E&OE TRANSCRIPT
TELEVISION INTERVIEW
SUNDAY AGENDA, SKY NEWS
SUNDAY, 15 DECEMBER 2019

SUBJECTS: Brexit; UK Election; US-China Trade Agreement; Anthony Albanese’s Queensland Tour; Climate Change; MYEFO; Wages Downgrades; The Economy; Labor’s Tax Policies.

KIERAN GILBERT, SKY NEWS: Let’s go live to the Shadow Treasurer, Jim Chalmers, who joins me from Brisbane. Mr. Chalmers, thanks very much for your time. This result could well benefit Australia. How soon would you like to see a free trade deal done with the UK?

JIM CHALMERS, SHADOW TREASURER: Good morning, Kieran. First of all, to congratulate Prime Minister Johnson on what was a pretty resounding victory. As Brexit occurs, Australia's relationship with the UK will change and trade's a very important part of that relationship. The Labor Party intends to engage constructively. We want to make sure that any new trade deal is good for Australia and Australian workers. The sooner we get that new relationship with the UK post-Brexit sorted the better.

GILBERT: In terms of the lessons for progressive parties out of the Corbyn experiment, what can the ALP learn from that debacle?

CHALMERS: We had our own lessons to learn from the election in May and we went through a review process to do that. We're not obsessed about what happened in May 2019, we’re looking forward. There are two parts to the election result in the UK. The first part was obviously Brexit. One party was promising to end the drama around Brexit, the other one was promising in one way or another to prolong it. That was part of the result, but it wasn't all of the result. The lesson for centre left parties is that you don't beat populism of the right with populism of the left. I've been saying that for some time now. You can't win an election just by preaching to your base. You need to build much bigger constituencies of support and that begins with a bedrock of economic credibility.

GILBERT: In terms of rebuilding that support, does it reinforce the views that you've expressed in recent months about trying to re-engage with the working class base that left the Labor Party in droves at the recent election?

CHALMERS: Absolutely, Kieran. It's self-evident that we didn't build a big enough constituency for change in our own election so we need to think long and hard about how we do that. We need to make sure that we can build a big constituency for change. In my view, that begins with ensuring that we have a bedrock of economic credibility, that we are communicating to people that we are a safe pair of hands on the economy, that we realise that more people need to get ahead not just get by in this economy, and that's what we're doing under Anthony Albanese. We have learned the lessons from May. We did that review and now we're looking forward. Australians deserve a really good Labor Opposition in Australia, because we've got a Government under Scott Morrison which is failing on the economy, and climate change, and which has failed to bring the country together after what was a pretty divisive election in May.

GILBERT: Anthony Albanese's tour of regional Queensland last week, he's supporting jobs and coal exports. He's copped flak for doing that during the fires and during this climate debate. Is that fair criticism or was it crucial in order to do some of the things you're talking about, re-engaging with those who do vote for Labor at the state level but drop you when it comes to federal elections?

CHALMERS: I don't think it was a fair criticism, Kieran. It's always a good time to visit Queensland and Anthony is always welcome here. It's not like he just discovered the joint. In other roles, principally in infrastructure and local government, he's been a regular visitor to regional Queensland and to Brisbane. He's always had Queensland front and centre in his thinking and that's the same now that he's the Leader. What Anthony and Labor recognise is that you can take genuine action on climate change and you can create new jobs in renewable energy without abandoning our traditional strengths.

This debate has become unnecessarily polarised and Scott Morrison has fed that because he's always looking for an excuse not to do anything on climate change. He's always looking for a distraction from the fact that we've got emissions rising. He's always looking for a political wedge and a scare campaign. But that doesn't reflect where the Australian people are at. What the Australian people want is for us to listen respectfully to the experts and to the science. They want genuine action taken on climate change in a way that is respectful of people's lives and livelihoods in places like regional Queensland. That's the approach that Anthony is taking and I think that closely accords with what the Australian people want and expect from Canberra.

GILBERT: Are you comfortable with where the emissions targets are at for Labor, i.e. 45 per cent reductions? Is that something that you can reconcile with your message to the traditional resources and coal communities?

CHALMERS: I'm obviously not going to announce the targets we take to the next election here, still a couple of years from that election. We'll take our time. We'll be consultative as always. We'll come up with a climate change plan which is more ambitious than the Government, which takes genuine action, which is mindful of people's lives and livelihoods, and which recognises that we can create new jobs in renewable energy without abandoning our traditional strengths.

GILBERT: Do you feel the message able to be reconciled between what you say in regional Queensland and suburban and urban Melbourne and Sydney?

CHALMERS: Millions and millions of Australians just want sensible, responsible, meaningful action taken on climate change. They want us to recognise that new jobs can be created without abandoning our traditional strengths. I think that accords with the views of people in Queensland, in Victoria, and right around Australia. It has become unnecessarily polarised, partly because of things like that convoy which was counterproductive, but also because Scott Morrison wants the debate polarised. Anthony Albanese is doing a good job communicating to the Australian people that we can take real action in a way that is mindful and respectful of the way that people make a living in central Queensland.

GILBERT: Do you empathise with Joel Fitzgibbon's argument, who has said that Labor should adopt a bipartisan target with the Government and reduce your ambition to 26 - 28 per cent by 2030?

CHALMERS: The person with principal responsibility for the development of our policy here is Mark Butler in conjunction with the whole Shadow Cabinet. Joel has an opportunity to feed into that deliberation, as we all do. I respect everybody's views in this difficult policy area. My personal view is that we can take a more ambitious approach to the election than the Government. I think the Government has been twiddling their fingers while Australia has literally burned. We need to have a proper conversation about what can be done here. Whatever the Morrison Government is doing is insufficient to deal with the real challenge we have with climate change in this country.

GILBERT: Bill Shorten backed the Adani project during the Batman by-election. He said he was against it and then equivocated during the election campaign. Was it important for Anthony Albanese in this last week to state explicitly that it's got its approval and should get on with it now?

CHALMERS: Anthony's comments reflect the reality that the mine has been approved. There is substantial work already going on, substantial equipment being assembled on the site. Whether people support or oppose that mine it's going ahead. It won't be as big a feature of the next election as it was at the last one. Anthony's comments just reflect that reality.

GILBERT: Are you happy with those jobs created? The Galilee Basin has quite a bit of potential in terms of resources jobs if more mines are approved in that region?

CHALMERS: Those communities rely very heavily on mining jobs and we need to be respectful and mindful of that as I've said a couple of times already today. We can take meaningful action on climate change without abandoning those communities and that'll be our approach.

GILBERT: We'll get to the mid-year budget update. It's coming tomorrow. We'll ask about that in a moment but just to pick up further on this certainty out of Brexit, we've seen the pound sterling surge a couple of percentage points. Obviously, investors were relieved at a bit of clarity on that front. Then there is the first phase of a China-US trade deal. Are things starting to ease in the international community? The Treasurer talks about headwinds, are they softening?

CHALMERS: First of all, Kieran, what's been happening between the US and China is not the major cause of our weakness in our own economy here at home, but it hasn't helped. Like all economies and countries around the world we want to see the Americans and the Chinese get on the same page and resolve their differences. Any progress along the lines of what we've seen in the last couple of days is welcome but we shouldn't get carried away by it. There's still a long way to go. It's just the first phase of the negotiations. If the global economy is to grow more strongly we need the two big beasts in our region to come to some kind of accommodation. We hope that that happens. There's been a step taken towards that, but it's not sufficient on its own to put everything on the right and proper footing.

GILBERT: On to the forecasts tomorrow with wages, Shane Wright in the Nine papers today reports that they will be downgraded again. Wages growth is obviously a symptom of our sluggish economy, but is it not a symptom of most developed economies right now?

CHALMERS: The Government's got their wages forecast wrong 33 times over various Budget and Budget updates. What that shows is that ordinary Australian workers are paying the price for the Morrison Government's incompetence, ineptitude and inaction on the economy. The mid-year Budget update tomorrow will be a humiliating admission from the Government that growth is slower, wages are weaker, and that most of the debt in the Budget at the moment is actually Liberal debt because they have more than doubled it. It will be a signed confession that after promising at the election that they'd make the economy even stronger the Morrison Government has actually made the economy even weaker. It's deteriorated on their watch. It's important to remember that when the IMF downgraded growth for Australia, just like the OCD did and the Reserve Bank did, they downgraded us by four times more than the other advanced economies. What that shows is that even with some concerns in the global economy the issues in our economy at home are principally home-grown and they are principally a function of a Government which doesn't have a plan to turn things around.

GILBERT: If you look at one key barometer and that's unemployment, that's one area where it's improved since they took office. It was 5.7 per cent when they won and it's now 5.3 per cent. Given the economic conditions around the world, isn't that at least one success they can point to?

CHALMERS: In the most recent numbers, the unemployment rate actually rose. Something like 19000 jobs were shed in the last month alone. It's not a good story for them to tell on employment. Wages growth slowed again in the most recent numbers. If you want to talk about the change between when Labor was in office and now consider this: annual growth now is slower than it was at the election, slower than it was when Morrison and Frydenberg took over and slower than it was when Labor was in office. It's not enough for this Liberal Party to wander around Australia pretending they're good at managing the economy when the facts about growth, wages, productivity, household debt, public debt which has more than doubled, tell a very different story. Right across the board this Government finishes the year with a big 'F' for 'Fail' on the economy.

GILBERT: Doesn't all the evidence suggest that people are pocketing and paying down the debt with those tax cuts? Isn't that a good thing to see? You referred to household debt. Well, quite clearly that would have reduced in recent times given the tax cuts.

CHALMERS: Household debt's actually at record highs. It's almost double income. Public debt has more than doubled, and household debt's extraordinarily high. It's never been higher than it is right now.

GILBERT: So isn't it good that people are using their tax cuts to reduce that?

CHALMERS: People will make their own decisions about how they use their tax cuts. Most of us were hoping that more of it would find its way into the economy. Consumption is most of the Australian economy and it's at very low levels at the moment. It barely grew in the last National Accounts. All of us had higher hopes for those tax cuts. The Government said that they would play a part in boosting consumption. The fact that we've got retail numbers the weakest they've been since the early 90s recession shows that they're not helping enough. Whether people save them or spend them, clearly whatever is in the system right now is insufficient to get the economy going again. That's why Labor, the business community, the Reserve Bank, the IMF and others have been saying that the Government needs a plan to boost the economy because whatever's happening right now is insufficient. We've got weak growth, weak wages and something needs to be done to turn that around.

GILBERT: You've said that you'd like to see the second phase of tax cuts brought forward. Would you also like to see an immediate lift to Newstart? And if so, can all of that be done as well as maintain a surplus?

CHALMERS: It's important to remember that the Budget position has actually been strengthening even as the economy has been weakening. That's because the surplus is built on the back of denying vulnerable Australians the support that they were promised, need and deserve. This is combined with higher than expected prices for our iron ore and other commodities and the low dollar and the Government can't take credit for those things. There's plenty of room in the Budget for the Government to have a responsible, proportionate and measured stimulus which recognises that the economy's weaker than it should be. They should be able to do something to support workers, pensioners and Newstart recipients in the Budget without jeopardising that surplus.

GILBERT: So you believe you can all three things? Bring the tax cuts forward, increase Newstart and maintain a surplus? That's doable?

CHALMERS: Yes, Kieran. We've given the Government a menu of options. We've said to consider some or all of these things, whether it be Newstart changes, the timing of their tax cuts, bringing forward infrastructure investment, tax breaks for business investment, settling an energy policy and coming up with a wages policy. For some time now we've been making constructive contributions. So has the business community, the Reserve Bank and expert economists. Unfortunately the Government's just been sitting on their hands and while they've dithered, the economy has deteriorated substantially on their watch.

GILBERT: The IMF has said ahead of its annual review that in case stimulus is needed, budget repair should be delayed, that the surplus should be shelved. Do you agree with that assessment?

CHALMERS: I read that IMF report. They're right to say that the Government needs a plan because growth has been weaker than expected and there are still some risks on the horizon. In their view things could get worse before they get better. We think it's possible to take action in a measured, proportionate and responsible way without jeopardising the surplus for all the reasons that I've just run through.

GILBERT: On other policies Labor took to the election on housing and retirees, how important is it to move on from those in terms of that economic bedrock that you talk about as being so pivotal to your political prospects? Surely you need a bit of clarity on some of that baggage.

CHALMERS: We're taking our time to work through all of the policies that we took to the last election. I've repeatedly made the pretty obvious point that no political party takes an absolutely identical set of policies to one election that they took to the last one. We'll take our time to work our way through all of that. I've been doing a heap of consultation on all of those tax policies, not just the controversial ones. What we'll do is recognise that some of those challenges that we wanted addressed at the last election are still there. They may be better ways to address them. We'll come up with a coherent economic and Budget policy for the next election, which recognises that we need to balance repairing the Budget with growing the economy and doing all of the other things to meet our economic objectives.

GILBERT: Shadow Treasurer Jim Chalmers, appreciate your time on this last Sunday agenda for the year. Merry Christmas to you and your family.

CHALMERS: And to you and your family too.

ENDS