E&OE TRANSCRIPT
RADIO INTERVIEW
ABC AM
FRIDAY, 23 FEBRUARY 2018

SUBJECT/S: Turnbull Government in crisis; Barnaby Joyce; Labor’s announcement for TAFEs and unis; IMF report; Liberals’ $65 billion big business tax cut

SABRA LANE: We invited several senior Nationals to join AM this morning. All declined. We're joined now by the Shadow Finance Minister Jim Chalmers. Jim Chalmers, good morning and welcome. 

JIM CHALMERS, SHADOW MINISTER FOR FINANCE: Good morning, Sabra. Thank you.

SABRA LANE: Labor doesn't have to lift a finger right now. How tempting is it to say and do very little while the Government, particularly the Nationals, make themselves the story?

CHALMERS: Well it is a full-blown crisis, Sabra, but we're resisting the temptation to be like spectators at the circus. We're out listening to people - Bill Shorten did his 57th town hall meeting, in regional Queensland, this week - we're developing policy on regional jobs and TAFEs and unis, doing the policy work so that when the election rolls around people have a genuine alternative.

LANE: What questions do you think Barnaby Joyce needs to answer next week, in your view, and what will Labor pursue when he returns to work?

CHALMERS: There are a range of issues, of course. There are the new allegations which are, as I understand it, being investigated and that's a good thing. I don't have anything to add on that front while that investigation is ongoing. But more broadly, we've had a breach of the existing ministerial standards revolving around Barnaby Joyce's failure to properly declare that gift of free accommodation from his friend in his electorate. So there are a whole range of issues, and basically what's happening here is we've got a crisis which is going from bad to worse. The Australian people don't get a look in. They want leadership from their Government and instead they get this circus.

LANE: OK. On to what Labor is promising, you're this morning promising a full review into the higher education sector today with more money for TAFEs - $600 million more. When that's added to the $17 billion more for primary and secondary schools and billions more for health, people will wonder where the money's going to come from to pay for all of this?

CHALMERS: I think people will understand that our education system, particularly in this case the policy we're announcing today, higher education, is a really top priority for Labor. I think people recognise that the TAFE system's not in especially good nick at the moment. We're not wringing maximum advantage out of the system and we've got universities under attack from the Government. So we need to rethink how we give people the best chance to succeed, particularly with the workforce changing as rapidly as it is, and we need to work out how universities and TAFEs can properly work together and leverage their strengths and work in concert, not at cross purposes.

LANE: All right, but the point of that question, I mean all of these things will cost billions of dollars more. Where will the money come from to pay for this?

CHALMERS: We're being very responsible about our alternative Budget, and part of that means not supporting the structural damage done to the Budget by that $65 billion tax cut for big business that the Government wants to bring in. That's an important difference. That's one of the ways that we pay for our commitments in education, but also in health and across the board. We've just got a different set of priorities, Sabra, to the Government. We think you can grow the economy more effectively by investing in the capacity of our people, in their skills and abilities and by investing in infrastructure to get proper productivity growth in the economy. The Government has a very different approach, which is their company tax cut. There are different ways to allocate public money, and we think our way is a smarter way of doing it and more likely to give us that inclusive and enduring and sustainable economic growth that the country needs.

LANE: The latest IMF report on Australia says that Australia's effective average corporate tax rates are currently in the upper-third amongst advanced economies and that a comprehensive tax reform has the potential to increase efficiency of the tax system, increase investment and labour demand and reduce inequality. How do you respond to that?

CHALMERS: There are a number of comparisons out there, Sabra. It's not easy to compare company taxes across countries because different companies like the Americans, for example, have state company taxes. All sorts of things feed into those kinds of analyses. But the IMF made a number of points in their report during the week. We take their report very seriously. They also called for the Government to jack up the GST, they questioned some of the assumptions in the Budget around nominal economic growth, and they also backed in substantially Labor's approach to negative gearing and capital gains. So the IMF made a number of points, not just the one that you identify.

LANE: No, and like the Government it sounds like Labor's going to cherry-pick the findings that relate to its own policies and dismiss anything else.

CHALMERS: No, I just ran through four of the conclusions of the IMF report. I don't think our reasons for opposing that big business tax cut were substantially addressed by the commentary in the IMF report. We opposed the big business tax cuts because they're unfair. They favour the top end of town at the expense of middle Australia. They're unwise. Even the Treasury modelling shows that the benefits are negligible and down the track. And it means we can't direct that money towards Budget repair, or productivity-enhancing things like skills and infrastructure. And they're unaffordable, because they do structural damage to the Budget, which has already got record debt which is growing faster on average per month under this Government than it was under the Labor Government previously. So there are a whole range of reasons why we oppose these company tax cuts and they're not substantially addressed by the IMF report.

LANE: And how worried are you that the big corporates will be stranded with other countries cutting their rates?

CHALMERS: Not worried at all. I mean, I spend a lot of time with the business community and I understand that they make their investment decisions based on a whole range of factors, not just the headline company tax rate, but the quality of the workforce, the quality of the infrastructure, all of these sorts of things. I'm in Townsville at the moment, Sabra, and it's a good example of the choice that we need to make. The choice here in Townsville is between that company tax cut, which will flow largely to foreign multinationals and the southern capitals, or investing in water security, widening the port, all of those sorts of things. And we think that you'll get better benefit for the economy and for business and for the broader Australian population if we prioritise investing in productivity like infrastructure and skills rather than this company tax cut.

LANE: Shadow Finance Minister, Jim Chalmers. Thanks for joining AM this morning.

CHALMERS: Thank you, Sabra.

ENDS