E&OE TRANSCRIPT
TELEVISION INTERVIEW
SKY NEWS SPEERS
MONDAY 17 DECEMBER 2018
 
SUBJECTS: MYEFO; Newstart; Labor’s bigger, better, fairer tax cuts; Andrew Broad

DAVID SPEERS: I'm joined by the Shadow Finance Minister here at the ALP National Conference. Jim Chalmers, thank you very much for joining me this afternoon.
 
JIM CHALMERS, SHADOW MINISTER FOR FINANCE: No worries, David.
 
SPEERS: You've been looking at these figures as well today. Do you welcome the improvement in the Budget bottom line and do you give the Government any credit for that?
 
CHALMERS: Of course we want to see the Budget bottom line improve, but I think it's more a function of good luck than good management that we're seeing this. It's more of a function of positive global conditions. If you look at the numbers in detail, very little of this can be explained by anything that the Government's done; anything that Josh Frydenberg's done. I think worse than that, if you look at the numbers in some detail, then what you see is after five years of division and dysfunction from the Liberal Party, we've got slowing growth, we've got record debt in these numbers today, and we've got the triple whammy of weak wages, weak spending and weak saving. So I'm not quite sure what Josh is patting himself on the back about.
 
SPEERS: Well, do you not agree that Government does play a role in how much tax there is in the economy, for example? And keeping that at just the right level, and spending as well does impact on economic growth and economic conditions?
 
CHALMERS: Yeah, but the point I'm making, David, is if you look at these numbers today in the mid-year update, most of what we're seeing is a massive increase in revenue, which is coming from things like the terms of trade.
 
SPEERS: But also fewer people on the dole.
 
CHALMERS: It's overwhelmingly a tax story, overwhelmingly a story about increased revenue. In one year alone, they're getting something like $7 billion more - in one year! They're collecting $108 billion more this year than they did in 2013. And yet still, despite all of this, we've still got record debt, which is double what they inherited in 2013. In these numbers that they're releasing today, net debt for example, is $352 billion; they inherited it at $175 billion. So I guess the point we're making is that with all this money rolling through the door courtesy of the global economy, they've run out of excuses for this record debt that's accumulated on their watch.
 
SPEERS: Let me get your view on this $9 billion war chest of decisions taken, but not yet announced. The stuff that will be rolled out between now and the election. The Treasurer there not confirming anything, but I think hinting that they prefer lower taxes. Whether that's going to be fast tracking the tax cuts they've already announced, we'll see. But what will Labor's priority be for $9 billion sitting in a war chest. What would you do with it?
 
CHALMERS: Obviously we don't know the nature of the $9 billion. It's a decision taken, but kept secret from the Australian people.
 
SPEERS: What do you think the Government should do with it then?
 
CHALMERS: We've got our own priorities. It's not for us to spend the Government's $9 billion.
 
SPEERS: It's taxpayers' money. You'd have a chance to allocate it in election promises as well.
 
CHALMERS: We've made a series of commitments already that we've fully paid for and fully funded and fully costed. When the Government announces what that $9 billion is - and we anticipate the same that we do, particularly after that interview with Josh just now that they will have some kind of tax cuts - the point I would make about that is, we've already got on the table $5.8 billion of income tax cuts, which would make sure people earning up to $125,000 are better off under us than under the Government. So, if the Government does have tax cuts for people in those income ranges, then they will be playing catch-up with Labor.
 
SPEERS: So you won't need to go further then on the tax cut front?
 
CHALMERS: We'll obviously have more announcements to make between now and the election. The point I would make about that money they salted away for the election campaign is if they were actually confident that they would make it to the Budget in April and to an election in May, they wouldn't need to salt that away now. I think it's a concession, or an admission, that the wheels might fall off the Government before they get to the April Budget. So they've given themselves the capacity to spend up big if they're forced to an election before then.
 
SPEERS: There'd be a lot of people with their hand out saying $9 billion would go a long way here or here or there. You walk around this Conference and the big theme, for some at least, is the Newstart Allowance. Labor's been under a lot of pressure to do something beyond just reviewing it. You could spend some of the $9 billion there?
 
CHALMERS: There are a whole range of things we could spend $9 billion on.
 
SPEERS: Would this be a good idea?
 
CHALMERS: We go to the election with a series of priorities. The big priority we announced in the last 30 hours or so was a big package on affordable housing - rental properties, for example - and we'll have other announcements to make. But what we said about Newstart - not just at this conference, but for some months now I've been meeting with some very good people from the community sector who are very well intentioned; they want to see  an increase in Newstart - what we say to them privately is the same thing we say publicly: we believe that Newstart is too low. We think we give ourselves the best chance of getting it right if we do a proper review in Government, not just about the adequacy of the Newstart payment itself, but all of the complex interactions with other parts of the payment system.
 
SPEERS: OK, now the economic outlook in the Budget update today shows a slight lowering of growth and wages growth in the coming financial year. There is some concern, not just in the Treasury but elsewhere about the housing market possibly going further down as well. What's your view of where the economy is going?
 
CHALMERS: The economy's really going through two things. Global uncertainty; the global economy's been performing really well in the last little while. That's why we've got the big recovery in revenue. But there is some uncertainty, obviously around Brexit, obviously around the Korean Peninsula, obviously the two big beasts of the global economy are butting heads over trade from time to time. So there's global uncertainty. But I think what most people are feeling in Australia is a lot of household insecurity, whether that be weak wages, weak saving, weak consumption, insecure work. The combination of all of these things together means that people are feeling very insecure. And I think one of the main tasks for us if and when we win office next year will be to do things like restore their penalty rates, like make sure that people can bargain effectively in the workplace to get good outcomes; all of those sorts of things.
 
SPEERS: But if there is this lack of confidence - not that you used those words - but caution in the economy, in the community right now, would higher taxes overall be a bad idea?
 
CHALMERS: Our view is that you don't grow the economy by giving the biggest tax breaks to the people who need them least. You can't just say a blanket rule is increasing taxes at all means one thing, decreasing them means another thing. Remembering of course, this Government right now is the second-highest taxing Government in the last 50 years. The highest taxing was in the Howard era.
 
SPEERS: But you want to go further?
 
CHALMERS: We've got some tax reforms on the table. We've made them known for some years now in some cases.
 
SPEERS: Tax increases.
 
CHALMERS: And the point that we would make is that there is no growth dividend from giving access to the biggest tax loopholes for the people who need them the least. The way that you use the tax system to promote growth is to give tax cuts to the people who are most likely to spend and invest in the economy. That's why we've got the tax cuts for low- and middle-income workers. It's why we've got the Australian Investment Guarantee, which is about incentivising business investment.
 
SPEERS: Sure, but your overall tax take will be higher. Is that going to grow the economy?
 
CHALMERS: It depends where your taxes changes, the impact of your tax changes. Obviously, there will be a growth dividend from us giving a bigger, fairer tax cut to millions of Australian workers on low- and middle-incomes. Obviously, there's a growth dividend there. I think that by closing down some of the loopholes at the top end of the tax system, we give ourselves every chance to invest in the things that actually matter for growth - like productivity and skills; infrastructure; like the Australian Investment Guarantee. All of these things that will actually give ourselves a chance to shift the needle on growth.
 
SPEERS: So growth will be higher under Labor?
 
CHALMERS: Obviously that's our intention. Obviously. All of our policies are about growing the economy in an inclusive way, making sure people are rewarded for their work, and making sure there's a decent social safety net. 
 
SPEERS: Final one, Andrew Broad, the Nationals MP, has resigned today. You've no doubt caught up with why. Was that the appropriate course of action? Should anything further be done?
 
CHALMERS: To be honest with you, David, I haven't been poring over all of the details of what's happened today. I've obviously seen some of the reports. I think as Chris Bowen said earlier, there's a personal element to that that I don't really want to go into. But I think the point I would make more broadly is that what's happened today does nothing to fix the perception that people have in the community that this is a chaotic and dysfunctional Government. They really can't get anything right and I'll leave the personal aspect aside. 
 
SPEERS: Fair enough. Shadow Finance Minister Jim Chalmers, thank you very much for joining me this afternoon.
 
CHALMERS: Thanks, David.
 
ENDS