ABC News 24 (1)

27 March 2018




SUBJECT/S: Labor’s Pensioner Guarantee; Liberals’ $65 billion big business tax cuts; Liberals and One Nation are one and the same

GREG JENNETT: For more on Labor's dividend policy and its position on company tax cuts, we are joined by the Shadow Finance Minister Jim Chalmers in our studio. Welcome, Mr Chalmers. There is a casual breezy nonchalance about the way Labor has gone through this backflip. It is $700 million though, so it's a big change. Was it in contemplation 15 days ago when the policy was initially announced? 

JIM CHALMERS, SHADOW MINISTER FOR FINANCE: We don't take of these sorts of decisions lightly, Greg. They are all the product of lots of careful consideration and collaboration, to make sure we get the policy right. What we did today was we spotted an opportunity to make a very good policy better, to make it more progressive and to make it fairer, and so we took that opportunity.


JENNETT: When was that opportunity spotted? What made the penny drop? 

CHALMERS: We have obviously been consulting and speaking with pensioner groups, individual pensioners; all of us in the Labor Party are quite well tapped into our communities. We've taken that feedback on board. We have seen the opportunity to make the policy fairer and better and I think Bill Shorten should be commended for doing that. You said it was an easy decision to tweak our policy today, but I think when you have the opportunity to still raise almost as much revenue but do it in a fairer way and to do it in a way where you are relying on the feedback from the community that we have appreciated throughout, I think people will welcome what's been said today.


JENNETT: You are essentially acknowledging here that politically, it was on the nose or on the nose enough to warrant going back and doing something about it.

CHALMERS: I don't think the broader community opposed our policy. I don't think they oppose it now. There is lots of evidence for that. 

JENNETT: But the pensioner community is a real pinch point in and of itself, isn't it? And you couldn't afford to alienate them.

CHALMERS: We are the party of pensioners. We've said from the beginning that it's not our intention to target pensioners, our intention is to change a policy we can't afford to continue which sees 80 per cent of the benefits go to the wealthiest 20 per cent in our community. The intention was never about targeting pensioners. We found a way to do the policy in a fairer way which doesn't include pensioners in our policy and we grabbed that opportunity.


JENNETT: Just on a specific, the Prime Minister or the government generally is pointing out anyone who goes on the pension from March 29 with Australian shares in their self-managed super fund will lose their refund or their ability to claim one. I know it is getting into technical space but is that actually true? Do you acknowledge that?

CHALMERS: They have said all kinds of things all throughout this conversation, Greg. Their credibility was torpedoed when they tried to tell people that taxable income and non-taxable income was the same thing. So I think people will see, whatever the next iteration of Malcolm Turnbull's scare campaign, they will see it as what it is. This is a guy who doesn't get fired up about Medicare or hospitals or schools but he will absolutely go to the wall to defend a tax break where most of the money goes to the ones who need it least. 


JENNETT: We are talking about a $10 or $11 billion measure. There is a much bigger decision made by Labor in the last 24 hours and that is the repeal of the next tranche of company tax cuts. What happens if you can't repeal it in government?


CHALMERS: We have signalled our intention for some time that we are not in favour of these tax cuts for big multinational corporations and so what we have done today is consistent with what we have done throughout this term which is to say to the broader community, but also people who might be elected to the crossbench in the future, that this is what we intend to do. We will seek a mandate at the election. We are quite comfortable and confident about the contrast between our approach, which is to say we can't afford to give $65 billion to multinational corporations, we need to invest in our hospitals and schools. The electorate will decide which path they want Australia to go down and it will be up to the Parliament after that. 


JENNETT: Now you're right, it is a stark choice but over a number of years - not in the short term - if couldn't get it passed, there would be a $35 billion hole in your costings, wouldn't there, because you're counting on it.


CHALMERS: That's one of the hypotheticals that is impossible to test, Greg. I think if we go to the election where the whole Australian community will know - they already know, but they will know precisely that we intend to repeal any tax cuts for the biggest tax companies, if they are passed through

the Parliament this week, the Australian people will vote on that basis and we would expect the Parliament to respect that afterwards. 


JENNETT: Fair enough, now that's a $35 billion pot of money in the future - $30 billion in tax cuts are already the law of the land. What is it about that $35 billion pot that Labor will be looking at when it sizes up whether to repeal some of that, or what's left of that?

CHALMERS: You're right to say that there's an element that has been legislated, and what we've been saying for some time now is that we will take a time to see what the Budget situation is. We'll make our view on those legislated tax cuts well known well before the election and as Bill said today, an important part of that consideration is seeing those numbers updated in the Budget.


JENNETT: So it could be that the rate stayed at 27.5 per cent and it was never extended beyond those companies with $50 million in turnover, is that the equation practically that you are talking about?

CHALMERS: That is entirely conceivable; we have not come to a view on the already legislated tax cuts. Currently, the threshold is $25 million, they go to $50 million as a threshold by the time of the election. We'll have more to say about that when we see all of the Budget numbers.

JENNETT: That is the pledge you're making, you will actually lay this out this year in May, will you?


CHALMERS: We'll make our position known well before the election, sometime after the Budget.


JENNETT: And just finally, Jim Chalmers, you are from Queensland, we saw an alliance, unusual I suppose, between Tony Abbott and Pauline Hanson today. What did you read? Is Tony Abbott back in the game?


CHALMERS: He would like to be back and he's causing a lot of trouble. It is a deeply divided Coalition as everybody can observe. I think it's becoming harder and harder to work out where the Liberal Party ends and One Nation begins. Pauline Hanson votes with the Government 90 per cent of the time in the Senate. When the Liberal Party says "jump", Pauline Hanson says "how high?" and we're seeing that with the company tax cuts now.


JENNETT: Alright Jim Chalmers, you have to get to Question Time. We'll let you go and thanks for coming in.


CHALMERS: Thank you.