E&OE TRANSCRIPT
TV INTERVIEW
SUNDAY AGENDA
SUNDAY, 1 MARCH 2020

SUBJECTS: Impact of Coronavirus on the economy; Scott Morrison’s failure to provide economic leadership or a plan; Reserve Bank decision on interest rates; National Accounts; Stimulus; Surplus; Stock market; Wellbeing Budget; Cleaner and cheaper energy.

KIERAN GILBERT, SKY NEWS: Let's go live now to Shadow Treasurer Jim Chalmers who joins me from Brisbane. Mr Chalmers, thanks for your time. I'll get to the Matt Kean and climate issue in a moment. I want to start, though, with the developing news on Coronavirus because we've seen some significant developments over the weekend. Do you support the Government's approach here with the latest travel restrictions on Iran?

JIM CHALMERS, SHADOW TREASURER: I spoke to Chris Bowen about this, Kieran, and as I understand it this has been the unanimous recommendation of the Chief Medical Officers of the Commonwealth and all the States and Territories. As we have done throughout this Coronavirus outbreak Labor has been constructive and prepared to support the Government's initiatives when it's based on sound medical advice.

GILBERT: The promised surplus is looking unlikely, as Andrew reported just a couple of moments ago, if the travel bans remain in place as they look like they will do, do you accept that most Australians would see these extraordinary circumstances that are out of the Government's control in terms of missing this surplus?

CHALMERS: A couple of points about that, Kieran. We've always acknowledged that the impacts of the Coronavirus on the economy will be substantial. It's damaging confidence in the economy right around the world, it's got stock markets very jumpy in the last week or more and we've acknowledged that throughout. The economy was quite weak before the Coronavirus and before the fires hit over this very difficult summer. The Treasurer wants people to forget that growth was already slowing, wages were already stagnant, and that we had big problems with investment and productivity. We have some longstanding problems in the economy which pre-date these challenges which have popped up recently. The surplus is a test that Josh Frydenberg and Scott Morrison asked to be judged on. It's a test that they set for themselves. It remains to be seen whether they will fail that test. This Government promised a surplus in their first year and every year after that. So far they are none for six and it remains to be seen whether they're going to be none for seven.

GILBERT: The Prime Minister's talking about scalable and targeted stimulus in the face of the Coronavirus. Would you like to see that sort of thing implemented?

CHALMERS: In challenging times like this the country is crying out for economic leadership and crying out for an economic plan and so far the Prime Minister has been either unwilling or unable to provide either of those things. We've been saying since the middle of last year that the economy is much weaker than the Government has pretended and much weaker than their own Budget forecasts. We've had multiple downgrades to expectations for the economy even before the fires and the virus hit. There's been a need for some time for some responsible, proportionate and measured stimulus in the economy to boost to the economy. It hasn't just been Labor saying it for some months, it's been the Reserve Bank, the business organisations, and the broader community as well. The economy has been weak for some time. If the Government comes forward with a plan specifically to support businesses and workers during the fallout from the Coronavirus we'll obviously look at that and we'll support it if it's good. But the fact remains, Kieran, that the economy has been weaker for much longer than the last few weeks. There are longstanding challenges in the economy. They've been left unattended for too long because we've got a Prime Minister who if there's some wedge politics to be played or a slogan to be recited he's everywhere but where national leadership is required on the economy or climate change then he's nowhere to be seen.

GILBERT: So when we talk about this stimulus, do you think tax cuts or an increase to Newstart - the Newstart allowance that's referred to by a lot of economists, the BCA support that as a stimulus - do you like those sorts of ideas and how much should be spent in that sense?

CHALMERS: There are a range of ideas that we have floated since the middle of last year when it became very apparent that the economy was weakening. Labor has been quite constructive and said, there are options on the table, whether it's Newstart, bringing forward some of stage two of the tax cuts, or bringing forward some of that infrastructure spending particularly some of the small and medium-sized projects and maintenance projects. Clearly, the lack of a settled energy policy is not helping growth, there's no wages policy and there may be space for a tax incentive for business investment, because business investment hasn't been this week since the early 90s recession.

We've put a number of ideas on the table. We're prepared to be constructive about it. We don't know the current position of the Budget. Only the Government knows that in any detail but we got a hint of that on Friday with a big deterioration. We're calling on the Government to come up with a plan, not to keep kicking the can down the road or pointing the finger or pretending that there's no need for economic leadership here. There is. It's for the Government to come up with a plan. If it's good we'll support it. If it's not then we'll continue to point out where they've failed on the economy.

GILBERT: You're open obviously across a range of areas to some action. Have you got a ballpark sense of how much the Government should spend?

CHALMERS: We don't have a full sense of what Treasury is telling Josh Frydenberg about the state of the Budget. We got an update on Friday which said there'd been a big deterioration. We know that net debt has more than doubled on Josh Frydenberg and Scott Morrison's watch. We need to be cognisant of that. We need to be responsible, proportionate and measured. Growth has almost halved since Josh Frydenberg became the Treasurer. We've got rising unemployment, stagnant wages, and problems in productivity and investment and household debt. All of these issues have been around for a long time. That's because there's been an absence of leadership and an absence of an economic plan. We've put ideas on the table. We want the Government to pick them up and run with them.

GILBERT: We've got the GDP numbers out this coming week. How serious is the risk of a recession in this country in the face of Coronavirus?

CHALMERS: I don't think it's a good idea for me to speculate on that specifically or to make predictions about Wednesday's figures. Wednesday's figures will show what happened in the economy at the end of last year before the Coronavirus hit and before we'd seen the worst of the fires. Most of the economists and the market expect the number to be quite weak again. We had a couple of weak quarters before that, after the election, but before the end of the year. We'll see what those numbers say. We got a bit of a hint of what they might look like last week. We got some quite bad numbers for construction and for investment. The portents aren't good for the economy at the end of last year. If the number is weak it will reinforce the point that we and all of the credible economists have made which is that we shouldn't pretend that the economy was going well and then the fires and the virus hit. The economy's been weak for some time.

GILBERT: I know you make that point and you obviously want the Government to be held accountable for any surplus promise that they've made. But when it comes to the economy, the Government, the Treasurer argues that unemployment had fallen for a couple of months at the end of last year, that the property market had stabilised, that in fact there were green shoots. What do you say to that argument?

CHALMERS: Unemployment's rising again and we've got a massive problem with underemployment. A couple of million Australians can't find work or can't find the hours that they need at work. For a lot of people they feel that no matter how hard they try they just can't keep up with the rising costs of electricity, childcare and health costs. We've got a problem in the labour market which has been unattended for too long. At the end of last year we had slowing growth and stagnant wages. This Government has the worst record on wages of any Government. We've got issues with household debt and all the other ones that I ran through. I don't think that the Treasurer's claims bear any scrutiny. He is desperate for Australians to forget that the economy was floundering before this summer. He wants to pretend that he can explain all of the weakness in the economy with what's happened over the last couple of months. That's not the case. The Coronavirus and the fires don't excuse or explain, on their own, weakness in the economy which has been around for some time.

GILBERT: We've got the RBA decision again this week, the board meeting of the Reserve Bank. As you alluded to earlier there's a lot of uncertainty right now. $200 billion wiped off the ASX last week, the worst five day stretch of trading since the Global Financial Crisis. How much of this is driven by fear of what might happen as opposed to what is happening right now?

CHALMERS: It's tough to separate it, Kieran. It is an observable fact that the stock markets have been jumpy and that there's an issue with confidence in the economy. There is some uncertainty around and times like these call for leadership and for a plan and we're getting neither. The Reserve Bank has cut interest rates to a quarter of what they were during the Global Financial Crisis which gives you a sense of how difficult things have been in the economy for some time now and not just over the last couple of months. That has been not been enough to shift the real economy. It's had some impact on house prices but it hasn't been enough to get the place growing again. That's because there's been an absence of a plan from the Government. The Reserve Bank is being left to do all of the heavy lifting on their own. That's why interest rates are so low. That's why people are speculating about another cut. The Government needs to come to the table and do their bit to support workers and businesses in the economy. They haven't done that so far. They need to do that quick smart.
GILBERT: A few other issues. The Wellbeing Budget which you discussed off the back of the New Zealand approach. There've been calls for Josh Frydenberg to apologise to the Hindu community in Australia because of his criticism of you in the Parliament the other day. Calls from Kristina Keneally, your colleague, among others. Do you agree that he should apologise? Or was this just some light-hearted parliamentary humour?

CHALMERS: If the community is concerned then Josh Frydenberg should engage with the community. That would be the decent thing to do. There are a couple of broader points there. There is an appetite in the Australian community and there's a lot of support from people with far more credibility than Josh Frydenberg to measure some of the other things in our economy like mental health, like environmental sustainability, like intergenerational disadvantage. A lot of people can't understand why the Treasurer is so dismissive of that. They want a Treasurer who cares about those sorts of indicators. I certainly would as Treasurer. Obviously Josh Frydenberg wouldn't and doesn't right now. I'm not calling for these measures to replace traditional measures like GDP, wages and the unemployment rate. On all of those measures right now Josh Frydenberg is failing badly with slowing growth, rising unemployment and stagnant wages. No amount of over-rehearsed C-grade comedy routines will distract Australians from his F-grade performance on the economy. No amount of overdone self-regard for himself will compensate for the fact that people are working as hard as they can but they still can't get by, let alone get ahead. That's what people in the community really care about. They care about that and I do too. It's a shame that the Treasurer doesn't.

GILBERT: So just to clarify, in terms of your argument when it comes to those wellbeing measures, it's not to replace traditional parameters, it's in addition to?

CHALMERS: Absolutely, and I made that point repeatedly and at length in the speech that I gave. I'm talking about supplementing and adding to our traditional measures not replacing them. Josh Frydenberg knows that on all of the measures that we currently have he's failing. I'm saying that we should measure additional things like intergenerational disadvantage, like the impacts of mental health, like environmental sustainability. We don't have a Treasurer who cares about those things. Hopefully after the next election we will.

GILBERT: Onto the issue of climate change and Matt Kean. The New South Wales Environment Minister is addressing the Press Club on the 18th of March as Andrew Clenell reported earlier in the program talking about the economic benefits of a zero net emissions target by 2050. That's the dynamic in New South Wales. Obviously tensions between some of the positions of that Government and the Federal Government. However do you recognise there is a challenge in your home state of Queensland to make this case to Queenslanders about the need for the target as you've set it?

CHALMERS: There are two parts to your question, Kieran. On Matt Kean’s speech at the Press Club, this shows how increasingly isolated Scott Morrison and the extreme elements of his Government are when it comes to net zero emissions. We're talking about a target which is the target adopted by all of the States and Territories, by 73 countries around the world including the UK under Boris Johnson. We're talking about all of the big employers in Australia who have signed up to this target. Rio Tinto have signed up to it and signed up to some big investments in renewables. This is a sensible mainstream target that has been adopted in corporate Australia, right around Australia by State and Territory Governments and by the Labor Party. Scott Morrison's opposition to it is leaving him increasingly isolated. That's because he will always prefer to play short-term wedge politics, and that is vandalising and jeopardising the future of the economy because net zero emissions is all about cheaper and cleaner energy, which means a stronger economy, more jobs, higher wages and more competitive businesses. You asked me about Queensland and the position here. We shouldn't caricature the position of Queenslanders to pretend that there's one homogenous view here. It's my view that Queenslanders want to do something about climate change. It's my view that we can do something meaningful to get cheaper and cleaner energy in a way that doesn't abandon some of our traditional strengths in the resources industry or in agriculture in a way that is cognisant of the needs of communities which rely on those sectors. That is not beyond us. That's what we are all about. We're about jobs right around Australia, including in regional Queensland and beyond. That's what our policy is all about.

GILBERT: Anthony Albanese said that he doesn't think the policy could cost you seats in Queensland. Do you share his optimism on that? Do you recognise that you're going to have to explain this in detail as to how you're going to protect those coal workers as you and other Queenslanders in the Labor Party have said that you will?

CHALMERS: We need to reassure people right around Australia including in central Queensland and parts of North Queensland that we support the resources sector and that there will be opportunities in those communities going forward. That's been our task for some time. We need to do a good job of that. It’s possible for the country to invest more in cheaper and cleaner energy without abandoning those traditional strengths and without abandoning those communities which rely on them. That is not beyond us. That's our task. I thought Anthony Albanese did a terrific job in country New South Wales yesterday pointing to the opportunities for regional Australia, whether it be in agriculture or the resources sector for jobs and opportunities even under this target that us, the business community in the States and Territories have set.

GILBERT: Jim Chalmers, appreciate your time. Thanks for that.

CHALMERS: Thank you, Kieran.

ENDS