SKY NEWS AM AGENDA
MONDAY, 30 SEPTEMBER 2019
SUBJECTS: Interest rate decision; The floundering economy needs an economic plan; Retirement Income Review; Light on the Hill speech.
ANNELISE NIELSEN: We are joined by Shadow Treasurer Jim Chalmers, live from Brisbane. Jim Chalmers, thank you for your time. Was Trudy right? Are you fired up?
JIM CHALMERS, SHADOW TREASURER: I am concerned that the Government's needlessly compromised this Retirement Income Review by appointing somebody to a three-person panel who has a record of campaigning against Labor and its policies. I think if the Government was serious about having a proper, forward-looking, bipartisan look at a really important part of the economy then they wouldn't have gone down this path. They wouldn't be playing these kinds of partisan games. That's not a reflection on Professor Ralston as a person but it is a reflection on her views and particularly on the Government's willingness to appoint someone with these views. We don't want to see the compulsory taken out of compulsory super so for as long as this person is on the review panel Josh Frydenberg's words about not touching super ring hollow. This Government's got form when it comes to attacking super and pensions, and we don't want to see this review become a stalking horse for further and harsher cuts to super or pensions.
NIELSEN: It's pretty much impossible to find anyone who has experience in the superannuation industry that isn't involved in either the retail side or the side of wanting to crack down on the industry. What's wrong with her having industry experience?
CHALMERS: It's not about experience, Annelise. It's about campaigning in the last election against Labor and its policies. I think, again, if Josh Frydenberg wanted to have a proper look at retirement incomes he wouldn't be going down this path. As always they inject a dose of partisanship into these sorts of processes to try and distract from the fact that they've got form when it comes to cutting or trying to cut super, and to cutting pensions. They've got form in trying to distract from their failures on the broader economy which we'll see and hear more about in the next couple of days. And I think this is of a piece with that.
NIELSEN: When it comes to this proposed increase of superannuation from 9 per cent to 12 per cent are you confident that big business fully supports an increase to super coming at a cost to wages?
CHALMERS: Look, it's a legislated increase, it's not a proposed increase it's actually been legislated. The Government's slowed down the increase multiple times but the legislation says that it's to get to 12 per cent. We know that big sections of the Liberal Party don't believe in that. When it comes to the business community I think that, you know, there will be a range of views on superannuation.
The issue around wages, I mean, the Liberal Party now wants to cry these kind of crocodile tears for people on low incomes. I think there's a lot of understandable scepticism in the community that if the Government was to slow down the increase in the Super Guarantee again that that would automatically flow through to higher wages. I think more likely than that is that the savings from the Superannuation Guarantee would just go to companies' bottom lines. Profits are already very strong in this country, wages are historically stagnant, and people don't yet have what they need to retire with dignity and adequacy after a lifetime of work. We think it's important that superannuation get to 12 per cent on the legislated trajectory. The Government should stop playing games with that with this Retirement Income Review.
NIELSEN: You're right that people are sceptical about this, but as Alan Kohler rightly points out in his column, it's because that money isn't just being quarantined; it's being put into superannuation funds which eat into your money with fees. Isn't that cause for concern, that this money isn't going to people where they need it, it's not going into their pockets, it's going to big industry super funds?
CHALMERS: He's not just talking about industry super funds, he's talking about super funds more broadly and a lot of the bad behaviour when it comes to fees haven't been on the industry side of things. I think fees are a legitimate avenue for investigation by the Retirement Income Review. I think if the Treasurer were serious about it these would be the sorts of things he'd be focussing on. We do want to make sure that people aren't ripped off. We do want to make sure that there is no gouging in the system so that when people save for their retirement in the superannuation system that they are getting their returns and getting the earnings that they need to retire with dignity. I think that is an important thing to consider and I read Alan's column today, his piece today, and I think these are important considerations.
NIELSEN: If the - as you say, as is legislated - the increase to superannuation does go to 12 per cent how many people will come off the aged care pension as compared to the 9 per cent?
CHALMERS: Well I don't do that modelling, Annelise. I don't have that sort of information to hand. Clearly if you want to boost retirement incomes you don't attack people's super. That's the principle that's involved here. It's for the Government to explain any further slowing down of the increase to 12 per cent and the impact that that would have on other parts of the system. We've got a retirement income system which relies partly on the pension, partly on super, partly on other forms of saving, and we want to make sure that we get the balance right. If you want people to have good retirement incomes it makes no sense whatsoever to be attacking their super as parts of the Government intend to do and as parts of the review panel have campaigned for in the past.
NIELSEN: If your argument for the increase to 12 per cent, though, is to keep people off the aged care pension shouldn't you have some idea of how much that's going to help?
CHALMERS: The reason to get people to 12 per cent Superannuation Guarantee in the super system is so they save more for their own retirement. That will obviously have a beneficial impact on their savings and make people less likely if they've got bigger balances to rely as much on the pension. That's the important principle that we're arguing over here. It's for the Government to model any proposed changes. We support the current trajectory to 12 per cent. It's the Government that intends to mess with that. They should be upfront about it. Clearly with these appointments to this panel, or this appointment to this panel, they have shown their true colours. As always the kind of extremists on the backbench the Liberal Party which want to see further cuts to superannuation, some of them want to see the family home included in the pension asset test, then typically what happens here is Josh Frydenberg says he's not interested in something until the backbench says they are. Typically the backbench tail wags the dog and I don't want to see that happen again. The Retirement Income Review should have been a really good opportunity to look at some of these issues in super, in fees, in the pension, all of these sorts of issues in a proper way and not use it as an excuse for harsher cuts to the pension and to superannuation by a Government which has form in cutting both.
NIELSEN: When it comes to the predicted cut to the interest rate that we're expecting from the RBA tomorrow, we heard Treasurer Josh Frydenberg say that that's more of an indication of global factors than anything wrong with how they are managing the economy. I'm guessing you don't agree?
CHALMERS: I mean firstly I don't pre-empt the decision of the Reserve Bank tomorrow, but as Trudy in your cross a moment ago rightly identified the market almost universally expects rates to be cut again to a new record low, less than a third of what they were during the Global Financial Crisis. I watched the interview with the Treasurer this morning and I think most people when they hear him talk about the economy would only conclude that the Treasury is hopelessly and dangerously out of touch with what's going on in the domestic economy. We've got the slowest growth here we've had for a decade. Wages are stagnant. Household debt at record highs. Living standards and productivity are in decline. Almost two million people are looking for work or looking for more work. The Treasurer wants to pretend that everything's hunky dory in the economy or if there are challenges that they're only imposed on us from overseas. It's a very dangerous complacency which he is exhibiting again. If rates are cut tomorrow it will be because the Morrison Government doesn't have a plan to turn the floundering economy around. By not having a plan they leave us unnecessarily and dangerously exposed to some of the global issues which are playing out around the world at the moment.
NIELSEN: If the RBA does cut rates tomorrow do you want to see the big four banks pass on that cut?
CHALMERS: Absolutely and if the interest rate cuts are going to have any impact at all then we want to see them passed on by the banks and the financial institutions. It's disappointing when that doesn't happen, when they thumb their nose at the Treasurer that's a disappointing outcome. I have the same view as the Treasurer on this; we want to see the cuts passed on in full. That gives them the best chance of circulating through an economy which desperately needs it at a time when under this Liberal Government we've got consumption very weak, retail very weak, stagnant wages, and all the other things that I ran through a moment ago.
NIELSEN: And just finally, Jim Chalmers you gave a very powerful speech on Saturday night about where you want to see the future of the Labor Party going. You had comments about not wanting to rely on warmed up nostalgia from the 1980s. Seems like the strongest vision we've seen for the future of the Labor Party since the election. Are you regretting perhaps withdrawing from contention for the leadership?
CHALMERS: Of course not. I don't second guess that decision for one moment. But the speech in Bathurst, which is an important speech in the Labor Party to commemorate Ben Chifley's life and legacy, gave me an opportunity to make a couple of points about the future which is that the Labor Party is always better when it looks to the future, when it cares about economic growth and how the gains of economic growth are redistributed, when it cares about how we make sure that more people get a stake in a growing economy and how we make sure that when things like technology changes the workforce we make sure that there are opportunities for ordinary working people and not just downsides. Anthony Albanese will be giving a speech, a vision statement, shortly about the jobs of the future and the economy. That's exactly where the Labor Party should be; looking forward, learning the lessons of the last campaign, but overwhelmingly looking forward to how we can deliver our next generation of economic growth in a way that is fair and inclusive and leaves nobody behind.
NIELSEN: Shadow Treasurer, Jim Chalmers, thank you for your time.
CHALMERS: Thanks Annelise.