Canberra Doorstop 27/11/19

November 27, 2019


SUBJECTS: Low wages the ‘new normal’; RBA Governor monetary policy; Cost of living; Westpac; Angus Taylor; Population growth.

JIM CHALMERS, SHADOW TREASURER: We've had two speeches from the Reserve Bank in the last 24 hours which show just how badly the Liberals have been mismanaging the economy. They've really shone a light on the fact that the Liberals have no plan to turn this floundering economy around.

The Reserve Bank Governor wouldn't even be considering such drastic measures as unconventional monetary policy if the Liberals were doing a good job managing the economy. It's very clear from the Governor's speech that he'd rather not have to do unconventional monetary policy. He shouldn't have to do it but he's forced into these considerations by a Government with no idea what's going on in the economy and no plan to boost it. Monetary policy can't do all the heavy lifting in this economy. Scott Morrison and Josh Frydenberg have dithered and denied while the economy has deteriorated on their watch, especially since the election.

The other speech in the last 24 hours was a damning assessment of wages under the Liberals and Nationals which indicated that there has been a step-change down in wages growth in this country on Scott Morrison and Josh Frydenberg's watch. On their watch feeble wages growth has become the "new normal". This Government has the worst record on wages ever and we've just seen wages growth go down again in the most recent figures. This is the inevitable consequence of a Government in its seventh year and its third term without a plan for the economy. Mathias Cormann said that lower wages growth is a deliberate design feature of the economy under the Liberals and Nationals. Many Australians feel that no matter how hard they work, they just can't keep up with the rising costs of childcare and electricity. Hardworking Australians deserve but are not getting the wages growth that they need to provide for their loved ones. They need to know that Mathias Cormann, Josh Frydenberg and Scott Morrison want it that way. They've said it's a deliberate design feature of the economy that we've got this fabled wages growth under the Liberals and Nationals. The Reserve Bank has said that these stagnant wages are the "new normal" over the last seven years or so. That is a damning assessment of the economic failures and economic mismanagement of the Liberal and National Government here in Canberra.

JOURNALIST: Jim, you don't have to have a lot of wages growth if you have no inflation. We've got no inflation so therefore wages growth doesn't really have to keep pace with inflation. It probably is. You know, what's the problem?

CHALMERS: The headline inflation rate has been weak for a range of reasons, but the cost of childcare and electricity have been skyrocketing. So many of the essential things that people need in their day-to day-lives, those prices are rising fast and wages aren't keeping up with those skyrocketing prices. If you go to any of the main streets of this country where there are so many 'for lease' signs in shops and you ask anybody, do they feel like their wages are keeping up with the skyrocketing costs of providing for their loved ones, they'll tell you that they're not. What the Reserve Bank has said in a damning assessment of wages under the Liberals and Nationals is that this is the "new normal", that people have to get used to the fact that under this Government with all of their economic mismanagement and economic failures, no matter how hard people work they just can't keep up with those rising prices.

JOURNALIST: This is an international thing though. All wages around the world aren't growing in modern economies and then we've got the same kind of malaise everywhere with low interest rates, low inflation and low wages. It's an international problem, not just Australia's.

CHALMERS: We never dismiss the challenges in the global economy but our economic challenges are primarily homegrown. They are a feature of a Government in its seventh year and its third term which doesn't have a plan to boost the economy in the interests of workers and pensioners. The weakest growth in a decade, productivity and living standards going backwards, record household debt, the worst retail conditions since the early 1990s, the worst business investment since the early 1990s - all of these factors are primarily homegrown. They are an illustration of the economic mismanagement of this Morrison Government and his predecessors. What the Australian people desperately need is a plan to boost the economy and to turn around an economy which is floundering on Scott Morrison's watch so that we can better safeguard our people against some of the concerning global developments.

JOURNALIST: Labor's now trying to bring Westpac in front of a Parliamentary inquiry. Is this turning into a witch hunt?

CHALMERS: It's absolutely crucial that Westpac front up to the Parliamentary committee. Andrew Leigh has made the right call here in demanding that the Liberals support his push for Westpac to front up and to give answers to the Australian people via their representatives. We should be using every available avenue to get to the bottom of what's gone on here and to make sure that adequate steps are being taken to fix what has been an appalling failure at Westpac. If the Liberals don't want to run another protection racket for the banks as they have done over recent years then they need to support Andrew Leigh's call.

JOURNALIST: Why do you think the Government's protecting Angus Taylor?

CHALMERS: In its seventh year and its third term this Government's defined by the arrogance and hubris that says the rules about Ministerial behaviour don't apply to them. Anyone who saw Scott Morrison's behaviour in the Parliament yesterday would see an arrogant person who's been really full of himself since he won the election. He thinks that the Ministerial Standards that Tony Abbott, John Howard and other Prime Ministers have adhered to don't apply to him. I think the rot has set in when it comes to ministerial standards. This is a Government in its seventh year and the rot has set in. If the Ministerial Standards are to mean anything at all then Angus Taylor needs to stand aside while this strike force from the New South Wales police investigate some very dodgy behaviour.

JOURNALIST: Kevin Rudd said yesterday that he thinks the Australian population should go to 50 million people, immigration should be boosted up to help us against foreign interference, foreign threats. What do you think?

CHALMERS: I'm not prepared to put the same number on it. As a former Prime Minister and a person of some standing we take Kevin's views very seriously on all of these issues, on issues of China and other issues that he weighs in on from time-to-time. Immigration is an important part of our economic story. Were it not for population growth the economy would be in all sorts of trouble under this Government. We need to be responsible about it. We need to be measured about it. I'm not prepared to put that number on it. Clearly, anyone who cares about growing this economy needs to understand that population is part of the mix.