JIM CHALMERS MP
SHADOW TREASURER
MEMBER FOR RANKIN
E&OE TRANSCRIPT
RADIO INTERVIEW
RN BREAKFAST
WEDNESDAY, 12 MAY 2021
SUBJECTS: Budget 2021
FRAN KELLY, HOST: I'm joined now by the Shadow Treasurer, Jim Chalmers. Jim Chalmers, welcome back to Breakfast.
JIM CHALMERS, SHADOW TREASURER: Thanks very much, Fran.
KELLY: Budgets are always about priorities. I think it's Labor that talks about that. Given the Government's still dealing with the pandemic, but has also made long-term structural investments in things like aged care and mental health, won't most people applaud the Government for getting the priorities right this time?
CHALMERS: Well, that remains to be seen. I think the Government's priority is to do whatever is necessary to cobble together enough political fixes to get them through an election. It's remarkable that they spent $100 billion last night, they racked up $1 trillion in debt, and yet still we've got real wages going backwards. We've still got the aged care funding falling short of what the Royal Commission recommended. They still haven't undone all of the damage they've done over the last eight long years of their government.
KELLY: It may just be an uncomfortable truth for the Opposition that this is a moment in time, when politics and policy collide. Economists are urging the Government to spend to support the economy. They're spending on things like $18 billion for aged care, $2.3 billion for mental health, $1.7 billion for childcare, $13 billion more for the NDIS, $3.4 billion all up for what they call a women's economic and security package. You know, do you support all those spending decisions? Is there anything in this budget that you don't want, or that if you were in government you would wind back?
CHALMERS: Well, first of all, if they really cared about those areas, they would have done something at some other point in the last eight years. In many of those instances that you just mentioned we're talking about a mess of the Government's own making - aged care, for example. Skills and apprenticeships have been cut. There are a whole range of other areas. We've been-
KELLY: -Sure, but the voters aren't going to penalise the Government for that, are they? They're going to penalise them for what they do.
CHALMERS: Well, it remains to be seen how the voters will react to the budget. The politics should be secondary here, genuinely, they should be secondary here. We want to get a good outcome for people, and one of the things that worries us, even if some of this investment in some areas is welcome - mental health, for example - we've still got a situation where after all of this debt and all of this new spending, which has been committed for political, not economic reasons, at the end of it, what are we left with? Real wages are actually going backwards in the Government's own budget. Growth is weak after the next year or two. What we say about the budget is if you're going to rack up this much debt, and you're going to spend this much money, let's leave a lasting legacy. Let's transform the economy in the interests of the Australian people.
Instead, the Government's got a short-term view about getting through an election. The tax cuts are a good example of that. The tax cuts have only been extended to the other side of an election. I think that's an illustration of what their priorities are.
KELLY: That's true of the tax cuts. It's not true of the mental health spending, and it's not true of the aged care spending, an $18 billion investment. Now, I'm sure there's plenty of the aged care sector, and we're speaking to Annie Butler from the Nurses Federation later, that will say we need more, but it's a pretty big down payment and it is structural reform.
CHALMERS: Well, the Royal Commission said that more needs to be done-
KELLY: -Gave them a blueprint.
CHALMERS: The point about the aged care funding is, and what we'll go through the detail of what the Government's announced and we'll be realistic about it, but the Royal Commission made all of those recommendations after uncovering all those stories about maggots in wounds and people malnourished, they made recommendations and what the Government did last night falls short of implementing those recommendations.
KELLY: You warned, Labor warns, the Government was going to get through an election with this budget, which is handouts for pretty much everybody, and then flick the switch to austerity if it wins the coming election, but actually, if you look at the out years, there is no sign of that. There's no surplus in sight, which I must say must be difficult for you personally, who was working in Wayne Swan's office as an advisor during the global financial crisis when all the opposition was talking about then was debt and deficit, but no surplus in sight, not for 10 years at least. No sign they're going to head for austerity, is there?
CHALMERS: It absolutely shreds their credibility. For 10 years now they've been talking about debt and deficit disasters, and now they've multiplied the debt and they've multiplied the deficits. I'm not much worried about what that means for me, but I think genuinely people will wonder why we've had this rhetorical shift and a shift in the budget.
I think most people appreciate it's not actually what the Government announces in budgets that matters. They've had a problem with delivering what they've announced. People know that this is a political budget. They know that there's an election coming. I think they'll judge the Government in that light.
To spend the $100 billion and rack up all of this debt and not have anything to show for it in terms of growth in wages or fully implementing the recommendations of the Aged Care Royal Commission, I think that's a problem. There's a moment here that's being missed. It's a missed opportunity budget, full of marketing, full of mismanagement, but really short in terms of that plan that we need and that vision we need for the future.
KELLY: Would you have a different plan and what some of that plan include paying down this debt? I mean, as I say, no surplus in sight of the next 10 years. net debt peaks at almost $1 trillion by 2025, which is eye watering. If Labor was to win the next election, how soon would you start the monumental task of budget repair, or don't you think it's your job to lay that out?
CHALMERS: Well, we've been consistent all along and said the priority needs to be jobs. We've already said that. But in racking up all this debt and all of these deficits, you need to make sure you're getting bang for buck. In the budget last night there were 21 slush funds with billions of dollars in it.
KELLY: What do you describe as a slush fund?
CHALMERS: Well, all of these buckets of money where ministers get to allocate funding for projects. 21 different slush funds either added to or created in the budget last night, and we know how this movie ends with this Coalition Government: rorts, sports frauds, dodgy land deals, and all the rest of it.
We think money can be spent more effectively. You measure that effectiveness not just for what it means for unemployment, but under-employment and wages and all of the other ways. What we can have here, Fran, is to go through this period together, go through this recession into the recovery, big spending budget, and still have Australians left behind.
******Alright, let me ask that question another way.
KELLY: How would Labor be getting bang for its buck out of this kind of spending, enormous spending?
CHALMERS: We've made the point before that there's a better way to do childcare. There's a better way to do investment in cleaner and cheaper energy. Obviously that's a priority for us. It's not a priority for the Government. We've got a National Reconstruction Fund, which is all about advanced manufacturing jobs, diversifying the economy, revitalising the regions. We've had more to say about apprenticeships on big government projects. There are a whole range of things that the Government should be doing-
KELLY: -But there have been 70,000 new apprenticeships and training subsidies in this budget.
CHALMERS: And I think we're 150,000 behind because of the cuts that the Government made over the last eight years.
KELLY: Let's talk about jobs. The Treasurer is making much of the jobs that have been created, nearly 500,000 new jobs since October, a further 250,000 new jobs predicted over the next year or so. The Treasurer says there's 75,000 more Australians in jobs now than before the pandemic. Do you give the Government credit for job creation?
CHALMERS: I'll give the Australian people a credit for that.The economy is recovering and that's a good thing. The labour market has been performing better than what the Government expected and that's a good thing as well. But the credit for that doesn't belong to the Government. The credit for that belongs to the Australian people. They did the right thing by each other to limit the spread of the virus and that's why the recovery is underway. But there's still almost 2 million people who can't find work or enough work. We shouldn't be declaring victory yet.
When it comes to the Government's predictions about how many jobs will be created in this budget, the centrepiece of the last budget, the JobMaker program, was supposed to create 450,000 jobs. It created 1000 jobs, so I don't think we can believe these projections the Treasurer talks about
KELLY: What about wages? We know that jobs, getting more job creating, get unemployment down is critical to wages growth. Do you see enough pressure in this budget and the forecast to bring down- to increase wages, sorry?
CHALMERS: Well, the Government's raised the white flag on wages growth. Even in this budget, after all of this spending, in the budget, the Government's own numbers, they've got real wages going backwards. Obviously not enough's been done in the budget to get wages going again. Partly that's a story about unemployment, but it's also a story about under-employment and job insecurity and some of those structural issues around childcare and training and industrial relations which are preventing some people from being able to grab the opportunities of a recovering economy.
KELLY: The economic response to the pandemic is still closely linked to the health response at the moment. That's obvious. One of the key assumptions underlying this budget is that every Australian who wants to be fully vaccinated, two doses, can, will be vaccinated by the end of this year. Now, that's an important goal. Do you have faith the Government will deliver that?
CHALMERS: No. It would be good if the Government could get their vaccination program back on track, but one of the opportunities that was missed in the budget last night, the Government didn't come clean on the costs and consequences of getting this vaccine rollout so horribly wrong. They've missed every target that they've announced. The words in the budget are actually weasel words about, you know, it's likely that people will be vaccinated by then. It's a plan to have a plan. It doesn't have the economy opening up again until well into the next year, and I think that's one of the issues here. You can't have a first-rate economic recovery with a third-rate vaccine rollout, but that's what the Prime Minister has given us with this bumbling and fumbling of it right from the beginning.
KELLY: What will Anthony Albanese be offering up tomorrow night in the budget reply?
CHALMERS: Well, I'm smiling, Fran, because you know how career-limiting it would be to to give Anthony's speech for him the day before.
KELLY: I just thought I'd give it a go.
CHALMERS: Well, I think what you can expect from Anthony is the vision that was lacking last night. People know where we're coming from. There's a better Labor alternative and Anthony will spell it out.
KELLY: Well, the Government has long sledged Labor over debt and deficit, we've referred to that earlier, after the GFC and the Wayne Swan Treasury years. Will Labor be returning the favour?
CHALMERS: I think what we'll be talking about tomorrow night is how we can actually have something to show for what we've been through together this country, the recession and the recovery, something to show for all of this debt and deficits so that we can have an economy and a society which is stronger after COVID than it was before.
KELLY: Jim Chalmers, you've got a busy day ahead of you. Thanks very much for joining us here on breakfast.
CHALMERS: Thank you, Fran.
KELLY: Shadow Treasurer Jim Chalmers.
ENDS
