ABC RN DRIVE
TUESDAY, 29 JANUARY 2019
SUBJECTS: Economy not working for middle Australia; Liberals’ division and dysfunction; Scott Morrison’s scare mongering over Labor policies; dividend imputation; instant asset write off; Huawei; Banking Royal Commission
PATRICIA KARVELAS: Jim Chalmers is the Shadow Finance Minister and he joins us on RN Drive. Welcome back and Happy New Year. I was trying to figure out if I was still allowed to say that. Welcome!
JIM CHALMERS, SHADOW MINISTER FOR FINANCE: And to you Patricia, and to your legions of listeners.
KARVELAS: The Prime Minister is right in that the Budget is close to balance and unemployment, inflation and interest rates are low and growth is solid. Do you give the Government any credit for their economic performance?
CHALMERS: At the same time as we've got those things, Patricia, we've got falling consumer confidence. We've got new numbers out today that said business conditions were the worst in five years. We've got slowing growth; stagnant wages, which is what most people are experiencing. We've got high debt. We've got all kinds of global uncertainty. So I don't think the picture he's painting is the picture that most people in the economy experience. I think most people feel like the economy's not delivering for ordinary working people.
KARVELAS: The Government succeeded in meeting the target set by former Prime Minister Tony Abbott to create a million jobs over five years. Why shouldn't voters trust its new target?
CHALMERS: Well, a few things about that. You're right to point out that all we got today was a reheated target that Tony Abbott had cooked up five years ago, so that's not really much news. And then even such a simple announcement as that, they've made a hash of. Scott Morrison said they'd all be full-time jobs. He got that wrong, given only 55 per cent of jobs created over the last five years were full-time. There's been a heap of part-time jobs in there. And then Stuart Robert in the last couple of hours has got that wrong as well. So, they've made a hash of it. What there actually proposing is for jobs growth to be slower than it is right now, but faster than what the Treasury's forecast. So it's a bit of a mess. They have to clarify it. They should release what the Treasury's telling about the prospects for jobs.
KARVELAS: Do you support the target that they've set?
CHALMERS: Obviously, we want to see as many jobs created in the economy as possible. But we also need to be conscious that we need good wages for people too, and wages have been stagnant. We've got a problem with job insecurity at the moment. We've got a whole range of issues around underemployment. And so all these things are important too, and I think when a lot of Australians hear Scott Morrison talk about the labour market, they feel like he's from another planet. Because, for a lot of people, the story they experience is about those stagnant wages and that insecure work.
KARVELAS: OK, so you say you obviously support more jobs being created, but you don't support this particular target, or setting a target?
CHALMERS: The target needs to be clarified. Scott Morrison and Stuart Robert have both said they're talking about 1.25 million full-time jobs. They needs to clarify that and release the Treasury advice that says that's possible.
KARVELAS: What target would you set? You're critiquing their target, but what would you do?
CHALMERS: They've sort of critiqued their own target, Patricia. Our business is in creating as many jobs as possible and making sure they're good, well-paid, secure jobs.
KARVELAS: But you're not willing to put a number on that?
CHALMERS: We haven't put a number on that. We don't think there's anything wrong per se with saying how many jobs you'd like to create. I'm just saying, simply, that it's a reheating of an old commitment.
KARVELAS: So does that mean you're looking at also announcing a target?
CHALMERS: Not at this stage. Our focus is on creating as many jobs as possible and making sure they're well-paid, secure jobs.
KARVELAS: OK, but that's not specific. Is there a reason for not being specific?
CHALMERS: There's no reason to dance to the Government's tune on this. What happened with this announcement today is that Scott Morrison's economic policy is to pay people less to work on weekends, and ideally he'd like to give multi-billion dollar tax cuts to multinationals and the big banks and we've defeated him on that. In the absence of any policy ideas, he relies on two things - this target, which is Tony Abbott's target from five years ago. And this type of hyperventilating scare campaign about Labor. That's where it's coming from. It's not for us to dance to the Government's tune. We've got our own plans for the economy, and central to that is making sure that people have a stake in our national economic success.
KARVELAS: So to be clear, you're not against a target? You just don't believe they can meet their target?
CHALMERS: I think their target today is no substitute for having a proper economic policy that recognises we've got a problem with wages in this country and insecure work. They can have their targets, that's fine. And on the face of it, we want to see as many jobs created as possible. But I think today was a bit of a gimmick because, in the absence of anything else to say they've sort of searched around and got this.
KARVELAS: A key part of the Government's messaging is that Labor's policies would deliver a recession. How dangerous is that message for Labor at a time when voters don't necessarily feel that the economy is working for them?
CHALMERS: That's right Australians want Scott Morrison to recognise the economy's not working for them. Instead, they get this type of hyperventilating scare campaign and language which is not befitting of a Prime Minister or Treasurer of this country. They put it all through the papers today - all of these ridiculous Armageddon predictions - and then by early this morning, they've contradicted each other and walked away from it. So that's been a bit of a mess as well. They shouldn't be into this hyperventilating scare campaign. Australians want to hear from the Government that they understand their concerns about the economy around wages and some of the other things I've spoken about. So I think the Government would be well served to shelve this sort of ridiculous language and concentrate on the people.
KARVELAS: If you're just tuning in, this is RN Drive. Jim Chalmers is my guest. He's the Shadow Finance Minister and we're talking about the economy, and well we're going to be talking a lot about the economy over coming months because that's a pretty central contest between the Government and the Opposition. 0418226576 is our text line. Of course you can talk to us on social media too. You can hashtag #RNDrive. There are reports retirees are angry at the planned changes to the dividend tax credits, which the Government will brand a retirement tax. Given that, you have grandfathered of course the negative gearing changes. Are you considering that option, to give those people certainty in relation to their taxation?
CHALMERS: No, we're not proposing to do that, Patricia. We've given people plenty of warning about the difficult decision that we intend to take if we're elected to office later this year. It's important to remember that pensioners are entirely exempt from what we're proposing and that 92 per cent of the Australian population won't be impacted. We're the only country that does things this way in this generous fashion, with a fully refundable dividend imputation system. What we're proposing to do is take it back to the system that existed between 1987 and 2000. So it's not unreasonable. It's difficult. And yes, some people are cranky with us about it, and that's fair enough. We've engaged with all of that criticism, and at the end of the day, we need to make difficult decisions to pay for hospitals and schools and that's what we're doing.
KARVELAS: Ok, so yes, people are cranky with you. Does it mean that you will consider revisiting the decision, or is this a blanket no?
CHALMERS: Our policy is as announced, Patricia. That's the policy we intend to seek a mandate for at the election, and what we would implement after the election if we were elected.
KARVELAS: The PM has extended the instant asset write off for small and family businesses until 2020 and increased the threshold from $20,000 to $25,000. Will you support that measure when Parliament resumes?
CHALMERS: Yes we will, Patricia. We support that measure as they've outlined. Unfortunately there's been a bit of confusion about the nature of it. Stuart Robert a couple of hours ago said that it would become permanent. That's not correct, so they need to get their story straight. But yes, we support the policy change. Not a lot of people appreciate this, Patricia, but that policy they're extending actually began as a Labor Party policy in the life of the last Government. The current Government abolished it and then reinstated it and expected a round of applause. We are always in the cart for responsibly supporting small business. So we'll put our hand up for this measure they've announced today. The other thing that people should understand is we have an additional policy for businesses that invest onshore in Australian jobs. It's called the Australian Investment Guarantee. What that means is that businesses would be able to immediately deduct 20 per cent of any new eligible asset worth more than $20,000. That means that in addition to that instant asset write off for smaller businesses, right across the economy that businesses can write off their investments that they make and will be permanent. The Australian Investment Guarantee is a permanent policy change.
KARVELAS: The United States has filed fraud charges against tech giant Huawei. Chinese companies have long been accused of stealing Western technology to develop their own products. What do you make of the charges? Do you think they're justified?
CHALMERS: It's a very serious development, as I'm sure you appreciate. But at the end of the day it's really a matter for the Americans and their legal system. Obviously around the world people are watching those developments with some interest.
KARVELAS: And just on the banking Royal Commission, which will be handed down on Monday next week, or made public - the Federal Government has delayed the release of the banking Royal Commission report until Monday after the close of trade. What do you make of that?
CHALMERS: I just don't think they're serious about full transparency when it comes to the Royal Commission report. If they wanted to provide it at the first opportunity after the market closed, they could do that on Saturday rather than waiting for Monday. You've got to ask yourself why they want to keep it under wraps for three days longer than is necessary? We call on them to release it immediately, as soon as it's possible to release it, taking into account considerations around the market and all of that sort of thing. I think when most people see that, they'll be a bit worried the Government wants to sit on it for a few days longer than necessary. They know the Government's got form. They know this Government, particularly Scott Morrison, has run a protection racket for the big banks.
KARVELAS: OK, but with respect, they are going to release it and then they will have to outline, if they are re-elected, how they will respond to it. Where could this possible dodginess come from if the report is released and the Government must outline on the public record what it's going to do?
CHALMERS: I guess the point I'm making Patricia is there is no reason for them to sit on it for three days. It is entirely reasonable that the Australian public get a look at it as soon as possible.
KARVELAS: What difference does it actually make?
CHALMERS: There'll be a period of time where the Government has under wraps one of the most important Royal Commissions that we've seen in recent decades. There's a lot of public interest in it and I just think questions need to be asked why they would sit on it and not just release it. They can respond to it formally later if necessary and so can the Opposition. But if they were actually fair dinkum about people getting a look at this report, being able to interact with it, they'd release it on the Saturday.
KARVELAS: Jim Chalmers, thanks so much for coming on.
CHALMERS: Thank you, Patricia.