E&OE TRANSCRIPT
DOORSTOP
CANBERRA
MONDAY, 7 MAY 2018
SUBJECT/S: 2018 Budget; income tax cuts; Morrison’s arbitrary tax cap; Turnbull’s $80 billion big business tax handout; Labor’s plan for a fairer tax system; Liberals slashing infrastructure spending; Katy Gallagher; Newstart; Peter Dutton’s lies on border protection
JIM CHALMERS, SHADOW MINISTER FOR FINANCE: One Budget on the eve of an election can never make up for the pain inflicted on families by the previous four Liberal budgets. For as long as there's an $80 billion tax cut for big business in this Budget, it will be a Budget for big business and not for battlers. The families of Australia understand that this $80 billion tax cut comes at the expense of their hospitals and their schools. We call on the Turnbull Government, not to reward the big banks with another tax handout, but to reverse their cuts to hospitals and schools, which are inflicting such damage on our community.
Australian families understand that when Malcolm Turnbull says he wants to give $80 billion to big business, that that means they pay more for hospitals, they pay more for schools and education and they cop cuts to pensions and payments. Australians understand that Malcolm Turnbull's $80 billion tax cut comes at their expense. We call on Malcolm Turnbull to reverse his cuts to hospitals and schools, not reward the big banks with that big tax cut. We call on him to ditch those cuts to hospitals and schools, to ditch his attacks on pensioners and families, and to reverse course on that tax cut for multinational corporations.
If Malcolm Turnbull doesn't reverse his cuts to hospitals and schools, or pensions and families and payments, then it will show that he has learned nothing from the first four failed budgets under this Government. No election eve Budget can make up for the damage done by the first four budgets by this out-of-touch Government. The Australian people know it. They know that this will be a Budget just like all of the others - attacks on hospitals, attacks on schools, attacks on families and pensioners, and record and growing debt.
Remember, Malcolm Turnbull and Mathias Cormann and Scott Morrison, these characters said that debt at $175 billion was a "Budget emergency" and a "debt and deficit disaster". Now we have net debt twice that, and we don't hear peep about the Budget emergency anymore because they've been such spectacular failures when it comes to meeting their own tests.
We have a Treasurer out there this morning banging on about a tax-to-GDP cap in the Budget of 23.9 per cent. How many Australian families do you think are sitting around the kitchen table tonight talking about the tax cap of 23.9 per cent? This just shows how spectacularly out of touch Scott Morrison and Malcolm Turnbull are, if they think that they will get a round of applause from the Australian people for implementing an abstract and arbitrary 23.9 per cent tax to GDP cap in the Budget. Australians don't care whether the tax-to-GDP cap is 23.9 per cent. They care whether the tax system is fair, and they care whether it funds the things that we as a society truly value. They care whether tax is fair, and whether it can pay for our hospitals and our schools, whether there are two tax systems in this country or one. Under Malcolm Turnbull, we've got these two tax systems - one which favours the very wealthy in our community, and another for the rest of us. I think the Australian people will see through this latest attempt from Scott Morrison to try to distract from the $80 billion tax cut of which $17 billion goes to just the big four banks alone.
The other thing we've heard about today is infrastructure spending. Infrastructure spending has been slashed by this Government substantially. The independent Parliamentary Budget Office has said that spending on infrastructure will go from 0.4 per cent of GDP to 0.2 per cent of GDP over the next 10 years. That's the independent Parliamentary Budget Office showing that, under this Government, we've seen the hollowing out of infrastructure spending. So any spending by the Government in this Budget will be off an incredibly low base. We also know that in each Budget they announce a whole bunch of new infrastructure investments way down the line, quite often including the contribution they expect others to make before those contributions have been agreed. And they ignore things which are ready to go, like the crucial Cross River Rail project in my home town of Brisbane. So they've got an appalling record on infrastructure. They won't undo the damage in this Budget that they've done to infrastructure investment in this country over the last five years. It's another desperate attempt to distract from what is the centrepiece of this Budget - an $80 billion tax cut for multinationals, of which $17 billion goes to the big four banks at the same time as we have cuts to hospitals and schools.
JOURNALIST: Just on the cap, the limit to GDP, by calling it arbitrary, are you saying that a Labor Government would breach that cap of 23.9%?
CHALMERS: That's Scott Morrison's tax-to-GDP cap. It's an attempt to distract from the big tax handout to multinational corporations, and it's an attempt to distract from the fact that they will go to the wall to defend the biggest tax concessions in this country going to those who need them least. The Australian people couldn't care less about Scott Morrison's latest tax-to-GDP thought bubble. It's a political accounting trick as fair as they're concerned. He has announced it before. He hasn't stuck with the Budget rules he's announced before then. He's breaking at least two of the so-called fiscal rules. So I don't think this one will be worth the paper that it's written on. We have our own approach to tax in this country; which says the biggest tax concessions shouldn't go to those who need them least; which says we shouldn't be giving $80 billion to multinationals and $17 billion to the big four banks. Because we want a tax system which is fair and we want a tax system which adequately and properly funds the things we care most about as a society - educating our kids, caring for our sick people and making sure the vulnerable people in our society aren't left behind.
JOURNALIST: Just on Labor policy, isn't it about time small business owners heard from Labor about whether you will accept the company tax cuts that have been legislated already for them, or whether you will roll any of them back? Isn't it about time that you actually took a stand on that and revealed your policy position on that issue?
CHALMERS: For genuinely small companies, we have committed to a tax cut for companies turning over up to $2 million a year, at the same time as we have said we won't cop a tax cut for big multinationals and big banks at the top of the tax system. You're right that we are yet to announce our position on companies in between those two extremes. That's because we want to see the numbers in the Budget. We want to take that decision in the context of spending and taxing right across the board. So we've said for some time now that our announcement on the tax threshold that we would adopt for company taxes will come after the Budget, but before the election. So the small business people of Australia, indeed the whole Australian community, can judge us on all our tax policies and plans, including that one, but also our approach to closing down big tax breaks, which the country can't afford, and also not proceeding with a $17 billion tax cut for the big banks who have been responsible for the rorts and rip-offs in the Royal Commission.
JOURNALIST: So is it still realistic, it is actually your message to those small business owners, or some of them, that the lower tax rate they are getting this year, they may actually, under Labor, get an increase in that company tax rate?
CHALMERS: Our message to genuinely small businesses turning over up to $2 million is that we support a tax cut for them. Our message to companies turning over more than that is you will know our position well in advance of the election and you can judge us on it. It's not unreasonable for us to say that we should get a full sense of the Budget - all of the tax policies, all of the spending proposals from the government - before we finalise our position on that. We have flagged that to the small business community for some time now, some months, that that will be the approach that we take to it. It's a sensible and measured approach. I think it's a commonsense approach to see what's in the Budget tomorrow before we properly and finally commit.
JOURNALIST: Using your argument though, that companies won't pass on the tax cuts in the form of higher wages, wouldn't the income tax cuts sort of balance that out?
CHALMERS: The highest priority in the Budget will be the company tax handouts, not tax relief for working people in this country. Until we see the numbers, we won't know how that all shakes out, but the highest priority for the Government isn't the working people of Australia. The highest priorities for the Government are the multinationals and the big banks. That much is clear already. I don't think any income tax cut in the Budget tomorrow night can properly make up for the damage that's been done to families in this country over the last five years. It won't completely unwind the pain which has been inflicted on people by the Liberal Party, really since the first 2014 horror budget. I make this other point about income taxes in tomorrow night's Budget: we will obviously take a very careful look at what the Government proposes tomorrow night on income taxes. We've said all along we look more favourably on a tax cut for low- and middle-income earners in Australia than we would for yet another Malcolm Turnbull tax break for the top end of town. But we have the capacity - because of the difficult decisions we've taken elsewhere in the budget - to deliver tax relief to working Australians in a far more responsible and sustainable way than the Government does. What the government seems to be proposing to do is to give tax cuts on the back of a temporary spike in revenue, as well as some likely very optimistic projections about wages and other things in the Budget to give permanent tax cuts off the back of that. What we say is that Labor has got a far more responsible way of going about it. Because we're saying we will deal with negative gearing and capital gains; we'll deal with dividend imputation; family trusts, the list goes on. And one of the reasons we do that is because we put a higher priority on people on low and middle incomes than the Government does. We go about looking after them in a far more responsible and sustainable way, and in a way which allows us to invest in the things that society values the most, which is health and education and looking after the vulnerable.
JOURNALIST: Do you think there is there any case of an income tax cut for people earning more than $180,000 a year? Or is that something Labor would definitely want to block or amend in the Senate?
CHALMERS: We take a very dim view of tax relief which favours the wealthiest in our community. We're not going to go into pre-empting or predicting what may be in the Budget tomorrow night, except to say that we would obviously much prefer to see tax relief for low- and middle-income earners, and not for the wealthiest wage earners in our community. We will have more to say about that when the time comes.
JOURNALIST: How about moving the tax bracket up to the top end of the spectrum, even if it is say five, six, eight years down the track? Is that something Labor's willing to contemplate?
CHALMERS: Again, that falls into the same category. I'm not going to try to go through all the different possible permutations of any announcement that might be in the Budget tomorrow night. I think people understand where Labor is coming from. We want to prioritise people on low and middle incomes; we want to prioritise closing down some of those big tax breaks, which overwhelmingly favour the wealthiest in our community; and we want to properly fund our hospitals and schools. I think if you look at what Malcolm Turnbull and Scott Morrison have proposed to date, and what they will likely propose tomorrow, they will never properly prioritise low- and middle-income earners in this country; they will never properly invest in health and education; and they will go to the wall to defend big tax breaks for property speculators and family trusts and dividends imputation and all those sorts of things. I think the Budget tomorrow night will be all about Malcolm Turnbull's tax handouts for the top end of town, and so will the election that follows it.
JOURNALIST: Hypothetically, if Labor was in Government at the moment, what would you do with the revenue spike that we are currently experiencing?
CHALMERS: Unfortunately we're not hypothetically or otherwise in government at the moment, if only that were different!
JOURNALIST: Or if it were the exact same case?
CHALMERS: We would take a far more responsible approach to what's going on right now. The Government has got billions and billions of dollars rolling through the door at the moment. Chris Richardson described it as a "humongous improvement" to the Budget. The Budget is really benefiting from the best global economic conditions for a decade or so, and so they've got billions and billions of dollars rolling through the door and they don't have any remaining excuses for the fact we've got record debt in this country and net debt has doubled on their watch.
JOURNALIST: So Labor would bank it?
CHALMERS: We would take a far more responsible approach right across the Budget by saying to the low- and middle-income earners of this country that we can deliver tax relief for you in a more responsible way because we've taken difficult decisions elsewhere in the Budget. So working people will always be better off under us, and the Budget will be on far more stable footing under us as well.
JOURNALIST: But at the last election, contrary to that rhetoric, Labor actually posted an election costing that showed deeper deficits over four years. Are you going to do that again at the next election?
CHALMERS: I'm glad you asked me about that, David. You will recall, having watched this as closely as anyone, that immediately after the election something like $11 billion or so of the so-called zombie measures were dropped by the Government. So that gap was never really a credible one between what Labor was proposing and what the government was proposing, and they ended up ditching a big chunk of those savings measures and we call on them to ditch some of the remaining so-called zombie measures tomorrow night as well. We will go to the election with a more responsible approach than the Government because we've taken difficult decisions at great political risk to ourselves frankly, by putting them out so far before an election. I think when we go to the election we will be the more responsible party in the contest. The Liberals will be the party of tax breaks for the top end of town, which is smashing the Budget. They will be the party that said they will fix the so-called debt and deficit disaster when debt was at $175 billion, and it is now twice that. So people can make their assessments. I'm supremely confident that we will have the more responsible offering when the election rolls around.
JOURNALIST: Just on the different issue, Katy Gallagher has a High Court decision on Wednesday, any views on that?
CHALMERS: Katy Gallagher is a terrific colleague, and we've only got a couple of days to wait now to hear what the High Court has found about her situation. I obviously won't predict or pre-empt what the High Court might say about her eligibility. That's a mug's game, as the Prime Minister learned when he confidently predicted that Barnaby Joyce would be found eligible to sit in the Parliament. Of course, that went a very different way. I'm not going to predict or pre-empt the High Court. I will say that Katy really is just such an extraordinary person and an outstanding colleague. I hope Wednesday goes well for her because she has made for a long time a very positive contribution to the politics of this town and to the nation beyond.
JOURNALIST: If she is unsuccessful, would Labor resurrect the motion of a multi-MP appearance in front of the High Court?
CHALMERS: I'm not going to get into the various scenarios and how they might play out. I'm not going to predict or pre-empt the High Court decision on Wednesday. Obviously there are different scenarios that are possible out of Wednesday and we will have more to say about it once we know what the decision is.
JOURNALIST: Jim Chalmers, there's been a lot of talk about Newstart and there's now been a motion flagged at conference to increase Newstart. Labor is of course reviewing it, but do you agree with your leadership team that it is manifestly inadequate at the moment and some kind of increase will have to be instituted by Labor if it wins power?
CHALMERS: We've said for some time that we think Newstart is too low, principally because it actually makes it harder at that level for people to find work. We've said that we want to do the job properly. We want to review Newstart adequacy. We think the best way to do that would be in the first term of a Labor Government. Yes, we are all as one on that issue. It will come up at national conference, as you flag, but I think from Bill Shorten right down through our show, we've recognised that for some time and said so publicly.
JOURNALIST: Peter Dutton has been demanding Labor explain its position on border protection. Can you explain what this 90-day limit is all about?
CHALMERS: They can't be too proud of their Budget if they wheel out Peter Dutton the day before it's released to tell his usual lies about Labor's position on border protection. Peter Dutton was up there telling his usual lies earlier on today. Peter Dutton is a walking-talking billboard for the people smugglers. Our position on border protection is very clear and very strong. We believe in offshore processing; we believe in regional resettlement; we believe in turnbacks where it is safe to do so. Peter Dutton knows that and he intentionally lies about it, but the unfortunate impact of those lies is it signals to the people smugglers that they should get back into business. That really is a very damaging thing for him to be on about. He should be spending more of his time negotiating a resettlement agreement with New Zealand than telling lies about Labor's policies, when the only effect of his lies is to encourage the people smugglers to get back into their vile business.
JOURNALIST: But what would happen after that 90-day limit, if it was implemented? Where would they go? Would they inevitably be resettled on the mainland, or at least put back into the Australian mainland?
CHALMERS: You're talking about an issue that will be before the national conference, which Shayne Neumann and others have commented on. The point that I am making is that he can wave around draft platforms all he likes; he can tell all the lies he likes the day before the Budget. Our position is really clear. We have got a strong approach to border protection. We believe in regional resettlement and offshore processing and turnbacks where it is safe to do so. Any other announcements made about border protection will be done by the relevant shadow minister.
JOURNALIST: Just back on the Budget, putting aside your opposition to the company tax cuts, do you at least think that perhaps the Government should be commended for achieving what some economists are calling the hat-trick by cutting income taxes, increasing spending and what is expected to be an early return to surplus?
CHALMERS: (Laughs) Wow. Where to begin with that? The reason we have got billions of dollars flowing into the Budget is not because of some economic genius from Scott Morrison, but because the global conditions have become so favourable. We have the strongest global conditions for a decade or so and that means billions of dollars are rolling through the door. Despite that, we have still got record debt; we still have debt twice as much as what they inherited from Labor. So I don't think they should be rushing to pat themselves on the back. Remember on tax relief, they were the same characters who were trying to jack up taxes on seven million workers only a week-and-a-half ago. They have all kinds of issues right through the budget so no, I wouldn't share your assessment.
JOURNALIST: Just locally for Brisbane, would you welcome the confirmed infrastructure funding for Brisbane Metro?
CHALMERS: If the Government was serious about funding infrastructure in Brisbane they would fund the Cross River Rail project. Labor has come to the table with a $2.2 billion commitment, because we can see how important it is; not just the inner city but, more importantly, for the outer suburbs because of the improvements it would make to the network. I think any infrastructure plan for Brisbane which doesn't include the Cross River Rail project really falls well short. More broadly, this is a Government which has slashed infrastructure spending. There will be announcements in the Budget, of course, but they are well-known for making announcements far down the track and funded by others and ignoring those ones which are ready to go like the Cross River Rail. Thanks very much.
ENDS
