SUBJECT/S: Final Budget Outcome; Labor’s fairer and more responsible Budget alternative; superannuation; wages
 
GRAHAM RICHARDSON: We still haven't heard anything from Billy Slater's situation. I know Jim Chalmers is equally wondering about whether he survives or not. Jim is in our Brisbane studio. Welcome Jim.

JIM CHALMERS, SHADOW MINISTER FOR FINANCE: G'day Richo. Yeah, I think like the rest of the rugby league community I am watching that very closely. I hope Billy gets through the judiciary tonight.

RICHARDSON: Yeah, so do I. I have been watching that same incident about 30 times now. It seems to me he had no choice. Were it me, if I ever had the courage or the talent to be in that situation I think I'd of kept going. But I had neither the talent nor the courage.

CHALMERS: It's not the kind of shoulder charge they are trying to rub out from the game. The ones that they need to get rid of are the ones where two big boppas go at each other in the middle of the field. I think this is a very different scenario and I think Billy was just doing his best to stop the try. I hope that we are not robbed of seeing Billy Slater one last time. He has been such an extraordinary servant of the game. He has made a heap of people happy - not just Queenslanders, but especially Queenslanders over the years. I hope he gets one more run.

RICHARDSON: There is nothing like seeing a champion go out on top. We've seen too many champions stay that season too long. He hasn't. He is still in brilliant form. I mean when he plays for Queensland he annoys you know what out of me. That having been said I'll forgive you because you’re a Queenslander. It's a big thing to forgive but I do forgive you. Now if we could move on to something a little more serious. I'm a little bit surprised that the Labor party, the Opposition hasn't really seized upon one weakness in Scott Morrison's CV that I would have though stands out. And that is that we get to half-a-trillion of debt under his stewardship at Treasury and that is just appalling. Labor has this reputation as spenders. Labor may have left us with a debt of a few hundred million but they had a GFC to counter, which everyone around the world spent money to counter, so we were no different. So there is some excuse. There is no excuse for the extra $300 billion added under this Government. I just wonder why you’re not jumping on that?

CHALMERS: We are doing our best Richo. I think one of the most important points that we can make is that, yes we had an increase in debt during the global financial crisis for obvious reasons and you have identified those. What a lot of people don't recognise and what we need to keep reminding people is that these so-called superior economic managers have actually doubled the debt at a time when billions of dollars have been rolling through the door because the global economy is in remarkably good nick. We do need to keep reminding people of that. There was a new number out today in what's called the Final Budget Outcome, which showed that the deficit for the year just gone was four times bigger than they predicted it would be, just a few years ago. Both measures of debt have doubled or almost doubled. We have got more than half-a-trillion dollars, as you rightly identify, in debt as a country without a GFC to point to. I think you are right; we need to keep the Government up to the mark. We need to keep reminding people that the hollow words about these characters being superior economic managers are just that. When you look at the record, billions of dollars rolling through the door and still record debt, then I think that exposes those words for what they are, the hollow words that they are.

RICHARDSON: They certainly have been. Now if I just turn you to the Newspoll this week. I don't get carried away with a two per cent increase in their vote. It couldn't go anywhere but up after that incredible week that the Coalition had tearing itself apart. Really looking like a disreputable mob. So the two per cent you could figure. Are you worried by the fact that he hasn't even been the boss for a month and he has opened up a 13 point gap on Bill Shorten as preferred Prime Minister?

CHALMERS: I'm not especially worried about that Richo. I don't think that is the decisive factor and a bit like you we don't get carried away by movements in the polls. We have been anything between 51 and 56 I think, on the two party preferred measure. As you would well recall, people do not go into the little cardboard booths with the little stubby pencil and vote in a popularity contest between Prime Ministers. The two party preferred measure is the one that counts and we've been ahead on that measure for a couple of years now and that's a reflection of a few things. Firstly, we've maintained a focus on middle Australia, not on ourselves. We've been remarkably united for five years now as a political party. A period of unity not seen in recent times on either side of politics. We've established ourselves as the more united team. We've led the argument on policy. For all of those reasons, people have been prepared to support us in those opinion polls. They don't matter so much, what really matters is what happens at the beginning of next year. I don't think the leadership contest has been a decisive thing. Turnbull was ahead and floundered badly. It's not the thing that people are most focused on.

RICHARDSON: Turnbull floundered badly in Longman. That's the seat that everyone talks about. Now you're a Queenslander and Longman's not that far away from you. I think it's a bit north of you is it not? I wonder is Queensland really going to supply the six, seven or more seats that Labor think they can win up there?

CHALMERS: We are certainly giving ourselves every chance. We are putting a lot of effort into Queensland. Bill has done more town hall meetings in Queensland than any leader of either party in modern history. He is here all of the time, listening to people and making sure that our policy offering is very much determined by the conversations he has up here. The last time I was on the show with you we talked about Longman. It was before the Longman by-election. I think it is pretty fair to say whether it's those by-elections, whether it's the 2016 election, people have pretty consistently underestimated Bill's capacity to appeal to people out there in middle Australia. I think they are continuing to do that now despite the fact that he has been out leader every day of those two years that we have led, sometime substantially, in the opinion polls. He's done a remarkable job getting us together, focusing us on middle Australia, focusing on leading the policy debate, uniting a team. Those things should not be dismissed. Those are the hallmarks of Bill's time as Leader of the Labor Party and if we are elected next year that would be the essence of a Shorten-led Labor Government. Focus on people, leading on policy and being a united team. I don't think the other mob could claim to have achieved any of those three things.

RICHARDSON: They certainly can't claim unity. Even after that week they're still having ructions right through the party. You use the phrase then 'leading the policy debate' and one thing under Bill Shorten you've done is, I think, Labor has been quite courageous because as an example, to come up with a policy the way you have on negative gearing, that is pretty courageous because you see the Prime Minister is out and about bashing you over that one and yet I don't think it's hurting you at all. I think people have to wonder in the end if it's all about house prices and keeping them up that's one argument but what about the idea that the same people who own those houses have kids who want to get into the market. What about talking about those kids and how if you don't get prices down a bit, if you don't give them the chance, then it seems to me they can never get in?

CHALMERS: The point of our policy is to try and level the playing field so that people can get in for the first time. We've been saying that really now since about 2015 when we first announced our policy. I think more broadly, people are appreciative that we are not following the old orthodoxy in opposition, which says you curl up into a little ball, you throw a bit of mud at the Government and you hope that people elect you because they don't like the other guys so much. Then when you get into office you pretend things are all worse than you realised and then you do nasty things. That was what Abbott did largely and people have rejected that kind of politics. People are rewarding the way Bill Shorten and Chris Bowen and others have gone about saying to people yes we want to do some big things. They won't be universally supported but at least we will be upfront with you before the election. So that when you go into the ballot box you know what you would get under a Shorten Labor Government if we are elected. I think people appreciate that. They're sick of the old politics that says be a small target in opposition and spring things on people after you win. 

RICHARDSON: You certainly haven't made yourselves a small target. It seems that the great attack on Labor that comes from the Liberals is less now about the term economic management, because I think they know they've got some of their own vulnerabilities, some of which we have just discussed. Also I think that they look at Labor and just say higher taxing. They just say what you'll do is tax everybody more. That's what you are always about, always have been about, always will be about is more taxes. When you look at the suite of policies you've so far produced, where are the extra taxes? What do people have to worry about from Labor when it comes to extra taxes?

CHALMERS: There is a real contrast on tax. I think the main contrast is, I'll get to us in a minute, but most of the things that the Government have announced favoured the top end of town and people aren't especially keen on that. The reason they are giving us a fair hearing is that they know we have a problem in the budget and the Liberals have doubled the debt that they inherited. We have to get the budget on a sustainable footing. We've got to be able to fund the things we truly value as a society - hospitals, schools, disability care and aged care and the like. What we've said is the best way to improve revenue in this country is to close down some of the loopholes, which overwhelmingly favour the people who need them least, right across the board - dividend imputation, negative gearing, trusts, all of the things we have announced. We do recognise that we have to get the budget in better nick; we have to repair the budget in a fair way. Some of that is spending restraint but some of that is also making sure that we have a tax system that is fair and helps us repair the budget. We've explained that for some years now. As I've said before we haven't sprung this on people. We've announced all of these things well in advance of an election so that they can hold it up to the light and work out whether they support it or not. All of the early signs are good that people know where we are coming from, they like that we are being upfront with them and they know that the budget needs to be fixed and there is two very different ways of going about it and our way is fairer and more responsible.

RICHARDSON: One group that don't seem to me to be as happy as you are making out are self-funded retirees. It seems to me that fiddling with superannuation always gets you into strife and you have fiddled a bit there haven't you?

CHALMERS: We are not pretending that the changes that we've flagged are universally supported. Obviously some of them have been contested. I guess the point that I'm making is we're not springing this stuff on people after an election if we were to win the election. We've had a range of good conversations with people about that policy dividend imputation. I spent a big chunk of today in Sydney engaging with the investment community about that very issue. We're upfront with them about it, we don't pretend that it is universally supported but I think on the main, people have had the opportunity to engage with us on our way of repairing the budget in a fair way. I'm very confident that when we go to the election and have a contest about budget responsibility, that our way which is to close down some of these loopholes, which are costing the budget more and more money over time. That one that we are talking about now has gone from about $500 million a year to $6 billion a year and will be almost $8 billion a year in time. People appreciate that some of these things are unsustainable and we have got to address them.

RICHARDSON: I understand that but it seems that superannuation is becoming more of an issue and I often have on the program Adam Creighton from the Australian. He is a brilliant young economist. Certainly not a politician. He is one who agrees you should tax the family home etc. I'm not sure he is part of the mainstream when it comes to politics. I don't think too many politicians I know on either side would jump at that one. But what he does talk about is that superannuation ought to be something that you don't have to go into, it shouldn't be mandatory it should be optional because a lot of low paid workers would be better off using the money no, especially at times when there has been no wage increase for five years, and I'll get to that with you in a moment. The question that he says is well look it's not working, if you're on a low income and you go through your working life you are still on a pension at the end. Is superannuation working in the way that Paul Keating and Bill Kelty and Bob Hawke wanted it to?

CHALMERS: I read Adam as well with a lot of interest. I find that I'm as likely to disagree with him as agree with him but his column is a good read each time and his articles are. This is one of the times that I don't agree with them. I think superannuation, compulsory superannuation is one of the great public policy triumphs, not just of the Government you were a part of but of the Australian nation. There are other countries around the world who look at our system with envy because it is a mixed model. It compels people to save for their retirement. There are a lot of people with a more dignified retirement than they would otherwise have in the absence of compulsory superannuation. I am a strong supporter, couldn't be a stronger supporter of the superannuation guarantee. That's not to say it doesn't have its imperfections. One of the big imperfections is obviously the fact that women retire with dramatically smaller balances than men do and we've had some things to say about that via Chris Bowen, Clare O'Neil and others and Bill Shorten in the last little while. We think that we can take some steps there, responsible steps there to try and start addressing that problem. So it’s got imperfections but it's a public policy triumph. I'm a strong supporter of it. We can make it better without taking the compulsory out of compulsory super, which is what Adam is proposing.

RICHARDSON: OK. Now if I can move on to this thorny question if you like of the last five years and no wage increases. I think the mob is well and truly aware that profits have gone up and they haven't shared. What can you do? Scott Morrison and Josh Frydenberg, whom I have on this show tomorrow night, they can wander around saying the economy is in great shape but for an awful lot of Australians that rings very hollow, very hollow. Because it's a long time since they've seen a wage increase and yet around them all sorts of costs have gone up.

CHALMERS: I think people hear Josh Frydenberg and Scott Morrison pat themselves on the back for these economic figures and wonder what planet they're from. I mean in aggregate some of the headline figures in the economy are relatively strong but the parts of the economy that people actually experience in their day to day lives, things like wages, things like household saving, household debt, living standards, all of these things are actually quite weak. I think that one of the reasons that people have been receptive to us in Longman as you mentioned before but more broadly is that we do understand that it’s the people facing part of the economy that matters the most out there in the suburbs and towns. The defining feature of the economy as it stands right now is that profits are growing something like five times faster than wages in the most recent national accounts data. People do get a bit narky when they see the Liberals pat themselves on the back for that kind of thing. You asked me what we can do about it. Well firstly we would restore penalty rates. That's a big part of the story. We'd deal with labour hire, dodgy labour hire practices, which are undercutting workers' wages in lots of places but I've noticed it particularly in regional Queensland it's a big issue. We would try and make enterprise bargaining fairer. There is a lot of dodgy practices which have sprung up in the industrial relations system around the tearing up of agreements, which obviously has meant that has tilted the balance further away from employees in the workplace and on the shop floor. There is a whole range of things that we can do. I think the wages story is probably the most important story in our economy, in our politics, in our society, in our community at the moment and if we were to be elected next year a Shorten Labor Government would make some of those things that I have just rattled off a really high priority.

RICHARDSON: You have to. What do you actually do to make wages go up? I have never heard anyone tell me how you force in the end an employer to pay the worker more. I just don't understand how you do that?

CHALMERS: You need to make sure that workers have a sufficiently level playing field that they can bargain for better outcomes. You got to make sure that the rules don't incentivise some employers, a minority of employers who want to do the wrong thing to rip up agreements and make people go back to inferior awards. You've got to make sure that we don't empower people who want to do the wrong thing by bringing in big labour hire workforces, making them essentially permanent, doing the same job as the next guy and getting paid different rates. We want the same job to be attracting the same level of pay. All of those things, restoring penalty rates, they will make a material difference to wages, not overnight necessarily in all cases but together they do have some prospect of shifting the needle on wages because as you rightly point out wages are barely keeping up with the cost of living in this country. People feel like the cost of everything else is going up except their wages and that obviously can't continue.

RICHARDSON: Thanks for very much for your time Jim. I do have to leave it there. I mean there is so much more I could go on with but we will have to stop. I've got to say, mate you are one of the rising stars in Labor and I wish more power to your arm. We will see you soon.

CHALMERS: Very kind of you Richo. Thanks very much for the chat.