Sky First Edition 05/05/20

05 May 2020

SUBJECTS: The impact of Coronavirus on the economy; JobKeeper; JobSeeker; Migration.


SUBJECTS: The impact of Coronavirus on the economy; JobKeeper; JobSeeker; Migration.

LAURA JAYES, SKY FIRST EDITION: Let's go to Queensland now. Joining me is the Shadow Treasurer, Jim Chalmers, ahead of Josh Frydenberg's speech today. Mr Chalmers, thank you for your time. First of all, we've seen today some details of what the Treasurer is going to talk about. Josh Frydenberg will say that the current Coronavirus restrictions are costing, and will cost, the economy about $4 billion a week. Do you agree that now is the time to get people back to work and back into jobs?

JIM CHALMERS, SHADOW TREASURER: These are more confronting reminders of the economic impact of this health crisis. The Government's had a balancing act to perform where they've been trying to keep the economy going at the same time as they've been closing big parts of the economy down. The point that we would make is that we need to be as careful and as considered in reopening parts of the economy as we were in closing it down in the first place. Those decisions need to be based really firmly on scientific and medical advice, and if the Government bases their decisions on that, then we will be supportive of the decisions to try and get the place going again.

JAYES: Josh Frydenberg will talk about a 10 per cent GDP hit in the June quarter alone. Do you see this as a good result given the circumstances that we're in, and given what we've seen in Europe and other continents?

CHALMERS: I'd find it difficult to describe it as a good outcome. An economic contraction of that size means that hundreds of thousands of Australians will join the unemployment queues and that's obviously a tragedy. What we'd say about that is yes, we've always recognized that there'll be massive economic consequences of this health crisis. The onus is on governments to do what they can to prevent as many of those job losses as possible. That's why I think it is disappointing that so many Australian workers have been deliberately excluded from the wage subsidy program by Josh Frydenberg and Scott Morrison. They have an opportunity to include more people in that scheme so that the unemployment queues aren't longer than they need to be. They've refused to take up that opportunity.

Just yesterday Laura, 5,500 aviation workers lost their jobs because they weren't able to access the JobKeeper wage subsidy. They satisfied all the other requirements except that their parent company is foreign owned. If those workers were able to access the JobKeeper scheme every cent of it would go to Australian workers and be spent in the Australian economy. Josh Frydenberg has an opportunity today at the Press Club to explain to Australians why he's excluding so many people from these wage subsidies and why, as a consequence of that, the unemployment queues will be longer than they need to be.

JAYES: What aviation company is that, because there was special provision given to Virgin workers, was there not?

CHALMERS: There was a company yesterday called dnata, it's an aviation services company with 5,500 local workers servicing the aviation sector, that company would have satisfied all of the other requirements except the one that I mentioned. So there are 5,500 Australians who have lost their jobs who in our view should be considered for the JobKeeper wage subsidies. The Treasurer has the capacity and the power under the legislation to include them with a stroke of a pen. He has so far refused to do that. He needs to explain why that's the case. The Government comes at this with a good idea - wage subsidies are a very good idea and we welcomed the announcement of these wage subsidies. But they've been communicated badly, the implementation of them has been botched, and too many Australians have been excluded. If it was a good idea to maintain the link between Australian workers and their employers before, it's a good idea now. We will see a spike in unemployment. That spike will be higher than it needs to be because of the decisions taken by the Government.

JAYES: Okay, well the Government probably would argue that it needs to draw the line somewhere. There has been some focus on the JobSeeker allowance as well. Would you like it to replace Newstart indefinitely?

CHALMERS: As I understand it the JobSeeker payment will replace Newstart in one form or another but the Government hasn't told us what the new level will be when the support runs out towards the end of the year. We've made it really clear that whatever you call it, Newstart or JobSeeker, that $40 a day is insufficient even in normal times and that we would like to see that increased. No doubt the Government is considering that at the moment. I think it would be unrealistic to expect that people could go back to a payment which is half of what it is now. The Government should tell us what their plans are for that JobSeeker payment and we will respond when they do.

JAYES: You say $40 a day is too low. At the election there was going to be a review by Labor if you won Government and that you would review it in order to increase it. But is $1500 a fortnight on the other end of this scale too high, in the unreasonable stakes?

CHALMERS: First of all, Laura it's not just us saying $40 a day is too low. Between the business community, John Howard, ACOSS and others there's a remarkable consensus amongst everyone except the Government that that is too low. We haven't nominated a number. We think that's a task for the Government to do based on the advice of Treasury -

JAYES: Do you have a ballpark?

CHALMERS: - and all of the various information that they have access to. We're not going to get into the practice of nominating a figure. At this stage of the cycle we think the first mover should be the Government. We are very concerned that the Government seems to assume that the economy will just snap back to normal towards the end of the year. We're worried that if they withdraw the support for the economy too quickly, and snap back to what it was before then that will stop the recovery in its tracks. That's our priority. When it comes to the new number of JobSeeker allowance that is first and foremost, in the first instance, a responsibility for the Government to nominate.

JAYES: But is JobSeeker too high? Is it unreasonable to expect that $1500 a fortnight for a JobSeeker payment, a dole unemployment payment or whatever you want to call it, would be too high into the future to keep there indefinitely?

CHALMERS: Well, again, Laura, I'm not prepared to nominate a number. The old rate was too low -

JAYES: No, I'm not asking you to nominate a number to be fair. But do you think that would be -

CHALMERS: You are. You're asking me to nominate $1,500.

JAYES: No. Well, should it be? Is that too high? Would that be too difficult to maintain given the economic circumstances?

CHALMERS: We've got to weigh up the economic circumstances. The withdrawal of this support if and when it happens needs to not be too hasty. We need to make sure that the new level is good for the economy, that we weigh up the budget considerations as well, but most importantly that we give people the means to support themselves and look for work. The labour market is going to be a very dangerous place for some time now. That's a point that the Reserve Bank Governor has made before and a point that I've been making for some time. Unemployment won't just snap back to 5 per cent. There will unfortunately most likely be a long tail here, a point that the Treasurer is going to be making today in his Press Club speech as well.

The second task that he needs to do today is to nominate what the plan is for jobs when this support runs out. There is currently no plan for this long tail of unemployment which most of the respected economists and commentators expect to see.

JAYES: Okay. Now let's talk about Kristina Keneally just quickly, your Shadow Cabinet colleague. She wrote this week that the current immigration policies have contributed, "to unemployment, underemployment and lower wages growth". What is Labor's policy when it comes to migration? Have you had a rethink about this in recent months?

CHALMERS: Migration is obviously crucial to the economy, Laura, and I think we're discovering now as that flow of migrants is slowing, if not stopped, just how reliant we've been on migration, especially temporary migration, to keep the economy going. In the absence of temporary migrants it's entirely likely that the economy wouldn't have grown at all in recent times. What Kristina is saying, understandably in my view, is that at a time when the flow has largely stopped as the Prime Minister has said, now is a good time to consider whether we've got the right mix of migration going forward, the right mix between temporary and permanent. It's also the right time for us to question whether the training settings are right when we do have something like two million Australians unemployed or underemployed, to make sure that we can train Australians to fill more of these gaps in the economy. I think those are reasonable points to make. We need to also make sure that temporary workers aren't exploited. We need to weigh up all of these considerations. That's the conversation that Kristina is hoping to have.

JAYES: Tony Abbott and other Coalition members called for lower net migration last year. Labor at the time suggested that was a bit of a racist dog whistle. How's this different?

CHALMERS: We're talking about the mix of migration. We have recognised throughout history and we recognise now that migration is absolutely critical to economic growth in this country, and that migrants make a very big contribution not just to our economy, but to our society more broadly. What we're talking about is getting the optimal mix right, about whether we can make sure that people who come here to work have pathways to citizenship, and about how they can make a long-term contribution to this country. All of these things are part of a conversation that we can be having at a time when migration has largely slowed to a stop. We need to think about what it looks like when it restarts again.

JAYES: Fair enough, but this is a conversation that the other side of politics did have last year. So the question is, where would you cut? You've got different categories such as skilled visas, humanitarian, student visas, family reunions. I mean, some of those are reliant on the economy, and some of them are moral obligations that Australia does hold. So where would you cut? What category?

JAYES: I've been making the same points Laura in this discussion, that the economy and our society rely heavily on migration. What we're talking about here is getting the mix right between temporary and permanent. We're talking about making sure that we are training Australians for vacancies in our economy when we've got something like two million Australians already unemployed or underemployed, and that will get worse before it gets better. I think it's important that we have a balanced conversation about this. That's what Kristina is seeking to have, and I think the community is up for it.

JAYES: We will see. Jim Chalmers, thanks for your time.

CHALMERS: Thank you, Laura.