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Transcript of press conference: Sydney: 5 September 2018: National Accounts; Liberals' division and dysfunction; Liberals' company tax leak; Morrison's humiliating pension age backflip; weak wages growth



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JIM CHALMERS MP

ACTING SHADOW TREASURER

SHADOW MINISTER FOR FINANCE

MEMBER FOR RANKIN

E&OE TRANSCRIPT

PRESS CONFERENCE

SYDNEY

WEDNESDAY, 5 SEPTEMBER 2018

SUBJECT/S: National Accounts; Liberals’ division and dysfunction; Liberals’

company tax leak; Morrison’s humiliating pension age backflip; weak wages

growth

JIM CHALMERS, SHADOW MINISTER FOR FINANCE: The defining feature of

these National Accounts released today is that company profits are growing more

than five times faster than Australians' wages. That's why Australians won't be

lining up to congratulate Josh Frydenberg and Scott Morrison today in the same

way that the Government is lining up to congratulate itself. For most Australians,

their experience of the economy is not a relatively strong headline GDP number,

but stagnant wages and insecure work, which is making it harder to make ends

meet. This Government will have been in office for five years on Friday, and over

that period living standards have barely grown, and the measure of living

standards has actually gone backwards in this quarter that we're talking about

today. Living standards in Australia, on these numbers released today, have

actually gone backwards under this Liberal Government. The economy is growing

relatively solidly, despite the Government and its chaos, and not because of the

Government. This is the third Treasurer in five years, but it's the same old failure

for the Liberal Party to understand a couple of truths which we see in these

numbers again today. The first one is stagnant wages, and in the National

Accounts measure of wages today, we're seeing a very poor household income

number - 0.1 per cent for the quarter, and just 1.6 per cent for the year; that's the

average compensation per employee, which is the proxy for wages growth in this

country per person. Very, very weak, and that's what people are experiencing in

the economy. And partly because of that, we are experiencing a decade low in

household savings of something like one per cent, and that is not a sustainable

growth model for this country, to have people fuelling their consumption by dipping

more and more into their savings. It's not a sustainable way for us to grow the

economy to have decade low household savings. That's before we get to some of

the other disappointing measures in this data, including disappointing business

investment, including flat private investment as well.

So the story of these National Accounts is not just a relatively strong headline GDP

figure, but very weak wages for Australian workers, very low levels of saving for

Australian households. And what that reflects is what Labor has been saying for

some time, which is that out in the community, it seems that everything is going up

except for people's wages. That is putting household budgets under extreme

pressure, and more and more Australians are forced to dip into their savings. We

have a new Treasurer in this country who is every bit as out-of-touch as the two

who preceded him, if he wants a pat on the back for an economy which isn't

delivering for middle Australia. The economy would be growing more strongly if we

didn't have a divided and chaotic Government giving the biggest tax breaks to

those who need them least or cutting education or training, or making an absolute

mess of the National Broadband Network. To be enduring, growth in this country

needs to be inclusive and it needs to be bottom up. It needs to invest in people's

capacity and their productivity. It needs to give tax cuts to those who are most

likely to spend in the economy. And it needs to prioritise company tax breaks for

those companies who need it the most and are most likely to invest onshore in

Australian jobs, particularly when we have that weak investment

number. Australians need and deserve a Government which is focused on growing

the economy in an inclusive way, boosting wages, and addressing cost of living.

Instead, they've got a divided and dysfunctional rabble led by somebody that

nobody voted for.

We've seen even more of that chaos and confusion and division and dysfunction

just in the last 24 hours or so with the dropping of the increase of the age pension

age, and also with the really extraordinary leak about the Government's plans for

the company tax cuts. On the age pension, Scott Morrison is not dropping this

disastrous policy because he doesn't believe in it. He's dropping it because the

politics have become that desperate for him. He had to announce this stunning

backflip on TV this morning because he couldn't be confident that it would last all

the way to cabinet consideration next week without somebody from his own side

leaking against him. This is so bizarre now that we have a Prime Minister leaking

against his own Cabinet because he can't be convinced that it will hold for another

week before somebody else in the Liberal Party leaks against him as well.

I think older Australians will see through this. They know that Scott Morrison was

one of the most enthusiastic backers of jacking the age pension age up to 70 years

old. He voted for it and supported it across five budgets. For every single day of his

1000 days as Treasurer, he supported increasing the age pension age. So I think

senior Australians understand the only way to protect pensioners is to vote Labor

at the next opportunity.

And that brings us the the extraordinary leak of the Government's company tax

considerations. This was a devastating leak from a divided and illegitimate

Government. Scott Morrison was the main architect of the company tax cut for the

four big banks and for foreign multinationals, and he will bring this back given any

opportunity. Scott Morrison believes that big banks and foreign multinationals are

the highest priority when it comes to tax cuts, and he will bring back these plans at

the first opportunity.

In summary, after another extraordinary 24 hours of chaos and division and

dysfunction in this Liberal Government under their third leader in five years and

their third Treasurer in five years, this is what it means: Scott Morrison created the

tax handout for the big banks and foreign multinationals, but now he says he was

wrong. He voted against the banking royal commission 26 times, but now he says

he was wrong about that too. He tried to cut the age pension, but he says he was

wrong about that now. He tried to increase the age pension age to 70 - he voted

for it seven times - but now he says he was wrong about that as well. Not even

Scott Morrison can trust Scott Morrison to get these big policy calls right in the

interests of middle Australia. And if Scott Morrison can't trust Scott Morrison, there

is absolutely no reason why middle Australia should trust this new Prime Minister.

Over to you.

JOURNALIST: Why is 67 the magical pension age? How can you responsibly rule

out raising it higher if life expectancy continues to grow or if Budget circumstances

demand it?

CHALMERS: 67 struck the right balance between paying for the biggest increase

in the pension in Australian history, but also making sure we didn't have an age

pension age which was much higher than the countries we compare ourselves to.

What Scott Morrison enthusiastically backed for every day of his 1000 days as

Treasurer, and across those five disastrous Liberal budgets, was to increase the

age pension age to 70, which was above the countries we compare ourselves to

and was too much to ask, particularly of manual workers in our community. So we

support 67. Obviously, 67 is more appropriate than 70, which is what Scott

Morrison wanted to do. We've been campaigning for this change for some time

and credit should go to Jenny Macklin and Linda Burney and Bill Shorten and

everybody who has campaigned for this change. The problem, of course, is that

Scott Morrison believes deeply that the age pension age should be much higher

than 67. He's not abandoned this policy because he's changed his mind. He's

abandoned this policy because the politics have become so desperate, because

he leads a divided and dysfunctional Government.

JOURNALIST: Don't you think voters would be relieved that finally there's a policy

with some bipartisanship behind it?

CHALMERS: I don't think there's any relief for Australian voters, and particularly

for Australian seniors, because they know that given the opportunity, Scott

Morrison wants to cut the pension, jack up the age pension age, give the biggest

tax breaks to the big banks and foreign multinationals. This guy has form, and he

can pretend all he likes that somebody else was the Treasurer for the last couple

of years, but he has a record. His record is to take money from pensioners and to

try to give it to the big banks. Australians won't easily forget that record, and nor

should they. They know right around the country that the only way to look after

pensioners, to give tax relief to people who actually deserve it, and to really focus

on an economy that delivers for middle Australia, is to vote Labor at the next

opportunity.

JOURNALIST: The Government says it will update the medium-term cost of this

backflip in the next Budget update. What do you understand its cost to the Budget

will be?

CHALMERS: I saw reported today that it was something like $3.6 billion in the first

four years of its operation, but nothing in the forward estimates. I understand that

the Prime Minister earlier today indicated there'd be no impact over the forward

estimates. It will be a multi-billion dollar backflip. We of course in the Labor Party

have never signed up to this change, so for us it makes no difference to our own

numbers because we've never been in support of jacking up the age pension age

to 70. It's for the Government to account for this humiliating backflip, but it will cost

them some billions of dollars.

JOURNALIST: Going back to the original figures you were talking about, how do

you practically suggest that wages can be boosted without, I guess, damaging the

profits of the companies who are paying them?

CHALMERS: Profits in this country are strong; there was something like 8.8 per

cent growth in profits in these National Accounts released today compared to a

wages measure, which is 1.6 per cent. So as I said from the outset, wages are

growing less than a fifth as fast as profits. Profits are healthy. We want healthy

profits in this country, but we want them to be fairly shared with the workers who

help create those stronger businesses. The first thing we need to do when it comes

to wages is not cut penalty rates for weekend work - that's the most important thing

that we can do in the near term. But we also need to make sure that our industrial

relations system allows workers to bargain on an even footing with their employers

so that people can get the wage rises that they need and deserve to provide for

their families. We also need to make sure that labour hire companies are not

undercutting the wages of permanent staff, and that's why we announced quite

recently our policy, which can summarised as "same job, same pay" to make sure

that labour hire isn't undercutting wages and putting further downward pressure on

wages. There are a number of things that we can do right across the board. The

problem is we have a Government that is too divided, too dysfunctional and too out

of touch to understand or to care or to do anything about the fact that stagnant

wages are destroying family budgets, forcing people to dip into their savings more

and more to fund their consumption, and that's not a sustainable way to grow the

economy.

ENDS

MEDIA CONTACT: NATHAN PAULL 0427 532 705

Authorised by Noah Carroll, ALP, Canberra.