E&OE TRANSCRIPT
DOORSTOP

PARLIAMENT HOUSE, CANBERRA
THURSDAY, 15 JUNE 2016

CHRIS BOWEN, SHADOW TREASURER: Well thanks for coming. I'm pleased to be joined by the Shadow Minister for Finance Jim Chalmers today because tomorrow Australia will pass an economic milestone and it is not a good one. Tomorrow gross debt will pass half-a-trillion dollars, under the watch of Malcolm Turnbull and Scott Morrison. Now of course, this is a Government which told us that if debt was the problem, more debt is not the answer.

A Government which told us there was a debt and deficit disaster and on their watch this has happened. This wasn’t what the Australian people were promised in 2013. Jim will go into more detail about the debt situation. Of course the Government will say, “Well it is net debt that counts” but even on net debt, and I agree that net debt is a very very important measure but even on net debt it will peak at a level not seen under any Labor Government in history apart from the financing of World War II.

The real question is what will the Government do about this going forward? Well they had the chance to do something about it. First thing they should do is drop their corporate tax cuts. At this time when we are dealing with this debt issue, they are proposing $65 billion worth of corporate tax cuts over the next 10 years. They should embrace Labor’s plan on income tax which raises more money in a fairer way and makes sure that people are paying according to their capacity to pay.

They should embrace negative gearing reform as is being called for now by group after group and expert after expert. Negative gearing reform will help the budget, help housing affordability and help financial stability and this Government refuses to act.

They should embrace capital gains tax reform, superannuation reform and embrace Labor's policy of a cap on the tax deduction for managing your tax affairs. We say that higher income people can spend as much as they like on accountants and lawyers fees but the Australian taxpayer should only subsidise up to $3000 a year. These are some of the ideas that Labor has proposed and will implement in office if the Government doesn’t do so but the Government should act before Labor comes to office, the Government should act before Labor comes to office because the need for change is now. But of course an incoming Labor Government will deal with these things should we receive a mandate from the Australian people at the next election. I will now hand over to Jim and then of course we're happy to take your questions.

JIM CHALMERS, SHADOW MINISTER FOR FINANCE: Thanks very much Chris. Tomorrow when the Turnbull Government crashes through half-a-trillion dollars in gross debt, it will be the first time in Australia's history that debt has been that high. So we’re seeing record debt under the Turnbull Government. Gross debt today is $499.3 billion; there is an $800 million issuance tomorrow which will see it break through that inauspicious barrier.

We do have a debt problem in this country and the Government's entire reason for being was to pay down that debt, so they are failing the test they have set for themselves. When gross debt was projected to be $300 billion, Malcolm Turnbull described it as “gigantic” and “frightening” and “an almost inconceivable level of debt”. Today we call on him to describe what half-a-trillion dollars in gross debt is under his Government.

The problem is that when it hits half-a-trillion dollars tomorrow, gross debt keeps climbing – $606 billion by the end of the forwards, $725 billion after 10 years and continues to rise with no peak in sight.

After four years of Abbott and Turnbull, it is long past time for them to accept responsibility for skyrocketing debt, to admit that when it comes to debt, they are part of the problem, and not part of the solution. As Chris said, if they were serious about arresting this skyrocketing debt, they would ditch their $65 billion gift to big banks and multinationals, they wouldn’t be giving a tax cut to millionaires and they would be proceeding with some of our sensible and considered tax reform measures as well.

Tomorrow when debt crashes through half-a-trillion dollars, it will be on Malcolm Turnbull and Scott Morrison and Mathias Cormann and they should not try to blame anyone else, especially when you consider that the pace with which the debt that has been accumulated is faster per month under this Government than it was under Labor – and under Labor we had a Global Financial Crisis. Morrison and Cormann and Turnbull have no such reason for their fiscal failures.

BOWEN: Thanks Jim, over to you folks.

JOURNALIST: The Treasurer says that from 2018/19 all new debt would be paying for infrastructure and defence capital etc. Is that a good enough response?

BOWEN: One of the great somersaults with pike in Australian history I think, the Scott Morrison good debt, bad debt conversion. I don’t remember the Liberal Party talking about good debt, bad debt, when they were saying the things Jim referred to when debt was $300 billion. Now on good debt, bad debt we have said very clearly that of course infrastructure investment is good thing and of course more transparency in the Budget is a good thing and Jim has led that debate in many respects. But of course not all recurrent expenditure is not an investment as well. Recurrent expenditure investing in schools is an investment in the future as well. I think what Scott Morrison is doing is setting up an excuse and an alibi for his failure when it comes to debt, he doesn’t actually believe in infrastructure. If he did, there would be more infrastructure projects in the Budget. He had a $10 billion rail fund in the Budget, he wrote out a list of projects and he did not fund one of them. Not one dollar. A Budget isn’t to talk about what projects have potential. Budgets are to announce what projects are getting funded, and he hasn't done that. The biggest on Budget infrastructure project in the Budget was the Collector Road and with all due respect to the Collector Road, not a piece of nation building infrastructure.

JOURNALIST: The Government says it won’t draw down on the Future Fund until 26/27. Would you do so earlier?

BOWEN: Again, we called on the Government to take a very prudent approach in advance of the Budget. I’m going to get Jim to add what we called for. We do think the future fund should be very prudently managed and protected.

CHALMERS: We do support the announcement made by the Government in the Budget. As Chris said, we did call in advance for them to take into account the fact that the liabilities weren’t fully funded into the future and that a responsible decision needed to be taken. The deadline for that decision was Budget night. They announced their decision and we’ve got no beef with it.

JOURNALIST: So they are using some of this money to fund the super liabilities that’s what they are saying. Some of this debt will be used to fund super liabilities until that period.

CHALMERS: When you don't pay it from the Future Fund inevitably you pay it from debt but that is not the reason for this blowout. We should not pretend that it is.  And to go to your question before Colin, as well: Scott Morrison is referring to net debt. You can pick any measure of their fiscal incompetence. The deficit for the coming year under Scott Morrison is more than ten times bigger than it was projected to be under Joe Hockey. So on deficits, on net debt that you refer to, on gross debt which crashes through half-a-trillion dollars tomorrow, you can pick your measure. These are the tests that this Government set for themselves and they are failing their own tests.

JOURNALIST: Just briefly on citizenship, Mr Bowen, I know that you haven’t seen the legislation yet, you will later today, but Tony Burke said this morning that he had concerns that in effect there would be a second class citizenship category created by these laws, do you share those concerns?

BOWEN: Well of course I think Tony has done a very fine job on this issue in the face of the Government politicising the issue of citizenship, demanding that Labor support legislation without showing it to us. I think today it's a good thing that we will finally see this legislation that the Immigration Minister has been standing at the dispatch box bellowing about Labor voting for legislation he hadn’t introduced and that we had not seen. We will of course now take the opportunity to examine the legislation and take it through our normal party processes but I think that Tony has very eloquently outlined the sorts of tests and issues that we would look at in terms of considering our position on this legislation.

JOURNALIST: (inaudible)… indication from the Government on your request that they delay for a year the GST on low value threshold?

BOWEN: Well I flag we will move those amendments in the Senate and we will move whenever it comes up in the Senate whether it is today or next week. I am a humble member of the Lower House so couldn’t comment.

JOURNALIST: Hasn’t Scott Morrison’s office talked to you about it?

BOWEN: We have engaged with Senators across the board. I would hope the Senate would adopt our amendments and I hope if they pass the Senate the Government will accept the will of the Senate. This is an interesting case study. Sometimes we get questions from you and members of the community, why can't there be more bipartisanship? Here is an issue where the Labor Party has said well, we will support the Government. We do think the threshold should be zero. This is important for small business, it’s good for the states and the Government has still managed to botch the implementation. I mean the Treasurer has got this utterly wrong and it’s the 15th of June, it’s meant to come in on the first of July and the legislation hasn’t passed Parliament and it's a measure from the last Budget, not this year’s Budget, the year before. So we've taken the sensible approach of recommending and flagging that it will move in the Senate as I said, a twelve month delay, done reluctantly because of Scott Morrison’s incompetence, and a Productivity Commission review of the implementation model in the meantime, that's what I will be moving. What the Liberal Party does about that is a matter for the Liberal Party.

JOURNALIST: George Christensen and Rebekha Sharkey have proposed an amendment to the protection of penalty rates for weekends, that would see less power given for unions to bargain for week day rates. Have you seen that and is it likely that Labor would support that?

BOWEN: We support the protection of penalty rates. That’s our position. Pure and simple. The Government supports a pay cut for Australians. We say the time of record low wages growth, this is the worst time, there is never a good time to be cutting wages and this is the worst time and anything else is frankly a distraction from the issue that on the first of July, workers who commit no crime other than work on a Sunday will take a pay cut. Malcolm Turnbull is letting that happen. He could stop it. He has let it happen because he is out of touch. Everything else is frankly a distraction from that issue.

JOURNALIST: You’ve got one member of the Government though breaking away from the Government’s suggesting a way of protecting penalty rates with some changes.

BOWEN: Well I would encourage George Christensen to simply support penalty rates. Pure and simple. 

Thank you very much.

ENDS