JIM CHALMERS MP
SHADOW TREASURER
MEMBER FOR RANKIN
E&OE TRANSCRIPT
RADIO INTERVIEW
RN DRIVE
WEDNESDAY, 23 FEBRUARY 2022
SUBJECTS: Situation in Ukraine and Russian sanctions; Real wages falling as costs of living skyrocket; Superannuation: Labour market; Labor’s positive policies to grow the economy the right way.
ANDY PARK, HOST: Scott Morrison announcing Australia's sanctions this afternoon. Meanwhile, on the home front, the RBA released its wages data today, showing 2.3% growth through the year, which economists have been quick to point out is below inflation. I spoke to Shadow Treasurer Jim Chalmers ahead of the Opposition's security briefing on Ukraine, and I started by asking whether the sanctions announced today will go far enough.
JIM CHALMERS, SHADOW TREASURER: Well, that remains to be seen Andy, but they are an important step to show the Russians that there are consequences for this act of aggression that we condemn on both sides of politics. I think it is important that we take those steps in concert with other like-minded countries around the world. This is an act of aggression and we don't want to see the territorial integrity or the sovereignty of Ukraine violated in this fashion. So there has to be consequences. The Prime Minister's outlined some initial steps on the sanctions front and we support them.
PARK: So I take it that you are taking a bipartisan approach here, but will the sanctions realistically have much effect and could Russia in turn retaliate? And what impact would there be on the Australian economy?
CHALMERS: Again, it remains to be seen. There will be an impact on the global economy from what's happening in Ukraine, and that will obviously have implications for us. You can imagine some consequences - for energy prices, for example, or food security in Europe, maybe some investor uncertainty - so there will be consequences for Australia as for the rest of the developed world. When it comes to these sanctions, it remains to be seen whether it will be enough. It needn't necessarily be all that the global community does - you could consider further sanctions, you could consider some kind of technical support for Ukraine, more steps in the cybersecurity space - there are a range of options available to us. As the Government considers those options, we would expect to continue to be briefed on that so that we can provide that bipartisan support when we can.
PARK: Moving to wages, annual growth over the year to December was faster since the pandemic began. How promising is that growth, and how likely is that going to continue in light of Omicron?
CHALMERS: We had a very, very modest tick up today, but it goes absolutely nowhere near making up for the cost of living pressures that families are under. We've got real wages still going backwards. The number today, for your listeners, was 2.3%. Inflation's 3.5%. So the difference between that is the amount to which real wages are falling and families are falling behind. Even with that modest improvement, it goes nowhere near making up for the skyrocketing costs of petrol, rent, groceries, and all of the rest of it. What we've had, as your listeners would know, is a decade now of wages growth which has been at or near record lows. We've had all of these attacks on wages, and job security, and penalty rates, and all the rest of it from this Government. Even the modest tick up today won't make up for all of that.
PARK: Growth was strongest in some of the hardest hit sectors though, doesn't that indicate that the impact of Omicron won't be as severe?
CHALMERS: Even in those cases - some of those workforces we've relied so heavily on, and some of the workforces which have been hardest hit, think about retail and hospitality - once again, it was a very modest increase in the numbers today. Nowhere near what people need to keep up with those skyrocketing costs of living and nowhere near making up for the damage done from a decade now of wage stagnation. So we need to see these figures with that perspective. Working families, whether in those industries or more broadly, are falling behind. It is getting that much tougher to provide for loved ones. So there's nothing for the Government or for the country to celebrate in these wages numbers today.
PARK: The Australian Industry Group has pointed out the wage price index does not include non-wage elements of renumeration, such as employer contributions to superannuation, and that we should also be accounting for the 0.5% increase in the superannuation guarantee. Shouldn't that also be included in any discussion about wage growth?
CHALMERS: Clearly, superannuation is an important part of the labour market and the pay structures in this country, but it has been for some time. What you're looking for in these numbers is the trends and the changes over time. So what we saw today - 2.3% over the year for wages growth, a slight tick-up on 2.2% - and a decade of wage stagnation. Whether you include super or not, it is very clear - objectively clear - over a very long period of time now, that people's living standards have been in decline. The modest increase in the superannuation guarantee, which has been legislated for some time, shouldn't be an excuse to not provide the sustainable, responsible wages increase that people need to feed their families.
PARK: On RN Drive with Andy Park. My guest is Shadow Treasurer Jim Chalmers. The unemployment rate remains at a 13-year-low and there's every indication that it'll keep falling. How would Labor address the shortfall?
CHALMERS: The most important thing is to think about the labour market more broadly than just the unemployment rate. Obviously, we want the unemployment rate to be as low as possible. But even with an unemployment rate which has been coming down, we still had all of this wage stagnation, we still had a lot of job insecurity, and we've still got 1.5 million Australians who are either looking for a job or looking for more work at the same time as we've got all these kinds of skills shortages right around Australia because we haven't trained enough people for these opportunities as they emerge. So we need to look broadly at the labour market right across the board. There's not a recovery in the economy if people are being left behind - if they're working hard and still falling behind because of the skyrocketing cost of living and the prospect of interest rate rises around the corner. If you look at it more broadly, you've got to get the economy growing the right way. So much of our policy around TAFE, or cleaner and cheaper energy, or childcare relief for families, is about growing the economy. You've got to make sure you deal with that job insecurity - whether it's because of labour hire, or the gig economy, or issues around casualisation - you need to address all of that at once if you're too improve the labour market across the board.
PARK: At the same time, Australians are also sitting on $424 billion in savings. Surely that puts us on a pretty strong footing. Is this money that can be easily deployed in times of crisis?
CHALMERS: That is an advantage that we have and we want to see that money flowing in the small businesses and local communities of this country. It's also true that some people have some kind of buffer but a lot of people don't, and it's dangerous to kind of see the economy in terms of just aggregates. We want to see that money in the economy but we also need to recognise that a lot of people have absolutely no buffer or absolutely no margin at all. A lot of people are working as hard as they possibly can and still going backwards, and they deserve our attention too.
PARK: Economist Saul Eslake recently said the idea the recovery from COVID-19 represents an opportunity to build back better - in the words of Joe Biden - is a good one, but it doesn't appear to be the one that has occurred to either side of politics here. What is Labor's plan, and how are you going to seize this opportunity?
CHALMERS: I just think that's completely wrong. Our whole agenda is about how can we make the economy and our society stronger after COVID than it was before. You think about our economic policies around cleaner and cheaper energy - get people's power bills down and get investment flowing because of that climate change policy. You think about free TAFE and more uni places where we've got skill shortages, so that more people get more opportunities. Modernising the NBN so there's more people with access to fibre in a world where more and more of us are working from home at least part of the week. A bigger, more productive workforce that comes from making it cheaper and more accessible to get childcare. I think about co-investment and a future made in Australia with our National Reconstruction Fund for advanced manufacturing and the care economy and other really important sectors. I think the whole idea of build back better should be the defining thing that we're thinking about as we emerge from this pandemic. That's certainly what's been guiding all of the serious policy work that we've been doing.
PARK: You obviously want to fight this election on wages and the cost of living, but many people would say tax reform would be a good place to start, to help us with this mountain of debt that we've accumulated.
CHALMERS: I think the opportunity in tax reform is in the multinational tax area. The global community - and I pay tribute to President Biden and Secretary Yellen in the US, but also the OECD and others - there's a big global movement towards more fairness for multinational corporations, so that they're paying their fair share of tax where they make their profits. I think there's an opportunity in that for Australia for tax reform there. We would be inheriting a trillion dollars of debt with not enough to show for it. So we need to think about multinational taxes, we need to think about getting better value for money, so that we end the rorts and the waste and the corruption, which defines the Budget at the moment. We need to be investing in the things that will grow the economy in a sustainable way - some of those issues I just mentioned around energy, and childcare, and skills, and the NBN, and advanced manufacturing, the care economy - so that we can get the economy growing in a way that doesn't add unnecessarily to those inflationary pressures that we're seeing.
PARK: Thanks for your time, Jim.
CHALMERS: Appreciate it Andy, all the best.
PARK: Shadow Treasurer Jim Chalmers on RN Drive.
ENDS
