JIM CHALMERS MP
SHADOW TREASURER
MEMBER FOR RANKIN
E&OE TRANSCRIPT
RADIO INTERVIEW
RN BREAKFAST
WEDNESDAY, 30 MARCH 2022
SUBJECTS: Federal Budget; Senator Fierravanti-Wells attack on Scott Morrison.
PATRICIA KARVERALS, HOST: To discuss Labor's response to this Budget is the Shadow Treasurer Jim Chalmers who joins us here in Parliament House. Jim Chalmers, welcome.
JIM CHALMERS, SHADOW TREASURER: Good morning. Patricia.
KARVELAS: You say that this is a terribly short-sighted Budget with no plan for the future, why then will Labor wave it through this week in Parliament? Why are you endorsing what you believe is a bad Budget?
CHALMERS: Well, because the fact that real wages are falling once again in this Budget necessitates some cost of living relief for Australian working families. People are confronting skyrocketing costs of living, falling real wages and so they're falling further and further behind. And so, as we've said for some time, there is a role for some cost of living relief in the Budget. What's missing from the Budget is a plan beyond May. This Government is temperamentally incapable of seeing beyond the May election. So we have this act of political desperation. Scott Morrison wakes up one day and realises he's got to call an election in the next fortnight or so, so he pretends to care about cost of living pressures. If he cared about cost of living pressures on Australian families he wouldn't have spent the best part of a decade going after people's wages, job security, pensions and Medicare.
KARVELAS: You have calculated that workers will actually be $26 a week worse off because wages are not keeping up with inflation. But does that take into account the halving of the federal excise - which the Government says will save the average household about $300 - and the pension bonus and the low and middle income tax?
CHALMERS: The point that we're making about that is, yes, Australian workers are about $26 a week worse off because of the fall in real wages that the Government is fessing up to in this Budget.
KARVELAS: But have you accounted for all of the other elements that they've included in this Budget?
CHALMERS: That's before those other elements, but nothing that was in the Budget last night makes up for the fact that Australians are going backwards because their real wages are falling. If you think about - that's the wages part of the story - the average family is $3,600 worse off over the past year because of the skyrocketing cost of living. Nothing that was in the Budget makes up for the fact that for a decade now, the best part of a decade, people have had stagnant wages. They can't keep up with the cost of living and they think Australians will see this for what it is. They will see through this Budget like they see through this Prime Minister. They know it's an act of political desperation. They know the Government's just got the shovel out because they have to call an election in the next week or two. We're always up for a conversation about cost of living relief. The missing part of this Budget is a plan that goes beyond May.
KARVELAS: Are you worried that this spending will put pressure on inflation?
CHALMERS: I'm worried about inflation broadly.
KARVELAS: That this actual spending will further put pressure on inflation?
CHALMERS: It depends what else you're doing in the Budget. And again, that's why the lack of a plan matters so much because the responsibility of a government should be to set out a plan to grow the economy without adding to these inflationary pressures. That's why skills and childcare and cleaner and cheaper energy, investment in the digital economy, a future made in Australia, all of our economic plans are so important because they are carefully and responsibly designed to grow the economy in a way that doesn't add to inflation. There's a role for cost of living relief in the near term but the Budget is almost entirely silent about what happens after that.
KARVELAS: Real wages might continue to go backwards over coming months but doesn't it turn around next year when wages growth is forecast to outstrip inflation? Isn't that a fair assumption, that unemployment, when it falls to 3.75 percent, that actually next year you see that shift, that turn around?
CHALMERS: Believing the Government's wages forecast would be the triumph of hope over experience. This Government, before last night, made 55 wage forecasts and got it wrong 52 times. They are notorious for over promising and under delivering on wages.
KARVELAS: That's the advice they're getting from Treasury as well. Does that mean that the wages forecasts that you'll be getting from Treasury you'll be cynical about?
CHALMERS: No, I'm saying that the Government hangs their hat on wages forecasts that have been wrong, have been wrong 52 out of 55 times. The point that I'm making is that this is a government which said that their deliberate design feature of their economic policy is stagnant wages. That's what they've delivered for the best part of a decade, not just because of the pandemic, but well before that. I think anyone who thinks that this government cares about wages growth in this country is misguided.
KARVELAS: Do you think that this Budget will see the Reserve Bank bringing forward high interest rates?
CHALMERS: Well, the Reserve Bank has made it clear in their own way, and certainly all of the private forecasters have said, that interest rates will go up no matter who wins the election.
KARVELAS: That's right.
CHALMERS: They can't stay at or near zero forever.
KARVELAS: Will this Budget, perhaps, bring them forward?
CHALMERS: That's a matter for the Reserve Bank.
KARVELAS: Is that a concern of yours though? Of course it's a matter for the Reserve Bank.
CHALMERS: I'm certainly concerned about the impact of rising interest rates on family budgets. If the government changed hands in May think of it this way. If the government changed hands in May, what would be their legacy? A trillion dollars of debt and not enough to show for it, falling real wages, interest rates rising, the cost of petrol will go up in September, the end of the low and middle income tax offset, all of these sorts of things will be left to whoever wins the election whether it's us or them. That's the legacy of this government after almost a decade in office.
KARVELAS: If you're just tuning in, the Shadow Treasurer Jim Chalmers is my guest here on RN Breakfast. Okay, so let's go to that, the cut to the petrol tax is only for six months, right? If you're the Treasurer after the election, will you reimpose the full excise rate in September?
CHALMERS: You don't want to pre-empt decisions that would be before the next government but I think it would be hard for a government of either political persuasion to find the money to extend this cut in the petrol excise. I would expect, whether it's myself or Josh Frydenberg or somebody else, I would expect the cost of petrol, because of the decision taken by the Government, will go up in September.
KARVELAS: And you're willing to reimpose, if you become Treasurer, a higher petrol price on people in September?
CHALMERS: My message to your listeners is that we will be way more responsible with the Budget than the Coalition has been. There'll be better quality spending, we won't promise what we can't deliver. What we know, and Katy Gallagher will tell you this too, our Shadow Finance Minister, there's not even room in our alternative Budget for all of the good ideas and all of the things that you would like to do. So you have to be responsible. The rorting and the wastage in the Budget has to stop, that's part of it. But we also won't over promise and under deliver. I think one of the reasons why the Government's designed this Budget this way is to take all the political problems in the economy from before the election, push it to the other side of the election. Whether we have to deal with it or they have to deal with it, there are substantial traps laid.
KARVELAS: Could you see a case for continuing the halving of the fuel excise though? Do you see a scenario where we're actually you know, you might need to extend it?
CHALMERS: You always want to do what's best for the economy at the time. And so it's hard to kind of imagine exactly what the petrol price will be in September, what the economic conditions will be in September. But doing this doesn't come cheaply and our commitment to the Australian people is to be responsible with the Budget so we don't pre-empt our decisions. I'm just making the point that it would be difficult for a government of either political persuasion to continue this relief indefinitely.
KARVELAS: You've combed through the Budget papers and come up with what you say is $3 billion dollars in secret cuts to the election.
CHALMERS: Yeah.
KARVELAS: What do you think they could be? What are you worried about?
CHALMERS: There's a part of the Budget called ‘decisions taken but not yet announced’ and what it says this time around is it's got two years of spending that they haven't announced yet - so before the election - and then it's got three years of cuts after the election, secret cuts that they don't want to tell us about. They add up to at least $3 billion. So Josh Frydenberg needs to come clean. What are his $3 billion in secret cuts that he doesn't want to fess up to until after the election? The Australian people deserve to know. Is it pensions? Is it Medicare? Is it something else? We shouldn't be going to the election with those secret cuts in the Budget that will only be unleashed on the Australian people if the Coalition is returned.
KARVELAS: So what happens to that $3 billion if Labor gets elected?
CHALMERS: Depends what it is Patricia, that's the point. Australians deserve to know what are these secret cuts? In what ways will the Australian people lose out from these $3 billion of Josh Frydenberg's secret cuts? If we know what they are, we can come to a view of them. We don't know what they are.
KARVELAS: You've ruled out any austerity cuts if you win the election. When would an Albanese Government get serious about fixing the Budget?
CHALMERS: The point that I've made about that, and I'm happy to make again, is that the way the economy is poised right now, there are big opportunities ahead if we get the decisions right but we're going through an uncertain period. Now's not the time to flick the switch to austerity, it's a time to flick the switch to quality. What's been missing in the Budget for a decade now, what's missing in the Budget last night, is quality spending where we get an economic dividend for it. We want to reorient the Budget away from the waste and rorts and corruption towards quality investments in the future. The Budget was silent about quality investments in the future.
KARVELAS: Senator Concetta Fierravanti-Wells unleashed on Scott Morrison calling him a bullying autocrat who has no moral compass, he is unfit to be Prime Minister. Has she skewered the Prime Minister and deliberately timed it to torpedo the Government and the Budget?
CHALMERS: The people who know Scott Morrison the best and work with him closest, trust him the least. And I think Senator Fierravanti-Wells was making a point that a lot of Australians would share - you can't trust this Prime Minister as far as you could throw him. And if you can't trust him to deal with his Senators, experienced Senators like Senator Fierravanti-Wells, then you can't trust him on wages, you can't trust him on secret cuts, you can't trust him to do the right thing by the people of this country.
KARVELAS: Thanks for joining us Jim Chalmers.
CHALMERS: Thanks Patricia.
ENDS
