The Guardian, Australian Politics 02/07/22

02 July 2022

SUBJECTS: COVID Isolation; Energy Prices; Multinational Taxes; October Budget; Fuel Excise; Comparisons To 1970s; Jobs Summit; Migration; Labour Shortages; Skills And Training; Federal Election Result.  







SUBJECTS: COVID Isolation; Energy Prices; Multinational Taxes; October Budget; Fuel Excise; Comparisons To 1970s; Jobs Summit; Migration; Labour Shortages; Skills And Training; Federal Election Result.  


KATHARINE MURPHY, HOST: Jim Chalmers, welcome to the show.

JIM CHALMERS, TREASURER: Thanks for having me back, Katharine.

MURPHY: Now, I gather you have very recently had COVID. So why don't we share your experience with the listeners?

CHALMERS: First of all Murph – and I say this knowing that a lot of people have had an incredibly tough - but I was so lucky, so fortunate. I had the most minor version of it I think, I was pretty free of symptoms. Very grateful for that. I had my week's compulsory isolation and was able to do a fair bit of work while I was in iso, and once I came out as well, so I was very lucky.

MURPHY: And where do you think you might have picked it up?

CHALMERS: Well, this is a source of some conjecture - as it probably is for everybody who catches it, given it's pretty much everywhere right now. A lot of colleagues in the office got a bad version of it, but I suspect I got my version of it from when I went to my little Annabel's - my five-year-old daughter's - parent-daughter disco. It turns out that some hundreds of people who were on that particular dance floor, on that particular Friday evening, got COVID.


CHALMERS: I know that you won't mention this to anyone else Murph, cause it's just me and you talking - I think I got it at a five-year-old’s disco party at the school.


MURPHY: The rowdiest nightclub ever, Jim Chalmers picks up COVID.


MURPHY: Anyway, it's a great story.

CHALMERS: It was the kind of disco that it was sort of barely dark when it took place, and there was a lot of mildly embarrassed, bad parental embarrassing dancing going on, and I think I got it there.

MURPHY: Okay, with that disclosure out of the way - and an important one that it is, bad dancing - I want to obviously just catch up on a bunch of stuff. Because I think the last time you and I had a conversation, it was just before the election.

CHALMERS: It was. I hope nobody's gone back through all of the fearless predictions and analysis, I hope that that's lost to us now.

MURPHY: No, no, no. No. I don't think either one of us would be mortally embarrassed by that conversation. But anyway, the point being, now obviously you've won the election, the Government's been sworn in, you've been Treasurer for just over a month. I just want to start with what has been the biggest shock to you coming in? Because obviously you all had your incoming Government briefings - and I asked the same question of Chris, actually, in the conversation we had a couple of weeks ago - so, what's been the worst of it in terms of what you've learned?

CHALMERS: I think mine is probably in Chris's portfolio, we share some of the energy regulators. For me, that really quite extraordinary electricity price increase in the default market offer, which our predecessors knew all about before and during the election campaign, and decided not to tell the Australian people about. I think for me that's been the most dramatic, undisclosed pressure in the economy, and the broader issues around the energy market - which I think Chris has done a terrific job working with the rest of us, to try and get on top of - that's been the biggest shock overall. The Budget, I think - you would have seen Anthony Albanese meeting with the Premiers and Chief Ministers not that long ago to extend the COVID related hospital funding - I was a little bit surprised to learn that some of that funding kind of assumed that the pressure on the hospitals all of a sudden just finished, when we've got a heap of COVID in the community. So, from a Budget point of view, really some of the unbudgeted for health costs, I think, have been the things I've been most disappointed about and focused on.

MURPHY: And obviously, you've now started the process, where you've got a lot of things on the boil, which we'll work through. You've started the process of looking for Budget savings, given where the Budget is at. Is this starting to take shape yet? Obviously, the Budget's not until October, but I think you want to make a statement when the new parliament opens in a few weeks time. So what areas are you looking at? Like, there's some obvious things in my mind, right. Like the Nationals, basically as a as a precondition of signing up to net zero in the previous government, got an extraordinary infrastructure spend around the country, for example. Is any of that on the chopping block? Obviously, prior to winning the election, discretionary grants were very much in the frame, in terms of what may not end up seeing the light of day. What can you tell people about where - we used to call it the razor gang in the olden days, in the olden times - so what are you looking at?

CHALMERS: I think it's easiest to begin with what we announced during the election about what Budget repair would look like, at least in its initial phases, under us. We had those $11.5 billion worth of Budget improvements, which had some of what you're referring to - starting to deal with this legacy of rorts and waste in the Budget. Some of those are discretionary funds that National Party and other ministers have had access to, as you rightly point out. But also some other important savings, too. For example, we think there's room for a responsible increase in foreign investor charges. We think that there's progress to be made on multinational taxes. We think that there has been spending on contractors and consultants in the public service, which has gotten out of hand. So there's been a whole range of areas that we've nominated already. But the main action, the main work, since we've taken government, is to work very closely with my friend Katy Gallagher on this audit of rorts and waste in the Budget.

I think, inevitably, after a government has been in office for almost a decade - but I think especially under the government that we've just replaced - there has been a lot of wasteful, politically-motivated spending. So what we've asked Finance and Treasury to do, is to work with us, to go through the Budget line by line, to work out where money that might otherwise have been directed purely at a political purpose, to work out where we could direct it or redirect it to something that gives us an economic dividend. That's a really important way of thinking about the work that's going in both sides of the ministerial statement that I'll give to the parliament at the end of July, but also the October Budget.

The October Budget is going to have three pillars and then one overarching theme. The three pillars are, first of all, implement our commitments - which have become more important not less - when you think about child care, and cleaner and cheaper energy, and training and a Future Made in Australia, making our supply chains more resilient. That's implementing our commitments. The second pillar is about cost of living, so implementing cheaper child care, cheaper medicines, starting to implement our plans for cheaper energy. And then thirdly, this area we're talking about now. How do we put the Budget on a more sustainable footing, recognising you can't just flick a switch and make a trillion dollars of debt disappear but you need to start the hard work. So that's kind of the third part of it.

But what sits over all of that, the kind of vision that Katy and I have for the Budget in October, is to recognise that this wasted decade that we've had of missed opportunities - in training, and energy, and a lot of these areas - has made us more vulnerable to these big shocks in the economy. Whether it's a spike in inflation, or failures in the energy market, we are more vulnerable after a wasted decade than we should be. So sitting over all of our efforts in the Budget, is how do we make our economy and our Budget as resilient as the Australian people have proven to be. Resilience is going to be a really key part of how I'd encourage people to see this Budget in October and the Budgets after that, too.

MURPHY: You mentioned multinational tax a minute ago, I'm glad because I've got a couple of revenue related questions to ask you. Just in terms of cost of living, the ultimate poison pill that you've got to deal with - well, actually, there's a few - but this one, given current events is a big one. Are you still going to restore the fuel excise to where it was prior to the previous government's cut? Because petrol prices have crept up again, I don't know where they are in Brisbane, but certainly in Canberra they're north of $2. Just again, I have real trouble wrapping my mind around how on earth you actually execute that in an environment where cost of living is on the march. We may see further interest rate increases, inflation is obviously where it is.


MURPHY: So, is that still going to happen?

CHALMERS: The short answer is yes, most probably. We have the same view on this that we've expressed on both sides of the election. It would be incredibly hard to be able to afford to continue some of this cost of living relief, this specific relief, indefinitely. I filled up on Sunday, it was $2.19 in Logan City. Even with that 22 cents a litre relief that's currently in there, petrol prices are through the roof again. What we've tried to do - what I've tried to do personally, and what I think the Government has tried to do - is to be upfront about the challenges that we confront. We've got high and rising inflation that's going to get worse before it gets better. We've got interest rate rises attached to that. We've got falling real wages attached to that. But our ability to deal with some of these challenges is constrained by that trillion dollars of debt that we inherited from our predecessors. So we can't do everything. We can't even implement all of the good ideas, all of the things that we'd like to do. So I think your listeners should assume that that petrol price relief comes off in September. Obviously, we factor in the conditions as they evolve, and the Budget and all of the rest of it. But nothing has substantially changed to make me think that we could continue that indefinitely, or even for a substantially longer period than September. So that's the expectation.

We also need to be conscious that every dollar that we spend in the Budget has got to tick a few boxes now, when we've got the constraints that we've got. The things that we prioritise - child care, is about easing cost of living pressures, but it's also about building a bigger pool of available workers in the form of newer parents. If and when they want to come back to work, we want to make it easier. Because that's another economic problem we've got, labour shortages and skills shortages in the economy. Every dollar we spend has got to tick a few different boxes. Some of that spending which is in the Budget, we supported at Budget time, but when you compare it to some of the other things we need to do, and you consider it in the context of all of that debt we've inherited, then it's going to be hard to extend.

MURPHY: I mean, I totally get it. And obviously, you want to, as you said a minute ago, focus on resilience, and you also want to focus expenditure towards productivity-enhancing investments. But, oh my God, the political pain, it just doesn't even bear thinking about because it will mean...

CHALMERS: I think about it a lot. Sorry to cut you off. I get asked all the time, is that going to be really difficult? And my answer is yes, it is going to be difficult. It's going to be difficult most meaningfully for people, but also we're not unrealistic about the politics. The difference between this government and the government that came before, is where we think something difficult needs to be done, we'll say so. Australia is not going to get through these economic challenges - which I think are really quite serious, certainly in the near term - we're not going to get through it if we just pretend to each other that everything's fine, and we can afford everything, and all the rest of it. It's going to be really difficult, and I think there's an appetite for a bit of real talk on the economy.

I am personally quite optimistic about the future of our country, the future of our economy, but we've got to navigate these really difficult, very choppy waters that we're in right now. With that inflation, and real wages falling, and interest rates rising, and all of that debt, we've got to be serious about it. We're not here to stuff around or to occupy the space, we're here to be upfront with people about the challenges and also the opportunities, and to see if we can chart a course together. That means not pretending away these problems or trying to tiptoe around them. We've got real and substantial challenges, which will not be solved if we're not upfront with people about them. I'm sorry to cut you off Katharine, I cut you off mid-sentence.

MURPHY: No, no. No, no. No, you didn't. It's fine. You have - I mean, I've heard you loud and clear - but there is there is a degree of hedge that you've got though in your answer, right. More than likely, more than likely it'll revert to where it was, but you're not saying absolutely it will. So if you are - accepting the merits of your broader argument, which I completely do - is there some sort of trigger point though, that the Government would look at to say, well look, there might be an appetite for real talk about the economy - and I agree there's an appetite for real talk about all kinds of stuff  but there may not be an appetite for a 20 cent a litre increase at the bowser. So is there a sort of threshold or trigger point, where you might look at it and say, oh well, look, we'd love to actually do more productive stuff, but people will actually lose their minds if we do this now?

CHALMERS: I understand your question, I don't really see it like that. I don't think there's necessarily a trigger. I think part of being upfront with people is saying that our job is not to kind of be proven right - to say something, and then down the track to be proven right about it. Our job is to do what's right, and to take into consideration the economic circumstances as they evolve, and the Budget circumstances as they evolve, and to try and work out what the best thing is to do. So the precedent I think this sets - by saying our intention is not to extend it, but we'll always do the right thing by the Budget, and the economy, and most importantly the Australian people - is just to reassure people that we won't be stubborn for the sake of it.

Let me put it this way. Forgive me for being a little bit kind of helicopter view about this, Murph. The way I see it, is we've been working our arses off for nine years to get into this position, where we get this really quite extraordinary opportunity to help run the country. I personally - and I'm sure my colleagues have got their own ways of explaining this - I'm not going to stuff around. Remember that great Paul Keating quote, where he said our job is to comb through the fairy floss of public life looking for the value? I don't want this to be a fairy floss government. I want it to be one where we're always trying to make the right decisions. Even if making the right decision means that we were wrong about something two years ago, or three years ago, I'm personally okay with that. We have been working too hard for this opportunity to do it in a half-arsed way or a dishonest way. That's how I see it. It's actually liberating to feel that way. If I feel like Australians understand if we make the right decisions, for the right reasons, based on the best available information - they know we'll get some things right, we'll get some things wrong - but our motivations will be in the right place. That's how we're kind of going about all of these challenges. I don't think the petrol excise cut is going to be extended, I'm pretty sure it won't be extended, but I will always do what I think is right.

MURPHY: Yeah. Okay. Now, just to multinational tax, because obviously, Labor - and, well, related- obviously Labor has supported the stage three tax cuts, which is a whole bunch of revenue that the Budget could use, that you're going hand back to people. I presume that's still your intention?


MURPHY: Yes. Just for you listening, Jim is nodding. Okay. But multinational tax is an area where Labor's left itself some discretion. Now, you did have a booked saving - I can't remember exactly, was it two billion?

CHALMERS: Just under, just short off.

MURPHY: Just under, right. In the election campaign, you were clear about the parameters of that. But I think, looking at what you say quite closely, you have left yourself some room to move in that area. So are we likely to see more from the Government in terms of chasing revenue from multinationals? Obviously, there's an idea - and I hesitate to say this to Jim, knowing your history working for another Treasurer during the mining tax debate - I hate to even raise it - but obviously, there's some chatter around about windfall profits out of the gas export boom. A lot of those companies are multinationals. Like, are you looking at anything more specifically in that area than what you foreshadowed just prior to the election?

CHALMERS: I mean, on the specifics of the energy companies, we're not looking at anything beyond the process that the former government set up. You'd be aware that there's a process that they didn't finish, and so we're trying to work out - we're getting briefed, obviously on that - where did the Government leave that process. In the context of other countries doing windfall taxes and the like, we haven't been working up an option like that.


CHALMERS: Our multinational tax policy is not geared towards any industry or another in particular, it's about a couple of pieces. Without sort of getting into the weeds of it, there's an issue with the way people use tax havens, and part of our policy is about tax havens. There's also an issue about how our big multinationals manage their debt, and so they avoid and evade their tax responsibilities, in legal ways, in countries like ours. So the two policies that give us almost $2 billion on the costing that the Parliamentary Budget Office gave us, that's part of the process. There's also a lot of activity on the global front by the OECD, but also Secretary Janet Yellen from the US, who I spoke to at some length the other night. And other countries have been interested in advancing some multinational tax reform as well. We've said - as did our predecessors, actually, to give them their due - we've said that we're interested in that as well. We will implement the policies we took to the election on multinationals, we'll also implement a version of what comes out of this OECD process that the Americans have been a big part of. We think that's important, and that's why that's our priority in tax reform.

MURPHY: And the costing - you got a PBO costing as you mentioned - has Treasury given you any updated numbers about what that might net? Or not yet?

CHALMERS: Not numbers, but we've had a heap of conversations about implementing our election commitments. To give your listeners a sense of how this works, you win an election on the Saturday night, if the outcome's clear enough and you know what portfolio you're getting - in my case, the Treasury Secretary rocks up to my house at Logan City and gives us a briefing. A big part of the briefing is how do we implement these election commitments. Obviously, a big one in my portfolio, was multinational taxes. So we've had a few conversations about the implementation of it, but we'll update the numbers in the usual way closer to the Budget.

MURPHY: Yep. Okay. Now, just more generally on the economy - and it's sort of been sitting in the backdrop of the conversation that we've had over the last, you know, few minutes, basically - that things are pretty rough. There's a lot of commentary around, I'm sure you will have read - internationally and here - about whether or not we're sort of in the 70s again. Whether or not we're looking at an oil shock, and then you get a wages price spiral, and all of that sort of stuff - all of those conditions that confronted the Whitlam Government when they were elected in the 70s. Do you think you're in the 70s?

CHALMERS: I don't. I certainly understand people's concerns, if not fears, about the global situation. Inflation in the US was I think 8.6 per cent last time we heard from them, in the UK 9.1 per cent. That means that their central banks are having to play catch up, and I think a lot of analysts and economists are worried about what that means for those big economies, particularly the American economy. Anyone who reads the Financial Times, most of the commentary right now is about prospects in the US. Obviously, that's something we're monitoring closely. Obviously, the Russian invasion of Ukraine is putting severe pressure on food and energy security in particular, and that has consequences for us. In China, the way the Chinese are managing COVID, still pursuing a version of zero-COVID with lockdowns and the like, that has implications for the global economy, too.

There are parts of the global scene that I am worried about, I am concerned about, as are most people who follow it. I feel like in Australia we have a big chance here. If we can get through this difficult period - however long it goes for, six or twelve months, or whatever it might be - I think our opportunities still outweigh our challenges after that, but we need to get through this period first. So again, I've tried to be upfront with people, and say this inflation challenge is incredibly serious. And interest rates, as they go up - even though some people have a buffer, many don't - and we've seen what interest rate rises do for confidence in the economy, so I've been upfront about that. People's real wages are going backwards. They've had a decade of wage stagnation.

These challenges are serious challenges. But if you asked me what I think about the medium-term and long-term prospects for the Australian economy, I still think they're relatively strong, but not if our highest ambition is to get through this inflation spike, and get to the other end, and then just wake up with all the same problems that we've had for much of the last decade - flatlining productivity, flatlining business investment, weak growth, stagnant wages, flatlining living standards. I think we can be much more ambitious about that. I think the only way that we could be ambitious and optimistic in a justifiable way, is if we do the work now on energy policy, and training policy, and participation in the workforce, and all those sorts of priorities we've identified.

MURPHY: It's a conundrum, though, isn't it? Because voters - if we sort of look at the kind of the political history - voters tend to vote in Labor governments to do things, right. Like, there is generally an appetite for the country to move along in some way. So that's the expectation. But certainly Kevin Rudd found how difficult it was to balance a progressive agenda with events, and obviously the GFC was a more profound financial crisis than our current moment, although our current moment's pretty sticky and difficult too. So, you know, you talk about confidence before, and confidence effects rising interest rates. And I totally get that. But what do you reckon about confidence though, because people will see a lot of uncertainty in the world, the Government's obviously run out of the blocks really fast and hard, because you guys have got a very clear sense, I think, of what you want to do and in what order, in order to set up your agenda for this term. But if you do too much, do people get worried about it? It's sort of a political calculation I think, more than a Treasury one.

CHALMERS: I think the answer to that specific question remains to be seen. I hope that doesn't sound like I'm trying to avoid it. But I think that there's a process...

MURPHY: No, no. I think that's a truthful reflection. It does remain to be seen, but what's your gut feeling?

CHALMERS: My feeling is that there is a sense of relief in the country, which flows from a couple of different places, and Anthony Albanese deserves the credit for these impressions that people are picking up. If you walk down the main drag of most places - and I was out bush today and I got different versions of it in places like Toowoomba - there's a sense that the adults are in charge, after our predecessors. People express that in different ways, but there is a sense of that. There is a sense that we're being upfront with people, and we've been through, from my point of view, why that's important in the economic space. I think those are good foundations upon which to build our efforts to change the country for the better, if people think we're doing it for the right reasons, we're being upfront about why these changes are necessary. Then plus in my portfolio, whether it's the Jobs Summit or our other efforts, people know that we're genuinely trying to find where the common ground is. Reform is difficult. In an era of pretty severe Budget constraints, you can't buy reform. You and I have spoken about that, it's different to the Howard / Costello years. Not everybody will win from every change that a government makes, but we're generally first trying to map out where the common ground is - which is, I think, a real strength of Anthony's. Because he is instinctively trying to find - if we want to make the place better, and we want to take difficult decisions to change the country and make it more resilient - where are the areas where we agree. That's a good start, and it will be tested at times.

We've never pretended that what we need to do on climate and energy is going to be universally applauded. You've followed it as closely as any other human being on the planet, the difficulties in this country around climate change policy. But we do have a chance to end the climate wars, if we're honest with people, we've got a good robust policy that strikes all the right balances, and we do. So if you ask me - and we were joking before about whether the things we talked about before the election hold up after the election, and we'll know whether the things we're talking about now hold up at the end of this parliamentary term - but I think that there's an appetite to try and end the climate wars and some of these other difficult things. Our job is to sort of maintain people's acceptance of that by being upfront with them, trying to bring them together, doing the right things for the right reasons, all of that. I think we've built a good foundation for reform, whether or not it holds is our responsibility.

MURPHY: Well, it's your responsibility, but also it's subject to things outside your control. Now, you mentioned the Jobs Summit, Jim - and obviously there has been this debate about wage outcomes following the Fair Work Commission's decision to boost minimum wages. You know - talk about the 70s - it's sort of like everybody's reverted to pearl-clutching about, oh my god, some people got paid more therefore inflation is out of control. As if we're in a, you know, sort of centralised economy, where wage fixing is, you know, done in the olden times, in the ways of the olden times, as if unions have actually got much power. It's kind of like, it's really weird, you know, how you sort of get caught in these sort of old debates, when many of the fundamentals have changed. But anyway, so the Jobs Summit, as you say, is the Prime Minister trying to bring people together and see if there's areas of common ground. That will be obviously industrial relations legislation, or regulations and other things, right. But is there some sort of, you know, ground for some sort of, you know, small-a accord between business and trade unions, given there are these difficulties, there are these inflation difficulties? You know, I think Sally McManus is totally right to say, well, you know, we can't actually flow wages outcomes across the economy - we'll try, but we can't actually do it. But what you think about that as a concept? A small-a accord, sorry, to be clear. I rambled with that.

CHALMERS: No, no. I do think there are big opportunities for employers and unions to find common ground with the help of a government that's genuinely seeking that. We're putting a lot of thought right now into the main tasks of the Jobs Summit. Clearly, migration settings are going to need to be part of it. Clearly, skills and training. There are industrial relations elements that Tony Burke and others are working through and thinking about. There are issues around participation. Child care is a crucial part of that, but are there other things that we should be doing - for example, for older workers - to try and get more participation. Because what we really need is a bigger, more productive workforce, where wages are growing strongly, but in a sustainable way. Those are our objectives.

And in order to do that, and to find the workers that businesses need - and I spent a big chunk of today on a farm in the Lockyer Valley talking about labour shortages - the challenges are sort of not really ideological. Some of them are, but not all of them are. A lot of them are just looking for a bit of common sense leadership, a bit of common ground, a bit of common purpose, including some of those ones that I just ran through then. Hopefully, the Jobs Summit can not just map out where we agree on things, but kind of start to chart the way forward. If we are able to be successful at the Jobs Summit - whatever you call it, whether you put a capital at the start of it or a lowercase letter at the start of it - I'm hoping that what we do at the Jobs Summit augurs well for things like Budget repair. I'm hoping it augurs well for some of our other challenges. We don't want to make this Jobs Summit about everything, but hopefully, if we can demonstrate some success there and some progress there, there shouldn't be anything that prevents us applying that model to some of our other challenges, too.

MURPHY: You mean as sort of a buy-in model, where you bring elements of the economy or institutions around the table to try and map out a strategy. Is that what you mean?

CHALMERS: Yeah, I think so.

MURPHY: Yeah, right.

CHALMERS: And if you look across our cabinet - and Anthony is obviously the person who does this most instinctively - the type of characters that we've got around the cabinet table, that's our preference. There are people who are up for a barney if we need to have a barney about policy, but we'd much rather prefer to spend our time trying to bring different parts of a conversation together and get an outcome. The Jobs Summit is a bit of a test of that. But also, hopefully, if we do well there, then we should be able to apply that model to other things, too.

MURPHY: And just quickly, just on migration. I want to ask you about Queensland to finish, we'll do that in a tick. But just quickly about migration, you mentioned that. Because, obviously, one of my dear friends is a small business owner, and every time I see her she says is the Labor Government going to allow a more normal migration pattern to emerge. But again, that's a conundrum, isn't it? Because there's sort of the scarcity of resources in the labour market - hopefully as a driver to increase wages, right - but yet businesses can't actually function because they haven't got enough staff to perform basic tasks, right. Where does that land? More migrants? Less migrants? Where does it land?

CHALMERS: I think we can do better. As we chase this wages growth that's been missing for a long time, we can do better than kind of resign ourselves to the only way to get wages growth is to have a smaller workforce. Because there are a lot of businesses around Australia - and I spend a lot of time with them - who could generate more activity, and employ more people, if they had access to more people. As I said - having spent a big chunk of today on a farm in the Lockyer Valley, having spent a chunk of today with some of the major employers around the Darling Downs around Toowoomba – labour shortages and skills shortages, were it not for this kind of quite extreme spike in prices and input costs right now, labour shortages would be number one. Labour shortage is a bigger, more enduring challenge in lots of ways. The way I think about it, is for all the wrong reasons people get pigeonholed. That person thinks the way to solve this problem is migration and nothing else. That person thinks it's training and nothing else. That person think it's child care. When, in reality, we need to do all these things simultaneously. It's not beyond us to say, okay, we've had the migration tap turned off. For higher income migration, how do we chase the world's best available talent. For skilled migration, how do we make sure that it's actually matching legitimate needs and it's not a substitute for training. For low wage migration, how do we make sure people aren't being exploited. None of those things are beyond us.

Migration is part of the story. In training, there's a whole set of issues there. One of our big, most substantial policies, is about fee-free TAFE in areas where there are genuine skill shortages. Child care is about making that workforce bigger and more productive, so that newer parents, if they want to, can return to work without being penalised out of the equation. All of this stuff needs to happen simultaneously, because we do need to get businesses the workers that they need. If we do that, and if we make those workers more productive - whether it's training, whether it's how we adapt and adopt technology, all of these sorts of things - we've actually got a big chance here with low unemployment, to create a really fantastic labour market where everybody's getting what they need, everybody wins. Sustainable wages growth, more productivity, more workers in the right parts of Australia - because labour mobility is part of the challenge as well - particularly a lot of the towns that I knock around in, particularly in Queensland, but also out west and elsewhere. The long way of saying, huge challenge, a number of levers, let's not pretend that we have to work out which one to pull, we need to pull all of those levers simultaneously.

MURPHY: Yeah, yeah, yeah. Yeah, yeah, yeah. All true and fair, except, I mean, obviously, labour mobility is the most sensitive issue for the trade union movement in contemporary times. And if you're talking about accords - either small or big a - that's quite, in a Labor Party sense, in an institutional sense, that's a difficult issue for you to manage, but anyway.

CHALMERS: Do you mind if I briefly say something about that, Murph?

MURPHY: Yeah. No, no, no. Sure.

CHALMERS: I think my job - as a Labor person who believes in migration, and the economic benefits of migration, and who accepts that there are near-term needs that need to be filled - our job, and where we have common ground with the union movement, is if you want to build support for responsible, reasonable levels of migration, you've got to make sure that people aren't exploited so that they're undercutting Australian workers and their entitlements. You need to make sure that you're not using migration as an excuse not to train enough people. If you do those things, there is more common ground there then it appears, is the summary of what I'm saying. Unions have got legitimate concerns that they've been raising about exploitation, and perhaps employers who would prefer to use more vulnerable workers for other reasons. There are issues there and if people like me want to build support for migration, then we've got to address those issues.

MURPHY: Okay, let's end with Queensland, where you are for this episode. You're speaking to me from Queensland. Obviously, Labor is in government, you've secured 77 seats. But the performance in Queensland, I imagine, would be disappointing to you. You lost some of your metropolitan territory, or one metropolitan seat. A seat went to the Greens that Labor probably should have been in the hunt for given the electoral climate and the sort of swings. Obviously, there were swings to Labor. Obviously. But do you think that as part of the campaign review there needs to be a specific focus on Queensland? Because until Labor boosts its performance in Queensland, it's always going to be hard scramble to get a majority government, isn't it?

CHALMERS: Well, let me begin with what went right - I have huge concerns about what happened, massive concerns about what happened, and I think about it quite a lot as you'd expect - but first of all, we need to recognise we've got a swing to us here. It didn't happen in the right places. But some of the seats which were out of reach, that have traditionally been within reach, are back within reach. You think about your Fordes, your Petries, your Flynns - seats that we targeted very enthusiastically in 2019, where their margin blew out to 8%, or 9%, or 10%. In many cases, those margins have halved. That's the kind of glass half full version of it. Devastating to lose somebody of Terri Butler's calibre. Terri Butler would have been a cabinet minister - a key one, a central one – and it stings a bit to lose someone of her calibre and to lose a seat like Griffith, which has produced a Prime Minister.


CHALMERS: So that hurts. That stings. We were in the mix in Brisbane. We had a really quite remarkable candidate, Madonna Jarrett, who I desperately wanted to see in the parliament. We were in the mix in Ryan. In all three cases, it went against us. Our big challenge here in Queensland is how diverse the place is, more decentralised than elsewhere. It's true in other places in Australia, but trying to simultaneously win Brisbane and Flynn, incredibly difficult, and we didn't manage it. So what Murray Watt, and Anika Wells, and Anthony Chisholm, and Shayne Neumann, and Milton Dick, Nita Green - all of our Members and our Senators - what we are trying to do is to work out, okay, in the absence of a heap of Members, how do we make sure that Queensland isn't left out and left behind. In a government that didn't care about representing the whole country, there would be a risk, with Queensland so severely underrepresented in the government, that our interests would fall by the wayside. We have worked with each other very well, we get along very well, and we want to work twice as hard to make sure that our voices are heard around the cabinet table and around the caucus room. Because we would be an even better government if we had more representation out of Queensland. Hopefully we can deliver that as part of, hopefully, delivering a second term. But in the interim, in the absence of that, then we're just going to have to work twice as hard.

MURPHY: But it's sort of also - a last question, I promise - it's sort of, you're right to say it's extremely difficult in an election to win both Brisbane and Flynn, like that's just demonstrably true. But the fact is, Labor would not be in government today had you not been able to hold your traditional blue collar territories in other states, as well as picking up in the metro contests where you could and try to hold out other progressive forces where that wasn't possible, right. This particular victory demonstrates that as hard as it is, you can actually hold traditional territories and progressive urban territory as well. But that didn't happen in Queensland. So is it a matter of working harder Jim, because I don't think any of you are lazy? Or do you need to look more closely at why the strategy that worked nationally - including in WA, a resource state very similar to Queensland - although McGowan's another issue. But do you need to look quite closely at what happened and what you need to learn from it.

CHALMERS: Yeah, we do. Already that soul searching, for want of a better term, is underway. It's sort of a little bit strange, because we've had this quite remarkable national victory, and there's a lot that we can be proud of, but at the same time we need to recognise where we fell short, and we fell short here. Again, there's no use kind of pretending otherwise. Part of it is, in these genuine three-cornered contests, all three of those seats that the Greens won could have gone either way. Maybe Griffith might not have fallen to the Liberals, but certainly Brisbane and Ryan. All three of the big players in those seats could have won the seat on the day. It's a close run thing, but that doesn't change the scoreboard. So there is an element of soul searching. And it stings a bit, because we did put a heap of work in before the election. And, as you rightly point out, it's not like we did nothing before and now we've decided we're going to put our back into it. We've did put our back into it. I did more than 60 visits to regional Queensland alone. Maybe that's why we fell short, maybe I should avoid the joint.


CHALMERS: So it's not necessarily about working harder in terms of hours. I spoke to Murray about this today. I speak to Anthony Chisholm about it, Anika, others, all the time. We need to make sure that with our small numbers we have a big, outsized influence on the Government. That's what we intend to do, and hopefully that pays off next time around. But I feel like – and I hope this doesn't sound like a cliche - but if we govern well, the politics will kind of take care of itself a little bit. If we demonstrate that in a relatively conservative place – and outside the South East corner of Queensland, it is relatively conservative compared to the rest of the country - I think if we demonstrate that we're trying to govern for everybody and not just for the inner cities, or even the inner ring of suburbs - if we demonstrate that we're trying to govern for everybody – hopefully, that pays off.

MURPHY: Good note to end on, Jim. You're busy. Thanks for your time, I appreciate it.

CHALMERS: Thanks for the chat.