JIM CHALMERS MP
SHADOW TREASURER
MEMBER FOR RANKIN
E&OE TRANSCRIPT
TELEVISION INTERVIEW
SKY BUSINESS NOW
WEDNESDAY, 23 MARCH 2022
SUBJECTS: 2022 Budget; Skills shortages; Debt; Labor’s plans.
ROSS GREENWOOD, HOST: This week, ahead of the federal Budget, Shadow Treasurer Jim Chalmers used a speech to set out the Labor Party's credentials as the alternative government. But to me there was a similar tone in some ways to the one we heard from Treasurer Josh Frydenberg last week. In other words, let's grow the economy faster than spending is increasing. But as we asked the Treasurer last week, is this realistic in a world when wages pressure and government costs - including interest bills and also the National Disability Insurance Scheme - are also growing very quickly. Jim Chalmers joins us now. Jim, many thanks for your time. In your address to the Australian Chamber of Commerce Industry yesterday you highlighted cost of living pressures. Isn't one of the best antidotes to cost of living pressures a job, and with full employment most people who now want a job have one?
JIM CHALMERS, SHADOW TREASURER: Good afternoon Ross, and thanks for having me back on your show. I think there's a range of responses that we need to these economic conditions. Clearly, we want the unemployment rate to be as low as possible, but we need to recognise that there are skills shortages which are holding back the recovery. So we need to be training people for opportunities and responding in other ways to some of the challenges in the labour market.
Your broader question about how do we deal with inflation, I think, is an absolutely critical one. We do have a situation where the costs of living are skyrocketing, real wages are going backwards, and a lot of families are falling further and further behind. The job for the government in this Budget, the job for an alternative government in a subsequent Budget, is how do we support families through a difficult period now, while also lifting the speed limit on the economy so that we can invest in things that boost productivity and growth, to get the economy growing in a way that doesn't add unnecessarily to those inflationary pressures.
GREENWOOD: Okay, but one issue here is for a person who's out there re-skilling, and the idea of that would be for them to get a higher paying job. But we also still need people at the entry level, doing the basic things, but the real problem in our capital cities with inflation is a lot of the people doing the public service jobs - the nurses, the teachers, the health workers - are being pushed out because they simply can't afford the accommodation in particular, in those capital cities.
CHALMERS: I think that's a big challenge. That's one of the reasons why, when we've talked about housing affordability, we have talked about the difficulty of essential workers in particular living close enough to where we need them working. We'll have more to say about that, but already our Housing Future Fund goes to that issue. That is a an issue that we accept absolutely, it's one of the big challenges. I think this challenge more broadly operates at least three different levels. At the highest end of the labour market, there's this big global scramble for talent that a lot of professional services firms and others are engaged in. So that's one level. At another level, we've got to make sure that we are training Australians for these opportunities that emerge. We've got skills shortages right around Australia at the same time as we've got one and a half million Australians who are either unemployed or would like to work more hours. So we need training to be a big part of that. That's why we've got a policy for free TAFE where there are skills shortages. But more broadly, there are issues around structural impediments to people getting into work, there's issues around labour mobility, which will be at least partly addressed by the fact that the internal borders in Australia are opening up. My point is Ross, we need to look at this right across the board. Training is part of it, sensible migration settings are part of it as well, because we do have this unusual situation where we've got real wages in aggregate not keeping up with the costs of living. We're seeing some wages growth in some parts of the economy, but not in some of those big human services workforces, for example. In aggregate, wages aren't keeping up with the cost of living. That's an unusual situation, as you know as an economist, when we've got unemployment at 4%, we've got skills shortages, but we're not seeing the sustainable, responsible wages growth that we'd like to see.
GREENWOOD: Because of course you could end up being a Treasurer who has to deal with a trillion dollar debt, rising interest rates, which is going to add pressure to the Budget. Rising costs, rising wages, this is - again, while the economy is growing strongly a great thing -but eventually that also creates a drain on the economy, and you may be the Treasurer that needs to deal with that.
CHALMERS: Obviously that's something I'm very focused on Ross, the fact that we do have almost a trillion dollars in debt in the Budget and in my view nowhere near enough to show for that. That's because we haven't, as a country, the Government hasn't been investing wisely, over the best part of a decade, in some of the things that will drive future growth. Whether it's cleaner and cheaper energy, TAFE and universities, whether it's childcare, whether it's co-investment in advanced manufacturing, whether it's the NBN and the digital economy, it feels like we've had this wasted decade of missed opportunities in our economy because there hasn't been that sense of investing in the right kind of growth - growth that works for everyone in an economy that works for everyone. I would like to change that.
One of the things that we need to change - we recognise that there will be debt racked up during the deepest part of the recession - but debt had multiplied, as you know, even before the pandemic. We don't have enough to show for that. We need an emphasis on quality in the Budget not just the quantity of spending. That's why some of the things that we've proposed, which will ease the cost of living in child care, and power bills and the like, also serve another useful economic purpose, which is to get the economy growing the right way. They tick more than one box.
GREENWOOD: So I think a really genuine question for you - and it's a real question - is to whether you're going to be a reformist, in the mould of say Paul Keating. Bringing union and wages to heel for example, so it doesn't become rampant. Privatising assets. NBN is the obvious one out there, it's worth between $70 and $100 billion. Takes pressure off the debts. Making our tax system easier for business of workers. These are tough decisions that could rankle your natural constituents. The question is whether you've got the gumption to be able to take them on.
CHALMERS: Obviously I'm prepared to take tough decisions, you don't put your hand up to be the Treasurer of this country unless you're prepared to take difficult decisions. We've said that we won't be in the business of privatising the NBN, I'm not sure it's worth as much as what you proposed just then. Regardless, we won't be going down that path. We want to fix the NBN. Because we've got this opportunity now in the digital economy to help people make decisions and give them choices, not just about how they work but where they work from. In some of the second cities around Australia, I think there's a massive opportunity there.
Our reform task will be in areas like cleaner and cheaper energy. I think when they write the history of the next Labor Government, they look back on it, I think one of the big things that they'll be focused on is this energy transition - cleaner and cheaper energy and getting costs down. None of that is easy, and I'd like to play a role working with Chris Bowen and Anthony Albanese to make that reform - which will be difficult - and there are others as well. I am someone who has followed very closely the life and career of Paul Keating, in lots of ways I'm only here because of Paul Keating. He was the person who first got me interested in politics and I count him as a friend now. His achievements are immense. The challenge for us is very different, focused on things like the energy challenge, the human capital challenge, the digital economy, and those will be my priorities.
GREENWOOD: Jim Chalmers, always good to chat to you. Many thanks for your time today.
CHALMERS: Thanks for having me on your show, Ross.
ENDS
