PATRICIA KARVELAS, HOST:
The Treasurer, Jim Chalmers, was in Rockhampton yesterday. He's on the Sunshine Coast today, and he's our guest. Treasurer, welcome.
JIM CHALMERS, TREASURER:
Good morning, Patricia.
KARVELAS:
So the proposal from the ACTU has come up with what really looks like a pretty radical reshaping of how the economy functions. Are you prepared to consider some of the changes?
CHALMERS:
Obviously when you put on a summit like we are, Patricia, you want people to bring forward their ideas - whether it's the union movement, whether it's the business community, community organisations. The whole point of having a summit like this is to bring people together to see if there can be common ground found. A lot of the suggestions made by the ACTU are not government policies, but it would be pretty strange if we said come along to a summit and only bring along ideas which have been pre-approved by the Government. That's not in the spirit of the Summit. It's not in the spirit of the way that the Government operates. Whether it's ideas from the union movement or from the business community or from elsewhere, we want to see them put out there and discussed.
KARVELAS:
Angus Taylor, who is of course your opposite number the Shadow Treasurer, says they would wreck the economy. Do you agree?
CHALMERS:
They're not the Government's policies -
KARVELAS:
Would they wreck the economy?
CHALMERS:
I'm not going to use Angus Taylor's words. I don't think he comes to this conversation with deep reserves of credibility when it comes to these issues. They're not our policies - what's been put out there by the ACTU. But we welcome a discussion about the priorities of unions and businesses and others in the lead up to the Summit. The whole reason I spent yesterday in Central Queensland and today on the Sunshine Coast is because we genuinely want to see what people's proposals are for this Jobs Summit. Our objective here is to bring people together to see if we can make sure that every business that needs a good well-trained, enthusiastic worker can find one, and that every worker who wants a good secure, well-paid job can get one. Those are our objectives. Different groups will have different views about how we get there, but I think the effort to bring people together to find that common ground will pay off.
KARVELAS:
Let's get to some specifics. is there merit in making full employment the primary focus of the Reserve Bank?
CHALMERS:
One of the reasons why I've got this review into the Reserve Bank - that you and I have discussed a couple of times on your program - is because the Reserve Bank already has these two important objectives. One of them, full employment, one of them, the inflation targeting regime. One of the things that the Review will look at will be the relative strength of those two objectives. But one of the things that certainly economists understand and I understand is that the inflation targeting regime is really important because when prices go through the roof as they have been lately, it's working people and vulnerable people who pay the heaviest price for that. And so the Reserve Bank Review will have a look at the relative merits and strengths of the Reserve Bank's various objectives, and give us advice on the best practice for how the bank weighs those up.
KARVELAS:
Critics say keeping inflation down is not an academic exercise and there are real world impacts when it gets out of control. Do you back the RBA's determination to keep lifting rates until inflation falls?
CHALMERS:
They'll take their decisions independently. But clearly, they see an important task for themselves in managing demand in the economy. As I've said, a couple of times now, that's not the full story. One of the reasons why prices are going through the roof is because we've got these issues in our supply chains. And so that's why the Government is focused on making the economy more resilient, making sure we've got more better-trained workers, why we're dealing with issues in energy, issues in childcare, investing in our supply chains, investing in advanced manufacturing, our Future Made in Australia. All of these sorts of things are part of the story because we've got this inflation for a range of reasons. Global reasons are a part of it. We've also got a relatively strong demand in the economy, but we've got issues in our supply chains as well. And so there are things that governments should be focused on and we are, and there are things that the Reserve Bank should be focused on and it is.
KARVELAS:
Do you believe the stage three tax cuts are actually needed? I'm not asking about the promise. But do you think economically they're needed?
CHALMERS:
What we've said repeatedly is that given that they're already legislated and they come in a couple of years down the track, that we don't intend to change them -
KARVELAS:
With respect, that's not my question. Do you think they're needed?
CHALMERS:
If we didn't think they were, we'd have a different approach to it. What we've said is we intend to leave them in place. They come in a couple of years down the track, and they're legislated already. We think that there are steps that can be taken now in the tax system, particularly in relation to multinational tax avoidance. I think that that's where our priorities should be. And that's why we've made that one of our election commitments and you'll see that in the next couple of budgets.
KARVELAS:
You keep saying that they're legislated - I've heard that in many interviews with me and beyond. But you're the Government, you can un-legislate before they start if you make the decision that they're not needed and that they're not actually necessary right now and would do enormous damage to the budget. Is it worth having a conversation as the ACTU wants at the Job Summit about that?
CHALMERS:
The reason I point out that they're legislated - and I obviously understand the point that you're making - is because I think there is a view out there in the community that somehow they need to be legislated between now and coming in in 2024. And the point that I've made repeatedly as a reminder to people is that the status quo is that they're legislated. People do have views about them and I understand that. I engage with people's views on that all the time, but it's a fact that they're legislated. It's a fact that we went to the election saying that we didn't intend to change them. That remains our position. But we've got priorities and tax reform, and they're focused on multinationals.
KARVELAS:
And do you also welcome a discussion about the stage three tax cuts at this Summit?
CHALMERS:
The Summit is primarily about labour market issues, specifically about some of the issues you raised in your introduction: training is important, migration, childcare and participation. How do we make sure when we've got unemployment at really low levels that more people are actually accessing the opportunities in the labour market? How do we get that bigger, more productive, better trained workforce, where we're getting decent growth in wages that is sustainable? These are our economic objectives, and so primarily, that will be the focus of the Summit. But again, it would be pretty strange for a government to say to anyone from any part of this argument that there's only a pre-approved list of issues that you can raise in the lead up to the Summit.
KARVELAS:
Would you revisit this decision if a community consensus about the stage three tax cuts emerge that they weren't necessary, given you can, of course, change legislation as the government?
CHALMERS:
It's not our intention and so it shouldn't be people's expectation that we would do that.
KARVELAS:
But are you inviting a conversation about it?
CHALMERS:
We're inviting a conversation about the whole range of economic policies -
KARVELAS:
Including that one, because that's a key economic policy?
CHALMERS:
Let me put it this way: we have an economic plan, which is geared directly to the challenges that we confront in the economy around inflation, falling real wages, we've got an issue with a trillion dollars of debt in the budget. Our economic plan is about that. But I think one of the things that we're trying to establish as a government - I'd pay tribute to Anthony Albanese on this front for setting the tone - is we've had this decade of division, which has delivered us an economy that is weaker than it should be and Australians are poorer than they should be as a consequence, because we've wasted a decade on unnecessary conflict. And so we're not going to go around trying to censor people's views about different aspects of economic policy. We are an inclusive government. We're a government that listens. And what we want to do is we want to hear people's views, whether it's this issue or issues more broadly in economic policy. That's how you find that common ground that we are seeking, particularly when it comes to jobs and skills in the Summit but more broadly as well.
KARVELAS:
Business says worker numbers are more important than sweeping economic change, will we see a dramatic boost to worker numbers as part of the outcomes here?
CHALMERS:
It's pretty clear that we need a bigger workforce. Probably the defining thing that comes out of my consultations, particularly in regional Queensland at the moment and more broadly, is we've got skill shortages and labour shortages. And so we need a bigger, better trained workforce. And you get that through a range of things. Childcare is a big part of that so people can work more and earn more if they want to. Training is obviously a hugely important part of that - skills and education, they'll be a key focus at the Summit. And there's a role for migration to play too but not as a substitute for those other two things. And so we need to move on all fronts simultaneously and that's why the Summit has made those sorts of issues the key priorities and the key focus.
KARVELAS:
Peter Dutton has rejected your invitation. Are you glad Nationals Leader David Littleproud is attending?
CHALMERS:
We welcome David Littleproud's attendance. Peter Dutton threw his toys out the cot yesterday in a typically divisive way. And I think it shows the difference between Prime Minister Anthony Albanese, who's genuinely trying to bring people together and find collaboration and consensus, and an Opposition Leader who is going out of his way to wreck that consensus and trying to divide people.
KARVELAS:
He says that this is a stunt.
CHALMERS:
This is the sort of language that emerges from this kind of bizarre Tony Abbott time warp that Peter Dutton seems to live in. He goes out of his way to divide people and wreck consensus. And that's not consistent with the national appetite to see what we can achieve together by seeking that common ground, by coming together around our big economic challenges. I think his behaviour in the last couple of days has isolated himself, humiliated himself, and it's already split the Coalition.
KARVELAS:
Just briefly - and I'm actually about to speak to Peter Dutton - the Chinese Ambassador says his country will reunify with Taiwan by any means necessary. And there would be some form of re-education of the Taiwanese people when that happens, did that alarm you?
CHALMERS:
I think that sort of language is concerning, obviously. And that's because our national interests in Australia are best served by peace, stability and prosperity in the region. That means no unilateral change to the status quo. It means restraint and de-escalation. It means calm and consistent language. And from our point of view, it means working with partners in the region, to the extent that that's possible, to deliver that stable region, that prosperous and peaceful region that we desperately need to see.
KARVELAS:
Treasurer, many thanks for your time this morning.