Jim Chalmers' newest economic friend is AI

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Treasurer Jim Chalmers has a message for working Australians.

Treat AI as an enabler, not an enemy.

So his message is he's pretty into AI, but the unions are very concerned about what it means for jobs.

The comments all come after the Productivity Commission report cautioned against heavy-handedness on regulating AI in the workplace.

But will all the fears that the unions are raising actually be a bit of a disruptor here?

It all comes as there are so many submissions.

Oh, it's so big.

So hard to wrangle this national economic roundtable.

The government's managing expectations, trying to lower expectations, it feels to me.

Welcome to Politics Now.

hi i'm patricia carvellis and i'm david spears you are david spears i am i'm the real david spears not good the ai wanted to check because you know

that was a question there's sometimes the stories about like you did you see the one yesterday about someone who who did an interview with someone and they were ai like david I had to check.

No, I didn't see that.

I am.

I am.

Well,

speaking of which, I've been messing around with AI.

I need to do more of it.

But

one of the platforms that you can just punch in a few details and it spits out a podcast.

Pika, have you had a go at those ones?

I have been shown them and they are alarming.

Tell me.

Is it better than what we do?

No, no chance.

Not yet.

No chance.

And the yet word is the key one, isn't it?

It's fascinating.

It's fascinating.

And for people who

do take in information news analysis and and so on through podcasts as you know hopefully people listening to this do I certainly do can't stop listening to podcasts

I can see why you know you get a report or a long news article that you'd rather listen to in a conversational format than read

you know chapters of a report punch it into this tool out comes a podcast that delivers it to you I can see why there's a place for that sort of thing even if it does risk the future of peace we're very real here here.

We should, this is no AI, this is you and me talking.

This is us and existential crisis now absolutely well developed.

Thanks, David.

But this is the microcosm, right, of what it means for our jobs.

Multiply this across the economy.

And as Jim Chalmers says, this is going to impact every aspect of our lives over time.

This is going to be enormous.

So I guess this gets us, PK, to what the government's going to to be contemplating, what's being discussed in the mini roundtables leading up to the big roundtable in just a couple of weeks' time.

So many roundtables.

Okay, so we'll start on the AI because the Productivity Commission has warned against tough laws to control it.

The unions, however, are very concerned.

They say it's having an impact right now as we speak, right this minute.

Someone's losing their job because of AI.

It's just,

it's a rolling situation, but there is now real contest over how to manage it.

There are some really controversial ideas in this Productivity Commission report.

The union movement has really tried to smash it.

The government,

how have they responded?

Maybe the Treasurer may be a little bit different to the Industry Minister.

Yeah, so just to

set up the dinner table here, you've got the Productivity Commission report overnight, which does say that we should use existing laws and regulatory structures to minimise the harms and introduce tech-specific regulations only as a last resort, right?

So the Productivity Commission is, as you say, taking a very much, you know, let's take a light touch regulatory approach here.

Use the existing regulations we have in place for all sorts of things in the economy rather than layering in new layers of regulation that could scare off a lot of investment and deny us the productivity gains that the Productivity Commission says are going to come through AI.

They reckon about more than 4% labor productivity growth over the coming decade, if we get this right.

And that's huge, given we've flatlined on productivity for so long.

On the other side, you're right.

The unions are very worried about job losses.

They want a new authority, a whole new authority sitting alongside the Fair Work Commission that would oversee how AI is rolled out in each workplace, that unions should be involved, workers should be involved in how AI is going to be rolled out to ensure

jobs aren't just lost, that they're redeployed, upskilled, and put in new positions that take advantage of this.

Where does the treasurer come down?

Well, this is kind of the Goldilocks

scenario that he's talking about here.

Not over-regulate, not under-regulate, but just this middle path that he talks about.

They love the middle path, this government, David.

They do.

He said there are some who want to let it rip.

There are some who want to pull the doona over their head.

He's talking about the middle path.

I think, though, while saying that and you know, take him at his word, the treasurer in his language is also on the glass half-full side when it comes to AI, don't you think?

You used the quote from Jim Chalmers today where

he did reference

it being an enabler, not an enemy.

He sees the opportunity there.

He did indicate that his thinking was aligned with the Productivity Commission.

So I think within the government and the labor movement more broadly, Jim Chalmers is on the not let it rip, but let's see this as an opportunity, not a threat.

side of the question.

Yeah, he is.

He's certainly a lighter regulation, but he will be under a lot of pressure because the unions are not sort of half-hearted about this.

They see this as, well, I said I was having an existential crisis.

They say it is actually genuinely an existential crisis for workers.

And I don't think they're entirely wrong in their assessment that it could really smash some industries and there needs to be a sort of reckoning about that and how we manage that.

Now, I don't know.

That doesn't necessarily mean the kind of controls they're pushing for, but it does, a government that is a pro-worker government, which is, you know, what a Labor government is all about, does need to be pretty responsive to those concerns, doesn't it?

Yeah, and you can see this becoming a point of friction potentially between the union movement and the Labor government.

And, you know, there aren't often many, and certainly after the Jobs and Skills Summit in the first term, it was the unions who were the big winners.

But I think on on AI coming out of this roundtable, whatever the government lands on, yes, you can see the potential for this being a point of friction between the two.

Chalmers made the point today that you look at technology and its arrival through history.

You know, and I guess we'd look at the Industrial Revolution, you'd look at

the internet and all the changes that brought.

His argument was it generally creates more jobs than it discards, right?

So you get these technological revolutions and it generates more work, not less.

We just change the way we work.

Yes, some jobs are lost, but more jobs are created.

And this is the glass half-full approach he's taking here.

We have never, however, PK, seen anything like artificial intelligence.

This is of a step change to

those other technological revolutions.

I don't think we know quite.

you know, what our economy and society is going to look like in 20 years time because of AI, but it is going to be very different.

And I think what does does government need to think about now at the outset?

I was reflecting on this.

I mean, it was only last week, right, that the Prime Minister was announcing the extension of the social media ban to include YouTube.

I was there at the press conference.

He had those three parents heartbroken standing behind him.

They'd lost 14, 15 year old kids after abuse on social media.

One of them was holding the urn of his daughter, Liv,

who died.

It was a really powerful point, right?

And it was about catching up on regulation in relation to social media, new technology that came along and was let rip.

And here we are trying to put in place guardrails around kids can't use it and media bargaining codes so that news organizations aren't killed off.

It's about retrofitting regulation on a technology that took off.

Here we are at the cusp of this AI revolution.

What does government need to be thinking about now rather than 20 years down the track when it's too late?

And look, it's difficult.

I think, you know, fundamentally, talking to a few people who got their heads well into this space, it's about keeping humans in the loop and where you want that human in the loop to be, you know, how you make sure you've got that human in the loop in all these applications.

It's really complicated.

It is complicated.

But if you look at the Productivity Commission report, and yes, some people are skeptical of its ideas, including the unions, but what they found is that it could add around 4.3% to labour productivity growth over the next decade.

So that's a lot.

It can contribute more than $116 billion towards economic growth over the next decade.

That's why you're hearing the Treasurer be very positive about it, because the game changer which it provides to, I mean, you just think about some,

you know, menial tasks that some workers have to do as part of their job that are transformed by AI.

So that's a non-existent part of the day.

Imagine how much more you could do, right?

Like what your business could then achieve if you didn't have to build in those those tasks.

This is the thing, David.

It can be transformative,

but it could also destroy us as a species.

Sorry, but if you look at some of the warnings around AI, it has been said, and it's not, I don't think, over the top for me to add that in.

Look, yeah, I'm not as pessimistic as I have read the,

it's a terrific book, Nexus, by Yuval Noaharari, that does paint a pretty bleak scenario as to where this is all heading.

And look, I'm not quite that pessimistic, but there is a great deal of uncertainty.

But yeah, you're right.

You think about your daily tasks.

I mean, for us as journalists, you know, occasionally, I mean, the productivity commission stuff overnight wasn't too long to read, but some of these documents, you know, you've got to digest them really quickly.

AI can help you pull out the most important areas or particular areas that you're interested in and do that job quickly.

This applies to so many workplaces where you can use that tool to really have a more productive day and job.

When you start talking about the use of AI in the courts, you know, how should AI apply in the decision of a judge or a jury?

When you think about

how AI works in the care sector,

this is where it gets more complicated.

I mean, yes, we need to have a more productive care sector.

We keep being told that.

You know, I was talking to

someone today about

people using AI to help make judgments and applications on putting a parent into aged care um you know you can see the benefit of navigating a really complicated um system but is it making this this comes back to where the human needs to be in the loop and and the role of government to to make to make a decision on what role humans need to keep playing, however this technology involves.

I don't think we've really, I mean, yes, it's great to hear the treasurer say middle path, we want to not over-regulate, we want to not under-regulate, but what does that look like?

We don't know what that looks like, and and that's that's why this conversation is important to have like you know we we're almost talking in unspecifics really if we're to be truthful here like I don't think anyone has any specifics I mean the productivity had one in relation to copyright and being able to basically get these these AI models across all of this content to make them if I can you know make them smarter to make them and and the pushback against that is enormous isn't it from arts organizations David like saying hang on a minute this is our intellectual property what do you mean we're just going to feed it to like there's and that's a really legitimate concern it's a very good concern it's not yeah this is

you know humans independently uniquely with their

brains and education and this sort of special source which makes us uniquely human, you and I, both journalists, but really different, bringing different perspectives.

Like it is something special about humanity.

I don't mean to sound Pollyanna, but you know what I mean?

And taking that away, it's frightening.

Yes, but there's also unconscious bias that comes from human decision-making as well.

You know, can you get around that with AI making some of these decisions?

It's a fascinating

thought experiment.

But look, from the government's perspective, like with so many things at this roundtable that's coming up, it's getting so much, you know, it's almost almost unwieldy, the number of submissions and roundtables, and how do they possibly come to some sort of conclusion at the end of this?

AI, I think, is going to be one of the more fascinating areas, not just at this roundtable, but over the coming years.

It's coming at governments all around the world.

How do they manage this?

How do they hit that happy middle path that the Treasurer is indicating there?

How do we take advantage of this?

Trump, you know, in the US is certainly taking a letter.

He is letting it rip.

And, you know, a point that, you know, Yuval Noah Harari makes in that book I mentioned, is that this ultimately will be a superpower competition between China and the United States, right?

Whoever can get the furthest, the fastest, is going to win.

And so you can see that incentive there for China and the US to let it rip.

Where does that leave smaller players like Australia in all of this?

Where will investment go?

Where will the productivity gains and economic growth come?

Are we just going to be caught up in the slipstream of this inevitably?

Yeah,

I don't know the answers to all of this.

Don't know the answers, but the questions must be asked.

Hey, David, of course, this economic roundtable has become, you know, bigger than Ben Hur.

Like, it's so big.

And now the government's trying to put the genie back in the bottle in some ways.

Like, calm down, folks.

They want to walk out.

They wanted to walk out with some sort of consensus deals, but they've also now added big tax reform ideas, being able to be ventilated on the agenda.

But there's no way they're going to walk out with any sort of ideas that people have agreed to on tax.

On your show on the weekend, where I was kindly invited, thanks for having me.

We talked, for instance, about the

radical ideas being put forward by the trade union movement.

Now, yeah, sure, they'll be ventilated at the economic roundtable, but no one's going to walk out with a deal on negative gearing as far as I can see.

No, I think that's right.

I think, look, the biggest ideas on tax have come clearly from the ACTU over the weekend and the Productivity Commission as well,

who are putting out a lot of ideas at the moment and their company tax ideas, certainly a big one.

Look, the government's made it very clear, don't expect to communique at the end of this summit right they're not going to walk out at the end of three days and go and here are the 10 things we agreed to um it'll be a set of ideas or reform directions uh that that you know the treasurer is most hopeful of of seeing and then i think you know we'll see the government take its time i think anything of that scale on tax anthony albanese would then be looking to take to the next election.

An election Labours expect to win given their huge majority so he can afford to take some more risks.

There will still be criticism of the government though if they wait that long.

If they don't use this moment of this massive majority and enormous political capital that they have right now to do something big because

we know big change is needed on tax, on growth, on productivity, on fixing the budget.

Can we afford to wait another three years to do this stuff?

This is going to still be the conundrum for the government coming out of this summit.

They might have a

shopping bag full of ideas coming out of it, but will they act on them?

Will the Prime Minister be more cautious?

Will the Treasurer be more ambitious?

We have to see.

Well, the Prime Minister has to be on board for it to happen, and he is more cautious.

It's a fact.

The Treasurer did want to be more ambitious.

It's a fact.

Right now, as we record, the opposition leader Susan Lee and her small business minister Tim Wilson are standing up and basically rebuking the roundtables as a way of just trying to increase taxes.

You know, this is one of her quotes which sort of speaks to what they're trying to do here.

It's a scare campaign.

Let's call it for what it is.

This is not about productivity.

This is all about raising taxes.

Every message you hear is about raising taxes.

Okay,

that's one critique.

Is it a fair critique?

A couple of points.

The government might

play down how concerned it is about the coalition, which is in a very weakened state right now, but it's always going to keep an eye on its opponents.

The treasurer is...

It's silly not to.

Yep.

The treasurer had a bit of a jab at

the shadow treasurer, Ted O'Brien, for saying that it's a waste of time, but also agreeing to come along.

He said, you know,

you either think it's a waste of time or you accept the invitation and come along.

I'm not sure how you can have both.

But anyway,

look, and on the substance of what Susan Lee is saying here, this is a secret stitch-up to increase taxes.

Look, the Treasurer has made it clear that we need ideas that are either going to be budget neutral or budget positive.

So look, yes,

I can see the point there, but isn't the reality here, PK, that the Australian people have been voting now for a while to embrace this higher level of government expenditure, whether it's on the NDIS, aged care, childcare, defence, all of these things where spending is rising.

The Australian people are quite comfortable with that.

We are moving into a higher spending phase as a country.

Our revenue is not keeping up.

So how do we do that?

I mean, do we cut spending dramatically somewhere else?

Well, tell us where.

Well, exactly, because the coalition, I'm sure it's three years away from the next election, but they think they're being very clever now, embracing this, oh, we're going to be about lower taxes.

Okay, that's a core value that they've had, and they want to revisit that.

But if they don't look at a new tax mix, which might involve some higher taxes, taxes that are, you know, and we talk about intergenerational fairness, if they don't, they're going to have to explain closer to the next election.

And people like you and I will be demanding, which I think is fair, where are they going to cut from?

Remember the big idea for the last election from Peter Dutton was the public service, but it became such a muddle during the weeks of the campaign about was it 40,000, was it this, was it that, was it this department, that department, is this, you know,

position cutting back on the growth or the existing positions?

It just was so confused because they had such political difficulty in spelling out the sort of cuts they really wanted to make.

Do they go back there?

I'd be surprised.

And you can't get enough cuts from that anyway to fund your 3% on defence.

And then what are you going to do?

Are you going to cut back health, right?

This government is increasing a lot of spending on health because they did Me Too, Me Too, Me Too under the Dutton leadership.

So are they prepared to go out there there and articulate cuts to health, education, NDIS, beyond the government's trying to make it more sustainable at 8% growth?

I don't know.

I can't really see how they're going to mount that case.

The point is, if they're going to be naysayers on economic reform and taxes, because they think it might give them, I call it the sugar hit, the sort of quick politics, they might come to regret it because they're going to have to explain where that money's coming from.

And I don't think it's going to be an easy thing to explain.

No, and maybe we'll be surprised and

the coalition under Susan Lee will take a hard-nosed, we're going to cut here, here and here.

We haven't seen that yet though, right?

I mean, so far we've seen,

well, just in the last few days, Susan Lee visiting remote Indigenous communities, talking up the need for something more substantial, more significant from the Prime Minister to close the gap.

What does that mean?

Well, amongst various other things, more spending.

That's just in one, I'm just taking one example.

It's a good example because all of the, if you want to actually turn that around, people say it's not about extra money.

Well,

prevention actually costs a lot because it's all in the prevention side you need to do.

If you want to deal with kids, for instance, and

incarceration rates, so much more.

But it's just one example.

Yeah, defence is the other one where they want to substantially increase spending.

I'm yet to see a policy area where the coalition is saying we need to spend less in this area.

And at the same time, as you say, when it comes to finding more revenue, like on the superannuation tax change or now with this roundtable, any sort of tax increase, they're saying no.

Ultimately, that leaves our budget in a difficult position or a worse position.

And yeah, remember the

Dutton election numbers would have seen the budget actually deeper in the red for the first couple of years before improving.

So, yeah, it's not easy making those numbers add up if you're saying no to any additional revenue,

but still supporting more spending in all sorts of areas.

That's right.

Look, the big thing that's still

everyday

front and mind, and it should be, of course, is the ongoing disaster in Gaza.

But then the adjacent issues around Palestinian statehood, how to progress peace.

The world wants, a lot of the world is calling for a peaceful outcome and wants to push that along.

Brett Worthington and I talked about a big shift, I think, not a little one, in relation to Wong's language, which Penny Wong, the foreign minister that is,

and she's obviously talking more about a faster timeline now.

The government was like, it's not about timelines.

But David, it seems to me when you're talking about a sense of urgency, it all of a sudden is now about timelines.

It is.

And the Prime Minister spoke to the French President Emmanuel Macron overnight in the last few days.

He's obviously spoken to the President of the Palestinian Authority, the UN Secretary General, the French President, all these people who are on board and trying to rally international support for recognition.

You know, and clearly that's where the Prime Minister's heading.

On Penny Wong's comments, though, I just wanted to throw this in because I found it quite significant what she said that now one of the new arguments the government's weighing is that, well, there may be no Palestinian left to recognise.

It's a sort of a new argument that sure is no doubt designed to build the bricks there to get to recognition and convince people that this is the reason why Australia needs to do it.

But just pause on that sentiment, if this is the foreign minister and the Australian government's view, that there may be no Palestine left to recognise, what is that saying?

It seems to me that's saying that the Australian government fears that Benjamin Netanyahu is going to destroy or occupy Gaza completely.

And if that's the case, that there's going to be no, there's a risk at least of no Palestine being left to recognise.

Sure, I have the argument about recognition, but is that enough?

Does more need to happen to stop that sort of scenario that the Australian government is now fearing?

And we know there's pressure for sanctions and more coordinated and concerted international action to stop Benjamin Netanyahu heading down this path.

It does sound like the Australian government now is taking very seriously the idea that there may be no Gaza left.

If you look at all of the Israeli newspapers, and as I do every day, I'm sure you do too, David, because

there is

news moving fast on this.

They are considering a complete takeover of Gaza again, even though Netanyahu is being resisted, I think, by some of his top generals.

So there is really a crisis really in many ways if there is such a disagreement at that top level about what the right approach is.

But the government is right, I think,

to be concerned about where this

very increasingly extremist leader of Israel is taking this conflict.

It's at odds with where the world wants to go.

But, you know, I said it yesterday.

I think it's imminent now.

Remember the word imminent?

I think it's imminent that we will recognise Palestine,

a Palestinian state.

Yesterday I actually spoke to some people who I know are really concerned about this and the Labour Party off the record and sort of, you know, I'll tell you, give you a little insight into some of my conversations because I sort of said,

why are you leaving Ed to do all of the heavy lifting here to some of these people, right?

Like, because I find that a little strange.

And

one said to me,

because we trust about

where the PM's about to go here, there's no reason for us to cause trouble.

Push too hard.

Is that right?

Do you think that's?

Oh, yeah, yeah, yeah.

Absolutely.

There is a lot of comfort, is how I'd put it, across the factions at the moment moment with where this is going.

You know, there's an inevitability.

Everyone knows this is where the PM wants to land.

It's when, not if.

So that's, I think, why you're not seeing more public agitation.

And even Ed Husick, you know, while he's the only one publicly saying we should do it now, I think he too accepts that this is where they're going to get to eventually.

Josh Burns is the one MP because he represents such a

diverse electorate, to be fair, but also a lot of Jewish Australians.

And then his electorate has always been given some leverage, David, to,

you know,

reflect his community's view, right?

It's really what it is.

And

when Australia changed its vote at the UN previously, he came out and said that he didn't like that decision.

You'll recall.

Yesterday I had him on afternoon briefing and he backed in Palestinian recognition

now.

Like like that that you know didn't he didn't play a different line.

That says a lot doesn't it?

I think that says heaps, doesn't it?

Yeah, it does.

And I think I saw you questioning Richard Miles from the Victorian Right faction about this as well.

I mean, yeah, there's just no real pushback now, is there, internally?

Certainly from the coalition.

But I don't think the government's too worried about that.

It feels like, you know, and certainly after the Harbour Bridge walk, that this is something that the Australian people are going to be very comfortable with.

I don't think there's too much concern about pushback from Donald Trump either.

And we chatted about this on the weekend as well, that

you know, the way Trump's reacted to Keistama and

Marcani in Canada,

you know, it's been pretty mild.

His disagreement with them on recognising a Palestinian state, but not exactly berating them.

So, I don't think Australia's too worried about that either.

Australia seems to be just poised now.

So, when it happens, we will bring it to you.

Now, tomorrow it's party room time.

Frank Ellie and I will take your questions, the partyroom at abc.net.au.

David, I'm so glad you're real, David, and not AI David, because I'm not ready for AI David.

Long may we survive

for another week or two before the AI bots are doing it all.

See you, David.

See ya.

Bye-bye.