SKY NEWS, AM AGENDA
TUESDAY, 5 NOVEMBER 2019
SUBJECTS: The economy is floundering on the Liberals' watch; RBA-Government agreement; The Government is leaving the RBA to do all of the heavy lifting; September retail figures worst since the 1990s; Australia-China relationship; Labor campaign review.
KIERAN GILBERT, SKY NEWS: Joining us now is the Shadow Treasurer, Jim Chalmers. Jim Chalmers, thanks very much for your time. Let's start with the story about the Government's statement with the RBA. It's going to remain as it is. Do you welcome that? Do you think that's the right decision in terms of the targeting on inflation?
JIM CHALMERS, SHADOW TREASURER: I think the agreement between the Government and the Reserve Bank is fine as it stands but it's not the main issue here. The main issue here is that the economy is floundering and the Government has let the Reserve Bank do all of the heavy lifting when it comes to turning it around. It's also worth noting that this agreement between the Bank and the Government is usually tied up within a couple of months of an election. It's been almost six months now. Treasurer Frydenberg is hopeless; it's taken him six months to do nothing and leave the agreement unchanged. But that's not the main issue. The main issue is that the Government doesn't have a plan. It's not coming to the table to help the Reserve Bank turn around an economy which is floundering on the Liberals' watch.
GILBERT: You say that he's been dithering on this matter, but isn't it better to be cautious right now given the various international challenges? He also points out that inflation levels across the advanced world are low so we're not an outlier in that sense?
CHALMERS: It's taking him six months to make no change to the agreement between the Bank and the Government, something which typically takes two months. I think that's very unusual behaviour for a Treasurer. It's not hasty to make this agreement in the aftermath of election as his predecessors have all done. It's taken him six months of dithering just to come to the conclusion that everything was fine as it was. That's not our main criticism of Josh Frydenberg, Scott Morrison and the Government. Our main criticism is when the economy is floundering and the economic data has deteriorated substantially since the election, that these guys don't have a plan for the economy. That has meant the Reserve Bank has had to do all of the heavy lifting. As the Governor of the Reserve Bank and many, many others have all pointed out, that's not enough to get the place moving again. We've got interest rates which are already one quarter of what they were during the darkest days of the Global Financial Crisis. There needs to be a role for government here but this Government has been sitting on its hands.
GILBERT: When it comes to the retail figures yesterday, do you think that people, consumers, instead of spending the tax cuts, the rates relief, that they're actually paying down their debt? It's a good thing, isn't it?
CHALMERS: It's very clear that the tax cuts so far have not had the impact that the Government promised. They're not helping enough to turn the economy around and nor are all of the interest rate cuts that we've got in the system. We need a plan. We need the Government to do more than they're currently doing. Household debt is at record highs. It's never been higher than it is right now under this Government. Families and workers are very worried about that and that's having an impact. The retail figures that we saw yesterday were actually the weakest volumes we've seen in retail since the recession of the early 1990s. It beggars belief that the Government wants to pretend that everything's hunky dory in the economy when we've got record household debt, we've got the worst retail numbers since the early 90s recession, the slowest growth since the GFC, declining living standards and productivity, the worst business investment figures since the early 90s recession, the list goes on and on and on. When you have this kind of data regularly coming through it's not good enough for the Government to either leave everything to the Reserve Bank or to sit on their hands while Australians are struggling and the economy's floundering.
GILBERT: Matt Comyn, the CBA chief, said at their General Meeting recently that the tax cuts have held up the economy at this time. As we mentioned earlier in our discussion it has been a difficult time internationally but he believes it’s held up the economy. Do you think that households are using that money to pay down that record household debt that you referred to?
CHALMERS: There is a broad consensus across the banks and other institutions, the economists, and the major respected commentators, that the tax cuts are helping a little but not a lot. When people are facing the highest household debt we've ever had in this country the temptation is to pay down debt rather than spend it in the shops. That's why we have those remarkably weak retail sales figures that came out yesterday. All of these problems are related. This Government has the worst record on wages growth of any Government. All of these things are related. There's not enough confidence in the economy. There's not enough wages growth. There's not enough economic growth. Understandably people are very concerned about where the economy is headed and they're not being given any confidence by their Government which tells them on an almost-daily basis that everything's fine when the facts tell a very, very different story.
GILBERT: There's been a positive development in terms of the Government agreeing to that regional comprehensive economic partnership. Do you see that as a start in pushing back against a wave of protectionism internationally?
CHALMERS: We do welcome the progress that's been made on the comprehensive partnership. This agreement has been seven years in the works and there's still a way to go. We'll be very cognisant of the details of the deal and that's what matters most, the details. We'll closely monitor and go through all the usual processes as we work our way through it. We do welcome progress. We do want to see more engagement in our region, not less. This is part of that but it's not the whole story. It's also about managing our relationship with China better. It's also about looking for all the opportunities to engage with our regional neighbours in a way that boosts growth and boost jobs here in our own economy.
GILBERT: The relationship with China, we might have started to see a thaw in the bilateral relationship. It was quite positive, the language after the Prime Minister's meeting with the Chinese Premier.
CHALMERS: First of all, we want the Prime Minister to do well when he engages with his counterparts in the region and around the world. No matter what political persuasion the leader of this country is we need them to make the most of the opportunities which present themselves in these discussions with our friends around the world. If any progress has been made there, then we welcome that. We should also note that this is a relationship which has been horribly mismanaged in recent years. We have a very complex relationship with China. There are issues where we converge, like trade, and issues where we diverge, like human rights. What we need from the Government is far more skill than they have exhibited in recent years. If there has been a thaw in the relationship then that's a good thing for Australia but the Australian relationship with China has been horribly mismanaged and we need to do better if we are to wring maximum advantage out of our relationship with the big economy of our region.
GILBERT: When you say it's been mismanaged, can you give us more detail on what you think? Many of our viewers would like the Government calling out China on its issues, not the least of which the mistreatment of its own people, the Uighurs and so on, but also its assertiveness in the South China Sea.
CHALMERS: In a complex relationship like ours with China there will always be issues of convergence and issues of divergence, and clearly human rights is one of those things that we've mentioned in the latter category. The Government has been on a frolic for some time now. We've had members of the Government use language which is very unhelpful, which makes it harder to manage that complex relationship rather than easier. We need the Government to speak with one voice. We need the country to speak with one voice in lots of ways when it comes to managing such a complex relationship. These are difficult and uncertain times, and they haven't been helped by the way that the Morrison Government has been a commentator on the relationship.
GILBERT: So in terms of the megaphone diplomacy, that's the problem?
CHALMERS: The way that Scott Morrison went about dealing with the World Trade Organisation issues when he was in the United States was unhelpful to the relationship. Andrew Hastie's commentary has been unhelpful in managing that relationship. There's been inconsistency and there have been mixed messages for some time now. There's not just one example, but multiple examples. It's a complex relationship. It's difficult to manage but they haven't done themselves any favours or Australia any favours with the way they've gone about it.
GILBERT: Before I let you go, the review into the Labor campaign is out this week. I read your speech recently about the need to engage with cohorts of Australians that traditionally would have supported Labor. I know you're not going to pre-empt the review, but can you give our viewers a sense of how you're going to go about that?
CHALMERS: There are lessons to be learned from what happened at the election in May and we need to learn those lessons. I haven't seen the detail of the campaign review which will be handed down on Thursday before Anthony Albanese responds on Friday. We owe it to the country, our supporters and to people who rely on us to take the conclusions of that review seriously. We need to take collective responsibility for what happened. We don't want to see Bill Shorten or anybody else carry the can for what happened in May. We take decisions collectively and we take our responsibility for those decisions collectively. We take responsibility for learning the lessons, but also move on after the review is released, and look forward to the next. I think that's very important.
GILBERT: Shadow Treasurer Jim Chalmers, we appreciate your time. Thanks.
CHALMERS: Thank you, Kieran.