E&OE TRANSCRIPT
TELEVISION INTERVIEW
SKY NEWS AFTERNOON AGENDA
WEDNESDAY, 2 SEPTEMBER 2020
 
SUBJECTS: National Accounts; State borders.
 
KIERAN GILBERT, HOST: Jim Chalmers, thanks for your time. At your news conference you were critical of the Treasurer making international comparisons, but why aren't they relevant if you look at what's gone on, in the UK a reduction of 20 per cent for that quarter, the US almost double-figures, and France and Canada all copped it? Seven per cent isn't as bad.
 
JIM CHALMERS, SHADOW TREASURER: Seven percent is horrible, first point. The other point that I was making was if you're one of the million Australians who have lost their job, or one of the 400,000 that is expected to lose their job between now and Christmas, then that comparison is meaningless to you. It's cold comfort whether we're doing better than Donald Trump's America or any of the other countries that Josh Frydenberg mentioned. Seven per cent is the worst on record for a quarter. We are in the deepest, most damaging recession of our lifetimes. We've got a million unemployed, and 400,000 expected to lengthen the unemployment queues. It is long past time for the Government to have a plan for jobs.
 
GILBERT: They say they've got their JobMaker plan. We'll get to that in a moment, but it sounds like the Government is going to bring forward income tax cuts as part of the recovery. Will Labor support those?
 
CHALMERS: They've been hinting at that for some time. I did catch the exchange you had with the Finance Minister earlier this afternoon. They've been sending out those smoke signals for some time. We've been saying for months now, that if the Government comes forward with a plan on income taxes then obviously we'll engage with that, and we'll have an open mind to it. But even if they do that, that wouldn't be a comprehensive jobs plan. It wouldn't sort out energy, training, social housing or some of the other really important things that we think should go into a comprehensive plan for jobs. 
 
GILBERT: When it comes to the broader response here, the RBA has been the one to do the heavy lifting in terms of recovery over many years. There's no scope in terms of rates for that now. What should be the main lever the Government pulls now in terms of prompting private investment?
 
CHALMERS: First of all on the Reserve Bank, yesterday the Reserve Bank came out and announced more support for the economy at the same time as the Morrison Government's pulling support out of the economy by cutting JobKeeper. That doesn't make a lot of sense to us when unemployment is still rising. There are many levers that the Government can pull as part of a more comprehensive plan for jobs. We're talking about business investment. We had another really bad business investment number today, but it was weak for some time even before COVID-19. There are opportunities in the tax system, and opportunities to get the energy policy framework right. I spend a lot of time with businesses and they're always saying to me that if you get the energy policy framework right then we can invest with a bit more confidence. That's would be a good thing because investment equals jobs.
 
GILBERT: But what in the tax system could the Government propose that you would agree with?
 
CHALMERS: We've said for some time that there's a case to be made for a targeted tax incentive for business to get them investing again. We said that before COVID-19. Business investment was flatlining for some time last year and even before that. We've said if they come to us with a proposal like what we took to the last election, the Australian Investment Guarantee or something that looks like the Business Council's proposal, we'll have an open mind to that. We think there is a case to try and incentivise more investment because as I said, if we get investment flowing again we can get the place growing again and that means jobs.
 
GILBERT: You've spoken about JobKeeper a lot, and again today the Finance Minister in that interview earlier said if you delay the adjustment, the weaning off of those supports, you could delay the recovery. What do you say to that?
 
CHALMERS: If you withdraw the support from the economy too soon it will cruel the recovery before it even gathers pace. The point that the Reserve Bank and a lot of the private economists have been making repeatedly is that they shouldn't be in a rush to pull the support out of the economy before it's ready, especially when there's not a jobs plan to replace it.
 
GILBERT: But you've said previously that there does need to be a tapering at some point?
 
CHALMERS: Yeah but not while the economy is as weak as it is now. The Treasurer tried to pretend today that we'd called for what they're doing. That is entirely rubbish. What we've said is that he should tailor JobKeeper to the circumstances in the economy. Unemployment is still rising, we're in the teeth of the worst recession in almost a century so they shouldn't be in a rush to pull that support out especially without telling us what’s to replace it.
 
GILBERT: Are the states capitalising on the wage subsidy, in terms of keeping the borders shut? Is the federal support basically giving Mark McGowan, Premier Palaszczuk and others the scope to do that?
 
CHALMERS: The state restrictions are really important. The worst thing for the economies of this country would be if we had another outbreak. Some of those restrictions, nobody likes them, nobody wants to see them in place for a day longer than is necessary, but they are designed to prevent an outbreak which would ruin the state economies of this country. That's the first point. The second point is if you look at some of the public investment numbers that we've seen in the last day or two they show that the states are doing a lot, and that they are contributing a lot to this effort. It's not as much as the Commonwealth for obvious reasons. The Commonwealth is a bigger player in this, but we shouldn't pretend that they're doing nothing. A lot of states have got jobs plans. We want to see a jobs plan from the Federal Government.
 
GILBERT: In the numbers today the National Accounts showed a big rise, I think the biggest rise in household saving since 1974. It's obviously showing that there's money there to be spent. It's crucial then for the states to reopen their borders as soon as possible, isn't it, to allow that pent up demand to be to be released across the board?
 
CHALMERS: The main reason why people aren't spending as much as we would like is because they're petrified, and that's understandable. In the deepest recession on record people are worried that they'll fall through the cracks, worried that they'll slip through the safety net, and that they’ll be left out and left behind by the Government. That worries them. People are petrified about that. When people are worried they don't spend.
 
GILBERT: Do you accept that the borders will also be important, to reopen them as soon as possible to allow that the travel of people, freight and other things to make it, what it should be, one nation?
 
CHALMERS: As soon as it's responsible to do it. You need to take all the medical advice into account, you need to be conscious of the history of the last few months. In my home state of Queensland Annastacia Palaszczuk got a lot of stick for the restrictions that she's put in place, but she's turned out to be right. She was resolute about it, strong about it, careful and cautious. That has prevented what could have been a catastrophic Victoria-style outbreak. None of us want to see the restrictions on longer than they need to be. We want to see them lifted, but only when it's responsible to do that.
 
GILBERT: Is Premier Palaszczuk’s stance motivated in some part by the election next month?
 
CHALMERS: No, it's motivated by the medical advice and the fact that the difficult steps that she has taken have protected Queensland from some of the outbreaks that we've seen elsewhere, so far at least. That's a good thing. That's good for business too because while business doesn’t like the restrictions, obviously, but they would like less another outbreak like we've seen elsewhere.
 
GILBERT: But some politics of course involved in it? I mean it's polling off the charts. It's obviously very popular. 
 
CHALMERS: It is very popular but she's motivated by the medical advice and by the success that we've had to date. Things could change. We saw that in Victoria. But the success that Queensland has had to date in limiting the spread of this virus has been really important. The Premier, Annastacia Palaszczuk, deserves some credit for that.
 
GILBERT: Finally, we'll go back to what you spoke about - the lack of a jobs plan. The Government talks about its JobMaker plan. It's got its infrastructure component, research, skills and training, higher education, and various arms to it. What do you want to see that is any different to what the Government's proposing?
 
CHALMERS: First of all, JobMaker is a slogan, not a plan. They don't have a comprehensive jobs plan. We've said that you need to think about it in three phases: respond adequately, which is why JobKeeper needs to be more substantial than the Government's proposing; in the recovery phase we need to do things like social housing, infrastructure, investing in the care economy; and in terms of the longer-term recovery, energy policy, turning our ideas into jobs, making sure that we commercialise our ideas; teaching and training people for technological change so that this change that has accelerated during the crisis is something that we can embrace rather than fear. These are the sorts of things that we need to see in a comprehensive jobs plan. Instead, we get a Government which is prepared to tell people what they already know, how bad things are, without telling people what they're going to do about it.
 
GILBERT: I know you've been critical of them over a long time before COVID, but they would argue that they got the unemployment rate down to 5.1 per cent I think it was, the pre-COVID level. The trajectory was good before this once in a century pandemic?
 
CHALMERS: We didn't enter this crisis from a position of strength, it was a position of weakness. We had underemployment, insecure work, stagnant wages, stagnant business investment and that has meant that some of the challenges that we're seeing now are not new to us, they've just been accelerated and exacerbated by the crisis.
 
GILBERT: Jim Chalmers, thanks. 
 
CHALMERS: Thank you.
 
ENDS