06 July 2020

SUBJECTS: Victorian outbreak; Deloitte's June Outlook; Australia's economic recovery; JobKeeper; Superannuation Guarantee. 


SUBJECTS: Victorian outbreak; Deloitte's June Outlook; Australia's economic recovery; JobKeeper; Superannuation Guarantee. 

ANNELISE NIELSEN, HOST: Joining us now is Shadow Treasurer Jim Chalmers. We will get to this Deloitte Access Economics report Jim Chalmers but first your reaction to the pretty drastic moves by the Victorian Government to shut down the border. Do you think it's the right call?

JIM CHALMERS, SHADOW TREASURER: I think it's important that we don't second-guess some of these decisions. Just listening to Premier Andrews there you could tell he didn't take this decision lightly at all. These are very difficult, very complex decisions. It's important that they are based on the best available medical expert advice, as this appears to be. I think it's important that we recognise that the outbreak has been really concerning, and decisions that no Premier or Chief Minister or indeed Prime Minister would like to be taking in these difficult times are being taken. I think that people will understand that although we do want economies and communities to open up when it’s safe to do so, we need to take these decisions from time to time to limit the spread.

NIELSEN: Now this comes as we had the significant report released by Deloitte Access Economics about the economic impact of the Coronavirus shutdowns - the dual responses from the National Cabinet since the Coronavirus pandemic again to manage the health impacts as well as the economic impacts. What did you make of what the report said about potentially Victoria being really affected by having such strict lockdowns?

CHALMERS: Clearly the shutdown of the economy, whether it's in Victoria or over recent months right around Australia, is having a devastating economic impact. That matters a great deal to people's jobs, the way that they can provide for their loved ones, put food on the table and pay the rent. Obviously there have been some really concerning developments and economic consequences of some of these necessary decisions to limit the spread of the virus itself. But the Deloitte Access Economics report made, in my view, three really important points. The first one is that the Government needs to plan for jobs in the recovery. The absence of a plan to now has been very costly. Secondly, they've joined a chorus of views from the Reserve Bank and others which says that if you pull the support out of the economy too soon that will cruel the recovery. The third important point they made was that the best way to fix the budget is actually to fix the economy. If we don't get on top of the economic aspects of this, and focus on a plan for jobs, then the impact on the budget in the coming months and years will be devastating as well.

NIELSEN: Labor is calling for an increase to a lot of the Government support including extending JobKeeper to causals - an extra 1.1 million of them - and extending it to foreign workers like the dnata workers. That would have an impact on the budget bottom line and increase the deficit. In light of the Deloitte Access Economics report do you think that that would have been a step too far?

CHALMERS: Of course not. The best way to understand our position is that if the Government's original instinct to try and keep people connected to their jobs is the right one, and we think it was, then you need to make sure that you apply that quickly enough and broadly enough to make a difference in the labour market. The unemployment queue is longer than it needs to be because of the way that the Government bungled what should have been welcome support by the JobKeeper program. Again, Deloitte Access Economics says the best way to fix the budget is to fix the economy. Too many people are being left out and left behind when it comes to some of these important programs. We've also said, importantly, that there should be ways to better target this support, and that there should be ways to taper it, but don't just snap it back on the last weekend in September. As Deloitte pointed out again today and as the Reserve Bank and as others have pointed out previously, that would cruel the recovery and it would cost jobs. We can't have the same kind of mismanagement coming out of this recession as we saw going into the recession. The uncertainty that the Government's creating by not coming clean on the future of JobKeeper is already costing jobs. We need them to clear that up so that people know what the future looks like and businesses know what they need to do to try and maintain as many workers as possible.

NIELSEN: But you are calling for that extended spending on JobKeeper. That will increase the deficit, will it not?

CHALMERS: There might also be ways, Annelise, to better target the payment. For example we've said repeatedly that if someone was making $100 or $200 a week and they're now make $750 a week on JobKeeper that clearly there are opportunities there to wind it back. There are swings and roundabouts. Overall the point that we're making is that it makes very little economic sense when Deloitte, the Reserve Bank, and the Government itself are saying that unemployment will be higher, to try and be in a rush to pull the support out of the economy. We need to make sure that the priority is jobs and we need to make sure that this isn't a jobless recovery where some people gallop ahead but most people are left behind. That's our objective here. We need to do what's necessary to invest in those jobs so that we can maintain support until the recovery gathers pace.

NIELSEN: On superannuation we've seen comments from David Murray at AMP who joins the chorus of people saying that the Superannuation Guarantee shouldn't be extended as is currently legislated. Do you agree or should we be considering it especially considering this industry super report saying that it will impact on wages negatively if we do go with that increase of the Super Guarantee to 12 per cent?

CHALMERS: I don't support calls to freeze the Superannuation Guarantee again. Remember this Government's frozen it multiple times already. That wasn't a recipe for more investment or higher wages; we saw after that stagnant wages, weak investment and weak growth. I don't accept that that link is necessarily there. I don't think the answer to the problems that we have in the economy right now in this first recession in three decades is to undermine people's retirement incomes. I think if we want to support business we need to be looking at the future of JobKeeper, we need to get some certainly into energy policy, and there might be other policies that we can look at as well. We don't want to see people's retirement income diminished. We don't think that's the answer to what's going on here. They've been diminished before and attacked and cut before when it comes to the Superannuation Guarantee, and it didn't deliver the kinds of economic gains that the Coalition now seems to think would happen if they froze it again.

NIELSEN: And just finally would you like to see Australian banks commit to deferring loan repayments beyond that September deadline?

CHALMERS: We've been in discussions with the banks about the future of the welcome support that they are providing to families and businesses in the economy. One of the reasons we've been calling for some more certainly over JobKeeper and the other Government support is because a lot of these other decisions will necessarily flow from what the Government's doing. Clearly there is a need for some ongoing support from the banks. They are working on that and considering that and that's appropriate, but we need some clarity from the Government as well.

NIELSEN: Shadow Treasurer Jim Chalmers, thank you for your time.

CHALMERS: Thanks Annelise.