SKY NEWS AM AGENDA
TUESDAY, 2 JULY 2019
SUBJECTS: Labor’s plan for tax cuts for all workers in this term of Parliament; floundering economy under the Liberals; interest rates
KIERAN GILBERT: Jim Chalmers, thanks for your time. Labor's not genuinely considering starting an electoral term by blocking tax cuts? That would be crazy wouldn't it?
JIM CHALMERS, SHADOW TREASURER: We want to do better for the workers of Australia and we want to give the economy a genuine boost. And that's why the amendments that I'll be moving tonight will seek to do that. What we want to do is we want to get more tax cuts into the hands of more workers and boosting a floundering economy sooner. We've got big challenges in the economy right now. The Government wants to pretend that there's nothing wrong in the domestic economy, but ordinary working people are worried about their mortgages; they're worried about their wages; they're worried about how they pay their energy bills. The Government wants to pretend nothing's wrong. We want to play a constructive role. Our amendments are all about getting more tax cuts into more hands sooner this Parliamentary term. And if the Government votes against that, they need to explain why.
GILBERT: But you are saying the economy's got its challenges, and yet you want to bring tax cuts from the second phase, which are due to kick in in 2022 forward to this year. How can the economy sustain that? How can the Budget sustain that?
CHALMERS: Well, the Budget can sustain it, and we've gone out of our way to be responsible about what we're calling for and what we're seeking to amend in the Parliament. Our position is informed really by three motivations. The first one is to boost the floundering economy. The second thing is to give every Australian worker a tax cut this term, not on the never never. And the third thing is to not sign up to a $95 billion tax cut five years down the track. We think that that would be irresponsible. So we want to play a constructive role. The Reserve Bank is meeting today to talk about the slowing economy, to talk about weak consumption and stagnant wages and all of those things that people in real communities are feeling every day. We want to play a constructive role in helping the Government turn the economy around. They're in their third term now. They're six years into government. They need to take responsibility. They can't pretend that there's nothing wrong with the domestic economy. I saw Josh Frydenberg talking to your colleague Laura Jayes a few moments ago and he wants to pretend that all of our challenges are global. Some of our challenges are global. But as the Reserve Bank has said, we've got a big problem with consumption which flows from stagnant wages. Ordinary people out in communities understand that. Unfortunately, Scott Morrison and Josh Frydenberg just don't get it.
GILBERT: You spoke about your priorities for what you want to achieve with these amendments, but the surplus and the timing for the surplus, that would be set back would it not by your approach?
CHALMERS: No, what we're proposing wouldn't jeopardise the surplus. The Government still has no excuse not to deliver the forecast surpluses in the coming years. What we're proposing is to bring forward part of Stage 2 of the tax cuts in a way that wouldn't jeopardise the surplus. That's an important thing. The Government should deliver those surpluses that they've promised and that they’ve forecast. They've got no excuse not to.
GILBERT: And in terms of the third phase, you say it's in the never never, but isn't it important for people to have certainty in their planning in terms of their own economic situation? That's the Government's argument, that it's a plan and it gives workers certainty and it appeals to, as we know, aspirational voters quite clearly.
CHALMERS: We know what the Government's doing here. They want to hold tax cuts this week hostage to tax cuts which come in in five years' time. You don't know, they don't know what the economy or the Budget will look like in 2024-25. We don't think it's responsible to bake in those tax cuts so far ahead. What is responsible, when you consider that we've got a slowing economy and stagnant wages and people are finding it hard to pay their bills, is to give every Australian worker a tax cut now. The only proposal that's on the table for every worker to get a tax cut this term of Parliament is Labor's proposal. That's what my amendments will be all about tonight. If the Government votes against that, they're voting against tax relief for every worker. You want to talk about aspirational voters, aspirational Australians. They think aspiration is something you learn from a focus group. We think it has real meaning. It means if you work hard, you can get ahead and you can provide for your loved ones. We are proposing to give every Australian a tax cut in what we're doing today.
GILBERT: Did you get a message from the election though from that that cohort, the aspirational Australian as you put it? Because it's a group of people that John Howard certainly appealed to, and clearly Scott Morrison did too.
CHALMERS: Well, he uses aspiration as a marketing term. We use it as a reason for being. We want more Australians to do well in this country and in this economy. That's what Australia is about, that's what Australian Labor is all about. We are the party of aspiration, and what we have done since the election, learning from the outcome of the election, is we have shifted our position on tax. We have said that we'll sign up to Stage 2. We have proposed a faster way to get that into the hands of more people. We are the only party proposing to give everybody up and down the income tax scale a tax cut this term, and the Government says that they want to vote against that.
GILBERT: Finally the RBA, you touched on that, making a decision today. A lot of economists think another rate cut is looming if that eventuates. What do you believe that says about the state of the economy?
CHALMERS: First of all, I don't make predictions about the Reserve Bank. They're independent and they make their decisions independently. I don't propose to give them advice. But if they do cut rates again today, I think that will bolster our already strong case that we need to get more stimulus into the economy. That means bringing forward some of these tax cuts, passing Stage 1 and bringing forward part of Stage 2. If the Reserve Bank cuts rates today, it will bolster our argument. They've already cut rates since the election. They've cut rates because they've said that there's a problem in the economy with household consumption, which flows from stagnant wages. And right now, rates are much lower, less than half what they were during the Global Financial Crisis. And when the Reserve Bank is doing these quite extraordinary things and cutting rates to extraordinary lows, the Government wants to pretend that there's no problem in the economy. Walk down any main street in this country and talk to people. They're worried about their wages, they're worried about their mortgages, they're worried about paying their power bills. And the Government wants just more of the same. Since the election, we've had a rate cut. They're contemplating another one. We've had National Accounts, which show the economy's growing at its slowest rate in 10 years and the Government's just promising more of the same.
GILBERT: Jim Chalmers thanks for your time, appreciate it
CHALMERS: Thank you, Kieran.