E&OE TRANSCRIPT
TV INTERVIEW
ABC AFTERNOON BRIEFING
TUESDAY, 15 OCTOBER 2019
SUBJECTS: Climate Change Emergency motion; Labor’s policy on emissions reduction; Big Stick; Government chaos on climate change and energy policy; ACCC inquiry into bank competition; Record low interest rates.
PATRICIA KARVELAS, ABC AFTERNOON BRIEFING: I'm joined in the studio now by the Shadow Treasurer, Jim Chalmers. Jim Chalmers, welcome.
JIM CHALMERS, SHADOW TREASURER: Hi, Patricia.
KARVELAS: Let's just start with the climate divisions, because they're real. In fact, apparently the national Right doesn't leak according to Tony Burke, and yet it did leak. What's going on?
CHALMERS: I think the Labor Party recognises that we need to take serious action on climate change. That's what our motion is about. That's what our policy will be about as we go about reviewing and revising what we took to the last election.
KARVELAS: That's not what happened. People were pretty cranky with Joel Fitzgibbon for going out and suggesting this 28 per cent reduction.
CHALMERS: I don't intend to outline what happens in these meetings. I do appreciate that others have in the papers today and online today. That's not how I go about things. I think it's pretty clear that there are views which have been put forward on climate change. I think overwhelmingly the mood of the Labor Party is that we want to do something genuine, something real on climate change and I think that's also the overwhelming sentiment out there in the community.
KARVELAS: Why has Labor decided to declare a climate emergency all of a sudden?
CHALMERS: I think it's important that we do recognise the seriousness of the threat which is posed by climate change; the threat to our environment, but also the threat to our economy, the threat to jobs, the threat to our region, the threat to living standards. It's important that we do recognise the seriousness of that. I support the motion that we'll be moving in the Parliament. Hundreds of thousands of Australians are on the same page and have signed a petition. The Parliaments of the UK, Canada, Ireland, France and others have all moved similar motions and I think it's appropriate that we do too.
KARVELAS: If we have a climate emergency as you say in this motion, and your side of politics wants to move this, should Labor lower its emissions reduction target?
CHALMERS: All of those things are up for discussion and consideration -
KARVELAS: But if it's an emergency how could you go lower than the 45 per cent reduction you took to the election?
CHALMERS: It means that we have to take genuine steps. We have to take real action on climate change. It's only five months since the last election. We'll take the time to review and revise our targets but we do believe in taking real action. We do believe that there is a climate emergency and that language does appropriately recognise the seriousness of the threat to our economy, our environment, our living standards, and our region.
KARVELAS: Then what is your response to Joel Fitzgibbon's proposal for this 28 per cent reduction, basically saying we'll do the same thing as the Government?
CHALMERS: I said on the day that Joel gave the speech that my view is that we need to do something real and substantial and that we will be more ambitious than the Government when it comes to climate change because we actually believe in the science.
KARVELAS: How much more ambitious than the Government?
CHALMERS: I'll make my contribution in the coming months and years on our climate change policy in the appropriate forums. I don't actually think it's helpful for me to nominate a number five months from the last election. We've got some work to do -
KARVELAS: But should it be lower? Let me just clarify, should it be lower than the 45 per cent you took to the election?
CHALMERS: That's all up for discussion. It's all up for review.
KARVELAS: But what is your view? Should it be lower than the 45 per cent you took to the election?
CHALMERS: I won't be expressing a personal view on the number that we take to the next election. There's a lot of work -
KARVELAS: Should Joel Fitzgibbon be expressing a personal view?
CHALMERS: It's up to Joel. There's a lot of work for us to do to make sure that the targets are properly calibrated, that they are achievable, that they are realistic, but also that they take real action on climate change. Emissions under this Government are actually going up which is a big problem. Labor takes it upon ourselves to recognise all of the impacts on the economy, all the impacts on jobs and living standards, and to do something real and meaningful. I'm confident that that's the view of the broader Australian community as well.
KARVELAS: Was this motion about neutralising what Joel Fitzgibbon had done by going out publicly and saying, we should adopt the Government's policy?
CHALMERS: No I don't think you should see it that way. There is a petition which has been signed by more than 300,000 Australians which will be presented to the Parliament. The Greens have a motion that we didn't want to sign up to. We wanted to move our own motion because we have a proud record of action on climate change. The Greens have a record of voting against action on climate change when we proposed it under the last Labor Government. We've got our own story to tell. We believe in the science. We believe in doing something real and meaningful and our motion reflects that. It simply reflects the commitments that Australia has signed up to - under the conservatives - under the Paris Agreement. Our motion reflects that. It makes some other points about how serious the threat is to Australia and its people.
KARVELAS: During the election Labor argued the divestment legislation would lead to higher prices and also sovereign risk. This is the 'Big Stick' legislation as it's become known as. Were you're wrong?
CHALMERS: That was a different Bill. It's important to recognise that the Bill that was pitched to us in the last Parliament is different to the Bill which is before the Parliament now, and it's different in meaningful ways. We did express our concerns quite strongly with the last version of the Bill; that it would chill investment, that it could lead to forced privatisation, and that it could actually do harm. This Bill is different. The Government's taken on board some of our concerns. There's now a role for the ACCC and the Federal Court. They've now ruled out full privatisation. We'll be moving some amendments on partial privatisation which the Government will support and so I think for all of those reasons our position on a different Bill is different to what we took to the last election. We should also make the point, Patricia, that this will not fix the chaos of 16 different energy policies. It won't fix the fact that wholesale energy prices have gone up 158 per cent in the last few years.
KARVELAS: Are you comfortable with the Treasurer having contracting powers or should they be given to the Federal Court?
CHALMERS: One of the issues in the last Bill that was pitched up in the last Parliament was that it leaned too heavily on Ministerial discretion. That was one of the issues that we raised. We thought that would chill investment because investors would look at that and worry about whether or not a Minister would take that step. We are satisfied that the extra role for the ACCC and for the Federal Court makes it a different Bill and one that we are prepared to support so long as the Government supports our other amendments on partial privatisation.
KARVELAS: But the Treasurer still has contracting powers?
CHALMERS: The Treasurer has a role to play in this Bill -
KARVELAS: And you're comfortable with that role now?
CHALMERS: The role is much diminished from what was proposed.
KARVELAS: It hasn't been removed.
CHALMERS: It's much diminished and we're confident that the steps that they've taken with the ACCC and the Federal Court deals with some of our concerns. Our major concern was about forced privatisation. Full privatisation has already been dealt with, and our amendments will deal with partial privatisation as well.
KARVELAS: Okay, and there's already a deal on that that the Government will support?
CHALMERS: They've indicated that they will support our amendments -
KARVELAS: If they don't or you're not satisfied, you are prepared to walk away from it?
CHALMERS: We'd have to. That's the decision of our of our party, that we will insist on those amendments. I'm confident that they'll be passed. We've been given a communication along those lines.
KARVELAS: The latest RBA Minutes indicate that the Bank is worried that rate cuts are fuelling a housing bubble. Is that a risk?
CHALMERS: It's a risk that they've outlined before and it's really a subset of a bigger argument. The main argument the Reserve Bank has been making quite forcefully for the last few months is they can't do all of this on their own. They can't be left to do all the heavy lifting. The Government doesn't have a plan of its own to boost the economy. One of the reasons why we're seeing international institutions downgrading their expectations for Australian growth is because the Government doesn't have a plan to turn things around. We've got the slowest growth in Australia we've had for a decade, stagnant wages, declining productivity and living standards, record household debt, the list goes on and on and on. Weak economic growth and collapsing consumer confidence are the inevitable consequences of a Morrison Government which does not have a plan for the economy.
KARVELAS: Given rates are already so low, they're at record lows obviously, do you think there is a case for quantitative easing?
CHALMERS: That doesn't yet need to be contemplated, but it's something I know that the Bank will have in their sights as interest rates get to these extraordinary lows, 0.75 per cent now and a lot of the market expects another rate cut if not more. The Reserve Bank is running out of runway here. The interest rates are at extraordinary lows, a quarter of what they were in the darkest days of the Global Financial Crisis yet the Government still refuses to do anything. If the Government was doing a good job managing the economy the Reserve Bank wouldn't be needing to cut rates to extraordinary lows or contemplating these other drastic actions.
KARVELAS: You've described them as drastic actions. Is it something that you think there may be a case for at some point?
CHALMERS: It'd be extraordinary in the Australian context for the Bank to take steps like that.
KARVELAS: But there are some who completely oppose it, as you know. What's your take?
CHALMERS: The highest priority for this country is to have a Government which is prepared to do some of the work in boosting the economy. At the moment it's only the Reserve Bank acting alone. The Government doesn't have a plan. It's sitting on its hands. It won't lift a finger to boost growth and so that's why the Reserve Bank has to contemplate some of this drastic action.
KARVELAS: On this inquiry that the ACCC will embark on that was announced by the Government in terms of banks and competition all of those issues - the Westpac CEO says bank returns on equity are lower than many other industries. Is he right?
CHALMERS: The Reserve Bank made the point quite recently - I think it was last Friday in their Financial Stability Review - that the banks are extremely profitable by international standards. There's no reason for them not to do the right thing by their customers. When people under this Government have got stagnant wages and record household debt, you can see why people get so angry when there is an interest rate cut and it's not passed on in full.
KARVELAS: Jim Chalmers I've been told I have to let you leave urgently because there's a division. I had other questions but I think we've covered a lot of it. Thanks for coming in.
CHALMERS: Thanks for understanding.
ENDS
