PARLIAMENT HOUSE, CANBERRA
WEDNESDAY, 16 OCTOBER 2019
SUBJECTS: IMF downgrades Australia’s growth forecast; The economy is floundering on the Liberals’ watch; Hong Kong.
JIM CHALMERS, SHADOW TREASURER: Last night the IMF substantially slashed their expectations for growth in the Australian economy. These new numbers absolutely torpedo what was left of the Morrison Government's economic credibility. The Australian economy is floundering and the IMF is slashing its forecasts for Australia because Morrison and Frydenberg don't have a plan to turn things around. For months now Josh Frydenberg has been pretending that the economy here is strong and that the policy settings are right, but what the IMF proves is that neither of those things are true.
The IMF is ringing the alarm bells on the Australian economy but Morrison and Frydenberg are too out of touch to hear them. What we need to see from the Government is a plan to turn around an economy which is floundering on their watch. The Australian economy is floundering and people are struggling, and the Morrison Government is just sitting on its hands doing nothing. They don't have a clue what to do here and so they're doing nothing. They can't continue to leave all of the heavy lifting to the Reserve Bank. The IMF makes the point in their report that there's been too much emphasis on interest rate cuts and not enough fiscal policy or budget changes from governments, including our own. Morrison and Frydenberg need to listen to the alarm bells which are being rung by the IMF.
The IMF has slashed their expectations for growth in this economy under this Liberal Government. What we need to see is a plan to turn things around. The absence of a plan so far is costing Australia in terms of economic growth and jobs. We have the slowest economic growth in this country that we've had in 10 years since the Global Financial Crisis; household debt is at record highs; almost two million Australians are looking for work or for more work; productivity and living standards are in decline; business investment is the lowest it's been since the early 1990s recession. Wherever you look in this economy there is weakness which is being left unattended by a Morrison Government without a plan.
JOURNALIST: What policy settings do you think would be appropriate to stop the economy from slowing down?
CHALMERS: The Government needs to bring forward a plan to deal with an economy which is floundering on its watch. That could be any or all of an increase to Newstart, they could bring forward some of their tax cuts, they could bring forward some infrastructure investment. They don't have a wages policy, they don't have a settled energy policy. They need a tax break for business investment to deal with the extraordinarily weak business investment in the economy. We're not calling on the Government to throw the kitchen sink at these issues; we're calling for the Government to come up with a plan to do something about an economy that's floundering badly on the Liberal Party's watch. It is long past time for the Government to stop pretending that sitting on their hands, hoping for the best and crossing their fingers will do anything to turn this floundering economy around. What these IMF numbers show is that the Australian economy is floundering because Morrison and Frydenberg don't have a plan to boost growth in the economy.
JOURNALIST: This is happening all over the world. Do you really think that the policies that Labor brought to the election could have helped this?
CHALMERS: There are challenges in the global economy but our economic problems in Australia are still primarily home-grown. That's the point that Deloitte Access Economics has made and it's a point that the Reserve Bank has made. We've had issues in the Australian economy for some time now which preceded the trade tensions between the Americans and Chinese, for example. When Josh Frydenberg tries to blame international conditions for this downgrade today remember that the Australian downgrade in these new numbers is four times bigger than the downgrade for the other advanced economies as a whole. The IMF has downgraded expectations for the Australian economy by four times more than other economies. In these numbers, the downgrade to Australian growth is bigger than that for Greece, Spain, the United States and a whole range of other countries as well. Scott Morrison and Josh Frydenberg are in their seventh year of Government and in their third term so it's about time they took responsibility for an economy which is floundering on their watch.
JOURNALIST: There are a bunch of Hong Kong students here that are hoping to lobby Australian politicians into supporting their cause, getting some human rights clauses into the free trade agreement. Do you really think Australia should be getting involved?
CHALMERS: In the Free Trade Agreement?
JOURNALIST: Just in general.
CHALMERS: The events in Hong Kong have been very concerning, particularly where there has been people hurt in the protests so we're very concerned about the developments there. We do believe in people's right to protest peacefully and we also believe in one country-two systems. If there are people who want their voices heard in this building about some of those issues that are playing out then I'm sure they will get a fair hearing.
JOURNALIST: They're putting Australia in a tough position though, right, given our relationship with China?
CHALMERS: I haven't spoken to them. I don't know the main concerns that they'll be relaying to other colleagues in the building. Our position as Australians has been clear for some time. We support the right for people to protest peacefully. We support one country, two systems. Beyond that, if people want to raise concerns with us then generally, typically, we will hear them out.