E&OE TRANSCRIPT
RADIO INTERVIEW
ABC RN DRIVE
TUESDAY, 4 JUNE 2019
 
SUBJECTS: RBA interest rate cut; Liberals soft on the banks; Liberals’ economic mismanagement; income tax cuts; Telstra job cuts; AFP search; Shadow Cabinet meeting
 
JONATHAN GREEN: Jim Chalmers is Labor's freshly-minted Shadow Treasurer. Welcome to Drive. 
 
JIM CHALMERS, SHADOW TREASURER: Thanks very much Jonathan. 
 
GREEN: The cut today widely anticipated. You would welcome it, I imagine? 
 
CHALMERS: I think for people who'll pay slightly less on their mortgage repayments, it's a good thing. And I think it's a good thing for the economy to try and do what we can to give it a shot in the arm. We've got slowing growth in the economy. We've got rising unemployment, stagnant wages, weak consumption, poor investment, poor confidence. All of these things all at once. Growth’s not exactly thick on the ground, so it's good to see the Reserve Bank doing their bit.
 
GREEN: We're starting to sort of split hairs aren't we with monetary policy? I mean with a cash rate down at 1.25 per cent, there's not a lot that the Reserve Bank can do to influence economic activity.
 
CHALMERS: It's pretty remarkable, isn't it? You think about during the worst of the Global Financial Crisis, a decade or so ago, the lowest the cash rate got to was three per cent. Now it's less than half of that. That's pretty remarkable. And what I think it does do, is it sends a message to the Government that it's not enough to kind of talk the talk on economic growth, you need to walk the walk as well. The Reserve Bank's doing what they did today because the Government has largely vacated the field on economic growth. They're not cutting rates because the economy's strong, they're cutting rates because the economy's floundering. And I think people in middle Australia are feeling that. So to the extent that they get a little bit of relief today, that's a good thing.
 
GREEN: The Reserve Bank is also banking on the Government's promised tax cuts as part of this package to attempt to stimulate the economy to some extent. You had a Shadow Cabinet meeting today. Are you going to pass those cuts through the Parliament in full?
 
CHALMERS: We will enthusiastically support the first tranche of those tax cuts, which are the ones that are genuinely for people on low and middle incomes. 
 
GREEN: The RBA wants more. 
 
CHALMERS: The other ones don't come in by the way until 2022 and 2024. So that would do nothing for growth in the next couple of years. That's an important point. The Reserve Bank wants to see this first tranche passed because, as we all know, people on low and middle incomes are more likely to spend that money in the economy. We've got a big problem with consumption in the economy, which is the main weakness that the Reserve Bank pointed to today. And so we want to see that first round of tax cuts delivered. We're prepared to enthusiastically support them in the Parliament. Unfortunately, the Government, in a very disappointing way, has attached those to tax cuts for higher income earners some years down the track. We don't think that's responsible at the moment. We'll have more discussions about what we do about stages two and three of the tax cuts, but we should pass stage one now.
 
GREEN: I guess flex your muscle while you can. The Government says it has a mandate for those things and it's about to get a new Senate, which will probably see them through without your intervention. 
 
CHALMERS: Well that remains to be seen. That may or may not be the case. But two points about that. We've been asking for more than a month now for the Government to tell us how many billions of dollars in this tax package would go to people in the highest income tax bracket. I think that's an entirely reasonable question. Mathias Cormann said more than a month ago he'd provide that information, and he still hasn't done that. I think the crossbenchers in the Senate would like to know an answer to that question. That's the first point. Second point is that it's just been revealed today - there've been new revelations from Sam Maiden in the New Daily - that the Government knew when they committed to having that first round of tax cuts in place by 1 July, they knew that they would break that promise. Because the Government - Scott Morrison in particular - didn't give the Parliament enough time or enough room to pass them in time for 1 July. So in record time they've broken that promise. We're prepared to do the responsible thing and pass that first tranche of tax cuts. Stage two and three are up for further discussion. We had a bit of a chat about that today in our Shadow Ministry meeting but we've still got a month before it comes to the Parliament. We still need more information from the Government. 
 
GREEN: You're saying they're delaying and you're framing that as a broken promise and yet you're proposing to delay them further?
 
CHALMERS: Not at all. No that's not true. What I'm saying is the Government said that they would have them in place by 1 July. That's now not possible because Scott Morrison himself insisted on the writs for the election being returned too late for that to be possible. So when he made that promise he knew that he would have to break it. That's just a fact. The point about our position, is we don't want to delay that first round of tax cuts. We've got the Reserve Bank's view that we need to see them implemented. Stage two comes in in 2022; stage three comes in in 2024. There's no rush on those stages. We'll have further discussions but let's get some answers from the Government about some of the key details of those tax cuts before we form a view.
 
GREEN: Given the precariousness of the economic position and the need for growth, you'd be standing I imagine shoulder to shoulder with Josh Frydenberg on his call to the banks to pass on that cut in full?
 
CHALMERS: ANZ has already thumbed its nose at Josh Frydenberg. I think that's an appalling decision. I think it's disappointing. I think it sells its customers short and I think if you're a customer of the ANZ and you're unhappy about their decision today then you should consider your other options; consider whether you can get a better deal at another institution. I think that's entirely reasonable. 
 
GREEN: It's kind of easy though isn't it, that getting a better deal? But for people without that sort of sense of financial confidence, that's a really big thing to do. 
 
CHALMERS: Yeah, and I think people historically in Australia, unfortunately, have been reluctant to go through the effort of switching their financial institution. Governments have tried before to make that easier, but it hasn't really shifted the needle when it comes to that. But I would encourage people to consider their options. Not just because it's unfair to ANZ customers that they don't get the full benefit of this rate cut, but also it's just so important to the economy that any of this kind of relief is passed on. As the Reserve Bank said in their own statement today, we've got a big problem with household consumption. That's because we've got this wages crisis in Australia, where wages have been so low for so long.
 
GREEN: You can understand ANZ's position. By some estimates if they hold back on that full rate pass on for seven days they'll make about thirteen and a half million dollars. Aren't they entitled to look after their business?
 
CHALMERS: Absolutely not. There are no excuses for ANZ not to pass on the full value. I note that others have managed to do it, and it would be good for their customers but also good for the economy if they passed on the full value of the rate cut. And I think after all we've been through the last little while, all the findings of the Royal Commission, people don't have a very positive view of the banks right now. You'd think that they would do what they can to try and restore confidence that banks are going to do the right thing by their customers.
 
GREEN: Employment not tracking particularly well, Jim Chalmers. As you said, news today that Telstra is to cut a quarter of its contract workforce - 10,000 jobs over two years. That's pretty significant. 
 
CHALMERS: It really is and it comes on the back of another 8000 job cuts that they announced not that long ago. When you consider the scale of those job cuts you do really feel for all of the families who will be impacted there. I think the message for Telstra is that when they do create new jobs in the business, it would be good to see as many as possible of those jobs created in Australia rather than offshore. Telstra is a big Australian company, obviously with a bright future and we want to see them creating good, well-paid jobs for our people. 
 
GREEN: An issue outside your your portfolio. A raid by the AFP on the home of News Corp journalist Annika Smethurst. Was her story about the possibility of increased spy activity on Australian citizens, was that story in the public interest?
 
CHALMERS: I've seen the reports of that raid. I can certainly understand why people are very concerned about it. I don't know all of the ins and outs of firstly, Annika's story or secondly, what's gone on today. I think fundamentally it's a matter for the relevant authorities. But I can understand why people are very worried about developments today. 
 
GREEN: It feels like an act of intimidation by the security services. 
 
CHALMERS: I don't quite want to go that far without having all the facts before me. I've seen the same reports that you've seen, and I've seen some of the comments from people who are very worried about this development. But I don't think it would be responsible for me to go further down that path without knowing everything about it. 
 
GREEN: So first meeting of the Shadow Cabinet today - a room full of robust self-reflection?
 
CHALMERS: To be honest, there was a bit of that. There was a bit of self-reflection. There was a bit of discussion about learning the lessons of the election outcome 17 days ago. I'm not going to lie about that. We've got a lot of listening to do, a lot of learning to do as we go about regrouping for the next election, which is still now three years away.
 
GREEN: What's that main lesson? 
 
CHALMERS: I don't know if there's one overarching lesson. My view is that elections don't generally just turn on one issue or another. There's a sort of urge to oversimplify things. I think there's a number of things that we need to do better. We need to reconnect, for example, better with the voters of Queensland, my home state. I certainly want to be a robust and prominent voice for them. That's one of the things that we learned. When only every fourth Queenslander's prepared to vote for us with their primary vote, we've obviously got challenges up here. But there are other lessons too. Today's meeting of the Shadow Ministry was very constructive. We are united in record time after what was a very disappointing and dispiriting election outcome. I think people are looking forward, not back. We're not going to re-prosecute the 2019 election, but we will learn from it. 
 
GREEN: Jim Chalmers, thanks for your time. 
 
CHALMERS: Thanks for your time, Jonathan.
 
ENDS