E&OE TRANSCRIPT
TELEVISION INTERVIEW
ABC AFTERNOON AGENDA
TUESDAY, 4 JUNE 2019
 
SUBJECTS: RBA interest rate cut; Liberals soft on the banks; Liberals’ economic mismanagement; income tax cuts; Labor’s economic policies
 
PATRICIA KARVELAS: My guest today is the Shadow Treasurer, Jim Chalmers. Welcome to the program.
 
JIM CHALMERS, SHADOW TREASURER: Hi, Patricia.
 
KARVELAS: The ANZ has announced its cut. They won't pass it on in full. Josh Frydenberg says the ANZ has let down its customers. Do you agree?
 
CHALMERS: I do agree. This is appalling, it's disappointing. I think the customers
of the ANZ deserve better. No doubt they'll consider their options and consider whether they can get a better deal elsewhere.
 
KARVELAS: So what is your advice to customers? Some of them, it's not easy to just refinance when you are locked in with a bank, but is that what you think people should do? They should start shopping around? The CBA has passed on the rate cut in full. Is that the only option here?
 
CHALMERS: Unfortunately in Australia, people are reluctant to shift banks and there's been various attempts made over the years to try and make it easier but there's a cultural reluctance. People often can't be bothered. What I'd say to customers of the ANZ or, indeed, any financial institution which doesn't do the right thing by its customers, is to shop around and see if there's a better deal at the other banks or at the other financial institutions. That's people's right to do that. I also think it's worth saying that Josh Frydenberg was all over the media this morning and on the front pages of the papers and all of that, pretending he would be all hairy-chested about this and the banks have completely ignored him. That's because for some time now Josh Frydenberg has been very soft on the banks. None of the words he says now after ANZ thumbed its nose at him really matter much to customers who won't get the full benefit of that RBA rate cut today.
 
KARVELAS: You say that, but the CBA is passing it on in full and there will be other announcements in coming hours and days. So given that, don't you give him some credit for having had some success?
 
CHALMERS: I don't, Patricia. When he was on the front of the papers this morning, pretending they would listen to whatever he told them to do, the very first bank that came out of the blocks thumbed its nose at the Treasurer. I just think that shows that he is ineffectual when it comes to this. but also, the banks know, and the Australian people know, that Josh Frydenberg and Scott Morrison are soft on the banks. They resisted a Royal Commission for two years before they were dragged to it kicking and screaming. I don't think the banks take them especially seriously and I don't think the Australian people take them especially seriously when it comes to their interactions with the banks.
 
KARVELAS: What should he do to force their hand? He's obviously put pressure on them. The CBA has decided to pass it on in full. One bank hasn't. What would you do if you were Treasurer? How could you do things differently?
 
CHALMERS: I'm not the Treasurer, unfortunately, Patricia. And the election's three years away. He's the Treasurer. He's the one pretending he had some say in this this morning. That's his mistake, not mine. The banks have done their own thing. They know that in Josh Frydenberg and Scott Morrison, they have a couple of characters who have historically been very soft on the banks. So I don't think they're taken very seriously.
 
KARVELAS: You say historically and I think that's the crucial word because you might talk about history but it's this Government that announced the Royal Commission into the banks.
 
CHALMERS: (Laughs)
 
KARVELAS: Well, you might say they were delayed, but they did.
 
CHALMERS: (Laughs) Oh, come on Patricia.
 
KARVELAS: But they did!
 
CHALMERS: Yeah, but they resisted it for two years and described it as a “populist whinge”. When they finally got dragged to it kicking and screaming they waited for a permission note written by the banks themselves saying the banks were requesting it. I don't think any objective observer of the last few years would come to any other conclusion than these characters are soft on the banks. What we needed to see today, looking at the broader issue, is the RBA cut interest rates because the economy is floundering. And the Government is failing to do anything about it. This is a Government which likes to pretend they're really good economic managers. Instead, we have slowing growth, rising unemployment, stagnant wages, weak consumption. If you read the statement the Reserve Bank put out, they said the main reason for this interest rate cut today was because households were having trouble, they had a problem with household consumption. And that's because we've had such a long period of stagnant income growth. Wages have been so weak in this country for so long under the Liberal Party, that's feeding through to broader economic weakness. So what the Reserve Bank had to do today was do their bit because when it comes to economic growth, the Government has largely vacated the field. They talk a big game. They talk the talk but don't walk the walk.
 
KARVELAS: The RBA Governor is still actually predicting the economy will grow by 2.75 per cent this year and next and pointed to investment in roads and rail, saying that's helpful too. Do you accept those facts that were also contained in that report?
 
CHALMERS: They're forecasts and not necessarily facts yet. They're opinions of the Reserve Bank.
 
KARVELAS: Of the Reserve Bank Governor.
 
CHALMERS: But what's a fact is we've had a prolonged period of weak income growth. That's a fact. The forecasts remain to be seen whether they will be fulfilled or not and tomorrow we'll get the National Accounts, which as you know, are the main report card on the state of the economy. And most of the market is expecting growth with a one in front of it. It remains to be seen, but that would be substantially below trend. The point I'm making is we've just had a big election campaign, where Morrison, Frydenberg and all of the other characters in the Government have been going around Australia saying that we're doing a really good job managing the economy. But we get all of this data month after month after month - slowing growth, rising unemployment, insecure work, stagnant wages, weak consumption and weak saving, and in the Budget they've more than doubled the debt. The point that I'm making is, it's not enough to say you're good at managing the economy. The facts tell a very different story. My advice to the Government is stop blaming everyone else, stop bagging Labor and spending all your time poring over Labor's transcripts, and actually come up with a plan about growing the economy. Because as it stands right now, the Reserve Bank is doing their bit but the Government has vacated the field.
 
KARVELAS: With respect, Jim Chalmers, where is Labor's plan to grow the economy? That was one of the main charges against you and what you offered at the election, that there wasn't a growth plan. What there was was a redistribution plan.
 
CHALMERS: Complete rubbish.
 
KARVELAS: Where was the growth plan?
 
CHALMERS: Complete and utter rubbish. The growth would come from prioritising people on low and middle incomes with tax relief, because they're more likely to spend it in the economy. The growth would come from investing properly in training and human capital. The growth would come from fixing the NBN. We had a substantial growth plan. If your argument is we didn't do a good enough job communicating that, we cop that on the chin, we listen and learn from the result of the election. But it's not true to say we vacated the field on growth. The Government has. They spent all their time focused on us. They spent all their time on scare campaigns. And what people will discover is we're three years from an election, the Government needs to be held accountable for these remarkably weak outcomes in the economy. And I think as this term rolls on, people will realise they've been sold a pup here. They've got a Government which talks about growth but does absolutely nothing to deliver it.
 
KARVELAS: So you mentioned the National Accounts and, of course, they are indicative. They will give us a stronger indication. If that has a one in front of you as you suggest - we have to wait - do you think that might indicate that the economy needs more stimulus, is that what you'll be arguing?
 
CHALMERS: First of all, I'm not making any prediction about the number tomorrow. The market consensus at the moment, all of the various market economists are predicting something with a one in front of it. It remains to be seen and we'll see that at 11:30 in the morning. That's the first point. But I do think it's likely we'll see a very soft economy, not just in that headline GDP growth number, but some of the other issues I talked about already on the program this afternoon. What that does mean is that we need to get that tax relief for people on low and middle incomes passed through the Parliament. The Government needs to stop playing games and attaching it to tax cuts which are years down the track and overwhelmingly favour people on the highest incomes. We need to get that first tranche of tax cuts in the system. The RBA has done their bit as well. The Government needs to have a plan to deal with things which are attacking disposable income in the economy, which are making it harder for people to make ends meet. Things like skyrocketing childcare fees, which have gone up 28 per cent in the life of this Government. Things like energy costs, which have risen substantially while they fought with each other over energy policy. All of these things matter. And the point I'm making is we're 17 days from the last election. We might be 1,000 days from the next election. It is long past time for the Government to come up with a plan. The ball is in their court on economic growth. We are not the Government and we need to be asking the Government, what is your plan to grow the economy? It's not enough to just talk the talk on economic management. It's time for them to start walking the walk as well.
 
KARVELAS: You met with the full Shadow Cabinet today for the first time since Anthony Albanese established his new team. What did you determine on the tax package? I think I have a strong indication there. Are you still going to insist that the bill is split and will you continue to oppose the tax cuts for higher income earners?
 
CHALMERS: First of all Patricia, you've been around long enough to know that we don't give you a play by play on the discussions in the Shadow Cabinet, nor does the Government on the Cabinet. What we have said is it's disappointing the Government won't split the bill because if they did split the bill, we would enthusiastically pass the first tranche of tax cuts which favour people on low and middle incomes. They've already broken a promise to have that in place from July 1. We know from Sam Maiden's story today that they broke that promise intentionally. They knew when they made the promise that they were going to break it. And we also need more information on the rest of the tax package. We've been asking for more than a month now for a sense of how many billions of dollars will go to Australians in the highest income tax bracket under their plan in stage three of their tax cuts. That's not been forthcoming. We need more information. If the Government was prepared to split out the first tranche, we would pass it enthusiastically. We've said that for some time.
 
KARVELAS: Didn't you get a message from voters across Australia that all tax cuts were to be welcomed? Isn't that the message from voters that by just favouring the lower end which you did throughout the election campaign, higher income earners were telling you - or people aspiring to be higher income earners - they thought your plan wasn't good enough?
 
CHALMERS: I think the election wasn't just about one thing. I don't necessarily agree with that take out you've taken from the election campaign. I think what people expect from Labor and what they'll get from Labor, and certainly part of my role in this new job as Shadow Treasurer, is when things come before us, we'll do what's right and responsible. We'll do what's fair and we will judge policy proposals that come to us from the Government on their merits and we'll do the right thing.
 
KARVELAS: Just finally, do you think there is still an issue with the cost of franking credit cash refunds and negative gearing?
 
CHALMERS: Look, we'll determine the policies that we take to the next election. We've made a factual point in the past that some of those tax concessions cost the Budget a substantial and growing amount of money. We have also said that we don't intend to take to the 2022 election the same identical policies that we took to the 2019 election. And people can read into that what they will. We had a discussion about all of that today. We haven't come to a concluded view. But I think it's fair for people to understand, who are watching your program, that policies that were taken to the 2019 election won't necessarily be the policies we take to the next election three years down the track. The circumstances will be different and our policy agenda will be different as well.
 
KARVELAS: OK, so they cost the Budget a lot. Do you think they're fair still though, those proposals, you had?  Are they fair? That's a different question. We know they cost and that's what you were trying to raise money from, but do you think they're actually fair?
 
CHALMERS: I was making a factual point. You're asking for an opinion. My opinion is that we will go through all of those proposals that we took to the last election and determine which ones we want to keep, which ones we want to discard, which ones we want to improve. But really for the purposes of your viewers, they should understand that we won't just try to re-prosecute the 2019 election in 2022. We'll take the time to come up with new policies to take to that election and in the interim, I think it's fair for people to ask the Government, what is your plan to fix the Budget given debt has doubled under their watch?
 
KARVELAS: You know that will be exactly the question I ask the Government but I'm speaking to you today. Thank you for joining us.
 
CHALMERS: Thank you, Patricia.
 
ENDS