Liberals’ Budget incompetence; Turnbull Government division,

JIM CHALMERS, SHADOW MINISTER FOR FINANCE: It's only three weeks until Malcolm Turnbull's make-or-break Budget and already his Government is showing all the usual signs of incompetence and dysfunction and division and chaos and shambolic management of the economy. The Budget hasn't even been sent to the printer yet and already it's descended into this dumpster fire of disappointment and dysfunction and division between members of the Coalition.

 

We've got an acting Prime Minister who is humiliated on a daily basis by the Treasurer; an acting Prime Minister who doesn't even know what's in the Budget; an acting Prime Minister who doesn't even know the difference between deficits and debt. It's pretty clear that this poor bloke is just not up to the job of being the acting Prime Minister of Australia. We've had footy grand finals last longer than Michael McCormack's credibility and he's showing on a daily basis that he's just not up to it. He's being humiliated on a daily basis by the Treasurer of Australia.

 

Scott Morrison says that this Budget will be just like the Liberals' others and that's really the problem - a Budget defined by cuts to hospitals and schools and pensions, and big handouts to multinationals and millionaires. This is the form that the Coalition has when it comes to budgets and Scott Morrison has said that it will be more of the same. What we need to see in this Budget is five things. We need to see Malcolm Turnbull in his make-or-break Budget reverse his $700 million worth of cuts to hospitals; reverse his $17 billion worth of cuts to schools; reverse his tax hikes on people who earn under $87,000 a year; reverse his $65 billion handout for the top end of town for big multinational corporations and the big banks; and to change his mind on some of these big so-called zombie cuts in the Budget, which are attacking families and pensioners, including that energy supplement, which Malcolm Turnbull wants to take off the pensioners of Australia.

 

Instead of doing these things, Malcolm Turnbull and Scott Morrison are showing all the signs of handing down a Budget just like the others - a Budget defined by that $65 billion handout to big business at the expense of everybody else; a Budget with record and growing debt; and a Budget poisoned by internal political division, dysfunction, incompetence, chaos and confusion.

 

JOURNALIST: With the internal division that you're alleging in the Coalition, can you give us a bit more specifics? We've heard through the Daily Telegraph the headlines, but what was the actual division, or is it just postulating?

 

CHALMERS: There’s division as far as the eye can see. On a daily basis we get reports, not just in the Daily Telegraph, but right across the board. We've had an open disagreement in the last two days between the Treasurer and the acting Prime Minister. We've had the Treasurer slap down the acting Prime Minister. We've had these two characters argue about who's Santa and when Christmas is. When we've got a Government that can't even agree on who Santa is and when Christmas is, is it any wonder that they've made such a mess of our $460 billion Budget? This is a Budget defined by that $65 billion handout to the top end of town. It's a Budget of growing and record debt, and it's a Budget poisoned by those internal divisions, which aren't just alleged by us, but which are openly carried out on the pages of our daily media.

 

JOURNALIST: Now on the subject of deficit, there's been kind of rumours, we've seen in the MYEFO update, revenue seems to be picking up, maybe we're headed towards the direction of a surplus. Isn't that a good sign for the Government?

 

CHALMERS: It's definitely true that revenue has been returning. We've been seeing that in the monthly updates. The Government, as a consequence, has absolutely no excuse for these big deficits and this enormous growing debt that has accumulated on their watch. We had overnight the World Economic Outlook released, which shows that the global economy is picking up around the world and indeed they've even revised up forecasts for Australian growth. And what this all means is really one thing: the Government has absolutely no excuses for the doubling of net debt, for gross debt crashing through half-a-trillion dollars and growing with no peak in sight, debt which is continuing faster under Mathias Cormann and Scott Morrison than it did under the previous Labor Government which had a GFC to contend with, while this Government had rosy global economic conditions. They have no excuse for this record and growing debt. The main reason we have growing and record debt in this Budget under Mathias Cormann and Scott Morrison and Malcolm Turnbull is because they continue to shower largesse on the top end of town. The $65 billion tax cut for foreign multinationals and the big banks is the symbol of that largesse that they're showering on the top end of town, but they're also defending big tax breaks for people who need them least, and that's why we have record and growing debt in this country despite the rosy global economic conditions that we're enjoying.

 

JOURNALIST: When you were in Government, or when Wayne Swan was the Treasurer, and you were working for Wayne Swan, Treasury then presided over a lot of failed promises on returning the Budget to surplus. What's changed in Labor?

 

CHALMERS: You might recall that we had the Global Financial Crisis to deal with, which was the sharpest synchronised downturn in the global economy since the Great Depression. The actions that were taken by Wayne Swan and Kevin Rudd and Julia Gillard and right across the Labor Party were actions that played a big role in ensuring that Australia continued to grow during that difficult period. It's something that we are extraordinarily proud of. And it is a fact, when you look at the Budget papers, at the debt which was inherited by this current Government,  net debt had doubled under this current Government; we've got gross debt crash through half-a-trillion dollars for the first time in the history of Australia, and it's growing, and there's no peak in sight. So we will happily stack up our record of managing the Budget against the Coalition's record. Labor had a Global Financial Crisis to deal with, and took some very good decisions, which have been recognised the world over as good decisions which helped protect our people from joblessness. In contrast, we've got a Coalition Government who are enjoying rosy economic conditions who have absolutely no excuse for the doubling of net debt or the record gross debt, the growing debt that we have in our Budget, which will remain even if and when revenue returns in the Budget in three weeks' time.

 

JOURNALIST: We've just got a couple of questions from our Canberra bureau on the banking Royal Commission. But just firstly, we're here on Eagle St, also known as Consulting Avenue, what's your government policy with consultants? We've seen a huge amount of consultants in the Turnbull Government.

 

CHALMERS: There has been an extraordinary blowout in spending on consultants and contractors and labour hire under this Coalition Government. And this is a Government which lectures middle Australia about the need to tighten their belts when it comes to Medicare and health and schools and the cost of living and deep cuts in the Budget which attack families and pensioners. But at the same time we're seeing these multi-billion dollar blowouts in spending on expensive contractors and consultants and labour hire. What this Government is doing is spending more money on an inferior outcome, at the same time as they lecture middle Australia about the need to tighten their belts. We will have much more to say about our plans for this part of the Budget, but it is right to point to this extraordinary wastage, these extraordinary blowouts in spending which, if they weren't there, could be better invested in fixing the Budget or investing in health and education and jobs.

 

JOURNALIST: So just on the banking Royal Commission, just quickly, given the revelations that are being made in the Royal Commission, do you think its year-long time frame should be extended?

 

CHALMERS: The revelations that we're seeing in the banking Royal Commission are incredibly concerning and they vindicate Labor's campaign for a Royal Commission and also our years of action when it comes to dealing with dodgy financial advice and poor practices by financial advisors. You need to remember that, at every point, Malcolm Turnbull has resisted the things that we need to do in the financial services sector to protect Australians from this kind of dodgy behaviour. We have long considered this Royal Commission to be essential, to be crucial, while Malcolm Turnbull has described it as "regrettable" and I think that says it all. If it was up to Malcolm Turnbull, this kind of dodgy behaviour in our financial services sector would continue, would not be reined in; we wouldn't have the airing of these sorts of revelations and we wouldn't have the Future of Financial Advice reforms, for example, which Labor has fought for against the resistance of the Government for a long time.

 

JOURNALIST: And what about ASIC? We've seen these bank institutions openly flaunt ASIC. Are the penalties tough enough? Is ASIC strong enough?

 

CHALMERS: That's an important consideration for the Royal Commission. We need to know whether, right across the board, the penalties are strong enough, the regulations are appropriate. We need to know what's going on in the financial institutions themselves. These are all very important considerations for the Royal Commission. Now, for a long time we have expressed some concern that the Royal Commission doesn't have the time to the work that it needs to do. We've said all along that we thought having one commissioner might be inadequate. What we're seeing with these revelations is that there is a lot to get to the bottom of. We want to make sure that the Royal Commission gets to the bottom of all of these issues because, at the end of the day, it's about one thing: it's about ensuring that middle Australia can have confidence in their banks and in their insurers and in the financial system more broadly. Because only with that confidence can we have a first-class, first-rate economy where we can trust our financial institutions where people aren't being ripped off and rorted and where people are getting the appropriate justice for what has happened to date.

 

JOURNALIST: And last question, sorry there's been a few - the banking Royal Commission, is that going to create a bit of sovereign risk for Australia with all of the pressure it's putting on?

 

CHALMERS: No, of course not. That term gets bandied around a lot. It's very rarely appropriate in my view. Obviously if investment in Australia relies on the continuation of some of these horrible practices, then we've got a bigger problem. Investment in Australia does not rely on the continuation of some of these dodgy practices, the rip-offs and rorts in the financial sector. What we're doing here is getting to the bottom of these issues, making sure that we can restore confidence in our financial sector so that people, whether it's businesses, whether it's families, can continue to save and invest and insure themselves against risk with the confidence that they need and deserve.

 

JOURNALIST: Just quickly on energy, obviously the National Energy Guarantee has been thrown around in terms of reducing costs for households. Do you believe that will be able to happen across the board for Australians under a Liberal Government?

 

CHALMERS: I'm highly sceptical. What we're seeing at the moment is for as long as the Turnbull Government is at war with itself over energy policy, prices will just keep going up and up and up. What we desperately need in our economy is some certainty around energy prices. We need investment in energy, we need certainty, we need downward pressure on prices. We're getting none of that from this Government while they continue to brawl with each other over energy policy. From our point of view, ideally there would be some sort of bipartisan agreement on energy policy, but that means that the Liberal Party needs to have some agreement within their own show. We have made comments in the last little while that we will try to look favourably on what the Government proposes. We've got some big concerns remaining about emissions reduction targets, about investment in renewables, about the Government's proposals to give greater market power to the big three retailers. But at the end of the day we want to get a good outcome for the Australian people. This Government, unfortunately, is showing all the signs of being more interested in fighting with each other than getting the downward pressure on prices that we need in our community.