SKY SUNDAY AGENDA
SUNDAY, 11 OCTOBER 2020
SUBJECTS: Federal budget; Childcare; Debt; Hiring subsidies; Migration; Rewiring the Nation; Morrison Recession; QLD election; Mathias Cormann.
KIERAN GILBERT, HOST: I'm joined by the Shadow Treasurer Jim Chalmers. Jim Chalmers, thanks for your time. Let's start with the childcare policy. Why should a household earning up to $500,000 receive any government subsidy?
JIM CHALMERS, SHADOW TREASURER: Because this isn't a welfare measure Kieran. This is about making sure that more women can participate in work. It's about making sure that more Australian women can grab the opportunities of the economic recovery when it comes. This is a key economic reform. When the Grattan Institute, KPMG and others modelled similar policies to the one that Anthony announced on Thursday night, they found that there would be billions of dollars in benefit for the economy every year. It's important that we do this. It's a key economic reform. It means that women will no longer be penalised for going back to work. No Australian woman should be penalised for having made the decision to go back to work, or to do more hours at work.
GILBERT: The Government's asking where the money is coming from for this measure. Is that fair enough, given how large spending already is and how high the deficit already is?
CHALMERS: It's absolutely laughable, Kieran. This is a Government which has racked up more than a trillion dollars in debt. They announced $98 billion in new spending on Tuesday night which wasn't offset. Now we have the stupendous hypocrisy that says that a tiny fraction of that, a $6.2 billion commitment, needs to be immediately offset. Obviously, every dollar in the Government's budget is borrowed. Obviously, Labor will make sure that between now and the election we make it clear how all our policies are being funded. But the time for the Government lecturing Labor about fiscal responsibility is well and truly over. The time for the Government dusting off all of the old scare campaigns about the budget has been once and for all torpedoed by the fact that the Government racked up more than a trillion dollars in debt and has hardly anything to show for it.
GILBERT: In your view, has the notion of fiscal discipline become irrelevant in the context of a recession?
CHALMERS: It's not irrelevant Kieran. Every dollar is borrowed. We need to make sure that we're getting maximum bang for buck for every one of those borrowed dollars. We need to make sure that the spending is effective. That's why what we proposed on Thursday night in Anthony's budget reply speech is so important, because there are few things which get more bang for buck than childcare, social housing, cleaner and cheaper energy, and making sure that we can get more apprenticeships out of all of the money that the Commonwealth spends on defence and rail procurement, and other things like it. This is about maximum effectiveness for the spend. We have said all along that this massive debt matters but the highest priority right now is Australians, their jobs and our communities. We've also said repeatedly that you can't fix the budget unless you fix the economy. You can't fix the economy unless you address what has been one of the defining challenges in the economy, which is women's participation in work.
GILBERT: And with childcare - before we move on from that - when you look at the nature of that system, you've got low wages for those who work in it, parents copping huge fees and you're saying you want to subsidise 90 per cent of that. How do you keep a lid on what that 90 per cent is given there does appear to be some gouging in elements of the sector?
CHALMERS: Obviously, Kieran, we've thought through that. We think that there is a really important role for the ACCC to play there, to make sure that there isn't gouging, to make sure that the costs in the sector are reasonable and reflect the realities of the sector. When it comes to the workforce, one of the reasons why we put such an emphasis on Skills Australia and other initiatives that we've announced in recent months is because we do anticipate that there will be more need for childcare. We need to make sure that the workforce can keep up, and we need to make sure that the costs of childcare stay reasonable, so that the pressure is not placed on Australian families and particularly Australian women.
GILBERT: One of the criticisms Labor has had of the budget is this wage subsidy for those aged 35 and under. But given the disproportionately high unemployment rate among younger Australians, why shouldn't there be a specific program like this to get younger people in work so they're on the right trajectory from the outset?
CHALMERS: Our concern isn't about helping younger Australians back into work. We've said for some time that we need to find ways to ensure that we don't have a lost generation of workers. We've also said that hiring credits and wage subsidies and the like have a place in the system. Our concern here is that they've managed to design an incentive scheme which leaves something like 928,000 Australians who are currently on unemployment benefits in the lurch, and leave them behind. That is a substantial concern when you consider the challenge that we've got. Recessions are notorious for leaving younger workers, but also older workers, out in the cold for too long. We do have fears about long-term unemployment. The issue we've got is the people left behind and left out of that policy.
We'll go through all the detail. There's a Senate committee to do that. We'll see how the Government responds to the concerns we've raised about possible rorting, possible churning of workers and all of those unintended consequences. They don't have a good record of implementing wage subsidies. We need to keep up with our questions and try to understand what the Government's doing here.
But there's a broader point. Again, the idea that we would take lectures about opportunities for young people when this Government has spent more than seven years now thieving opportunities from young people with their cuts to TAFE, their cuts to universities, their cuts to penalty rates, excluding them from JobKeeper, the list goes on and on and on. When the Government talks about supporting young people, give me a break. Have a look at their record over the last seven years. Even this initiative, even if it worked, wouldn't undo all of that damage.
GILBERT: Instinctively, is it your preference to see a subsidy like this made universal for anyone out of work, because the over-50 measure that the Government already has in place, someone has to be out of work already for six months. Would you like this new announcement by the Government to be made universal for anyone out of a job?
CHALMERS: First of all, that program for over-50's has been a monumental failure. I think it's had something like a 95 per cent under-subscription on the most recent full details that we have, which means that that program is not working for older Australian workers. In terms of the final design of the scheme, again, we'll see what the Senate committee throws up. We'll have our own discussions and consultations. We also need to remember that the draft legislation for this leaves most of the rulemaking and most of the details to the Treasurer to settle outside of the Parliament - a bit like JobKeeper. We need to factor that in as well. This is largely the preserve of the Commonwealth Treasurer to change the arrangements as he sees fit. We'll take all of that into account. We'll have a look. We want to support young people. We want to make sure that there is something for all of those almost a million Australians left behind. We've got a bit of time before the Senate returns in November to come to a settled and final view.
GILBERT: One of the massive challenges facing the nation through this crisis is the population. By the end of 2022, there'll be one million less Australians than previously thought via migration and other measures. What do you think needs to be done to see a return to migration and international students? Have you got any thoughts on where the Government should go on that?
CHALMERS: Obviously that's really heavily contingent on whether or not we can contain the virus. By "we" I don't just mean Australia, I mean the world. The closure of the international borders obviously poses substantial problems for our economy, and it hits key sectors like education harder than most. I think for the time being it just means that we have to lean more heavily on finding other ways to grow the economy. The Australian economy has been remarkably reliant for some time before COVID-19 on migration as a source of growth. Without it, we would have had almost no growth in the economy. For the time being, we need to get the other bits right; productivity and participation. That's why our childcare initiative is so important, but not just that; rewiring the nation so we can have cleaner and cheaper energy; making sure we grab the opportunities in government procurement, particularly for apprentices; building social housing; all of these sorts of things are about how we grow the economy in the absence of that population growth that we've relied on so heavily. We need to kickstart this recovery. We need to do that in the context of closed international borders. We don't know when they'll reopen. We need to make sure that we have a plan and a vision for the recovery and for after that so that the economy after COVID-19 is better than it was before. That's what Anthony's speech on Thursday night was all about. It provided the vision and the plan for the future that was lacking in the Government's budget.
GILBERT: The Prime Minister has said the Government's considered using facilities like Howard Springs in Darwin to help expedite the return of migrants and international students. Is that a worthy initiative? Is that a good idea?
CHALMERS: Let's have a look at it Kieran. Certainly, we need to be innovative here. It's a really big problem that we're dealing with. Even before we think about that, though, there are tens of thousands of stranded Australians around the world that the Prime Minister doesn't have a plan to bring home. Let's get that sorted as an immediate priority. If there are other ideas for how we get migration back responsibly and safely, then we'll do what we've always done throughout this crisis, we'll engage with that constructively.
GILBERT: On the renewable energy contribution to the electricity grid, does the policy as announced by the Opposition Leader negate the need for more gas supply in the system?
CHALMERS: I think there'll be a need for gas, Kieran. We've made that point repeatedly. There's a lot of investment there. Manufacturers in particular rely very heavily on gas not just as an energy source but as feedstock. We've been through all of that before. This plan that Anthony announced on Thursday night is all about a vision for how we modernise the transmission network. It's not really about one type of energy or another. It's about modernising the network so we can get that cleaner and cheaper energy into the system, but also to do it in a way where the costs aren't passed on to households and businesses so that those savings are passed on. That's really important for how we modernise the network. The energy market operator and the states have recognised there's a need for about $20 billion in investment in the network. If we can do that at no cost to businesses and consumers, then we can make sure that energy reform and improvements to the network is a key part to kickstarting the recovery and boosting growth in the longer-term as well.
GILBERT: Do you accept that a lot of people who watch politics and see the comments from the Labor leader, yourself, and others calling it a "Morrison Recession" would scratch their heads and say, come on obviously it's been caused by the pandemic. Do you recognise that many people would reject that phrase?
CHALMERS: Australians understand that we've said throughout that the health crisis is having a big impact on the economy and the budget. We've acknowledged that at every turn. But it's a statement of fact; Scott Morrison is the Prime Minister and this is the worst recession we've had for almost 100 years. We've got a million unemployed, the Government says there'll be an additional 160,000 unemployed between now and the end of the year. It's a statement of fact. In our view, this recession is deeper and worse than it needs to be, and the unemployment queues are longer than they need to be because the Prime Minister had a massive missed opportunity throughout this, but particularly in the budget by racking up a trillion dollars to build almost nothing that lasts, and leaving people out and leaving people behind when it comes to some of the support measures. We're within our rights to make those points.
GILBERT: Onto a couple of other issues; Mathias Cormann nominated for the OECD. Will Labor back that?
CHALMERS: We're certainly considering it. We've had a discussion about it. Clearly the overarching principle is that we want Australians to be making a contribution on the world stage. We haven't come to a concluded view. When we do, Anthony Albanese will indicate our preference. As others have pointed out, this Government does not have a good record of supporting bipartisan nominees for key international institutions. We all remember what they did to Kevin Rudd in the context of the United Nations which was clearly not good enough and not in the national interest. We'll have further discussions and when we come to a concluded view, you'll hear from Anthony about it.
GILBERT: From my colleague Andrew Clennell earlier in the program, it looks like Labor funds for the next federal campaign might be short in supply. Is that a worry for you?
CHALMERS: I don't focus a lot on the Party's finances. I've spent much of recent times focusing on almost nothing else but the nation's finances. I'm not sure what the budget position is of the New South Wales branch in particular, or the national arm the Party. I'll leave that to the officials.
GILBERT: Finally, Scott Morrison is in Queensland at the moment. Is this a concern for Premier Palaszczuk given the Prime Minister's popularity in Queensland? Will it be a boost for the LNP?
CHALMERS: I don't think it will Kieran. I think every day that Scott Morrison spends in Queensland will be a reminder that during this recession he's left a lot of Queenslanders behind. He's left us in the lurch up here. Him, Josh Frydenberg and Deb Frecklington, the Opposition Leader up here, were the ones calling for the early opening of the borders. That could have had catastrophic consequences for our health here, and for our businesses. They got that big call wrong. Annastacia Palaszczuk got the big call right. She's been right and resolute throughout. I don't think we have anything to fear from Scott Morrison being here.
GILBERT: Jim Chalmers. Thanks for your time.
CHALMERS: Thank you, Kieran.