ABC NEWS BREAKFAST
WEDNESDAY, 5 JUNE 2019
SUBJECTS: RBA interest rate cut; Liberals soft on the banks; National Accounts; Liberals’ economic mismanagement; income tax cuts; State of Origin
MICHAEL ROWLAND: To get his take on those interest rate moves, we're joined now by the Shadow Treasurer, Jim Chalmers. Jim Chalmers, good morning to you.
JIM CHALMERS, SHADOW TREASURER: Good morning, Michael.
ROWLAND: So both ANZ and Westpac have said yeah-nah when it comes to passing on the full 25 basis points. Josh Frydenberg, as have previous Treasurers, has pounded the table and wagged his finger, but there's really nothing any Government can do. How does that make you feel?
CHALMERS: It's a disgraceful decision by both of those banks. If we want the Reserve Bank interest rate cut to do the good in the economy that it's intended to do, we need to see the full benefit passed on. That's a point that the Reserve Bank Governor has made as well. We expected the banks to thumb their nose at Josh Frydenberg, he's typically been pretty soft on the banks, but in doing so they also thumbed their nose at so many people in the community who are doing it tough in a world where we've had stagnant wages and weak consumption and a slowing economy and rising unemployment, and insecure work. All of these things are compounding each other, and with quite a weak and floundering economy under the Liberals, we can't afford to have banks pocket some of this interest rate relief.
ROWLAND: OK. What should customers of ANZ and Westpac do? Should they take their business elsewhere?
CHALMERS: They should certainly shop around to see if they can get a better deal somewhere else. I think customers of those two banks will just be incredibly disappointed after seeing all of the revelations from the Banking Royal Commission that the Liberals resisted for so long; to see all of that in the news and now to have the banks treat them so shabbily, I think is very, very disappointing. They should consider their other options. What we really need to see here is we need to see the full benefit of the rate cut passed on, so that people can get spending again, so they can have some disposal income. Because as the Reserve Bank said yesterday, the big problem in the economy is actually that we don't have enough spending, we don't have enough household consumption. That's because under the Liberal Party, we've had weak wages growth for so long.
ROWLAND: You have mentioned growth. We are expecting the latest growth figures to be released later this morning. What do you expect them to show?
CHALMERS: I think the market expects those numbers will be quite weak again. We've had a period now of prolonged weakness in the economy and what I'd say about that in terms of the political contest is that the Liberal Party wants everybody to believe that they have done such a good job managing the economy. If they'd done a good job managing the economy, the Reserve Bank wouldn't have cut interest rates yesterday. If they had done a good job, we wouldn't have slow economic growth, we wouldn't have stagnant wages and rising unemployment, and all of these things which are bedevilling our economy and our country. It's not enough to pretend that you're good economic managers, it's long past time for the Government to take responsibility for this floundering economy and to come up with a plan to deal with it. It's not enough to point the finger, to always talk about Labor. They need to do something about it.
ROWLAND: Will the Labor Party do its parts to help economy recovery by supporting all of the Government's tax cuts?
CHALMERS: We're always up for being responsible when it comes to decisions about the economy, and that begins with enthusiastically supporting the first tranche of the tax cuts, which are supposed to come in from 1 July this year that favour people on low and middle incomes, because they're the people who are more likely to spend in the economy to get the place moving again. The other tax cuts, stage two and three of the Government's plan, they don't come in for some years. The third tranche doesn't even come in until after the next election. So those stages are not crucial to getting the place moving again in the short-term. We will support the first tranche of tax cuts. We have been saying that for some time now.
ROWLAND: OK. The second tranche would kick in close to the end - or the second term or this current term of Parliament, and your leader, Anthony Albanese, has been talking about a big miss by Labor in not appealing to what he describes as aspirational voters. That second tranche will offer relief people earning $90,000 a year. Do you believe people on $90,000 are rich?
CHALMERS: I don't, Michael. I don't believe that people earning $90,000 are necessarily rich, but it's important to remember stage two comes in after the next election. That's an important point to remember. And also stage two and three actually benefit people right up the income scale, not just people on those middle incomes that you mentioned. But we'll look at all of that. We've got further consultation to do. We're seeking further information from the Government as well. We'll come to a considered view. It doesn't come before the Parliament for another four weeks or so, and we'll have a view in advance of that.
ROWLAND: OK. Jim Chalmers, thank you. As a Queenslander, commiserations in advance for tonight.
CHALMERS: (Laughs) We'll win by 100 tonight, Michael, don't worry about it.
ROWLAND: Yeah, not sure about that. Thank you very much for your time.