JIM CHALMERS MP
SHADOW TREASURER
MEMBER FOR RANKIN
E&OE TRANSCRIPT
PODCAST INTERVIEW
THE GUARDIAN, AUSTRALIAN POLITICS
SATURDAY, 9 APRIL 2022
SUBJECTS: Queensland and the Federal election; Scott Morrison versus Anthony Albanese; Federal Budget; Aged care; Defence spending; Truth in politics.
KATHARINE MURPHY, HOST: Jim Chalmers, welcome to the show.
JIM CHALMERS, SHADOW TREASURER: Thanks very much, Katharine. Good to be back.
MURPHY: Now, look. Given the election could be hours, could be days away.
CHALMERS: Could be minutes away!
MURPHY: Minutes! Hard to know. Just for clarity, we're recording earlier in the week. Jim is in Canberra to do his National Press Club speech, which is a traditional reply after the Budget. But anyway, the point of me saying the campaign, you know, is imminent, is because I want to start there. And I want to start with Queensland. We'll get to the portfolio and all kinds of thorny questions, but it's a truism in Australian politics that elections are won and lost in Queensland for a reason. There's a hell of a lot of seats in the state, and I know you have done a lot of work since 2019 to try and work out what went wrong there, listening how you can redux the message, how you can reconnect with communities. So, tell me, what is it like on your home turf at the moment?
CHALMERS: I feel like we're doing well in Queensland, but we have to do really well in Queensland. You would understand, but perhaps not all of your listeners would, that there's a lot of seats in Queensland that have got very big margins, seats that we have traditionally targeted. So, people look at polls and they see a swing to Labor in Queensland - which, it feels like that on the ground - but it needs to be quite a swing to secure seats. We always have to work twice as hard for every vote in Queensland. I'm born and bred, I've always understood it's traditionally - at the federal level - been harder for Labor in Queensland, so we have to work harder. But I feel like the door is ajar because people are working Scott Morrison out and I think, objectively, he has treated Queensland shabbily during the pandemic and during the floods, and I think people are working that out. They don't like the fact that he seems to fly in, bag Annastacia Palaszczuk, and then fly off again. So they feel duded, they feel taken for granted, they feel like he's turned his back on us when we needed him most and gone missing. So I think that invites a bit of a reconsideration of who they might support. I don't think that decision is in the final stages yet. I think there's a lot more work for us to do. It's kind of you to acknowledge that I spend a huge amount of time, obviously - not just because I'm from there - thinking about Queensland, not just in a political sense, but in an economic sense, in an industrial sense.
MURPHY: Yeah.
CHALMERS: Because I feel like if the national economy is going to recover really strongly, then Queensland needs to be a really big part of that story. As the country's gaze is fixed on Queensland, I want it to be more than a political question. There's an economic story there too, and that's why I've done 60 - six zero - visits to 29 regional cities and towns in Queensland just this term alone, for that reason.
MURPHY: You know, you're right to point out the margins. I’ve been on a lot of panels where I pointed that out and people are always surprised by it, I think they just haven't wrapped their heads around that you could get a positive swing in Queensland of 5 per cent and have a gain of one seat. So, it's sort of like the, you know, curse of 2019 has left you in a difficult position. Do you think it is - I'll ask the question in a slightly different way - do you think there is a pathway to victory for Labor in this contest if your net gain in Queensland is one or none?
CHALMERS: Yes, but a very difficult one. It's hard to see us winning an election without winning seats in Queensland, but perhaps not entirely impossible. I think the other important thing to acknowledge about Queensland is it's nowhere near homogenous. The southeast corner looks a lot like seats in New South Wales and Victoria. The regions are not even necessarily similar. Central Queensland, North Queensland, Far North Queensland, the industrial base is different, all of those things are different. So, there's more complexity. People want to simplify Queensland for understandable reasons. But there's more complexity in the electoral politics than people give it credit for. So, you know, how we perform in the suburbs of Australia will matter in the suburbs of Brisbane, and how are we performing the regions. So it's a more complex thing. But I think overall, we know it's hard there. We know it's harder to win without winning some seats in Queensland. And I think that there's an opportunity for us in Queensland, which is partly about our policy agenda, partly about safe change, but partly about Scott Morrison.
MURPHY: Well, it's interesting. If we think about that, some strategists are saying at the moment for instance, the sort of picture with Morrison - this is an aggressive and crude simplification so bear with me. But there’s something to it. Morrison remains a plus for the Government in the regions and some of the outer suburbs, but a minus for the Government in the metros, in all the major cities in Australia at the moment. So go figure, I'm not sure how that nets out in an electoral sense. But is that your impression, and I'm glad you raised the outer suburbs because it really is critical. I've been in Tasmania recently in Bass and Braddon for more than a week and obviously the Liberals are having a real crack at Lyons too, which has a big chunk of outer suburban Hobart in it, for example. Like what's your - I'm sorry to turn you into a commentator, we will get into substantive issues in a tick. But we are like, literally five minutes to midnight, and I value your political judgments. So, what do you think about that? You said Morrison gives you an opportunity. What sort of an opportunity does he give you and is it a big enough one, I guess?
CHALMERS: I think Australians broadly but Queenslanders especially were prepared for a period to give Scott Morrison the benefit of the doubt. I think that changed really quickly. Maybe it changed more quickly in other parts of Australia before it changed in Queensland, but it's changing in Queensland. The contrast between the two leaders is becoming better and better for us with each passing day because Anthony shows up - not just at election time - he takes responsibility, he doesn't try and play people off against each other. All of these things you can't say about Scott Morrison. Scott Morrison's thing about some kind of flood support for New South Wales but not Queensland, Liberal seats versus Labor seats - all of that stuff - people are aware of that. Quite often I get asked by your colleagues and counterparts, why is Queensland a little bit different in a political sense? I think another thing that people don't really focus on enough is they value authenticity over almost anything else. Premier Palaszczuk is an authentic leader. Anthony Albanese is an authentic leader. Scott Morrison - they may have seen him that way at some point in the past - they're not seeing him like that as much anymore. So I think that will be a big part of the story. All of our policies, in one way or another, are more attentive to the industrial base, and the employers, and the workforce of Queensland, then it's probably been for a really long time, and I think that's part of it too. We shouldn't underestimate the relationship between our policy agenda and having opportunities in Queensland as well.
MURPHY: That's true but you do have to get your message up, and that's another bit of feedback that we get around the country. It's not like 2019. Everywhere we went in the country in 2019, people would cross the road to tell you that they really didn't like Bill Shorten. It was quite a thing. That is not happening now - certainly in our pre-election field trips, and my office has done several - people aren't crossing the road to tell us oh that Anthony Albanese, I really don't like him at all. But people are telling us around the country, I don't hear enough of him, I don't really know what the Labor offering is. You know, I'm not saying this in a j'accuse sense, because there's been a big three years, right. But still, you know, let me put it this way, right. In your own speech at the National Press Club today you borrowed a Kevinism: this reckless spending must stop. You had your own locution. But that just reminds us, right, that Kevin Rudd in 2007 had ads out six months before the election campaign, in essence telling the country who he was through, obviously, his own construction of who he was. That hasn't happened with you guys. So, you know, have you been present enough, do you think?
CHALMERS: I think collectively, we can do more. Collectively. I don't believe in challenges that only exist for leaders. I think we all - particularly in the Labor Party but more broadly - if things are not as we want them to be, we should take collective responsibility. If things are going well, we should take collective credit. I think this is one of those areas where the pandemic's made it almost impossible to punch through. Anthony's punched through better than any other Opposition Leader in the country, but it is more difficult, I think that's self-evident. It has been more difficult but the more that they see of Anthony, the more they want to trust him, the more authentic they think he is, the more prepared they are to vote for him. It would be worse if it was the other way around, so I'm not as troubled about that. I think that the more people get to know Anthony, the more they're willing to support him. The more they get to know the Prime Minister, the less willing they are to support him. And you'd rather it that way than the other way around.
MURPHY: Okay. Let's, just do a couple of things. Because you may, in the event Labor wins this election, you may be in the Treasury portfolio before terribly much longer. Let's start with aged care if we can. Obviously, you know, because of the demographic profile of the country, because this system has been significantly underfunded for a long period of time, we have workforce issues across the economy, but particularly in aged care. This is all big bucks. Now, Anthony Albanese used his own budget speech in reply to unveil elements of your aged care policy, including Labor would support pay increases for workers. How on earth does this get paid for Jim, given Labor is also falling over itself at the moment to tell people we're not proposing big revenue measures like we did in 2019. You're slightly careful in what you say about tax, but you are certainly trying to convey the impression, no hidden taxes. How can people trust that Labor can pay for a better aged care system? You're in a very, very, very tight box.
CHALMERS: We don't commit spending if we don't think it's absolutely necessary and responsible to do so. In the context of the Budget that was just handed down, the $2.5 billion that we've allocated to aged care is not a large amount in the context of the rest of it, right. I think we need to end this double standard on spending that says the Government on a Tuesday night can spend $39 billion without offsetting it but Anthony Albanese can't allocate $2.5 billion on the Thursday night, in arguably the area of most pressing need. Even if you want to think about another way - that $2.5 billion - less than half what the Government's just wasted on submarines that will never be built. A tiny fraction of the JobKeeper money that went to businesses that were profitable and didn't need it. So, let's have a proper conversation about our spending priorities. I think aged care is perhaps the best example of where the Government says, oh, no, no, that would be irresponsible to spend in that area - but they think it's responsible to tens of billions around on all kinds of rorts and waste and all the rest of it. The old saying, we can't afford not to, I think that applies here too. But $2.5 billion is relatively modest. You raised the issue around the Fair Work Commission and the wages, and I want to make a broader point about that. But on the specific, it's not possible to cost a decision that hasn't been made, partly because you don't know over what timeframe the Fair Work Commission will make it. The Prime Minister himself has said that they would fund it if the Fair Work Commission made a decision. So, both parties are in the same boat on that, the difference is we're enthusiastic about a pay rise for these workers, the Government's not. More broadly, we think about this investment in aged care - rightly – as doing the right thing by older people and the people who look after them - making sure they've got decent care, decent food, decent wages, right? That is the right way to look at it. But the care economy in this country is the big opportunity for Australia, millions of people will be working in this sector. We're talking about something that where we have a massive national advantage - we care about each other, and this is going to pay an economic dividend so it's an investment in the economy as well. If you see the $2.5 billion in light of the waste the Government's been putting in the Budget, the economic dividend, and most importantly what it means for older people and the workers who care for them, I don't think it's a big amount of money.
MURPHY: No, no, all of that's true. And you're right to point out that there can be a double standard in the way these things are measured. That's a reasonable point. But it's not so much that I'm nit-picking on where's your offsets, right? Because no one’s got offsets at the moment, the fiscal rules are completely out the window, right? But I'm sort of trying to make a broader point. You and I have discussed on the show in the past, we've sort of been in this period where we've basically had low interest rates and growth, basically, sort of can take care of reducing debt. Because, you know, the economy grows faster, etc, right? We've heard that whole conversation.
CHALMERS: Yeah.
MURPHY: But the environment has turned and now the risks are on the downside in relation to that. Obviously, inflation is back. And whomever wins the election - you or them - no one can just borrow to fund recurrent spending with no downside risk place anymore, we're in a different place. So, again, like, obviously the Aged Care Royal Commission recommended a levy for example. You could increase the Medicare Levy or whatever else. I'm sort of, rather than nit-picking...
CHALMERS: Understood.
MURPHY: I'm giving you the big picture, right? I totally accept the productivity argument. Anyone listening to the show today, who's sort of the sandwich generation - people caring for children and their elderly parents - there's all kinds of productivity benefits if people can be assured that the care is decent, both for their kids and for their parents. So totally a given, but someone's still gotta pay for it.
CHALMERS: Yeah, I understand that. I've spoken at the Press Club and elsewhere about how there is room in the Budget to reprioritise. There's a lot of waste, there's a lot of rorting, we want to deal with that and use that money for more productive purposes. We've said that we'll look at multinational taxes, how multinationals pay tax here in Australia where they make their profits. There are a range of ways to improve the Budget. But I think the first step - certainly the task of a first Labor Budget if we're successful, and I've said we'll hand down a proper Budget this year if we win the election, if - the big task there will be to go through line by line and make sure we're getting maximum bang for buck. That's before any of these other kinds of considerations. We're not up for a levy, we've said that a few times now. But we are up for trying to work out where can we take $1 that has been wasted on unproductive purpose and invest it instead in the care economy or looking after older people. I think that's a big job. I think it gets kind of lightly dismissed in the building, because people want some big controversial change. But I feel like sitting down with Katy Gallagher, the Shadow Finance Minister, and going through line by line working out where could that dollar be better spent, I actually think that's a substantial task.
MURPHY: It is, it is. Another one in the vein of some tricky things on your desk, in the event that you win.
CHALMERS: A few tricky things on my desk.
(LAUGHTER)
MURPHY: We could do about three hours on the tricky things on your desk.
CHALMERS: This is why I don't sleep anymore, Katharine.
MURPHY: Sure, sure. Yeah, it's good training for what may occur afterwards. I want to ask you about AUKUS, just from a fiscal point of view. Obviously – and you referenced it a minute ago - there's the break fees associated with the French contract, which, you know, billions, I don't know.
CHALMERS: They've fessed up to $5.5 billion, which makes everyone think it's much more than that.
MURPHY: There you go, right. So, there's that. We are actually in a universe where we're contemplating, based on what people are saying, building nuclear powered submarines in Australia with no domestic nuclear industry. How does that happen? Next, obviously, the Government says it's an important partnership reflecting darkening strategic times. Look, I've got no argument with all of that, but the whole thing really makes no sense from a practical implementation point of view. If, for example, we've got this process, right, eighteen months, or whatever it is, to determine whether or not we are going to proceed with what's been presented to the public. There is every prospect that that assessment could determine it's completely fiscally irresponsible to do this, that there are significant practical impediments to actually doing it. In the event that happens, is there any universe where a Labor Government says sorry guys, just can't do that, for no other reason other than it's not fiscally responsible and it's not in the national interest?
CHALMERS: Yeah. I think the best way to think about this, is that the level of investment is not contested. The commitment to substantial defence spending is not contested, that is bipartisan. What is contested, is the Government's competence to deliver on agreements and on spending. The submarine debacle is just one example of billions of dollars in taxpayers’ money being wasted on submarines that won't ever be built. So, depending on what we inherit, I think your listeners could expect the same level of investment, but ideally, more competently invested.
MURPHY: But are you saying, come what may, we are going to construct nuclear powered submarines in Australia, come what may?
CHALMERS: We'll honour the deal with the Americans and with the Brits, we signed up to it. By the way, as I move around the business community and the national security community, there's a lot of appreciation for the efforts that we've made to try and be bipartisan about national security, despite Dutton and others trying to create these artificial differences. There's no difference on the level of investment, there is a difference in terms of the level of competence. It's hard for me to pre-empt the advice that we would get on the National Security Committee. Who knows what that advice looks like. We have our own views, but we would honour the deal. We'd invest like the Government in terms of quantity, we'd try and get more quality out of it.
MURPHY: How do you feel about being a Treasurer, potentially, who has to reduce or reverse a cut in the fuel excise?
CHALMERS: I think that's the reality of the legislation. I think people - they understand now, it'll be a different story if they don't understand in September - but I think people understand that the Government has put in place a six-month temporary cut to fuel excise. I've tried to be really upfront with people and say it's hard to imagine a government of either persuasion - including a Labor Government - being able to afford to continue that indefinitely. I think that's just real talk. We'll see what the conditions are, you know, obviously, we'll play the cards we're dealt and all the rest of it. Our whole fiscal and economic strategy will be based on the economic conditions of the time and the opportunities of the future. But I think it's just self-evident that all of this cash that's been spent on taking a problem from one side of the election and putting it on the other side of the election will end at some point, we have to be responsible about every dollar, and so I've been upfront about that.
MURPHY: Yeah, but it's - look, I appreciate that that's probably all you can say in the circumstances, neither one of us can project ourselves forward to September - but, you know, you've been around politics long enough to know that it's pretty easy to give people something and it's really bloody difficult to take it away from them.
CHALMERS: We had a moment out in the hallway during last week where - for your listeners’ benefit, you come out of an interview and you're walking along the press gallery hallway and you'll get stopped again, cameras and microphones - there was a big gathering there. They must have been waiting for somebody else I assume! There was a big gathering there and they said to me, do you think it will be hard for the petrol excise thing to end and I said I would have thought so.
(LAUGHTER)
CHALMERS: And there was this pause afterwards because people aren't used to that, right? To give what will seem like a diversion but will make perfect sense to you.
MURPHY: Yeah.
CHALMERS: A light bulb moment for me on this was actually when the Government ministers read out the wrong speeches, that said that there was going to be a cut to the cost of medicines.
MURPHY: Yes.
CHALMERS: After the Budget had been handed down, two ministers - one in the Senate, one in the House of Reps - gave speeches where they read out a speech that said we've decreased the cost of medicine by a certain amount. The reality was that wasn't in the Budget, it had been taken out, the speech drafts were obviously a couple of weeks old, and so it didn't happen, right? Bear with me. They obviously read the wrong speech out, they tried to change the Hansard, they got a hard time in estimates about it, as you know, and many of your listeners would know. Josh Frydenberg goes on the Insiders program with David Speers, and David asks him about this, and Josh pretends that it was all consistent, right? And everyone knows there was a stuff-up, they read the wrong speeches, it was embarrassing. And for me, the idea that a Treasurer on the couch there can't say there was a mistake made - it probably wasn't even his mistake - but there was a mistake made. So I feel a bit that way when it comes to fuel or something else. It was a bit of a thing for me to kind of think, can we just sometimes - just sometimes - tell it like it is. It's like today, right? I sent out a tweet today that had the fact the wrong way around.
MURPHY: Yeah.
CHALMERS: The Government’s made this huge deal out of it. If the worst thing they can say about a Press Club speech and a question-and-answer session that goes for an hour and a quarter, is that we sent the draft tweet out rather than the final tweet, I'm okay with that. And I can say to your listeners, I sent the wrong tweet out, should have sent this other one out. And Josh should be able to say we gave the wrong speech. We should be able to say it's going to be hard to afford to do petrol excise or something else. You know what I mean?
MURPHY: No, no, no. I applaud the plain speaking. I think sometimes politicians are so risk averse that they end up discounting the sensibility of people, that people just couldn't actually bare reality if it was placed in front of them.
CHALMERS: Yeah.
MURPHY: And I think a lot of people obviously can bare reality and, in fact, crave it. But I still struggle to imagine a universe...
(LAUGHTER)
MURPHY:...seriously, whether it's you, whether it's Frydenberg, whomever it is, right, in September, where, God forbid, this conflict in Ukraine could still be causing shocks around the world. And people skip along and just reverse an excise cut. Forgive me, but I do have trouble absorbing how that will actually happen in the real world.
CHALMERS: Yeah. It'll be a politically difficult period for whoever's in office. I accept that.
MURPHY: Yeah.
CHALMERS: I'm just making the broader point, that we should be able to say that.
MURPHY: No, no, no, I'm not discounting your broader point. You're exactly right. Agreeing with your broader point, but I just think, God almighty, that's gonna be bad. One more, just on sort of broad Treasury portfolio matters. Now, you're sort of limbering up, as you would, to say - just in the sort of environment that we've been talking about, referencing in this bit of the conversation - that the Government will have secret cuts after the election, right.
CHALMERS: Yeah.
MURPHY: You're obviously limbering up for that conversation, but the same of course could be said about yourselves. Because, you know, getting back to that point where - referencing your plain speaking, right. Obviously, there's been sort of debt and debt hysteria in the country that's not been helpful to the national interest, or to sanity, or to policy directions, or development, or whatever.
CHALMERS: Yeah.
MURPHY: So that point's granted, but also the point has to be made that it isn't a money tree, the environment has changed. So, you know, it's all very well to say the Government's got secret cuts after the election, does Labor have secret cuts after the election?
CHALMERS: We've been really upfront, again, and said if we find opportunities to trim the Budget, we'll do it. And we've identified some areas - Commonwealth spending on labour hire and contractors and consultants, we've said multinational taxes - where we've found a way to get better value for money or to begin to repair the Budget so that we can invest in other priorities, we've said so. One of the interesting things I've found - and I know Katy Gallagher has found this too - is because I said if we win I'm going to hand down a Budget this year, people say oh for that Budget are you going to go through every line of spending line by line? And my answer is I'm going to do that every Budget, I'm going to do that every time. That's my commitment. And because the Government - they're more likely to look for savings in areas like pensions, they've done in the last nine years. Medicare, they've done the last nine years. They are not being upfront about that. There's $3 billion of secret cuts in the Budget described as a decision taken but not announced. $3 billion in cuts and they won't say what that is. What we've said, upfront, here's how we're looking for cuts, if we find more, if we find other ways to trim spending in discretionary funds or something else, we're going to do that. Because that money would be better spent on aged care, child care, skills, cleaner and cheaper energy, those sorts of things.
MURPHY: And the flip side, just of that. I presume you've still got expenditure commitments to come over the campaign. For instance, we've not seen an awful lot on health. The Premiers have been running a campaign on hospital funding. You know, there's bits and pieces on education, but nothing huge there. What can people expect over the next couple of weeks, obviously, you know, without subjecting you to being flogged for those answers, obviously, what's the general direction?
CHALMERS: I do think people should expect it to be a relatively modest offering by historical standards because we do have that trillion dollars in debt that we'd inherit - and all these other important issues we've been discussing today, they are material. You've got to work out, where can you be the most responsible in an area where you get the most bang for buck. And in a world where you're not proposing big tax changes to fund some of these things, the onus is on you to be even more responsible. Obviously, we'll have more policy to announce. I'm quite proud of the policies that we're going to announce in this election campaign, but people shouldn't expect it to be a free for all, it's not going to be. It's going to be incredibly responsible, and that's because we would be inheriting, factually, the worst set of books ever taken to an election by any government in the history of the Commonwealth. So that matters.
MURPHY: Let's end, because we need to wrap because of time. Let's go back to Queensland.
CHALMERS: We're just getting started Katharine!
(LAUGHTER)
MURPHY: We're just starting, it's true. We could do more, and I'd like to do more, but I'm conscious you're on the clock.
CHALMERS: Your listeners don't want six hours of Chalmers and Murphy.
(LAUGHTER)
CHALMERS: They want six hours of Murphy, they just don't want six hours of Chalmers.
(LAUGHTER)
MURPHY: They don't. Believe me, they don't. Let's go back to Queensland because that's where we started, right. You acknowledged that it's going to be difficult for Labor there. Obviously, with the usual caveats - the campaign’s still to win, it's difficult for Labor, etc.
CHALMERS: Yeah.
MURPHY: A nice, easy question to end up on. In the event you fall short at this election, and largely because of the margins in 2019 have made gains in Queensland really difficult.
CHALMERS: Yes.
MURPHY: As you acknowledged, that pathway to victory is difficult.
CHALMERS: Yep.
MURPHY: Does that suggest that people will only elect a government if there's a Queenslander at the head of it?
CHALMERS: Oh no, I don't think so. I don't think so. I'm working my arse off to make sure that that decision that you're dancing around is not necessary. One of the things I'm most grateful to Anthony for is that the Treasury portfolio is held by a Queenslander. That means that our home state has a bigger, more prominent voice in the economic decisions taken at the national level. I think that's really important.
MURPHY: There is the Rudd experience though?
CHALMERS: Yeah, and I tell you, I think about that Rudd campaign all the time. Because I think, in lots of ways, that's the template. The template in the sense that there was focus, there was a few things that they wanted to do differently, there was that sense of safe change, Kevin Rudd campaigned beautifully if not perfectly, and I think in lots of ways that is the model. I think Anthony is capable of a campaign like we had in 2007, the last time we took government from opposition. I think the building blocks are there, the lessons are there, the example has been set by Kevin, and I think that's broadly acknowledged. In terms of my role, and the role of Queensland, if I've tried to do anything this term, it's try to elevate Queensland not just in political terms but economic terms as well. The whole Shadow Cabinet has been through regional Queensland more times than I can ever remember any shadow cabinet or cabinet doing. The whole place takes Queensland really seriously, we do that for the right reasons, and we've given ourselves a chance there.
MURPHY: Thanks for joining me.
CHALMERS: Thanks very much, Katharine.
ENDS
