtain has come down on one of the world's most significant leaders. He was a pivotal figure at a defining moment. When the world saw conflict and stalemate, he saw peace and possibility. He was the epitome of courage and vision and he was a reminder that it takes more courage to end a war than to start one. And his gift looks even more remarkable in the contemporary world. There is no history of the 20th century that doesn't have him playing a central role in it. So the world mourns his passing today.
Today, we have in Sydney a meeting of the National Cabinet and obviously we have the Jobs and Skills Summit tomorrow and Friday. This is all about bringing people together to confront our most pressing economic challenges, to address stagnant wages and skill shortages and to strengthen the economy in a way that there are more opportunities for more people in more parts of our nation. And we believe that more can be achieved when we work together. This isn't just the defining instinct of a Jobs Summit, it's the defining instinct of the Prime Minister and his Government. This doesn't start tomorrow morning and it doesn't end on Friday arvo. We've been really energised, we've been really encouraged by the genuine spirit of cooperation and collaboration that has emerged in recent weeks.
We've had more than 100 consultations and workshops and many summits right around Australia, and in every part of our economy, and in many ways that has already made it worth the effort. People are clamouring to be part of this effort, and that's really welcome as well. This doesn't mean we have unrealistic expectations about the next few days. We're not naive. We know that there will be issues which are contentious, and we know that not everything that will be pitched up this week can be progressed by the Government. We're looking for broad consensus not unanimity. We're looking for collaboration, not conflict. We're looking for common ground and common cause and the common good. Now this is our big chance to put an end to a decade of needless conflict and division, missed opportunities and warped priorities which have weakened our economy made wages stagnant, seen living standards flatline. This is our opportunity to see what we can achieve if we work together. We recognise that a better future relies on a better way of governing. That's what we're all about - not just over the next few days but every day as well. And with that, I'm happy to take your questions.
JOURNALIST:
When are you expecting to see outcomes after the end of the Summit. Are we expecting some sort of announcement or statement on Friday afternoon, or should we wait until early next week?
CHALMERS:
That's our intention. What we would like to do is to agree to a handful of more‑or‑less immediate actions and announce them on Friday afternoon along with the areas where there's sufficient common ground for more work to be done. And so if it plays out as we anticipate, you could expect on Friday afternoon a list of initiatives that the Government will take working together with participants at the Summit that could be implemented let's say this calendar year, and then a whole bunch of areas where further work is necessary - whether that's to inform subsequent Budgets or the Employment White Paper or other processes, including the Commonwealth‑state processes. Eliza.
JOURNALIST:
Premiers are clearly expecting pandemic leave payments to remain as long as workers are forced to isolate. Will the Federal Government extend those payments beyond the September 30 deadline? And can the Budget afford it?
CHALMERS:
Obviously there'll be discussion at National Cabinet today about COVID and about the best way for governments at all levels to manage the ongoing pressure that COVID puts on our communities and on our economy. I'm not going to pre‑empt that conversation. There'll be some health advice presented and the Prime Minister and the state and territory leaders will make decisions about the best way to manage and respond to that health advice.
There will also be a conversation at National Cabinet about skills, about migration and other important areas in the lead‑up to the Jobs and Skill Summit and I don't really want to pre‑empt those discussions.
We'll go Sam and then Stela and then Rachel.
JOURNALIST:
There's a principle at play here though which is - do you think that pandemic support should maintain as long as mandatory isolation is in place? Surely you can answer that question. Are you worried about people taking so much time out of the workforce when they get COVID? And if I could just ask about the stage three tax cuts, there's a new distributional analysis out that says that blokes are going to get $160 billion and women are going to get $82 billion of that $243 billion split over 10 years. So if you're interested in addressing equal pay, isn't that going to reinforce that - those tax cuts?
CHALMERS:
First of all, on pandemic leave, we've shown a willingness in the past to be responsive to the conditions, but that kind of support can't go on forever given the economic and fiscal situation that we've inherited. So there'll be a conversation about that, no doubt at the National Cabinet and again, I'm not keen to pre‑empt it.
When it comes to the stage three tax cuts as I've answered, I think a number of times - many of you have asked - our position that we took to the election hasn't changed. Stela.
JOURNALIST:
Just back on the pandemic leave payments. I know you don't want to pre‑empt anything but you didn't answer part of Eliza's question where she asked if you think the Budget can afford it. Obviously you have extended them once before. Is there capacity there for just a further extension by maybe three, six months?
CHALMERS:
The Budget's got some pretty serious constraints. We've inherited a Budget, which is heaving with a trillion dollars in Liberal Party debt. And so we've got to work out where we can get maximum value for money, maximum bang for buck and the commitments that we make. And I'm proud of the extension that we made, working closely with the state and territory leaders in the past. But I think the reality, accepted on all sides, is that that kind of support can't continue forever. It's also contingent on some of the other ways that we're responding to this COVID health challenge and economic challenge. And one of the issues at play there is the length of the isolation period. And again, not wanting to pre‑empt the discussion that will happen in Sydney this afternoon. But that's a relevant consideration as well, I would have thought.
JOURNALIST:
So the pandemic leave payments aren't going to be extended at all, is that what you're saying? And just separately on the Jobs and Skills Summit, you said that you're going to be able to announce some things on Friday, hopefully, and some things later on. In what areas are you hoping to be able to have some immediate announcements?
CHALMERS:
First of all, on paid pandemic leave, I don't have much more to add. There will be a conversation, no doubt, at National Cabinet, which will rely in part on some of the other health advice and some of the other arrangements around the management of COVID. When it comes to the areas where we want to find some common ground, there's some pretty serious challenges in the economy right now. We've had a decade of stagnant wages and flatlining living standards. We've got an economy which is nowhere near as productive as we need it to be. We've got pockets of the Australian community locked out of the opportunities of a labour market, which is at the moment at 3.4 per cent unemployment nationally. And we've got skills and labour shortages right around the country, which are acting as a handbrake on the economy. So we've got a serious set of challenges, and they are broadly agreed amongst, right across the board, when it comes to the participants in the Summit, and much more broadly, as well. So we know what the challenges are, we know what the destination is, which is an economy which is generating more opportunities for more people, in more parts of the country. An economy where, every Australian who wants a decent, secure, well‑paid job can find one. And every Australian employer that wants a well‑trained, enthusiastic employee can find one - those are the objectives as well. What the Summit is about, is the specific way to get there, when it comes to the agreements that might be reached, or the common ground, that might be found at the Jobs and Skills Summit. Obviously, we're looking in areas like skills, we're looking in areas like migration, there are issues around participation, there's a whole conversation to be had about enterprise bargaining, to try and get wages moving again. So those are the sorts of areas that will be contemplated at the Summit. I might just try and impose some order here, we'll go Phil, then Mark, then here, and then up the back.
JOURNALIST:
When the Morrison Government brought all the same parties together that you're bringing together, it was universally agreed that one of the big problems with enterprise bargaining was the BOOT was too rigid, it was discouraging employees from using bargaining and falling back on awards. You are a student of the Keating area, of the Keating and Hawke era. Do you agree the BOOT, at a minimum, needs to be made more flexible? And that the ACTU, should agree to that, along with business [inaudible]?
CHALMERS:
We do have an open mind to that. And as you know, you follow it as closely as anyone, you know, our position on that has evolved over time. And the view that we take of that, is that if there is sufficient common ground found, between employers and the union movement on something like that, when it comes to bargaining, then we will have an open mind to that, we'll try and be supportive of that - if it's in accordance with our own objectives in the labour market. I think Tony Burke's made it really clear, that his position on that has evolved. And so if there is genuine progress made on the better‑off overall test, it would be strange for us to ignore it.
JOURNALIST:
Would it be too far in your view to go back to the no disadvantage test. Is it too big a leap for Labor to embrace the Keating model?
CHALMERS:
I'm reluctant to weigh too much further into Tony's portfolio areas or to pre‑empt the discussion at the Summit. But I think we have shown a willingness to be open minded about possible changes in the industrial relations system and to give them their credit, both employers and the ACTU have shown a similar willingness. One of the things that we found especially encouraging in the lead up to this Jobs and Skills Summit, which in this regard has surpassed our expectations, is that people aren't just looking to make arrangements with the Government. They're looking to make arrangements and find common ground with each other. And that, for me has been tremendously encouraging to see the way that COSBOA and the ACTU, to see the way the Tech Council and the ACTU - there's been a whole range of examples of where people haven't waited for government to dictate some kind of agreement and try and sign people up to it, they've done their own work. And we appreciate that and we're grateful for it. Mark.
JOURNALIST:
Treasurer, Labor's own analysis of the childcare policy says that for every dollar outlay, to get at least two back in economic benefit, it releases at least 100,000 women back into full time work, and millions more hours each week. It just seems like such a no brainer, why not bring it forward?
CHALMERS:
A couple of things about that. Our childcare policy will be a game‑changer for Australian parents. And in a world where we want people to have the choice to work more and earn more if they want to, then this will be one of the most substantial things that we will do in this term of the Parliament. I know that people that I respect greatly, would like us to get that up and running sooner than what we have currently planned to do. And what I say to them privately is the same thing I'll say to you now, Mark. It's not cost free to bring forward something as game changing and as expensive, frankly, as our childcare policy. And so we need to weigh that up against all of our other priorities. And my concern here, is that people might see a July start date for a game‑changing economic reform, which provides cost of living relief with a big economic dividend, is in some way falling short. July is not far away. It's a big game‑changing investment that we're proud to make. It will be good for mums and dads, and good for the economy, and it will kick off on the first of July. We did have a look at bringing it in earlier. I've said that publicly before, we did have a look at that. I spoke to Amanda Rishworth before the election, and with Jason Clare and Anne Aly after the election, about doing that. I've spoken to many of you in this room about our efforts to see if that was feasible, but it's very costly. There may be other issues associated with bringing it forward. We're proud to bring it forward on the first of July, it will make a big difference.
JOURNALIST:
Can you explain the element of cost because the policy says it has a net economic benefit so it's not a cost -
CHALMERS:
The budget rules see that differently. Yes, there is a massive multiplier effect investing in childcare. But the way that the budget rules are set up mean that we account for the cost, but not for the benefit.
JOURNALIST:
Back on tax cuts, you've said they're legislated, it's not your policy to change them, didn't take it to the election and all those sorts of things. But have you given any consideration to tinkering with some of the more extreme ends of this. The same analysis that Sam quoted from shows that the top one per cent of earners are going to get the same benefit as the lowest earning 65 per cent of people. There are some very rich people that are going to get some quite large benefits from this. Is the tax cut package in your view holus‑bolus, it can't be touched or is there some tinkering at the edges that you might be thinking of.
CHALMERS:
The reason that we point out that these tax cuts will come in in 2 years time is because we've got some near term challenges, and they are occupying 100 per cent of our time and our effort: the issues in the labour market that the Jobs and Skills Summit is all about, the issues in multinational tax, which is our priority in the tax system. Our position on the stage three tax cuts hasn't changed. We've got other priorities and other focuses, and that's occupying all our time.
JOURNALIST:
That's not a question. What about a deficit levy? There are obviously ways that you could put something over the top while leaving the stage three tax cuts in situ. Would you consider a deficit levy for high income earners?
CHALMERS:
That's not something I'm working up.
JOURNALIST:
To what Mark was saying, do you concede there are some decisions you can take today that would free up a workforce that are people that are not in the workforce because of childcare or at the other end of the spectrum with seniors who are locked out of the workforce and could give a vital skill workforce to businesses immediately?
CHALMERS:
The way I would encourage you to think about it as this: there are a heap of good ideas out there, and some of them are expensive, and we can't fund all of them. And from this lectern, and right around Australia, I've been as upfront as I can, whether it's the petrol excise relief, whether it's childcare, whether it's some of these other initiatives - paid pandemic leave. There are a lot of things that if absent the fiscal constraints that you would do, but we have really serious fiscal constraints. And again, one of the heartening things about the lead up to this Jobs and Skills Summit is that people broadly recognise that we've got a trillion dollars in debt. We need to get maximum bang for buck. We've got a whole bunch of legacy things to fund. We've got a whole bunch of health pressures that weren't accounted for in the lead up to the election. And so we've just got to be upfront with people about our ability to fund everything. There are good ideas that can't be funded, leaving aside the bad ideas, and so constantly on a daily basis, me, Katy Gallagher, the whole cabinet, the whole government, we're trying to work out what can we responsibly do that will make a meaningful difference, recognising the substantial fiscal constraints that we have inherited.
JOURNALIST:
You have released the list of attendees overnight who will be at the Summit. I notice unions have a biggest seat at the table than business? Do you think you've struck the right balance? The raw numbers in terms of unions versus big business bosses [inaudible]
CHALMERS:
No, there's more representatives of employers and business than there are of unions.
JOURNALIST:
Do you think you've struck the right balance?
CHALMERS:
Let me tell you putting together an invitation list like this is not the easiest task that we've ever undertaken, and it's a difficult balance to strike. And the heartening thing is that in a country like ours, there are hundreds, if not thousands of people with a legitimate claim to be there. I have fielded more calls in the last 2 or 3 weeks and text messages then probably at any other time. That's because people are clamouring to be part of this and that's a good thing. It's better than the alternative. And so to those who are not on the list, we've tried our best to get around to all parts of the economy and all parts of the country in the lead up to the Jobs Summit. There'll be a process after the Jobs Summit leading to the White Paper and budgets and Com‑state processes and all the rest of it. But the reality is you can't invite everyone that you would like to invite. You've got to make some difficult decisions when you're putting together the invitation list. Have we got it perfectly right? Who knows? But we've got a good representative cross section of the Australian economy and the Australian community, and we can't lose sight of the bigger picture here, which is trying to find some common ground about our big economic challenges.
JOURNALIST:
The RBA meets next week and markets are pricing in another half percentage point increase, and you've got a Budget in 7 weeks. How difficult will it be to introduce a Budget that does not put upward pressure on interest rates and deals with cost of living at the same time?
CHALMERS:
That is a challenge. The Budget has got a big job to do because we've got to make sure that we're not adding to inflationary pressures that the Reserve Bank is dealing with independently. And we've got to make sure we're doing what we responsibly can to deal on the supply side with some of these pressures in our supply chains, whether that is labour shortages, whether it's some of the issues around self‑sufficiency. These are key priorities of the Budget. Now, the way I see it is we've had this wasted decade, which has made us more vulnerable to some of these external shocks. And the job of the Budget is to try and make us more resilient, make the budget more resilient, make our communities more resilient, make the economy more resilient. And that's a difficult balance to strike when you've got our fiscal constraints. But that will be the task of the Budget to try and provide responsible cost of living relief in a way that delivers an economic dividend to implement our election commitments. And to make a start on this legacy of rorts and waste, which has been a defining feature of the budget for too long.
JOURNALIST:
I just wanted to ask on Pakistan, Treasurer. The Prime Minister of Fiji says we're all responsible for the flood crisis in Pakistan. Those that are emitting the most in the world are the most responsible. There are calls for our contribution to aid funding to be vastly increased, do you think we should be increasing our aid?
CHALMERS:
We've got a substantial aid program, of course, and any changes to that is the domain of Penny Wong and Pat Conroy. I don't want to cut across any conversations they might be having. Clearly, when it comes to climate change, that's a key driver of the fact that we've got more extreme weather events. I think that is broadly accepted around the world and around the country. And so we've got to do what we can on the climate change front at the same time as we support our friends and neighbours when we can.
JOURNALIST:
AEMO's Statement of Opportunities report has just dropped. It foreshadows reliability gaps in pretty much every single state over the next 10 years. Is it inevitable that we will see major shortfalls, and we will experience an extremely rocky decade ahead to keep the lights on?
CHALMERS:
These are the costs and consequences of having 22 different inferior energy policies over the course of a decade. We're not prepared for these kinds of energy shocks because we've had a government before us determined to play politics with energy. We start further behind than we would like to when it comes to getting cleaner and cheaper and more reliable energy into the system. That's the task before us. That's the task that Chris Bowen and others more or less work around the clock on. That AEMO report which I haven't read yet sounds like a decent encapsulation of the inheritance and the challenge, and we'll work as hard as we can to deal with it. Thanks very much.
