E&OE TRANSCRIPT
RADIO INTERVIEW
ABC RN BREAKFAST
THURSDAY, 15 MARCH 2018
SUBJECT/S: Labor's fairer tax plan; Batman by-election
FRAN KELLY: Jim Chalmers is Shadow Finance Minister. Jim Chalmers, welcome to Breakfast.
JIM CHALMERS, SHADOW MINISTER FOR FINANCE: Good morning, Fran. That was a lovely tribute to Stephen Hawking before. Well done.
KELLY: Thank you very much. He's a great man, and it is a huge loss, but then we were lucky to have him so long.
Bill Shorten is saying that Labor will, quote, "make sure that pensioners are OK, full stop". Now, that's what he said yesterday. Is Labor looking at some form of compensation for the 250,000 pensioners who will lose out under your policy?
CHALMERS: No Fran, those reports this morning are not accurate. What they're picking up on though is the obvious point that Bill made yesterday, that if some pensioners lose money as a consequence of what we're proposing here, that will be factored into the various tests that people are subjected to when they apply for the pension. And those tests are based on some pretty complex interactions. Everybody will be in a different situation, but Bill is saying for some people there will be an increase to their part pension and that's what those stories go to, but it's not true to say that we're working on another package.
KELLY: No supplement, no nothing, no extra for the pensioners who lose out?
CHALMERS: No, but remember, Fran, what we're talking about here is not getting rid of franking credits that people can use to reduce their tax. There won't be a single dollar taken from people's share dividends. There won't be a single dollar reduction in their super. There won't be a single dollar of extra tax paid by people who've been affected, and it's not retrospective. There's plenty of notice that it's coming.
KELLY: Just because something's not retrospective, doesn't mean that it doesn't hurt when it gets there.
CHALMERS: No, but no money's taken from dividends, from super or from extra tax paid. And what the Prime Minister said in that clip that you played just then is a lie plain and simple. Most of the impact will be felt at the other end of the scale and what Malcolm Turnbull and Scott Morrison have been saying the last couple of days with their breathless hyperbole about this proposal is not accurate.
KELLY: Labor itself says 250,000 pensioners will lose out. Now you say, OK you lose a bit of your cash, but you'll be compensated in your pension. But that's just not right. We've got examples in the paper today of a retiree with $451,000 in assets currently receiving a $1000 cash refund under the franking credits scheme, and that would see their part pension increase by $78 a year - that's $3 a week. That's not compensation at all for losing $1000.
CHALMERS: I said, Fran, that some people would see a change to their part pension. It's true that not all will.
KELLY: Well this person will, but it's $3 a week.
CHALMERS: We've never pretended, Fran, that some people won't be impacted by what we're proposing, but the impact will overwhelmingly be felt at the top end. The biggest saving from what we're proposing is from the wealthier end of the self-managed super funds. We're talking here about much less than 10 per cent of pensioners being impacted.
KELLY: Just on that, according to Treasury's figures - now I'm not sure if you're contesting them - but Treasury's figures are that 610,000 of those affected are on incomes of less than the tax threshold of $18,200 a year, and those people would lose $800 a year on average. Bill Shorten's got to talk about multi-millionaires welfare funded by taxpayers. These are not wealthy people.
CHALMERS: I'm so glad you asked me that, Fran, because there's been this confusion which Scott Morrison has promoted the last couple of days which confuses income with taxable income. If people don't want to take my word for it, that Scott Morrison is deliberately misleading people, think about what Saul Eslake said. Saul Eslake is a frequent contributor to this program. A completely non-partisan economist, a very respected economist. He said, that what Morrison and Turnbull are saying, and I’m quoting, “is misleading in the same way that most of what Morrison said about Labor’s policy on negative gearing was misleading”. And that’s because they are mixing up income with taxable income. We are talking about people who often have very large superannuation balances, on which they don’t pay tax. And the simple fact is the country can’t afford to continue to send cash refunds to people who haven’t paid that tax in the first place.
KELLY: I do understand the difference of taxable income and the income, and what Treasury is talking about is people with income of $18,200. Now, on any measure, they are not wealthy people, that is not multi-millionaire welfare.
CHALMERS: We’ve had this policy costed and analysed by the independent Parliamentary Budget Office, and what that shows is that the impact of what we’re proposing, overwhelmingly, falls on people with very large balances, particularly in self-manager super funds.
KELLY: So do you dispute the figure of Treasury of 610,000 people on incomes of less than $18,200? Do you dispute that reckoning?
CHALMERS: We haven’t seen the detail of that Fran, or had the opportunity to pull it apart.
KELLY: You have seen, obviously, the detail you worked on from the Parliamentary Budget Office that costed your policy, will you release that?
CHALMERS: It’s not the usual practice to release the Parliamentary Budget Office costing, not our practice, nor has it been our opponent’s practice. And that’s because there are a whole range of things which are in those costings which are not necessarily part of the final decision…
KELLY: Is that a no?
CHALMERS: No, we will not be releasing the Parliamentary Budget Office costings.
KELLY: Just staying with the pension. The point you were making that some people might lose some cash and that means they might be able to pick up some in the pension. There are plenty of examples where that equation doesn’t work out. To the benefit of those on the pension anyway. Labor is calculating this policy will save $59 billion over a decade. Have you worked out, as part of that, how many self-funded retirees could be forced onto the age pension? Or how much more pension people might be able to claim? And if so, what’s the revised saving, once that’s taken in?
CHALMERS: No, the costing provided by the independent Parliamentary Budget Office takes into account all of those kinds of interactions.
KELLY: Can you give us a sense of that figure? How many self-funded retirees would be forced onto the aged pension?
CHALMERS: No, it’s all part of the costing we’re provided, Fran. It’s not an itemised costing. But the PBO is very conscious of that sort of interaction and that impact, and take that into account when they give us the final costing.
KELLY: Jim Chalmers, retirees are obviously working out, trying to figure out, how much they are going to lose under your policy. Pensioners and self-funded retirees. Yesterday we spoke to Ian Henshcke, from National Seniors:
IAN HENSCHKE, FILE AUDIO: I would think that there will be enough people that would be angry about this because you’re talking about I think, it’s around 600,000 self-funded retirees. Not all of them are wealthy. You’ve got a million and a half Australians who are on the pension. You’ve got another million that are actually on part-pensions, and as said before you’ve got 5.5 million Australians who are over 50. Every second voter is over 50, Fran.
KELLY: That’s a lot of people who might be angry at you at the next election. How much harder does this make it for Labor at the next election, or are you calculating that a lot of these self-funded retirees don’t vote Labor anyway?
CHALMERS: Oh look, we’re not making those kinds of political calculations Fran, and I think when you propose a meaningful change, like we are, it will have its supporters and its detractors. But we don’t intend to kind of tiptoe around the big Budget challenges that we face. We don’t intend to sneak into office by not telling people what we intend to do. We don’t want to surf in, on the basis that people have written off Malcolm Turnbull for being so out of touch. This is a key part of our economic policy – to fix the Budget in a fair way. We’ve got record growing debt, which we can’t ignore, and we want to tell people, with plenty of notice before the election, what we intend to do.
KELLY: Your candidate in Batman might have wished you waited a week or two, because, I think you might be calculating the impact on them, and that’s 23,000 voters in Batman aged over 65. Now, one analysis in the Financial Review today has the Greens already ahead of Labor 51.5% to 48.5% two party preferred. Has this policy announcement just made it harder for Ged Kearney to win Batman for Labor?
CHALMERS: Look, I think Batman will be an uphill battle for us regardless. I don’t think this will be the only issue, or even arguably the most consequential issue. I think what will determine Batman is whether people understand that Labor’s their best chance to get the schools funded, or the tram extended, or the best chance to resist the trickle-down economics in Canberra…
KELLY: You might only need 200 votes to change because of this to make it impossible for Labor to hold Batman.
CHALMERS: I don’t accept that this makes it harder for us. I think it will be uphill in any case, but I think we’ve give ourselves every chance, because we’ve got a candidate in Ged Kearney who’s spent her whole working life, first looking after people as a nurse and then looking out for people as a representative of workers. And we’ve got a good policy agenda. And the Greens, Fran, are in the newspapers today making a big deal about announcements. It would be very disappointing if the Greens party sided with Scott Morrison again on something like this. That wouldn’t be the first time. We’re not going to take a lecture from them, Fran, when they did a deal with the Liberal Party to kick 100,000 people off the pension; and to lessen the pension for 370,000 for Australians. They have no credibility on the pension.
KELLY: When you say it’s going to be uphill for Labor in Batman, does Labor think it’s not going to win Batman?
CHALMERS: No, I just think it will be tight Fran. We’ve given ourselves every chance. We’ve selected the best available candidate. We’re going to extend the tram, properly fund the schools, and all of those sorts of things.
KELLY: Just briefly, back to your portfolio, when will Labor say what it will spend this $59 billion in savings over 10 years on? How much income tax, for example, will you be offering people?
CHALMERS: I’m not prepared to outline that here Fran.
KELLY: When will we get it through?
CHALMERS: You’ll get it in good time, Fran. I think we’ve got a ways to go between now and the election. We’ve got another Budget that we’ll need to respond to. But I think you’re right to point to the fact that we’ve got other priorities. We can’t afford to keep giving a tax refund for tax that hasn’t been paid in the first place. The Budget’s broken. We want to invest in jobs and health and education. The alternative to doing what we’re proposing to do, Fran, is to go down the Liberal Party path, which is to cut health and education, and pensions. We think our alternative is better. And we’ll have more to say in the lead-up to the election.
KELLY: Jim Chalmers, thank you very much.
ENDS
