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October 15, 2020

PATRICIA KARVELAS: Joining me now is Brendan O'Connor, who's the Shadow Minister for Industry and Employment. Brendan, lovely to speak to you. The Federal Government is blaming lockdown restrictions in Victoria for the rise in the national unemployment rate. Is that how you read the figures?

BRENDAN O'CONNOR, SHADOW MINISTER FOR EMPLOYMENT, INDUSTRY, SMALL BUSINESS & SCIENCE: I think that the lockdown in Victoria has a bearing on the unemployment rate, of course, because businesses have been, due to health reasons, asked to close down or restrict business. And to do otherwise would be to sort of head down the fatal path of Donald Trump's America or Boris Johnson's United Kingdom. The Victorian Government's doing exactly the right thing based on science. And frankly, I'm appalled at federal ministers attacking the health experts advice on what we have to do in Victoria in order to ensure that we see this second wave end, and we can open up to the rest of the country.

KARVELAS: As you mentioned, the Treasurer Josh Frydenberg, and others, of course too, the Health Minister, have urged the Victorian premier Daniel Andrews to ease more restrictions this weekend. There is going to be an announcement on Sunday. We already know that with more easing to open up business. Given the World Health Organisation is now saying, if you heard this morning in a pretty good interview with my colleague, Fran Kelly, that essentially lockdowns are unsustainable, they can't be the model. Shouldn't the Victorian Government with the numbers that we have be looking to pivot and open up the economy given also the job situation?

O'CONNOR: I don't think when the WHO was talking about lockdown they we're looking at Victoria, I can assure you they were looking at-

KARVELAS: They were talking about the sustainability of-

O'CONNOR: Let me just answer the question, though. They were looking at the horrific escalation in Europe, where frankly, there's been a loss of control by governments, and chaos. Every day, every night on our television, we see the calamity and chaos of the United Kingdom, parts of Europe, North America, unfortunately, in other parts, South America, India. We're not in that state, and neither is Victoria.

And frankly, I think Victoria will be held up as an exemplar as one of the very few places in the world that will suppress the second wave and may well be used, Patricia, as a template, at least to be adapted to other jurisdictions. We are very close. And the fact that we have a Prime Minister and his ministers attacking a state government, who are so close to suppressing this second wave is irresponsible, reckless and ignorant. I really wish they would be working with the Victorian Government.

Insofar as unemployment is concerned, I just heard David Speers say employment growth has been highest in Queensland, although you wouldn't know that listening to the Prime Minister or the Treasurer. And the unemployment rate in Victoria is lower than any state on the eastern seaboard. So there are, you know, there's sort of lies, damned lies and statistics, depending on what you want to say about a given state of-

KARVELAS: Well 37,000 jobs lost.

O'CONNOR: And still the lowest unemployment rate, other than Western Australia, in the country.

KARVELAS: That's based on where they started from, but clearly this pandemic is disproportionately affecting Victoria.

O'CONNOR: People have different views, but I've watched what Donald Trump has done to the United States and what Boris Johnson is doing in failing to respond properly to a pandemic. And I'm like you and have been under very significant restrictions and so have millions of Victorians. It's been very frustrating. I'm now in self isolation, as you know, in Canberra. But frankly, looking at it,  it's a very difficult challenge. We are so close. And to see federal counterparts sort of come in and start attacking the government just when we are so close is disheartening and disappointing.

KARVELAS: Do you think-

O'CONNOR: It'd be better if they worked with the Victorian Government.

KARVELAS: Do you think opening up Victoria at this stage will really see those sorts of disastrous outcomes that you just described overseas?

O'CONNOR: Well, look at the one person who went from Chadstone, Kilmore, Shepparton, Benalla - just one person. I think that we do have to deal with breakouts. I do think we have to open up. And I do think it has to be based on evidence, science. I think that's exactly the way in which the Victorian Government's responding to it. I expect to see some easing of restrictions on Sunday, as has been promised. And I expect further restrictions to ease as we can get our life back. But I do agree you have to deal with the health front. This is an unprecedented, contagious pandemic. Deal with that first and then deal with the economy, of course. 

But I just look at Europe, they're going to close down again, their health systems are going to be overrun again. And they haven't even hit winter and they are not even through the peaks of the second wave. It's going to get worse and worse. And that to me is a reminder as to what can happen if Victoria had opened up too early, Patricia. 

KARVELAS: You mentioned we're both Melburnians, and we are. That means that we're both pretty connected in our communities you'd hope.  You know what kind of menacing role this lockdown is having on people. That's the sentiment that clearly the government federally is trying to pick up on. These increased calls to Beyond Blue. The mental health consequences too are quite significant, not just the job losses, but the sense of isolation. Surely that is an important factor in all of this?

O'CONNOR: It is an important factor. But in the end, I think you have to look at what is ultimately the net benefit. I mean, I don't think it would be in anyone's well being, mental well being if we were to open up too early, and then lock down very hard, and then get the sense that we can never succeed in ending this sort of second wave. And so it is a difficult decision. But I do accept the evidence and the advice of the health experts who obviously focus on these things. 

I mean, Josh Frydenberg, hasn't got a clue. He's no expert in this field. And yet every day he stands up and attacks the Victorian Government, which is really disappointing, given that he's from Victoria and must understand that we have to end the challenges on this front so we can open up our economy. And I think we're very close, Patricia, I mean, we're doing very well now. And I think, and I'm sure everyone else does, that we're going to do well. I just wish the government would get off the back of Victoria and Queensland. They choose to pick Labor states and never mention even comparable things that are happening in other states. That's not leadership, it is partisanship. And in the pandemic, it's irresponsible, frankly.

KARVELAS: Let's just talk tax if we can. Will Labor scrap or scale back the $130 billion stage three tax cuts? Do you think that's a wise thing to promise the public? 

O'CONNOR: It's a lot of money, an enormous amount of money. If it were to proceed it doesn't come in, as you know, for four years. So whilst the Prime Minister does say he's got a mandate, he doesn't have a mandate for what happens in the next parliamentary term, Patricia. Labor certainly has to work its way around its position. There are other areas we should look to invest. The Treasurer himself has said that the third stage of the tax cuts wouldn't give him the bang for the buck that he needs in terms of the economy. 

So we have to look at all the priorities and see where we land. I mean, it's not a very progressive stage. It does help the very high income earners, frankly, like myself and other politicians and other people. And so to that extent a very high proportion goes to the top 3 per cent of income earners. And we have to evaluate, is that what we need? Or do we need to spend more money in aged care, social housing, and the like? Can we do both? Well that's possible too. So we will have our answers to that very important question before the election. But the tax itself is not going to come in this parliamentary term.

KARVELAS: Just back on the unemployment figures, it's clearly better than the market had expected. Does that give you some confidence that our economy is rebounding better than perhaps we thought it would?

O'CONNOR: Well I hope so. Look, partly the reason why the employment rate is lower than forecast is the participation rate fell. As that falls so too does the unemployment rate. But my main concern right now is whether in fact, the JobMaker hiring credit policy that takes over from JobKeeper can do the job. The design of that is you have to have additional workers if you get any subsidy. 

The problem for the recovering businesses, not just in Victoria, but across Australia, is they won't have recovered sufficiently to be able to add, you know, above and beyond what their staff levels are once they lose JobKeeper. So the intersection of JobKeeper and the new policy is of great concern to me and Labor colleagues in terms of it working. 

You have to remember Treasury has forecast employment over the last seven years and has almost never got it right and it's always been higher, unemployment has always been higher than forecast. And so I'm sceptical about this forecast. And I just do concern myself with the way in which the initiative is supposed to work. And I think there are design flaws with it, which we should examine. We will examine in a Senate committee before it's legislated. We'll be doing that very soon just to see if we can improve the mechanism that's proposed by the government.

KARVELAS: Brendan, thanks for coming on.

O'CONNOR: Thanks very much, Patricia.