Doorstop - Brisbane (1)

05 August 2016


SUBJECT/S: Parliamentary Budget Office electoral costings; Government’s lack of economic leadership; Turnbull’s weak stance on the banks

JIM CHALMERS, SHADOW MINISTER FOR FINANCE: A short time ago the Parliamentary Budget Office released their final assessment of the costings of the policies which were released during the election campaign, and I want to run through some of the key take outs.  

The Parliamentary Budget Office has backed up Labor’s costings of our plan to save Medicare, to properly resource our schools and to invest in people and their future.

The Parliamentary Budget Office has also confirmed that Labor’s improvements to the Budget bottom line are structural, which means they improve over time, which is very, very important.

The Parliamentary Budget Office also provided more evidence; that the Government’s budget-busting, big business tax cut, will unleash real violence on the Commonwealth Budget over the years.

Now, both sides intend to balance the Budget by 2020-21, but we intend to go about it in very, very different ways.

Labor believes in Budget repair which is fair. That means not proceeding with handouts to the top end of town - whether they be business or individuals. It means sensible tax reform, in areas like negative gearing and Capital Gains Tax, and it means investing in people-powered growth in this economy.

Our $130 billion in Budget improvements are structural. They do improve over time. They do get us to balance in 2020-21, and they do build strong surpluses after that.

The Government’s approach is very, very different. It relies principally on taking money out of hospitals and out of schools, and giving it to multinational corporations, with that budget-busting, big business tax cut. It also relies on measures which didn’t pass the last parliament, and which are unlikely to pass the new Parliament either.

The consequences of this kind of fiscal ineptitude is a deficit which has tripled since their 2014 disastrous Budget, debt that has blown out by more than $100 billion during their term in office, and puts our hard won AAA credit rating in serious jeopardy as well.

Now the problem is the Government has a slogan for the economy but not a plan. This morning, the Reserve Bank will be releasing their Statement on Monetary Policy. The Reserve Bank release of the Statement on Monetary Policy reminds us that the Government has left the heavy lifting of economic growth to the Reserve Bank.

Boosting demand and growth in our economy shouldn’t be left to the Reserve Bank alone. If the Turnbull Government were actually delivering on their slogan of ‘jobs and growth’, then the interest rates we are seeing, which are half the level they were during the Global Financial Crisis, wouldn’t be necessary.

At a time when we’ve got declining living standards, we’ve got paltry wages growth, we’ve got unemployment near-GFC levels and we’ve got worrying levels of business investment, it is not good enough that we have a Government that has vacated the field on economic leadership.

We need Budgets that underpin the right kind of economic growth - growth which is inclusive, which creates jobs, which fuels social mobility and which invests in people and their aspirations for the future.

Finally, on banks. When the Reserve Bank cuts interest rates, it’s supposed to provide a multi-billion dollar boost to the Australian economy, not a multi-billion dollar boost to bank profits. That’s the most important thing.

What the Prime Minister has proven again this week, is that he is in the pocket of the big banks. For proof of that, we have this half-baked, half-hearted, half-arsed announcement about a Parliamentary Committee.

Australians knows that when the Prime Minister tries to talk tough about the banks, his heart is not really in it. The banks know that as long as Malcolm Turnbull is Prime Minister, they can carry on as they please.

What Malcolm Turnbull has done is he has invited the banks to pop down to Canberra for a cup of tea once a year. That will do nothing to change the culture of our banks. But, compelling them to front up to a Royal Commission will change the culture of our banks and will start to rebuild confidence in banks from the Australian people.

For as long as Malcolm Turnbull’s approach to a Royal Commission is written and authorised by the banks themselves, then banks in Australia will continue to thumb their nose at Australians.

For as long as Malcolm Turnbull continues this protection racket for the big banks, then a lot of Australians will conclude that Malcolm Turnbull’s Government is a government of the banks, for the banks and by the banks, and the Australian people won’t get a look in.

JOURNALIST: Didn’t the Parliamentary Budget Office give you these original figures, and how have they changed?

CHALMERS: What the Parliamentary Budget Office has concluded, is that there is no material difference between the costings that Labor put out during the election campaign, and the costings provided in their detailed document today.

So, what they have done is backed up the costings of Labor’s plan to save Medicare, resource our schools and invest in people and their future. It’s a very good piece of work from the Parliamentary Budget Office, and they are a very professional outfit. We thank them for their effort during the campaign, and since the campaign, for their help to provide the factual basis for this important conversation this country needs to have about the right kind of Budgets, and the right type of economic growth. Growth which is inclusive, which invests in people and which invests in their aspirations.

JOURNALIST: Calling for a Royal Commission seems to be the easy way out these days – if there’s a problem, just call for a Royal Commission. What are you actually hoping to get from that?

CHALMERS: Our decision to call for a Royal Commission into the financial system was not one that was taken lightly, but I think it’s an important step that the country needs to take, so that Australians can get to the bottom of some of the behavioural issues that have come to light in our banks. So we can get to the bottom of that and rebuild confidence, so that such important institutions in our economy are servicing the Australian people in the way that they should.

This is no small thing for Labor to call for a Royal Commission. It happened after substantial thought and substantial input. What we are seeing is, with these cultural issues in the banks which have come to light in recent time, and for some time, is only a Royal Commission will really get to the bottom of some of these issues. For as long as Malcolm Turnbull continues to be in the pocket of big banks, the Australian people won’t get the answers that they deserve when it comes to behavioural issues, structural issues and issues of regulation in our financial system.

JOURNALIST: Where do you think his plan to haul the banks before a hearing ties into all that?

CHALMERS: Malcolm Turnbull’s announcement about a Parliamentary Committee is pathetic. It is a joke. We have this sort of tough talk from Malcolm Turnbull, when his heart’s not really in it. Inviting the banks down to Canberra for a cup of tea once a year will not change culture, but compelling them to front up to a Royal Commission will.

The Australian people support our way forward, we are confident of that. Malcolm Turnbull needs to get out of the way. He needs to stop being in the pocket of the big banks. He needs to govern for the Australian people and not for the banks.