MONDAY, 5 OCTOBER 2020
SUBJECTS: Federal budget; Infrastructure; Jobs crisis; Tax cuts.
JIM CHALMERS, SHADOW TREASURER: This is an incredibly important budget. It’s framed in the teeth of the deepest, most damaging recession we’ve seen in Australia for almost 100 years. We confront a full-blown jobs crisis in this country with almost a million Australians unemployed and the Treasurer has said that he expects it to get worse before it gets better. At risk here is a lost generation of Australian workers sacrificed to the first recession in this country in three decades.
The test for this budget is what it means for unemployment. If unemployment is too high for too long, then this budget and this Government would have failed its central task. What we need to see in this budget is new jobs created, people supported, and investments in the future so that we have something to show for these mountains and mountains of new debt. We can’t allow the only legacies of this recession to be a lost generation and more than a trillion dollars in debt racked up by this Government. That’s what is at stake here as the Government gets set to announce its budget here tomorrow night.
This can’t be another budget which over promises and under delivers. It can’t be another budget which leaves people out and leaves them behind. It can’t be another budget which fails to address, let alone acknowledge, some of the big challenges of the future. It can’t be another budget which indulges the Government’s ideological obsessions at the expense of ordinary working people. This is the Government’s opportunity to prevent unemployment being unacceptably high for unacceptably long. If they fail to do that in the budget then the Government itself will have failed.
Tomorrow night the Government will try and pull a big swifty on the Australian people. They will try and pretend that all of this debt in the budget is the consequence of COVID-19 alone. It cannot explain seven years of economic mismanagement by seven months of COVID-19. The Australian people shouldn’t fall for Josh Frydenberg and Scott Morrison’s spin which says that all of the problems in the economy and all of the problems in the budget have suddenly appeared in 2020. Seven months of COVID-19 don’t explain those seven years of economic mismanagement.
We have always acknowledged that coronavirus is having a devastating impact on our economy and on the budget. It’s time for the Government to acknowledge the decisions taken by Scott Morrison and Josh Frydenberg have made the unemployment queues longer than they need to be and made this recession deeper than it needs to be by providing support too late and too narrowly and withdrawing JobKeeper too soon and too bluntly has made a bad situation even worse.
When it comes to over promising and under delivering, this is a Government which makes big announcements, pats themselves on the back, and gets the big headlines without the follow through which is necessary to properly create jobs, support people, and invest in the future. On that note, I’ll ask Catherine King to say a few things about infrastructure, then happy to take your questions.
CATHERINE KING, SHADOW MINISTER FOR INFRASTRUCTURE, TRANSPORT AND REGIONAL DEVELOPMENT: Thanks Jim. As Jim said we’ve seen lots from this Government in terms of getting a headline but very little when it comes to delivery. Today’s infrastructure announcement that’s due to be formally announced in the budget tomorrow is another one of those. We know over the course of the last six budgets that the Government has underspent $6.8 billion on infrastructure projects that it promised, but has failed to deliver. Last year alone, they spent $1.7 billion less than they had promised because they had failed to deliver. If you take things like the Urban Congestion Fund which was in fact something announced in the 2018 budget, they promised $200 million for New South Wales but they’ve spent $4 million. They’ve spent nothing in the Northern Territory, nothing in South Australia, and nothing in the ACT. This is a Government that is big on the headline, but very very poor on delivery. We can’t afford a Government who is not on the ball when it comes to actually getting this money out the door, investing the time that it takes to get these projects moving, and to actually get this money circulating through the economy. Too many people are relying on this Government to deliver, to deliver for their jobs, to deliver for employment, and to deliver for the economy, but their record so far in every single budget is a big announcement on infrastructure, big headlines on infrastructure, but the delivery is actually missing every time.
JOURNALIST: This announcement today on infrastructure, the $7.5 billion, is that enough? Do you think they should be spending more than that?
KING: It’s hard to see whether it’s new money. I saw the Deputy Prime Minister this morning unable to answer whether it’s new money. The problem is that the Government makes the announcement but isn’t spending the time and the effort on actually delivering. It’s not interested in the projects actually getting there on the ground. It’s interested in the headline. It’s not interested in the jobs that come from them.
JOURNALIST: You say it’s unacceptable for unemployment to be too high for too long. What is your definition of too long? When would you like to see it back to pre-COVID levels?
CHALMERS: It’s for the Government to explain how the policies that they announce tomorrow night will do the job of getting that unemployment rate down somewhere near where it was. The Reserve Bank thinks that full employment is something around four and a half per cent. The point that we’re making is that if the Government is going to be borrowing hundreds of billions of dollars to add to the record debt that they had already racked up before COVID-19, we need to get bang for buck for those borrowed dollars, and we measure that effectiveness by what it means for jobs. The Treasurer has said that when unemployment gets below six per cent that he can put the cue in the rack or flick the switch back to austerity. We don’t think that’s good enough. He has conceded himself that the unemployment rate doesn’t even properly capture all of the underemployment and insecurity which defined the labour market for much of the last seven years. There is almost a million unemployed Australians as it is. The Treasurer says that will get worse before it gets better. We don’t want high unemployment for too long, and that mountain of debt to be the only legacy of this budget tomorrow night.
JOURNALIST: Jim, will Labor support –
CHALMERS: We’ll just go to Jen and then back to you.
JOURNALIST: There’s speculation that the income tax cuts will be lumped together in one bill, both stage two and three. Will you support it?
CHALMERS: We haven’t seen what the Government is proposing. Clearly it’s difficult to come to a position on Monday on something that we won’t see until Tuesday. We’ve made our views on tax cuts well known for some time now. For some months we’ve said that we’ve got an open mind to tax cuts for workers on low- and middle-incomes. We have raised concerns with stage three of the income tax cuts. Stage three is the least responsible, least affordable, least fair, and least likely to be effective because higher income earners aren’t as likely to spend in the economy as workers of more modest means. We’ve made that clear for some time. It’s up to the Government how they present that –
JOURNALIST: Sure, but will you oppose the legislation?
CHALMERS: It’s up to the Government how they present that legislation to the parliament. We haven’t seen how they intend to do that. We’ll come to a position after we see that.
JOURNALIST: Jim, will Labor support raising the debt ceiling to above a trillion dollars?
CHALMERS: We don’t have a say in the debt ceiling like we used to. But clearly, one of the big takeouts of this budget is the Government will have new record debt, more than a trillion dollars. Remember this is the party that said debt a tiny fraction of that was a debt and deficit disaster. Now they say that debt higher than a trillion dollars is manageable. It’s for them to explain that inconsistency. It’s for them to explain that hypocrisy. We’ve said that every single dollar here is borrowed money. We need to get maximum bang for the buck. We measure that by what it means for supporting jobs, supporting communities and investing in the future.
JOURNALIST: The Treasurer says the budget assumptions are predicated on there being a vaccine sometime this year or next year. Obviously, everyone wants to see a vaccine for COVID but is that too rosy a prediction?
CHALMERS: Let’s have a look at what the budget forecasts say. We don’t have access to them yet, not for another day and a half or so. We’ll go through all of those.
JOURNALIST: Is it irresponsible though to make that sort of prediction?
CHALMERS: I’ll make that judgment once I see what the forecasts are, but I will say this; the last time that the budget was updated, it was based on the assumption that the international borders would all be opened on 1 January, it was based on the assumption that Melbourne wouldn’t be locked down, it was based on a whole lot of rosy assumptions which fed the Prime Minister’s absurd assumption that the economy would come roaring back to life in the last weekend of September. We always said that that was a ridiculous assumption which was being used to feed the Prime Minister’s insistence that welcome support in the economy and JobKeeper and JobSeeker be pulled out at that date. The Government doesn’t have a good record of anticipating what’s going on in the economy. I think part of the reason for that is because they have no affinity and no empathy for real people in real communities.
JOURNALIST: Should there be maybe a different set of predictions, and maybe one where there is a vaccine, and one where there isn’t a vaccine?
CHALMERS: Let’s see what the forecasts say.
JOURNALIST: The WA Government is saying that they are reporting a surplus of $1.7 billion. Do you think that is a good look or in your view does that indicate that there needs to be more investment in jobs in that local economy?
CHALMERS: The Western Australian Government is investing in the local economy and that’s appropriate. They’ve got some tremendous advantages, as you know, in Western Australia. I think that Ben Wyatt and Mark McGowan have done an extraordinary job and continue to do an extraordinary job out west. My job is not to second-guess the decisions made by state governments. My issue is whether the Federal Government gets its budget right. We measure whether they get it right or wrong by what it means for jobs.
I just might go over here mate – I’ve had a couple over here that I have missed.
JOURNALIST: Would you support an increase to the low income tax offset for poorer Australians?
CHALMERS: The priority in tax relief should be Australians who need it most and Australians who are more likely to spend it in our shops and small businesses around the economy. That’s been our view, forever, and it continues to be our view now. Let’s see what the Government comes forward with.
JOURNALIST: What kind of increase would you like to see though, if you’re supportive of that increase?
CHALMERS: I’m not prepared to put a number on it without seeing all of the other budget numbers and seeing what all of the trade-offs are. One of the points that we’ve made about tax relief is that when it is directed at people on middle incomes and lower incomes they’re more likely to spend it than people on higher incomes. That’s Economics 101. Every dollar here is borrowed money. There are opportunity costs of doing one thing or another. We want to make sure that it’s the most effective it can be in the economy.
JOURNALIST: Just on infrastructure, Infrastructure Australia has previously released lists of recommended projects. I know here at least in the ACT there’s infrastructure spending [INAUDIBLE] deemed necessary. Do you believe that we need to be pursuing the projects on that list to get the best bang for buck?
KING: This is a Government that’s completely sidelined Infrastructure Australia. Let’s be frank, they’re not interested in independent advice about where their best projects are. They’re interested in putting infrastructure investments in seats they hold. They’ve done that with the Urban Congestion Fund. It looks like, when you look at the projects certainly in my home state of Victoria today, there weren’t many Labor seats and projects in Labor seats that were announced today. Let’s be honest this Government has been absolutely up to its neck in using public funding for pork barrelling. Infrastructure is probably a prime example of that, and I don’t think we’re going to see the Government suddenly changing its tune anytime soon.
JOURNALIST: Just further on infrastructure, do you think that doing a big spend on infrastructure is actually going to give the best bang for the buck given the people who have lost jobs in this environment?
KING: I think you’ve got to do a number of things. The first is, of course it is really important for the economy in the longer-term to be investing in those large-scale projects, those visionary projects, that are really going to boost productivity across the country. We’ve heard Anthony Albanese talk about high speed rail and faster rail. They are long term projects that do take some time, but there are also projects that are equally very important in local communities, whether it be small-scale road projects or social infrastructure that has been so important in being able to keep people active, whether it’s been in our parks where people have been able to exercise, whether it’s been on bike trails and small-scale projects. Certainly for building and construction, it is critically important, but of course there are other parts of the economy that that money then flows to whether it is our hospitality workers and retail workers when people in those industries start to spend money. That’s why it’s so important and so disappointing that the Government fails every time to deliver on the promises that it makes. That is money that should be flowing through those economies today, and it should be flowing through every economy. Why is one region able to benefit from infrastructure or regional funding, and another not? It’s not as though one region has been affected by coronavirus and another not. That’s the problem with what the Government does with infrastructure; it over promises, under delivers, and then it favours its own seats.
JOURNALIST: Considering Michael McCormack couldn’t say that he had confidence that the issues identified in that ANAO report on the Leppington Triangle had been fixed to his satisfaction just yet, what confidence can the Australian people have that this record infrastructure spend will be spent properly?
KING: That’s a very good question. $30 million for a $3 million piece of land that the Government now somehow says was a bargain, and was somehow just maybe a poor process issue. We’ll be investigating this further. Frankly it is absolutely scandalous. This is an acquisition at 10 times the value. It makes it pretty hard to have confidence in the Government’s spending on infrastructure and its investment in infrastructure when it does something so blatant as wasting taxpayer money in that way.
JOURNALIST: The Department won’t say whether any details of the independent report it’s apparently compiling right now will be released, or if it will be released publicly. Would you like for that report to be release publicly?
KING: Absolutely. I think for people to have confidence in the Government’s infrastructure spending program, it needs to be absolutely transparent about not only what happened and how it happened, but why did it happen and why it occurred. Until the Government fronts up to the parliament and to the media and tells them that, this project will continue to smell to high heaven.
CHALMERS: We’ll just go Brett and then Jen, and then we’re going to have to call it a day.
JOURNALIST: Just if the tax cuts are presented to the parliament in one month which is widely expected, is Labor prepared to block tax cuts for 70 per cent of workers in order to stop tax cuts for 6 per cent of workers?
CHALMERS: I don’t think there’s much use in anticipating a hypothetical about what the Government might do. There’s lots of speculation. We’ve all seen it in the papers. We’ve all read the smoke signals that have gone up. Let’s see what the Government does tomorrow.
JOURNALIST: But if it does?
CHALMERS: I will talk to my colleagues. We’ll come to a view on what we do in the parliament. We’ve made our priorities and our principles really clear. We’ll see what the Government does. We’ll respond to it then.
We’ll just go to Jen, and one more then we’re done.
JOURNALIST: The Government’s described this budget as the most important since the end of the Second World War. Do you agree with that? And in a few words, what do you need to see tomorrow?
CHALMERS: This is obviously an extraordinarily important budget. We want to make sure that people aren’t left out and left behind. We want to make sure that there’s investment in jobs, supporting communities, and investment in the future. We want to see a budget which is not about headlines, not about over promising and under delivering, not about dodgy deals, pork barrelling or paying too much for land from Liberal Party donors as Catherine said. The budget needs to be about jobs, people, and the future. If the Government doesn’t prevent unemployment being too high for too long, then it will have failed.
JOURNALIST: Given the global pandemic, are you worried that Labor isn’t getting much traction during this budget process?
CHALMERS: I’m worried that Australians don’t have enough jobs and opportunities. The politics will take care of themselves. Our role here is to do what we can, to agree where we can and disagree where we must, to put up robust alternatives where that’s necessary, to point out where the Government is not acting with sufficient urgency, and when the Government is announcing projects as Catherine said and not getting the money out the door, there’s a role for the Opposition there. It’s not business as usual in the economy so it can’t be business as usual in politics. We’ve tried to be supportive where we can be, but we’ve also been critical where the Government’s got it wrong. They’ve got it wrong with JobKeeper for example, they’ve got it wrong with these big announcements which aren’t followed through on, and that means the unemployment queues are longer than they need to be, and this recession which is already horrific for too many Australians is worse than it needs to be as well.
Thanks very much.
CHALMERS & KING – TRANSCRIPT – DOORSTOP – CANBERRA – MONDAY, 5 OCTOBER 2020