E&OE TRANSCRIPT
PRESS CONFERENCE
BRISBANE
TUESDAY, 1 OCTOBER 2019

SUBJECT: Interest Rate Decision.
 
JIM CHALMERS, SHADOW TREASURER: If the Liberals were doing a good job managing the economy the Reserve Bank wouldn't have had to cut rates again today. When Australians are struggling, when growth is the slowest it's been for a decade, when wages are stagnant, the Government is leaving all of the heavy lifting to the Reserve Bank. Interest rates are a quarter of what they were during the depths of the Global Financial Crisis. They're now at record lows, they're below one per cent for the first time ever. Interest rates are a quarter of what they were during the Global Financial Crisis because the Morrison Government doesn't have a plan to turn the floundering economy around.
 
If you look at what the Reserve Bank Governor said today he was very clear in pointing out that the outlook for the global economy remains reasonable and the primary driver of this decision today was weakness in the domestic economy. If you look at the statement that he issued he talks about how growth in the economy is weaker than expected. He talks about how employment growth is likely to slow. He talks about wages growth being subdued with little upward pressure at present. So the Reserve Bank Governor is making it very very clear that the challenges in our economy are home-grown.
 
It is long past time for Scott Morrison and Josh Frydenberg to come up with a plan to turn around an economy which is floundering on their watch. The Reserve Bank is doing all it can to try and boost growth in the economy and they're running out of room to do so at the same time as the Prime Minister and the Treasurer are barely lifting a finger to support jobs and to support growth in our economy.
 
The fact that the Government doesn't have a plan to turn this economy around makes Australia dangerously and unnecessarily exposed to a further, deeper downturn and to risks in the global economy as well. Labor reiterates our calls for the Morrison Government to bring forward a responsible and affordable budget update which does the right thing by the economy, by jobs, by workers and by families and boost this economy which has been floundering on their watch. The Reserve Bank can't do all the heavy lifting on its own.
 
The Reserve Bank Governor has made it very clear today that our challenges are home-grown. It is time for Josh Frydenberg and Scott Morrison to come up with a plan that has been missing for the economy. For as long as Josh Frydenberg and Scott Morrison continue to sit on their hands we will have a weak economy getting weaker. These are the issues that the Reserve Bank has had to deal with today in the absence of a plan from the Government and in the absence of leadership from the Prime Minister and the Treasurer. It needn't be this way, ideally the Reserve Bank and the Government would be as one, boosting growth and supporting jobs in this economy. Instead the Reserve Bank yet again today has had to do all the heavy lifting on its own.
 
JOURNALIST: Can the Government be criticised considering struggles with the housing market and drought?
 
CHALMERS: Look the Government always goes out of its way, and Josh Frydenberg and Scott Morrison in particular, to try and pretend that the challenges in our economy have nothing to do with them. They always want to pretend that it's international conditions when the Reserve Bank Governor made it very clear today that growth in the global economy continues to be reasonable, they always want to pretend it's Labor's fault or it's the states fault or somebody else's fault. It's time for them to come up with a plan to turn this economy around; the economy has deteriorated since the election. They wonder around Australia pretending that they're good at managing the economy but if they are so good at managing the economy the Reserve Bank wouldn't have had to cut rates again today. If you look right across the board at the Australian economy you see that it is weak and getting weaker on the Liberals watch. The slowest economic growth in a decade, interest rates at a quarter of what they were in the darkest days of the Global Financial Crisis, stagnant wages, weak consumption, productivity and living standards going backwards, record household debt - right across the board there are issues in the Australian economy which are being left unattended by a Government which is complacent at best, in denial at worst and hopelessly out of touch with what's actually going on in the economy and how that impacts on workers and families.
 
JOURNALIST: Are they not being prudent by trying to ensure a surplus in this climate?
 
CHALMERS: The Government doesn’t have to choose between delivering the surplus that they promised and doing something responsible and affordable to boost the economy. They have room in the budget to bring forward some infrastructure spending, bring forward their tax cuts, do something about Newstart, any combination of these things which would give the economy the boost that it desperately needs. There are tax cuts in the system and there are interest rate cuts in the system but so far they haven't proven enough to shift the needle when it comes to growing this economy. The Government should be considering other options. We call on them to consider other options. For too long now not having a plan has been a recipe for the slowest growth in a decade and stagnant wages and all the other issues that I've just identified.
 
JOURNALIST: How much should Newstart be increased to have a real stimulus in the economy?
 
CHALMERS: Well the thing about Newstart is an increase in Newstart, all of it would be spent in the economy. So it is a very good chance, a very good opportunity for the Government to do the right thing by people at the same time as to deliver genuine stimulus into the economy. The precise dollar figure is a matter for the Government to come up with. Ideally we'd have a quick review of all of the payments and interactions and then a responsible increase to Newstart. The point we make about Newstart, as part of half a dozen ideas that we put on the table for the Government to pick up and run with, is that every cent of a Newstart would be spent in the economy. The economy desperately needs a boost to consumption. That is the primary problem in the economy according to the Reserve Bank Governor again today, but he's been saying that for some time, and so if the Government wanted to get things moving again they should be considering a Newstart increase.
 
JOURNALIST: Do you have any idea of a dollar figure?
 
CHALMERS: We haven't nominated a dollar figure. We have been calling for the Government to do a quick review and to responsibly increase Newstart. The point that we'd make is that every dollar of increase would be spent in the economy.
 
JOURNALIST: What fiscal stimulus would Labor implement right now?
 
CHALMERS: Well there are a range of things that the Government should be contemplating given the ongoing weakness in the Australian economy and given the Australian economy has deteriorated even since the election and that's why the Reserve Bank has had to cut interest rates to the lowest ever rates, a quarter of what they were during the Global Financial Crisis. They should bring forward shovel ready infrastructure. They should consider increasing Newstart. Bringing forward stage two of the tax cuts, or part of that, which don't kick in until 2022. They should be bringing in an investment incentive, some kind of tax break for businesses to invest onshore along the lines of what Labor proposed at the election. They need a wages policy. They shouldn't be taking penalty rates off people at the same time as stagnant wages and weak consumption are the primary problems in our economy. They can't keep chopping and changing energy policy which has been a handbrake on growth for so long now; having sixteen different energy policies. There is half a dozen different things that the Government should be considering. Their only policy right now is to sit on their hands and hope that things get better. That's been a recipe for the slowest growth in a decade, stagnant wages, record household debt, weak consumption, declining productivity and declining living standards. The list goes on and on and on.
 
JOURNALIST: Should the banks pass on today's rate cut?
 
CHALMERS: The banks need to pass on this interest rate cut today so that it can do the good in the economy that we need it to do. We want to see more money flowing through the economy, flowing through our shops and businesses and for that to happen the banks need to pass on this interest rate cut in full. They haven't been willing to do that in the recent past. They should stop thumbing their nose at the Treasurer and more importantly at the Australian community. We want these interest rate cuts to have an effect in the economy and in our community and for that to happen the banks need to pass it on.
 
Thanks very much.
 
ENDS