E&OE TRANSCRIPT
PRESS CONFERENCE
SYDNEY
WEDNESDAY, 5 SEPTEMBER 2018
 
SUBJECT/S: National Accounts; Liberals’ division and dysfunction; Liberals’ company tax leak; Morrison’s humiliating pension age backflip; weak wages growth
 
JIM CHALMERS, SHADOW MINISTER FOR FINANCE: The defining feature of these National Accounts released today is that company profits are growing more than five times faster than Australians' wages. That's why Australians won't be lining up to congratulate Josh Frydenberg and Scott Morrison today in the same way that the Government is lining up to congratulate itself. For most Australians, their experience of the economy is not a relatively strong headline GDP number, but stagnant wages and insecure work, which is making it harder to make ends meet. This Government will have been in office for five years on Friday, and over that period living standards have barely grown, and the measure of living standards has actually gone backwards in this quarter that we're talking about today. Living standards in Australia, on these numbers released today, have actually gone backwards under this Liberal Government. The economy is growing relatively solidly, despite the Government and its chaos, and not because of the Government. This is the third Treasurer in five years, but it's the same old failure for the Liberal Party to understand a couple of truths which we see in these numbers again today. The first one is stagnant wages, and in the National Accounts measure of wages today, we're seeing a very poor household income number - 0.1 per cent for the quarter, and just 1.6 per cent for the year; that's the average compensation per employee, which is the proxy for wages growth in this country per person. Very, very weak, and that's what people are experiencing in the economy. And partly because of that, we are experiencing a decade low in household savings of something like one per cent, and that is not a sustainable growth model for this country, to have people fuelling their consumption by dipping more and more into their savings. It's not a sustainable way for us to grow the economy to have decade low household savings. That's before we get to some of the other disappointing measures in this data, including disappointing business investment, including flat private investment as well.
 
So the story of these National Accounts is not just a relatively strong headline GDP figure, but very weak wages for Australian workers, very low levels of saving for Australian households. And what that reflects is what Labor has been saying for some time, which is that out in the community, it seems that everything is going up except for people's wages. That is putting household budgets under extreme pressure, and more and more Australians are forced to dip into their savings. We have a new Treasurer in this country who is every bit as out-of-touch as the two who preceded him, if he wants a pat on the back for an economy which isn't delivering for middle Australia. The economy would be growing more strongly if we didn't have a divided and chaotic Government giving the biggest tax breaks to those who need them least or cutting education or training, or making an absolute mess of the National Broadband Network. To be enduring, growth in this country needs to be inclusive and it needs to be bottom up. It needs to invest in people's capacity and their productivity. It needs to give tax cuts to those who are most likely to spend in the economy. And it needs to prioritise company tax breaks for those companies who need it the most and are most likely to invest onshore in Australian jobs, particularly when we have that weak investment number. Australians need and deserve a Government which is focused on growing the economy in an inclusive way, boosting wages, and addressing cost of living. Instead, they've got a divided and dysfunctional rabble led by somebody that nobody voted for. 
 
We've seen even more of that chaos and confusion and division and dysfunction just in the last 24 hours or so with the dropping of the increase of the age pension age, and also with the really extraordinary leak about the Government's plans for the company tax cuts. On the age pension, Scott Morrison is not dropping this disastrous policy because he doesn't believe in it. He's dropping it because the politics have become that desperate for him. He had to announce this stunning backflip on TV this morning because he couldn't be confident that it would last all the way to cabinet consideration next week without somebody from his own side leaking against him. This is so bizarre now that we have a Prime Minister leaking against his own Cabinet because he can't be convinced that it will hold for another week before somebody else in the Liberal Party leaks against him as well. 
 
I think older Australians will see through this. They know that Scott Morrison was one of the most enthusiastic backers of jacking the age pension age up to 70 years old. He voted for it and supported it across five budgets. For every single day of his 1000 days as Treasurer, he supported increasing the age pension age. So I think senior Australians understand the only way to protect pensioners is to vote Labor at the next opportunity.
 
And that brings us the the extraordinary leak of the Government's company tax considerations. This was a devastating leak from a divided and illegitimate Government. Scott Morrison was the main architect of the company tax cut for the four big banks and for foreign multinationals, and he will bring this back given any opportunity. Scott Morrison believes that big banks and foreign multinationals are the highest priority when it comes to tax cuts, and he will bring back these plans at the first opportunity. 
 
In summary, after another extraordinary 24 hours of chaos and division and dysfunction in this Liberal Government under their third leader in five years and their third Treasurer in five years, this is what it means: Scott Morrison created the tax handout for the big banks and foreign multinationals, but now he says he was wrong. He voted against the banking royal commission 26 times, but now he says he was wrong about that too. He tried to cut the age pension, but he says he was wrong about that now. He tried to increase the age pension age to 70 - he voted for it seven times - but now he says he was wrong about that as well. Not even Scott Morrison can trust Scott Morrison to get these big policy calls right in the interests of middle Australia. And if Scott Morrison can't trust Scott Morrison, there is absolutely no reason why middle Australia should trust this new Prime Minister. Over to you.
 
JOURNALIST: Why is 67 the magical pension age? How can you responsibly rule out raising it higher if life expectancy continues to grow or if Budget circumstances demand it?
 
CHALMERS: 67 struck the right balance between paying for the biggest increase in the pension in Australian history, but also making sure we didn't have an age pension age which was much higher than the countries we compare ourselves to. What Scott Morrison enthusiastically backed for every day of his 1000 days as Treasurer, and across those five disastrous Liberal budgets, was to increase the age pension age to 70, which was above the countries we compare ourselves to and was too much to ask, particularly of manual workers in our community. So we support 67. Obviously, 67 is more appropriate than 70, which is what Scott Morrison wanted to do. We've been campaigning for this change for some time and credit should go to Jenny Macklin and Linda Burney and Bill Shorten and everybody who has campaigned for this change. The problem, of course, is that Scott Morrison believes deeply that the age pension age should be much higher than 67. He's not abandoned this policy because he's changed his mind. He's abandoned this policy because the politics have become so desperate, because he leads a divided and dysfunctional Government.
 
JOURNALIST: Don't you think voters would be relieved that finally there's a policy with some bipartisanship behind it?
 
CHALMERS: I don't think there's any relief for Australian voters, and particularly for Australian seniors, because they know that given the opportunity, Scott Morrison wants to cut the pension, jack up the age pension age, give the biggest tax breaks to the big banks and foreign multinationals. This guy has form, and he can pretend all he likes that somebody else was the Treasurer for the last couple of years, but he has a record. His record is to take money from pensioners and to try to give it to the big banks. Australians won't easily forget that record, and nor should they. They know right around the country that the only way to look after pensioners, to give tax relief to people who actually deserve it, and to really focus on an economy that delivers for middle Australia, is to vote Labor at the next opportunity.
 
JOURNALIST: The Government says it will update the medium-term cost of this backflip in the next Budget update. What do you understand its cost to the Budget will be?
 
CHALMERS: I saw reported today that it was something like $3.6 billion in the first four years of its operation, but nothing in the forward estimates. I understand that the Prime Minister earlier today indicated there'd be no impact over the forward estimates. It will be a multi-billion dollar backflip. We of course in the Labor Party have never signed up to this change, so for us it makes no difference to our own numbers because we've never been in support of jacking up the age pension age to 70. It's for the Government to account for this humiliating backflip, but it will cost them some billions of dollars.
 
JOURNALIST: Going back to the original figures you were talking about, how do you practically suggest that wages can be boosted without, I guess, damaging the profits of the companies who are paying them?
 
CHALMERS: Profits in this country are strong; there was something like 8.8 per cent growth in profits in these National Accounts released today compared to a wages measure, which is 1.6 per cent. So as I said from the outset, wages are growing less than a fifth as fast as profits. Profits are healthy. We want healthy profits in this country, but we want them to be fairly shared with the workers who help create those stronger businesses. The first thing we need to do when it comes to wages is not cut penalty rates for weekend work - that's the most important thing that we can do in the near term. But we also need to make sure that our industrial relations system allows workers to bargain on an even footing with their employers so that people can get the wage rises that they need and deserve to provide for their families. We also need to make sure that labour hire companies are not undercutting the wages of permanent staff, and that's why we announced quite recently our policy, which can summarised as "same job, same pay" to make sure that labour hire isn't undercutting wages and putting further downward pressure on wages. There are a number of things that we can do right across the board. The problem is we have a Government that is too divided, too dysfunctional and too out of touch to understand or to care or to do anything about the fact that stagnant wages are destroying family budgets, forcing people to dip into their savings more and more to fund their consumption, and that's not a sustainable way to grow the economy.
 
ENDS