FRIDAY, 9 AUGUST 2019
SUBJECTS: RBA Statement on Monetary Policy; Liberals’ economic mismanagement; Liberal cuts to TAFE and training; CPAC; US-China trade war; tax cuts.
JIM CHALMERS, SHADOW TREASURER: Today the Reserve Bank has said that economic growth in Australia will be slower than expected and unemployment will be higher. This is a damning indictment of the Liberal Party's economic mismanagement.
The economy in Australia is just not working for ordinary working Australians. We've got the slowest growth in a decade since the Global Financial Crisis. Wages are stagnant. We've got record high household debt, living standards are going backwards, and almost two million Australians are either looking for work or looking for more work. These downgrades from the Reserve Bank today should be a wake-up call for a Morrison Government which is in denial about the weakness in the economy. These downgrades from the Reserve Bank should spur some action from the Morrison Government, which for too long has pretended that this economy is delivering for ordinary people when it isn't.
The Government needs to stop playing silly political games and pointing the finger at everybody else and take responsibility for the fact that economic growth is being downgraded and that people's expectations for unemployment are worsening at the same time. What the Reserve Bank Governor has said today is that low interest rates and monetary policy can't do all the heavy lifting on its own, that there are dangers associated with relying too much on monetary policy - we need the Government to play a role at the same time.
We need the Government to stop sitting on its hands when it comes to slowing growth, and underemployment and unemployment which is still too high, and we need them to do their job which is to come up with a genuine plan to turn this floundering economy around.
Now, the Prime Minister is in north Queensland today talking with the states about skills. This Liberal Government has managed a rare double whammy of wage stagnation and skills shortages at the same time. This is the inevitable consequence of cutting 150,000 apprenticeships and cutting $3 billion out of TAFE and training. What the Morrison Government is doing by cutting apprenticeships and cutting TAFE and cutting training is now making our economy too reliant on foreign workers. By locking Australians out of TAFE and training the Morrison Government is locking Australians out of Australian jobs. If they were serious about turning around the situation with stagnant wages at the same time as skills shortages they would act to restore TAFE and restore training and restore apprenticeships after six years of cutting the very things which will deliver opportunity for people in this country, especially young people.
One of the reasons why the Government has dropped the ball on the economy - one of the reasons why growth is slowing while we've got stagnant wages and skills shortages and high household debt and declining living standards - is because the Government spends all its time focussed on politics and focussed on ideology.
We are seeing that again with the CPAC conference this weekend. The CPAC conference is a freak show encouraged, funded, supported, organised, and attended by the Liberal Party. Maybe the economy wouldn't be as soft as it is right now if the Liberal Party spent more time focussing on ordinary people and the economy, and less time encouraging the alt-right in this country. The CPAC conference is a freak show encouraged and funded and supported and attended by the Liberal Party and the Australian people would be better off if the Government spent less time at conferences like this, encouraging these kinds of freaks, and more time dealing with an economy which has slowed substantially on their watch.
Over to you.
CHALMERS: Well it remains to be seen. What we do know is that the economy has slowed substantially on the Liberals’ watch. We do know that economic growth right now is the slowest it's been in the decade since the Global Financial Crisis and the Reserve Bank itself has downgraded their expectations for economic growth, and they've also said that their expectations for unemployment are getting worse as well. I would encourage you to read the very first sentence of the Statement on Monetary Policy which was released this morning which said: “The Australian economy has been navigating a period of slow growth, with subdued growth in household income relying on consumption spending". So any predictions about the future of the economy remain to be seen but what we do know is that the economy is underperforming substantially under the Liberals. It likes to pretend they're doing a good job managing the economy, but the facts tell a very different story.
CHALMERS: Look clearly there has been some concerning developments in the global economy. We've got a lot of skin in the game when it comes to the conflict at the moment between the Americans and the Chinese and we don't play those down, but the turbulence in the stock market over the last few days as a consequence of that economic conflict, does not explain the last few years of slowing economic growth or the fact that we've got a high underemployment and stagnant wages and record household debt and living standards in decline. What we can't let the Governments do is to try and pretend that our problems aren't home-grown. Yes there's some uncertainty in the global economy and we will see how that plays out, but the big issues that we have in our own domestic economy are a consequence of a Government which is now in its third term, and has spent much of the last six years pretending that the economy is in tip top shape when that's news to ordinary Australians right around the country who know and understand better than their Government does that this economy is not delivering for ordinary working people.
JOURNALIST: Latest reports or forecasts not been [INAUDIBLE].
CHALMERS: Well the tax cuts have passed the Parliament with Labor's support. We enthusiastically supported the first stage of the tax cuts which are now circulating through the economy and helping, but are on their own not enough. We said that the second stage should be brought forward to help bolster the floundering economy and the Government, remarkably, didn't support us trying to implement their tax cuts faster. The third stage of the tax cuts come in in five years’ time. They obviously have absolutely no prospect of boosting the economy in the near-term because they don't come in for so long.
The point that the Governor has made - the point that we've made repeatedly - is that a combination of record low interest rates plus the tax cuts which are circulating through the system right now with the support of the Labor Party may not be enough to turn things around. We also need to see infrastructure investment brought forward in a responsible way. We also appreciate - as many people in the community, and many of the peak organisations understand - is that if the Government reviewed and increased Newstart then that would also help bolster demand in the economy, help bolster consumption in the economy, and help turn things around.