Sky News Speers

11 March 2018




SUBJECT/S: US trade tariffs exemption; Labor’s anti-dumping proposal; Adani; National Accounts; Liberals’ $65 billion big business tax cut; Wayne Swan running for ALP National President


DAVID SPEERS: Joining me now is the Shadow Finance Minister, Jim Chalmers. Thanks very much for your time this morning. Let's start on the steel and aluminium tariffs, the exemption for Australia. How much credit do you give the Turnbull Government for this?


JIM CHALMERS, SHADOW MINISTER FOR FINANCE: That was a very good outcome for Australia.  We've been very supportive of the Government's efforts to secure that exemption and we've been very positive about their efforts in securing that exemption. The reality is, David, that's an important step, but really only one of the three big challenges that have been dealt with now as a consequence of President Trump's decision, and arguably the least consequential one, because so much of our steel is sold into our own domestic market. 


Our focus really needs to turn now to tightening up our anti-dumping rules, because there will be a whole lot of steel from around the world which would have found a home in the United States, which will now be looking for a home. We need to ensure it's not dumped into the Australian market. That's why we made a very constructive suggestion at the end of last week for some proposals to tighten up the anti-dumping regime, to increase the penalties, to increase the resourcing for investigations and to make sure that the investigations are done by the Anti-Dumping Commission. We call on the Government to be as constructive about those suggestions that we've put on the table as we were about their efforts to secure that exemption.


SPEERS: The announcement Labor made for greater monitoring of dumping, but if steel isn't technically dumped in Australia, but simply sold legally by Chinese-Korean manufacturers, is there much that can be done to stop that?


CHALMERS: Well not just the monitoring, David. Also the penalties for doing the wrong thing. There is already a big number of anti-dumping cases, which have been prosecuted. But our anti-dumping regime is weaker than other countries, and it's insufficiently resourced. So it's a tougher approach to anti-dumping in this country.


SPEERS: But if it's not being dumped, it's being legally sold, is there much that can be done about that? 


CHALMERS: Not if it's legally sold, but what we're seeing is that when steel can't find a home in the United States, it will increasingly try to find a home elsewhere. And sometimes that steel is dumped for ridiculously low prices, and that smashes our local businesses, our local industry and our local workers. So it should be a concern to all of us.


So that's the second challenge. The first one was the tariff itself, the second one is dumping and the third one is the broader consequences for the global economy as other countries - not necessarily Australia - take retaliatory measures. That has consequences for the global economy, which will flow through to our economy as well. 


SPEERS: Is there anything we can about that though? This potential global trade battle, as you say between the big players - China, Europe, the United States.


CHALMERS: That has a little way to run yet and it might evolve in unpredictable ways, so we need to keep an eye on that. But really across the three big challenges: a big tick for the exemption, we need to do more on anti-dumping, and we need to be conscious of the possible ramifications for the global economy too.


SPEERS: The tick that you give there for this exemption for Australia, just returning to that. How much of a role do you think Australia's military contributions have played in this? And it's cited by both Donald Trump and Malcolm Turnbull.


CHALMERS: President Trump and Prime Minister Turnbull have both mentioned that as a factor. The point that we've made all along via Jason Clare and other spokespeople, Bill Shorten of course, was that if the exemption was good enough for Canada and Mexico, then an exemption was good enough for Australia, given our long record of cooperation, not just on the military front, but the economic front as well with the United States.


SPEERS: Is that how it should be though, that because we join US wars, fight alongside American troops, that we should get a trade benefit? Should there be such a direct link?


CHALMERS: I think a whole range of factors come into these sorts of deals that are made between countries, not just the military one, but economic cooperation as well. Self-evidently, our cooperation with the Americans has been extraordinarily close for a long period of time now.


SPEERS: Do you think there will be an expectation from Donald Trump, the deal-maker, that there'll be a quid pro quo, Australia will have to give something more?


CHALMERS: That remains to be seen, David. I don't have an insight into the conversation between Donald Trump and Malcolm Turnbull, but I think it's fair to say that our cooperation is really already extraordinarily close in the military sense, in terms of intelligence sharing, right across the board. So we will wait to hear more about any further developments, but for the time being, we're being very positive about the outcome secured.


SPEERS: Can I turn to the proposed Adani coal mine, Jim Chalmers. Does Labor support it going ahead?


CHALMERS: We've said all along for some time now that it needs to stack up commercially and environmentally.  I think it's hardly a revelation that Bill Shorten is sceptical that it will. And not just Bill Shorten, I think right around the country there's a lot of scepticism about the mine going ahead, and that's partly because the company itself has missed a number of its own financial deadlines. So that's our position. We've also said, of course, if and when we come to Government, we're not in the business of ripping up contracts or creating sovereign risk. We'll make decisions in the national interest at that time. But it has to stack up commercially, and it has to stack up environmentally. I think there's a growing view around the country, that Bill is reflecting, that it won't.


SPEERS: But he's expressing more than scepticism, as you know. He's said it doesn't stack up environmentally and he doesn't support it. Is that Labor's official position?


CHALMERS: It's hardly a revelation that that's his view, David. He has said all along that it's got to stack up. 


SPEERS: Is that the Shadow Cabinet position?


CHALMERS: Of course it is. Yeah, of course it is. Labor's Shadow Cabinet view has always been that it has to stack up. Bill expressing scepticism that it will stack up.


SPEERS: No, he's going more than that, as I say. He says it doesn't stack up environmentally and he doesn't support it. I'm just wondering, is that a considered Shadow Cabinet position, or is the leader freelancing there?


CHALMERS: No, of course it is. It reflects the facts on the ground. The company just missed another financial deadline; another deadline to raise the necessary funds. That's an indication, I think, not just to Labor's Shadow Cabinet, but more importantly to the broader community that the project is having its own difficulties. But I want to make this broader point, David, because it gets missed in this conversation: Bill Shorten has spent more time in regional Queensland than any leader of either political party that I can remember in my time in politics. What Bill understands better than most, and what all of us understand when we spend time in regional Queensland, is that regional Queensland won't succeed or fail on the basis of one mine. It's got a very bright future in mining, in agriculture, in tourism, in services, in defence. But we've got to get the infrastructure right. And that's why we've spent so much time and energy and money, frankly, in widening the port, getting the hydropower invested in, getting the water security done right, because we think there's a bright future for that part of the world. We shouldn't put all of our eggs in one basket. We need to take a broader view of the place so that it doesn't just rely on whether or not one mine stacks up or not.


SPEERS: OK, but with any big project, any major investment in Australia, there also needs to be some level of certainty around going through the hoops and expensive environmental approvals. You've just acknowledged Shadow Cabinet agrees that it does not stack up environmentally. How has that decision been taken. How does it not stack up environmentally when it has won approvals?


CHALMERS: I was referring to the financial hurdles that the company has missed.


SPEERS: But I'm asking about the environmental part of this, which Bill Shorten says it does not stack up environmentally.


CHALMERS: Well it hasn't passed all of the environmental tests yet, that's just a statement of fact. And you can try all you like to pretend this is something other than a factual realisation that it hasn't yet passed all the environmental tests and it hasn't passed all the commercial tests, so obviously if our position as a Labor Shadow Cabinet is that it needs to pass both, it hasn't yet. Bill is sceptical that it will.


SPEERS: But it's one thing to say it hasn't passed the test yet, it's another to say it does not stack up environmentally.


CHALMERS: It hasn't stacked up environmentally. It hasn't passed the tests and it hasn't passed the commercial test yet because it hasn't raised the necessary finance.


SPEERS: Alright, but it still may?


CHALMERS: It still may, that's true. Bill is very sceptical that it will. Bill doesn't think that it will. That's Labor's Shadow Cabinet position as well. But we've said that we're not in the business of tearing up contracts or creating sovereign risk. If and when we come to Government, we'll make the necessary decisions then. But fundamentally, the tests are not tests for the Labor Party. The tests are tests for the company and the company has not yet passed them.


SPEERS: Can I turn to the economic figures that we're released during the week. On Wednesday, we saw a 0.4 per cent growth figure for the final quarter of the year. It means that economic growth continued, but certainly slowed through the course of 2017. How would you characterise the health of the Australian economy right now?


CHALMERS: It's best to begin, David, with the global economy. The global economy, despite geopolitical risk, despite threats on the trade front, despite some pretty extreme sharemarket volatility, the global economy's in the best nick it's been for probably a decade or so, and that's been reflected in the commentary of our own Reserve Bank and also the International Monetary Fund. So it is especially disappointing I think in those strong global conditions, that in our National Accounts, we had the Australian economy growing slower than expected and especially we had really weak investment as well, and that's very troubling. But even more troubling is in the people-facing part of the economy. We've had living standards actually go backwards in the last quarter. We've got wages which are very stagnant, which are barely keeping up with the costs of living. And we've got confirmation in those most recent National Accounts that the wages share of national income over the last couple of years has gone backwards, while the profits share has gone forwards. 


And so the observation I'd make about that is that people are experiencing a very different kind of economy than the one described by Malcolm Turnbull and Scott Morrison. People can't understand how Turnbull and Morrison can be so out-of-touch that they want a round of applause for the state of the economy when we have stagnant wages and declining living standards and more and more people just conclude that these guys are from another planet when they see the self-congratulation that happens around the economy when the reality on the ground is very different. 


SPEERS: Both sides do agree though on the need to do something about the problem that you identified there, which is flat wages growth not keeping up with living standards. What's Labor's plan to boost wages.


CHALMERS: Labor wants to grow the economy in an inclusive way. That begins by not cutting penalty rates. It includes making sure that middle Australia has money to spend and invest in the economy, and that means not jacking up their income taxes as the Turnbull Government wants to do. It means investing in productivity, which means skills and infrastructure and the adaption and adoption of technology. It means right across the board giving people a stake in the growth of the economy.


And the contrast there is with a $65 billion tax cut, which the Government crosses their fingers and hopes that it somehow trickles down to wages in middle Australia. With that company tax cut, there is absolutely no guarantee that it will be invested onshore in Australia or boost Australian wages.


SPEERS: Keeping income taxes where they are, which is what you've suggested, that's no guarantee that will suddenly lift wages either. If we're keeping tax rates where they are and penalty rates where they are, that's not necessarily going to boost wages?


CHALMERS: Well it helps not to take extra income tax from middle Australia, but you're right, David; there are other things we need to do. The power relationships in the workplace have become further skewed towards employers. We have to care about the strength of our collective bargaining system. We need to care about the strength of our labour movement. We need to care about the impact of things like labour hire on insecure work and more precarious work. All of these things are crucial to ensuring that people get the wages growth that they need to provide for their families. But what I'm saying is that right across the board, this is about living standards, it's about demand in the economy, and the problem we've got is we've got a Government that wants to jack up taxes on middle Australia, make it harder for people to get wage growth, cut their penalty rates. All of these things are devastating for inclusive growth in this country. 


SPEERS: Final one, Jim Chalmers. Your old boss Wayne Swan has put his hand up, he's running for the presidency of the ALP. He'll be up against your frontbench colleague Mark Butler, who wants another turn in the role. Who will you back?


CHALMERS: Without reservation, I'll enthusiastically be supporting Wayne Swan. I'll be campaigning for Wayne Swan as well. He will make an outstanding National President of the party. He's got the passion, he's got the experience, he's got the Labor values to do a terrific job as Labor's National President. I'll be voting for him.


SPEERS: Mark Butler doesn't?


CHALMERS: Mark Butler's a terrific frontbencher and you'll never hear me say a bad word about Mark Butler, who I enjoy working with on an important policy area. But I'll be supporting Wayne Swan. I suspect lots of people around the country will see him as the best available candidate to be the National President of our party, to grow the party by focusing it on social and economic justice, and especially inclusive growth.


SPEERS: Shadow Finance Minister Jim Chalmers, we'll have to leave it there. Appreciate your time this morning. Thank you.


CHALMERS: Thank you, David.