PATRICIA KARVELAS:
There were stronger than expected employment numbers yesterday, and of course the government has welcomed them, but what do they mean for interest rates? We’re going to talk about that in a moment with the Treasurer, Jim Chalmers. But first we will stick to the situation in the Middle East.
Treasurer, you’re in the studio with me here in Brisbane in your beautiful city. Welcome to the program.
JIM CHALMERS:
Welcome to Brisbane, PK, you’re always welcome here.
KARVELAS:
Yes, well, I can see why you live here. What is the federal government’s response to the Israeli killing of the Hamas leader, Yahya Sinwar?
CHALMERS:
We don’t mourn for one second the death of a terrorist leader, but we do mourn his victims and we do mourn the tens of thousands of innocent lives lost to this conflict.
We hope that his death helps and hastens an end to the war, because we want to see a ceasefire, we want to see the humanitarian aid get in, and we want to see his hostages released.
KARVELAS:
You just heard the analysis from Mr Levy, who suggested that in fact Benjamin Netanyahu has no intention of ending this war. Are you calling for a ceasefire in the wake of this killing as well?
CHALMERS:
We were calling for a ceasefire before the death of this terrorist leader, and we call for one now.
Our hope is that the death of this character helps and hastens the end of the war. Too many thousands – tens of thousands – of innocent lives have been lost. We mourn his victims. We don’t mourn his passing.
KARVELAS:
I want to move to some of the domestic issues that have been in focus this week. Sixty-four thousand jobs created in September. Of course that’s great for those who got the jobs. But is that goodbye to a rate cut this year?
CHALMERS:
I’m not going to make predictions about a rate cut, but I do think it’s interesting, Patricia, that people will go out of their way to try and diminish the really good news that we got yesterday.
It has never happened under any government of any political persuasion that a million jobs have been created in a single parliamentary term.
This is the first time and only time that that has ever happened, and our job and the Reserve Bank’s job is to get on top of inflation without ignoring the risks to growth, and also to try to maintain the gains that we have made in the labour market.
Those figures that were released yesterday were very welcome figures, very encouraging figures, because they haven’t come at the expense of inflation moderating. Inflation is moderating really quite considerably at the same time as we’re creating all these jobs.
KARVELAS:
They do come at the expense of a potential rate cut, don’t they?
CHALMERS:
That’s a matter for the independent Reserve Bank. They’re primarily focused on inflation, and inflation has been coming down really considerably, and that’s a very good thing. Even though people are still under pressure, inflation in the monthly figures most recently was less than half what it was in the year we came to office. That’s a good thing. We’ve been managing to get on top of inflation without sacrificing the gains that we’ve made in the labour market.
More than a million jobs created on our watch, inflation more than halved, real wages growing again, a tax cut for every taxpayer, a couple of surpluses, these are all welcome developments and people shouldn’t try to diminish them.
KARVELAS:
About 70 per cent of the jobs created in those 12 months are government‑funded essentially jobs – things like health and education. The Opposition employment spokeswoman, Michaelia Cash, said they were essentially about the public sector being increased, the size of the bureaucracy being increased. They’re not actually private sector jobs. What’s your response to that, Treasurer?
CHALMERS:
First of all, the distinction that’s drawn is between market and non‑market jobs. They’re not all government‑funded necessarily, they’re not all public servants, and so not for the first time Michaelia Cash is making stuff up.
Second point is there have been hundreds of thousands of market sector jobs created in our economy, part of that million, hundreds of thousands.
Now obviously, as the economy recovers, we want to see more jobs created in the private sector, but we need to recognise as well that care economy jobs are real jobs. I completely reject this sense that it’s only a real job if it’s not in the care economy.
In the context of our ageing population and all of the needs that we have, we want to see care economy workers respected. We are paying them more, we don’t want to see them respected less or paid less, and that seems to be the approach taken by our critics. There’s a real snobbiness at the core of that critique, which says that if you work in the care economy, that’s not a real job. It is a real job, we value it, we are paying people appropriately, and that’s the truth.
KARVELAS:
You say it’s snobbiness, but if we look at the mix, would you like to see in that mix a greater number of the jobs being market jobs created?
CHALMERS:
I just want to see the creation of good, secure, well‑paid jobs.
KARVELAS:
But the mix doesn’t matter?
CHALMERS:
We want to see jobs created in both parts of the equation, and hundreds of thousands of jobs have been created in the market sector, just as hundreds of thousands of jobs have been created in the care economy. A lot of that’s inevitable in the context of the way that our society is changing and ageing, and we want to see people looked after.
I want to say to every worker in the care economy who might be listening to your program, Patricia – we value you, that’s why we want to pay you more, it’s why we are paying you more, and we think it’s a real shame to see this snobbiness that pretends in a very dismissive way that care economy jobs aren’t real jobs. They are and we appreciate you.
KARVELAS:
You said earlier that it’s not your job, and of course it isn’t, to set, interest rates, we know that. But do you see these latest figures as being a threat to – as the Reserve Bank weighs everything up, we know what they’re weighing up, that they see this as a sign that the economy is too strong and that they can’t cut interest rates, which people desperately want to happen?
CHALMERS:
It would be hard to sustain an argument given the national accounts and growth figures that we’ve seen this year that the economy’s too strong. I’ve made that point with you on other occasions as well.
Growth in the economy is quite weak, and the labour market’s been softening a little too. The unemployment rate’s come up even as we’ve created these million new jobs. So it’s hard to sustain an argument the economy is too strong.
Second point about that is, and again, not giving free advice to Governor Bullock and her colleagues on the board, they’re primarily focused on inflation, we’ve made good progress on inflation, but they have a dual mandate, which is to care about full employment as well, employment in the economy.
What they do is they sit down at each meeting, and they weigh up what’s happening on inflation, what’s happening in the labour market, what’s happening around the world, and they come to a decision independently.
KARVELAS:
You’ve been making some announcements this week about a range of reforms to help consumers and small business. The RBA is also running a review on card charges. Mastercard and Visa are warning that the money they take from those transactions goes to funding anti‑fraud and refund systems, and they’ve actually threatened to stop providing refunds to defrauded customers in a pre‑emptive attack. What do you make of that?
CHALMERS:
First of all, we believe that people are paying too much just to use their own money, and that’s why we are prepared to ban surcharges on debit cards, subject to being assured that small businesses will be looked after in any change that we make.
One of the reasons why we work through these issues in a methodical way and a consultative way is because we want stakeholders to raise their concerns, and we want to work through them, and that’s what the Reserve Bank will do.
KARVELAS:
The Greens commissioned research by the Parliamentary Library which shows Labor’s negative gearing election policy from 2019 could see nearly 300,000 extra homes owned by owner‑occupiers instead of property investors. This is Parliamentary Library research, they haven’t done the research themselves. Does it look like a good plan if that many extra people could own their own homes?
CHALMERS:
I’ve seen the reports about that, but I haven’t seen the actual analysis. I’ve only seen the coverage of it. I would say to the Greens that if they cared about getting more people into home ownership, they’d vote for our Help to Buy Scheme in the Senate.
KARVELAS:
Okay. Okay, I just have to interrupt. It’s a plan that only helps a small number. In the scheme of the country’s population and people, it’s not as big as this modelling shows.
CHALMERS:
But it’s not everything we’re doing in housing. As you know, and we’ve talked about it on countless occasions, we’re coming at this housing challenge in around 20 different ways, $32 billion of investment.
But it is a fact, not an opinion that the Greens are holding up the Help to Buy Scheme in the Senate. If they were genuine about getting people on low and middle incomes into their first home, if they were genuine about making sure that nurses and teachers and people on modest incomes can live near where the jobs are being created, they’d vote for that in the Senate, and then we’d take them seriously.
KARVELAS:
You’ll recall the last time we had you on the program you were asked about negative gearing and capital gains tax. You didn’t really share who commissioned what or who asked, but you also have asked, Treasury’s looking at this issue. What do we know about what’s being looked at there?
CHALMERS:
It’s not especially unusual for Treasurers to seek advice from time‑to‑time on issues which are contentious.
KARVELAS:
Have you seen it yet?
CHALMERS:
No, I get advice – I’ve had advice over the course of the last couple of years. For example, we prepare a Tax Expenditure Statement, the Treasury gives me advice on how much these concessions cost. You get advice from time to time as Treasurer –
KARVELAS:
On this negative gearing advice, have you seen it yet?
CHALMERS:
No. I’ve seen advice on negative gearing over the course of the last couple of years, but if you’re anticipating – as I said in a press conference a couple of weeks ago now – one big new discrete piece of work, then that’s not the right assumption.
We get advice from time‑to‑time. That advice is general, it’s about issues in the public domain, and that’s what’s happened here.
KARVELAS:
But, of course, the Prime Minister’s house purchase has meant that some of your opponents, people who are very passionate about this, have zeroed in on this issue. Has it made it harder to resist calls to change this?
CHALMERS:
I don’t believe so. I understand the interest in it, and I understand the kind of the politicisation of it as well, but we had and have a very substantial, very broad, very ambitious housing policy, which we’re trying to roll out, and that’s why we need to see key elements of it pass through the Senate.
KARVELAS:
So, is that it with negative gearing, you’re not going to touch it?
CHALMERS:
We’ve made it really clear, it’s not part of our housing policy, and we’ve got –
KARVELAS:
Right now – I mean I know the language, I’ve studied this, as you know, right now, I know it’s not your policy, but do you think you should change it?
CHALMERS:
No, I understand that, and we go back and forth, I’ve been asked countless times about this. People shouldn’t anticipate that this is part of our housing policy. It’s not.
KARVELAS:
Even if it’s a good idea?
CHALMERS:
We’ve got better ideas on housing – funding land release and small infrastructure, the Help to Buy Scheme, lots more public housing to free up the market for others. We’ve got a heap of other better ideas, and that’s why we’re pursuing those and trying to legislate them.
KARVELAS:
If you’re just tuning in, this is Radio National Breakfast, and my guest is the Treasurer, Jim Chalmers. You’re the federal government’s most senior voice in Queensland. We’re heading to the Queensland election in fact, that’s why we’re here face‑to‑face, we are in Brisbane ahead of that election. Do you really think Labor can still win?
CHALMERS:
I do. I do, and that’s because I think that this choice is really crystallising in people’s minds, and it’s a very simple choice. The Miles Labor government, which is all about helping people with the cost of living versus an LNP which is all about savage cuts.
I listen intently to the economic part of this election campaign here in Queensland, and David Crisafulli says that he won’t increase taxes, he’ll balance the budget, and he’s made billions and billions of dollars of commitments, and that can only mean one thing, and that’s savage cuts to essential services.
Most Queenslanders see the Campbell Newman period as a really dark period in the history of our State.
KARVELAS:
Sure, but he’s not Campbell Newman.
CHALMERS:
David Crisafulli, he is basically Campbell Newman –
KARVELAS:
He’s not.
CHALMERS:
– 2.0. He is. He worked closely with him. He was a big supporter of Campbell Newman, he’s an admirer of Campbell Newman, and he will bring back the same kind of slash‑and‑burn approach which did so much damage to Queensland and its people the last time that they were in government.
As people file through the polling booths – and I’ll be at one later today helping my great friend Mick de Brenni – when people are streaming through those polling booths, that’s the choice they should have in their mind. Do they want help with cost of living or do they want savage cuts under the LNP? That’s the choice.
KARVELAS:
Very briefly, the birth rate is very low.
CHALMERS:
It is.
KARVELAS:
Very low. Just like negative gearing, have you asked for advice on options for helping this country have more babies?
CHALMERS:
Better than that, we’re rolling out policies to make it easier for people, if they want to have babies.
KARVELAS:
I know the existing policies, but I’m wondering if you’re looking at extra things.
CHALMERS:
I don’t think we should dismiss or diminish, Patricia –
KARVELAS:
I’m not dismissing, I’m just trying to find out if there are other things, given it’s so low, do you think it’s a crisis that needs more options in your toolkit in terms of policy?
CHALMERS:
It’s very low, that’s a long‑term trend, and that’s an international trend in a lot of developed countries.
We are doing our bit by extending Paid Parental Leave, paying super on Paid Parental Leave, making early childhood education cheaper and more accessible. These are the sorts of things that will make it easier for people to have more kids if they want to.
KARVELAS:
Is that it though?
CHALMERS:
I’m not going to give them free advice about how many kids they have. My job is to make it easier for them to make that decision. We know the cost of living can be a deterrent, and that’s why the things that we are already doing are so important.
KARVELAS:
All right. Jim Chalmers, we’re out of time. Thank you so much for coming in.
CHALMERS:
Patricia, I’m not sure if I get to have a yap with you again between now and when you finish up, but I really wanted to say thank you.
I know you’ve made a big announcement about your future, and one of the reasons I brought my 2 little kids in this morning to say hello to you and see how you do your thing is because they’ve listened to Radio National probably more than any other 7 and 5‑year‑old kids on the planet, especially when their dad’s on. It’s really been terrific spending this time with you in the mornings.
Maybe we’ll get another couple of opportunities before you finish up, but I just wanted to say how grateful I’ve been for it.
KARVELAS:
Thank you so much, Treasurer, I appreciate it, and we’ll give your children a little therapy later, all the time we’ve subjected them to listening to us. Thank you very much. That’s the Treasurer, Jim Chalmers.