ABC RN BREAKFAST
WEDNESDAY, 13 MAY 2020
SUBJECTS: Economic impact of Coronavirus; JobKeeper.
FRAN KELLY, ABC RN BREAKFAST: Well the Opposition lost no time savaging yesterday's economic statement as a missed opportunity by the Government to outline the plan for the economy once the pandemic passes. Jim Chalmers is the Shadow Treasurer. Jim Chalmers, welcome back to Breakfast.
JIM CHALMERS, SHADOW TREASURER: Thanks very much, Fran.
KELLY: You said the failure to come up with an economic plan is unforgivable but as the Finance Minister just reminded us, we are still smack-bang in the middle of dealing with a pandemic. Australia has been credited with doing that pretty well. Is it too harsh to accuse them of not having a plan for beyond that when they're still dealing with the here and now?
CHALMERS: Not at all Fran. Yesterday, unfortunately, the statement from the Treasurer had nothing in there that we hadn't heard already or didn't already know. It was a cut and paste of old press releases. I think that is a missed opportunity. I think people are really anxious in the economy. They're worried about their jobs, their personal finances, and their living standards, and they've got a right to expect that the Government will take them into their confidence and tell them how they think this economic crisis is going to play out and what that means for them. They don't need a reminder of all the sacrifices they're making. They're making those sacrifices every day. What they need is a sense of why that matters and what's on the other side, so that they can make decisions about their own finances and so businesses can make decisions as well.
KELLY: But it's hard to know the answers if you don't know the size and shape of the problem yet and that's what we're still finding out. We had some new information yesterday from the Treasurer. Josh Frydenberg outlined an 18 per cent fall in business confidence and household consumption is down by 16 per cent. But we don't have the forecasts of the dimensions of this problem, ultimately, when we get to the other side.
CHALMERS: We don't have them because the Government is refusing to provide them.
KELLY: Mathias Cormann says they don't have them yet.
CHALMERS: That's because they haven't asked them for them, Fran, and that's the problem. There's always a degree of uncertainty when you're forecasting the economy and obviously at times like this, there's a lot of uncertainty around. We've always acknowledged that. But the Reserve Bank, the International Monetary Fund, Deloitte Access Economics, they've all prepared detailed forecasts over the coming years so the Government has no excuse not to provide those either. They don't have an excuse, as you mentioned in your introduction, not to come up with a plan for what comes next. The Government's operating on this dangerous assumption that all of a sudden people are going to wake up on 28 September, on the Monday morning, and everything is going to be fine again, that everything will have snapped back to normal and everybody will be back in work. That's a dangerous assumption because nobody shares that assumption.
KELLY: Well they're not saying that. They're not saying snap back. Yes, but the Prime Minister has specifically said that he's not talking about a snap back now and that this will be a slower recovery out of unemployment, for instance, in particular. So, the Government's not saying that, are they?
CHALMERS: They're trying to walk away from the language, Fran, but their policy is to end all of this support; when it comes to JobKeeper it ends on 27 September and the boost to JobSeeker ends a few days before that. The point that we're making is we need to be smart about it. The states and the Commonwealth are putting a lot of thought into how they reopen the economy and that's appropriate. We need to be considered and careful about how we do that. But equally, we need to be careful and considered about how we withdraw some of this welcome support in the economy because most economists don't share the assumption that things right across the economy will all of a sudden bounce back. The recovery for some people will be long, it will be patchy. The Reserve Bank and others have all said that they think unemployment will be higher for longer. What we've said is be smart about it. Be smart about this support. If you need to target it, if you need to taper it, if you need to do different things for different industries or for different kinds of workers then put something on the table and we will engage with that constructively. But don't just assume that everything's going to be fine one day in September, because most people, most economists and the credible commentators don't share that view.
KELLY: Well, let's go to that now. Labor says it would support changing the scheme to stop people topping up their wages through JobKeeper. In other words, some people are getting more money now than they were actually earning before they got JobKeeper. What about ending the scheme early for businesses that are back on their feet? That's a push coming from some Coalition MPs. Do you support that?
CHALMERS: I'm not sure that the push coming from those MPs is that we need to target it better. Some of those comments yesterday were a bit loopy. I think some of them want us to pull out the JobKeeper support almost immediately. A lot of those comments were from people who probably didn't support the wage subsidies in the first place. There are some legitimately raised concerns about people who might have only been earning $100 or $150 a week, all of a sudden getting paid $750 a week. We're up for a conversation about tightening that up. The leader of the Labor Party has made that clear over recent days as well. There might be opportunities to better target it and better taper it, but we shouldn't be listening to the zealots in the Liberal party room who probably didn't want to do this in the first place.
KELLY: Okay, well as I was mentioning to Mathias Cormann, Labor is going to try this week with the Greens to extend JobKeeper to university staff and local workers employed by companies that are owned by foreign governments. The Finance Minister was clear; they're not going to give money to foreign-employed people and they're not going to give money to university staff because universities also get significant subsidies from the Government. How much would it cost to do what you're suggesting?
CHALMERS: First of all, I think it's disappointing that the Government has lost sight of the original objective of what we're talking about here. We shouldn't lose sight of what we're trying to do. What the Government said they're trying to do, and what we welcomed, is we want more Australian workers to maintain that link with their employer. The changes that we are seeking in the Senate are to recognise that for these workers at dnata, the aviation catering company, for example, there's 5,500 workers there, it's not their fault that the parent company is foreign owned. They're all Australian workers. They were under the impression that they were going to get the JobKeeper payment. The rules were changed so that they no longer get it. That means the unemployment queues will be 5,500 people longer than necessary. That's why we are seeking to fix it.
KELLY: How much would it cost?
CHALMERS: We have a rough costing of about $100 million, but it's for the Government to cost up that change if it proceeds. I think this point is really important; this is about making sure that more Australian workers maintain a connection with their employer. It's about making sure that the unemployment queues which will already be unacceptably long are not even longer. The Government should maintain faith with the original objective of the JobKeeper payment to maintain that link, and if they do that then we can fix up a couple of these areas. Not all the areas, not all the exclusions, but university staff and aviation staff like dnata workers with a foreign owned parent company would be a step in the right direction.
KELLY: Jim Chalmers, thank you very much for joining us.
CHALMERS: Thank you, Fran.