ABC The Business 12/05/20

May 12, 2020

TUESDAY, 12 MAY 2020

SUBJECTS: Economic impact of Coronavirus; JobKeeper; Labor’s constructive approach; Debt; Economic policies.  

ELYSSE MORGAN, ABC THE BUSINESS: Shadow Treasurer Jim Chalmers joined me from Canberra. Jim Chalmers, we've just heard on the program there are multiple calls for there not to be a hard stop in the JobKeeper and JobSeeker programs in September. How do you think it should be handled?

JIM CHALMERS, SHADOW TREASURER: Hi Elysse. I think the Government needs to be smart about this. Most people in the business community and certainly most economists and credible commentators think that the issues in the economy won't just miraculously disappear one day, and all of the private demand will come back on one day. The recovery here is going to be long. It's going to be patchy. Some industries will do better than others. Some will be slower to come back than others. The Government's policies need to reflect that too.

MORGAN: What’s your plan? What do you think they should actually do?

CHALMERS: They should be considering things like how they taper the JobKeeper program, for example, and whether or not there's wisdom in leaving it on for some industries and not others. This is the sort of work they should be commissioning from the Treasury. If they come to the Opposition and say that this is what they're looking at then we'll be constructive about that. I think the most important thing that we recognise here is that most people don't think the economy is just going to miraculously snap back like the Prime Minister said into some kind of reasonable shape. Once you recognise that then I think the onus is on all the decision makers in the economy, not just in politics but the business community and others, to make sure that we are calibrating support in the economy. What you don't want to do is pull it out so fast that it cruels the recovery before the recovery can even get going.

MORGAN: It is all costing a lot of money though, and there is merit in saying let's review the program. What do you think should happen for workers who are now actually earning more under the Government's programs than they were previously? Should that be stopped?

CHALMERS: We've certainly expressed our concern about that. That's something that we hear a lot from the community. It doesn't make a lot of sense to many people to have someone who might have been earning $80, $100 or $150 a week to all of a sudden be earning $750 at the same time as the Government has deliberately excluded a lot of long-term casual workers who might have different employers. We said we want to make sure that we're getting maximum bang for buck. This is a lot of money that's being spent. We want to make sure that it's supporting jobs and it's well targeted - 

MORGAN: Yes, so how soon would you like to see people who have got this massive windfall out of the Government's program, how soon do you want that payment to be taken off them?

CHALMERS: Let's see what the Government's review says and what the reasons are behind it. Our job is to be constructive where we can be but point out where things might be able to be done better. That's something that we've expressed concern about, but our overriding concern - 

MORGAN: It sort of sounds like you're squibbing it. You're pointing out the problems but you're not saying what the solution should be. What do you think should happen? Should those people immediately lose those payments and that money then be given to those people that you say are unfairly missing out?

CHALMERS: That's not what we're calling for. What we're saying is that we'll take a responsible approach. If the Government comes out after their review and says there are better ways to target this program - it's a good program, a lot of people are relying on it, but it’s got its issues, it’s being badly implemented. There's a lot of confusion. There's this issue that we're talking about here, and too many people are being excluded. It's not for us to cross all the t's and dot all the i's of the Government's policies. The community, particularly in the business community, their feedback to us has been that the approach we're taking to identify areas where things can be done better and to be constructive in trying to fix those issues is the right approach for us to take. That doesn't mean that we have to nominate dates and figures.

MORGAN: When Labor talks about wanting to see these programs tapered, how long would that tapering be, do you think? Because of course this is costing a lot of money.

CHALMERS: Again, we're just saying this is something that the Government should be considering. It's not for us to propose the Government's policies for them. If the Government - 

MORGAN: No, but you can propose your own potential policies. 

CHALMERS: Yes, and I've said that what they should be looking at is a kind of tapering, some kind of industry-by-industry treatment perhaps. We don't know what the Treasury is advising them. Hopefully they've sought that advice.

MORGAN: In September we'll see JobKeeper roll off, JobSeeker roll off, and also the banks' freeze on repayments end. You've said the Government is without a plan today. What's Labor's plan for how that horrible month for many people should be handled?

CHALMERS: We need to make sure that there is something to replace these payments if they are pulled out of the economy. The obvious area there, which Anthony Albanese and Jason Clare have been talking about, is that we expect construction to fall off a cliff when it comes to housing in particular. We think it should be part of the Government's thinking that they invest in social and affordable housing, for example, to boost that part of the economy.

MORGAN: We're running up a huge amount of debt here. What is the best way for Australia to pay down this debt?

CHALMERS: There are three ways to go about it. You can grow the economy in a way that pays down the debt, you can cut spending, or you can change taxes. The Government has said that their priority is growing the economy, as is ours. I think realistically there will need to be a discussion about what mix of those three things is needed to pay down debt, not overnight but over time. We're up for a discussion about that.

MORGAN: Would you consider a trade-off of lowering income tax cuts sooner? 

CHALMERS: We've previously pointed out that the Government has tax cuts coming in many years down the track. They will need to be looked at at some point, but the Government hasn't come to us yet. There are no firm proposals on the table. If they do come with proposals then we'll hear them out and we'll make our views known then.

MORGAN: Jim Chalmers, thank you very much for your time.

CHALMERS: Thank you Elysse.