SUBJECTS: Mid-Year Economic and Fiscal Update; NSW cluster.




SUBJECTS: Mid-Year Economic and Fiscal Update; NSW cluster.

PETER STEFANOVIC, HOST: Joining us live is Jim Chalmers, the Shadow Treasurer. Jim, good to see you. Thanks for joining us this morning. Before we get onto MYEFO I just want to get your reaction to our top story this morning. As you know, we've got this outbreak in Sydney's Northern Beaches, 17 now. The Premier says things are going to worsen. The Queensland Premier moved pretty quickly last night declaring it a hotspot, which means there's going to be restrictions in place. Was she right to do that?

JIM CHALMERS, SHADOW TREASURER: She's certainly right to follow the health advice. I think that's been the secret to the success, not just of the Queensland Premier, but a range of state governments around Australia. They've stuck to the health advice. They've taken difficult decisions for the right reasons. So long as leaders of either political persuasion in any state in the Commonwealth continue to do that, then that gives us the best chance of limiting the spread of the virus.

STEFANOVIC: Given that, as the Treasurer said, New South Wales is the gold standard at the moment is there a chance that premiers - and we include Western Australia in this too - have gone too early and not perhaps learned the lesson of South Australia from a few weeks back?

CHALMERS: I'm not going to be like Josh Frydenberg and try and second-guess or play partisan politics with the decisions taken by premiers based on the health advice. All along we've been consistent, we've been constructive, and we've said the best thing that premiers can do is to weigh up the health advice provided by the experts and to do the best job they can take in good, difficult decisions on behalf of their people. We say that in Liberal and Labor states. We are concerned, obviously, about this cluster in Sydney. We want the Government to do the best they can to get on top of that. We want people to follow instructions, get tested, participate in the tracing and the rest of it because everyone's got some skin in the game here, particularly at Christmas. We want to limit the spread of the virus. We want to make sure that we can get on top of it. We support any efforts to do so.

STEFANOVIC: It's going to come at an economic cost, though, isn't it?

CHALMERS: Clearly when we have outbreaks, as we saw in Victoria, and we've seen elsewhere, of course there are economic consequences for that. But the economic consequences of getting it wrong, of letting this thing run rampant in our communities, is far, far greater than the economic costs of taking sensible steps as early as possible.

STEFANOVIC: Do you believe, Jim, that there should be changes involving airline staff? They have a bit of a different system. They're allowed a bit more leeway than ordinary passengers are in our airports at the moment. Do you think there needs to be some tightening of controls there?

CHALMERS: I was a bit surprised to be honest with you, Pete, when I saw some of those arrangements. I'd like to know more about them. I'd like to know what evidence base they come from because at first blush it seems a bit unusual. Let's hear what the airlines, the state governments, and the chief medical and health officers from around Australia say about it. It may be that there's an explanation for it but I understand why some people would be scratching their heads about it.

STEFANOVIC: Okay, Jim, just onto MYEFO. The GDP will expand rather than shrink, growth is up, unemployment is down. All things considered, it's not bad?

CHALMERS: I think any improvement in the economy or the budget is welcome. We need to be realistic about it, though, and have some perspective. The improvement in the budget is a big part of the reopening of state economies. Even in those job figures that you referenced a moment ago from yesterday, 80 per cent of the improvement in the jobs market was in Victoria because the Victorian economy reopened. That doesn't come as a big surprise, but it's a good thing. We need a bit of perspective here. What really matters in the economy is the people-facing parts of it; the bits that relate to job security, wages, unemployment and underemployment. When you look at those numbers yesterday, we've still got almost a million unemployed, we've got more than a million who can't find the hours they need to provide for their loved ones. Wages growth actually got weaker in the budget update. The Government says there will still be another 90,000 unemployed between now and March. It's too early to declare "mission accomplished". I think the Government has a real blind spot when it comes to those people-facing parts of the economy but that's where the focus should be. If you focus on that, then you need to care about not pulling support out of the economy too fast; you need a plan for jobs and the recovery. We didn't get that yesterday.

STEFANOVIC: What would be your plan to rescue the economy?

CHALMERS: First of all, be flexible about the support that's in the economy. Don't be in a rush to pull that out if the labour market is not ready for it. We need a settled energy policy so business can invest in cleaner and cheaper sources of energy. We need to get training right. We need to get research and development right to turn our ideas into jobs more effectively. We need to get childcare right so more people can participate in work, especially women. We need to modernise our energy network as Anthony Albanese has been talking about since the October budget. Apprenticeships. All of these sorts of things would be part of a sensible, comprehensive plan for jobs in the recovery but we didn't get that yesterday. Instead, the Government is focused on cutting wages, cutting superannuation and winding back consumer protections in the financial system. That seems to me to be madness.

STEFANOVIC: Your plan means higher costs, so would debt and deficit be higher under Labor?

CHALMERS: Under a government of either political persuasion, there will be deficits for the time being, and there will be some debt. What really matters is how you invest that money, whether or not you get bang for buck, and you measure that effectiveness by what it means for jobs. The Government's racked up a trillion dollars in debt but they don't have enough jobs to show for it. That's because we've had this festival of waste, rorts and favours for mates. They've got private jets for ex-ministers, Robodebt settlements, sports rorts, airport rorts, the list goes on and on and on. That money that the Government's wasted on these rorts and favours would have been far more effectively spent if they actually understood and addressed the serious issues that we have in the jobs market in particular.

STEFANOVIC: Okay. Jim Chalmers appreciate your time this morning. Thanks so much for joining us. We will talk to you soon.

CHALMERS: Merry Christmas, Pete. All the best.

STEFANOVIC: Same to you.