SKY News First Edition 1/12/21

01 December 2021

SUBJECTS: National accounts; Omicron variant; Cost of living pressures; Wages; Social media.



SUBJECTS: National accounts; Omicron variant; Cost of living pressures; Wages; Social media.
PETER STEFANOVIC, HOST: Jim, good to see you. Thanks for your time this morning. Just off the back of that we'll start there. The probe into tech giants today, you're on social media and it's part of the gig. What do you make of this probe? And can the online world be 100 per cent safe?
JIM CHALMERS, SHADOW TREASURER: Good morning Pete. Obviously, we need to be doing all that we can to make sure that people are safer online. It's a really important objective. I think what matters here, when it comes to the Prime Minister's commitment, is we've seen these kinds of announcements before. We've seen these headlines now for a couple of years. Let's see the actual legislation. Let's see what he actually intends to do about it. It's a really important objective. It is an anxiety that exists out there in the community, we need to do better in this area. So let's see what they actually intend to do.
STEFANOVIC: Onto Omicron. So far, the Premiers are holding the line and sticking to the plan, would you be urging them to stay the course Jim, even as Omicron eventually spreads here?
CHALMERS: There's a lot of anxiety and a lot of uncertainty around this new strain. I think when the Premiers have done a great job the last couple of years, it's because they've listened to the health advice. That health advice is evolving when it comes to the Omicron strain. So I would encourage them to continue to listen to the health advice and continue to make those difficult decisions in the interests of public health. I'm confident that they'll keep doing that.
STEFANOVIC: If they do shut their borders is that something that you would eventually or that you would have to support?
CHALMERS: Let's see what the health advice says. No doubt, all of the state governments of both political persuasions are listening to that advice, taking that advice, and that's a good thing.
STEFANOVIC: You've got this first study which has come out of Israel overnight. It suggests that Pfizer vaccine is 90 per cent effective against Omicron, as opposed to 95 per cent against Delta. That's pretty strong. It is only preliminary data. It's first stage data. So these things can change. But with that said, would it be your hope that this pause on international students and skilled migrants, which is essential to our economic recovery, would you hope that this pause would be it?
CHALMERS: Nobody wants to see the borders closed for even a day longer than is necessary. But I think as that study shows, and what our experience of the last couple of years shows, is that this thing evolves quickly and sometimes unpredictably. So we need to be ready for any eventuality.
STEFANOVIC: On to the economy, Jim, economists are predicting that national accounts will show a two to four per cent drop today which is getting up there in terms of the record books, that's because of the Delta variant. So it could be one of the biggest plunges, as Ed Boyd just said since 1959. What is the significance of that, in your opinion?
CHALMERS: This is a really important snapshot of the national economy. The national economy is defined by skyrocketing prices and falling real wages, and in the September quarter by the second biggest fall in economic growth since these records were kept. You listen to the Prime Minister and the Treasurer and they always want to talk about international comparisons, well of all the countries that have reported so far, Australia is expected to be absolutely last when it comes to economic growth. These are the costs and consequences of a Morrison Government which got the initial vaccine rollout, quarantine and economic support so badly wrong. At this time last year, they were talking about a big recovery. We've heard all of this before. Instead, they delivered the second biggest downturn in the history of the national accounts. So we can't be complacent. The Omicron virus strain is something that we need to be very attentive to. Complacency is what stomped on the green shoots of the beginnings of the last recovery and we don't want to see that again.
STEFANOVIC: Unemployment though, it went the other way when the last figures came out, all things considered thought it's not too bad. Wouldn't you concede it would be much worse without the government support that has been provided so far?
CHALMERS: It would be much better had the government not stuffed up the initial vaccine rollout, quarantine or withdrawal of economic support. The government wants you to forget that 200,000 jobs were lost in the last two months alone. That is not a good outcome. More broadly, we've got this situation in Australia where 2 million Australians are either unemployed or underemployed at the same time as we've got skill shortages, and that speaks to not just the last two years of economic mismanagement, but the last eight years of economic mismanagement, that we have that situation. So the labour market is not in as good a condition as we would like it to be. It's partly a story about training. It's partly a story about a couple of months of quite bad unemployment figures with 200,000 jobs lost. Regardless, you'll hear all kinds of stuff about the recovery today from the government but we've heard this all before. We can't be complacent about it. We need this recovery to be strong, sustainable, broad and enduring and that's what we want to see.
STEFANOVIC: This contraction, though, if there is good news, it's because of the Delta variant, we always knew we were going to get a bad one. So wouldn't you concede the next one, and that's going to take into account the Christmas period, it'll bounce back?
CHALMERS: The reason why we have the worst September quarter in the developed world, out of all the countries that have reported so far, is because Scott Morrison did such a bad job on vaccines, quarantine and economic support. We shouldn't be in a position where our economic growth for the September quarter is the worst in the advanced world of all of the countries that have reported so far. Nobody's pretending that the Delta variant wasn't a big problem in our economy. Nobody is pretending that. What we are saying is that the downturn was worse in Australia, because of the mistakes that Scott Morrison and Josh Frydenberg made. That means that the recovery is not as far along as we need it to be. It means that the complacency that we saw at this time last year and in the May budget where Josh Frydenberg said the economy was roaring back instead, we’ve now got the second biggest downturn in the history of the national accounts. I think that speaks to the caution that Australians should have when they listen to these two guys, Morrison and Frydenberg, talk about the economy and the recovery.
STEFANOVIC: Wage growth is certainly a problem. It has been low for some time now even pre-pandemic, but according to reports, households have got up to $270 billion as a total saved. Doesn't that show, Jim that the money is there, and will eventually feed back into the economy boosting things again?
CHALMERS: We hope it does. We genuinely hope that some of those savings that people have accumulated find their way into the small businesses of our economy. We've been saying that now for some time, that would be a very good outcome. It doesn't disguise or distract from the fact that real wages went backwards in the last numbers, and the government expects real wages to go backwards over the next four years. That's what turbocharges this cost of living pressure that ordinary working families are feeling all around middle Australia. Petrol prices are skyrocketing. Childcare prices and rent is going through the roof at the same time as real wages are going backwards. I think that is a defining feature of the Morrison government's economic mismanagement, not just for two years, but for the eight years that the Liberals and Nationals have been in power.
STEFANOVIC: Jim Chalmers appreciate your time as always this morning, thank you.