E&OE TRANSCRIPT
RADIO INTERVIEW
ABC RN BREAKFAST
MONDAY, 25 SEPTEMBER 2017

SUBJECT/S: New book Changing Jobs: The Fair Go in the New Machine Age; New Zealand election; ATM fees; Royal Commission into the banks

FRAN KELLY: Man versus machine. Ever since the industrial revolution, workers have been displaced by new technologies. And so it continues this century with the rapid growth in artificial intelligence, robotics, and automation emerging as a major anxiety for the modern worker. In fact, Barack Obama used his farewell speech in January of this year to warn that "the next wave of economic dislocation won't come from overseas. It will come from the relentless pace of automation that will make a lot of good, middle-class jobs obsolete." Here in Australia, will technological change lead to new bursts of inequity and dislocation? That's the key question posed by a new book, called Changing Jobs: The Fair Go in the New Machine Age. It's been written by the former head of the NBN, Mike Quigley, and the Shadow Finance Minister, Jim Chalmers. Jim Chalmers joins us in our Brisbane studios. Jim Chalmers, welcome back to Breakfast.

JIM CHALMERS, SHADOW MINISTER FOR FINANCE: G'day Fran, how are you doing?

KELLY: I'm doing well. Let's go to the sort of premise here and the scale of the brave new world of analytics and artificial intelligence. There's no holding it back, that's for sure. What are the jobs here in Australia most likely to be replaced by machines?

CHALMERS: What we've become accustomed to thinking, Fran, when it comes to automation and robotics is that this will impact on process workers in factories and all of that kind of thing and that remains the case. But what we're seeing increasingly is jobs up the income scale, the middle income jobs that require some skills, are now at risk. What that does is hollow out the middle of the labour market. It pushes a lot of skilled workers down towards the lower-income jobs and that has implications for inequality in this country.

KELLY: Does it have to work that way? The statistics are pretty clear. Research shows 40 per cent of current jobs have a probability of greater than 70 per cent of being computerised or automated over the next 10 to 15 years. Those are significant stats and herald significant change. Does it have to be that change bringing people to lower-paid jobs? If we get our education settings right, couldn't we all be looking at better jobs, more highly-skilled jobs?

CHALMERS: That shouldn't be beyond us, Fran, and that's really one of the motivations for the book that I've written with Mike Quigley: to say that technology has a really big upside, but we can't dismiss those anxieties that you mentioned in your introduction that people have - legitimate anxieties - about where they fit in workplaces increasingly dominated by machines; even whether they fit in workplaces dominated by machines. And what we believe is that we can deal with the most challenging consequences of automation and artificial intelligence without denying ourselves the broader benefits of change. But what that requires is a bit of fresh thinking about social security, about industrial relations, about our schools and skills systems. All of these things need to be looked at and addressed, because we can't kid ourselves that we can have these massive changes in our workplaces without accompanying changes in the way that we think about these challenges, in our Government polices but also in our personal mindsets.

KELLY: Indeed. But should we be putting our focus on education as the platform of that new thinking? Your new book is subtitled "The Fair Go in the New Machine Age". Technological advances have reduced equality in many senses, it's opened up a world of learning for poorer people. I mean, is there any hard evidence that the advent of artificial intelligence, robotics, automation will widen the gap between rich and poor in this country?

CHALMERS: It will. It actually narrows the gap between countries, but it increases the gap within countries. It does that in a whole range of ways. It changes the composition of the workforce, as I said. It hollows out the middle. It changes the location of jobs, so that we're more and more competing to be part of a big global value chain rather than the entire thing. It changes the skills people need to succeed, as you say. Often those skills can be expensive to acquire, or difficult in other ways to acquire. And it also changes the power relationships at work and in relative terms it weakens employees. So for all of those reasons, technology does have the capacity to turbocharge trends towards inequality that we already are worried about. But we think with a bit of thinking about these sorts of challenges in our schools as you mentioned, education is a big part of it - lifelong learning - but also income smoothing in our social security system; portable entitlements in our industrial relations system; all kinds of ideas.  We've got 33 different policy directions sketched out in this book that we think we should start thinking about if we're serious about making technology work for us and not against us.

KELLY: There's been calls for all sorts of solutions. There's been a universal basic income is one idea people had to deal with the expected surge in unemployment that's essentially a basic salary paid for by the Government, maybe $20,000 is one suggestion, which would enable to Government to scrap a lot of welfare payments. Do you support that?

CHALMERS: I don't support a universal basic income, but a lot of very serious people have pitched that up as an idea and we take those proposals pretty seriously. We've got a really well-targeted social security system in this country. We wouldn't want to throw that away. And even at a more modest rate than you just mentioned, about half of what you just mentioned, we're talking about something that would cost twice the current social security budget. So there's a whole range of reasons where in the book we don't recommend a universal basic income. We don't dismiss the calls for it, but we think there are other ways to go about it in the social security system.

KELLY: What about a "robot tax"? The UN supports a tax like that. Bill Gates has argued if a robot replaces a worker being paid $50,000, a robot should be taxed at the same level. Do you want to see a robot tax in Australia?

CHALMERS: We talk about the robot tax in the book. We're not ready to recommend it. But you're right, Bill Gates has put that forward as an idea and also one of the most prominent economists in the world, a guy called Robert Shiller, has proposed that. What we say is that with people like that proposing an idea of that magnitude and ambition, we should keep an eye on that debate as it involves, but we're not ready to recommend that as a hard recommend for Australia in the near term.

KELLY: We need to be looking at the solutions beyond the arrival of this revolution, because this revolution is already here. Now in the past we've adapted. The Agricultural Revolution, the Industrial Revolution did not result in an overall reduction in employment in the long term. But you write that this one is different. You say earlier while earlier revolutions replaced human effort, this one goes a step further to directly challenge some intrinsic traits that make us human - thinking, problem solving and decision making. What do you predict or forecast to be the ultimate result of that? If that is indeed true that intrinsic traits of thinking, problem solving, decision making are required less, what impact is that going to have on our societies?

CHALMERS: You're right, Fran. We've written in the book that this is really the seventh big change in our workplaces and in our societies. The first six changed the way we work, they replaced human effort and this one, as you rightly say, replaces some of those human traits that you mentioned. What that means is that machines have got the capacity to learn, to improve, to recognise speech, to recognise imagery, to even make in some cases medical diagnoses. All of these sorts of things, which are a more fundamental challenge to the sorts of things that make us human. Quite often when people talk about artificial intelligence, they think that the only way that the workplace will be disrupted will be when machines have the capacity to completely replace humans. But there's an intermediate step which we're going through now where machines do have the capacity to replace so many of the things that make us human and what that means is so many jobs will be destroyed, some will be created, but all jobs will change. What we say in this book, Fran, is that there are wildly different predictions about how many jobs will be destroyed, and different predictions about how many will be created. But as that report from AlphaBeta and Andrew Charlton mentioned a few weeks ago, every single job will be changed, will be augmented in some way and we can't use the unpredictability of technological change as an excuse to do nothing. That's what this book is about, thinking about in a "no regrets" way what kind of policy changes we need to be thinking about if we are to deal with this challenge in a way that doesn't make inequality worse.

KELLY: It's 8:14 on Breakfast. Our guest is Jim Chalmers, Shadow Finance Minister and co-author with Mike Quigley of this book, Changing Jobs: The Fair Go in the New Machine Age. Talking about the fair go and the fairness gap, in New Zealand on the weekend, it looks like the conservative National Party, the governing party, will receive a fourth term. That's despite all the hope and the hype, Labour has fallen well short. Jacinda Ardern's message was also about fairness and bridging that gap. It's a similar message to Labor's. Is there a message for the Australian Labor Party in this result, as the Government party really struck out at New Zealand Labour's tax policies in particular.

CHALMERS: I found Jacinda Ardern's campaign in New Zealand to be inspiring, Fran. I thought she did an absolutely outstanding job from a standing start.

KELLY: Is there a message for you in the result thought, that the voters didn't buy it? They stuck with economic stability, largely.

CHALMERS: There was an enormous swing to Labour, Fran, compared to where Labour was two months ago.

KELLY: Yeah, but not much or at the cost of the Government.

CHALMERS: I think the New Zealand people responded very well to Jacinda's message and our message is not the same, but it's similar. We think in this country, what the book's about and what a whole range of other things that we're talking about at the moment in banking, in tax, in marriage equality, it's all about a country that cherishes the fair go. The fair go is at risk in this country. We want to advance it for modern times and I think that the Australian people, as you see in our own opinion polls, are supporting the approach that we're taking to economic fairness, but also fairness in the community.

KELLY: And can I just ask you in your own portfolio areas, we've had the major banks scrapping the $2 foreign ATM fees, which customers indicated already they like of course. But the Government says it's making all the right steps and we spoke to the Treasurer Scott Morrison earlier.

CHALMERS: (laughs) It was comedy hour earlier. I heard that interview.

KELLY: Well let's just hear a little bit of it here saying the Government won't be calling for a Royal Commission.

SCOTT MORRISON [file audio]: Why would we want to wait three years to do something?

KELLY: To make sure you're fixing the right thing.

MORRISON: We are fixing the right things, Fran. We're fixing accountability, we're fixing access to people having their claims heard and dealt with in a fast fashion. We've dealt with increased powers and resources for ASIC. We're just getting on with it. Labor wants to do something perhaps several years if and when they're elected. I mean, that's not an answer. That's a cop out.

KELLY: Is that a fair point? There's a lot of pressure coming on the banks right now and they are making changes as we've seen with that ATM announcement.

CHALMERS: I don't think any of the changes that the Treasurer is speaking about are a substitute for a Royal Commission and if they're implemented, none of them would prevent a Royal Commission. Often I think what we see with Scott Morrison and the Turnbull Government is they're playing a game of political catch-up and running interference on that Banking Royal Commission. It's not a genuine fundamental attempt to get to the bottom of some of the issues that have arisen over the last few years. Only a Royal Commission will do that.

KELLY: It will take three years. It will cost a lot of money and it won't necessarily result in change. 

CHALMERS: I think it will be money well spent, Fran. We need to give the Australian people the confidence to know that we've gotten to the bottom of all these issues. Not just these sort of half measures announced in a political and cynical way by Scott Morrison. We'll take a careful look at what he's proposing, but it's no substitute for a Royal Commission.

KELLY: Jim Chalmers, thanks very much for joining us.

CHALMERS: Thank you, Fran.

ENDS