LAURA JAYES: Let's bring in Jim Chalmers now as the Shadow Finance Minister. He joins us live from Brisbane this morning. Jim Chalmers, thanks so much for your time. First of all will you support the Government's latest move to bring in these fast-tracked small business tax cuts by 2021?
JIM CHALMERS, SHADOW MINISTER FOR FINANCE: We'll have a discussion about it internally Laura. We will come to a position in the usual considered way. There is still a lot of detail which hasn't been provided including how the Government intends to pay for these tax cuts. We'll weigh up the policy that they're proposing today against all of the other priorities we have. We also have to consider, as the more responsible participants in this conversation about fiscal responsibility, we also need to consider that debt has doubled under the Government. There are a lot of priorities that we need to pursue as a nation including preschool for three-year-olds, including that that game-changing investment that Tanya and Bill announced yesterday into schools. We will weigh all of that up and come to a considered position in due course.
JAYES: OK, but this is going to be introduced into Parliament next week so you don't have that long to weigh it up. When will you come to a decision and do you note that there has been some saving made by the Government not going ahead with the corporate tax cuts at a higher level so the hit to the budget is perhaps $2 billion rather than 3.4?
CHALMERS: Well, there is plenty of time for proper consultation and consideration and to take this through our usual processes before we'd be called upon to vote on it in the Parliament. You're right that part of the money could come from the abandonment, for now at least, of the company tax cuts for bigger businesses. I would make the point that Scott Morrison's Plan A, Plan B, Plan C has always been to give the biggest tax cuts to big banks in this country and foreign multinationals and I think if he wins the election that will come back on to the table. We have to factor that in too. Even taking in to account now the temporary abandonment of that part of his tax plan that doesn't completely offset what they're proposing here. We want to be comfortable that it won't come at the cost of more cuts to hospitals and schools, which has been Scott Morrison's form to date. All of those details will come to light in due course and we'll have a proper conversation of those and come to a decision, which will be a responsible decision which weighs up all our priorities.
KIERAN GILBERT: That's fine to weigh up the priorities but it's the pragmatic view you've got to have as well. There's an election no later than May and it's a big call isn't it, in a political sense, for an opposition to say we're going to wind back tax cuts already legislated?
CHALMERS: We've got good form when it comes to making the big calls in this term of opposition. We've led the debate on economic policy. We've led the debate on tax reform. We've found the room in our alternative budget to make those game-changing investments in preschool and in schools, which will do so much not just for kids and their families but also for the broader economy. There was a study out of Griffith University, which showed that every dollar that we invest in education will return something like $21 in GDP for the economy. We've been very considered. We've done a good job of leading the economic debate. We will take our time to come to a position on what's being proposed today but to do that we need to know where the money is coming from, especially when debt has doubled under the life of this Government.
GILBERT: To say to a cohort, the small and medium businesses, which are largely Australian owned, that in a global environment, which is still quite uncertain. We've seen that on the stock market overnight on Wall Street and we will ask you about that in a moment too for your thoughts on that. In such uncertain time to say to them well we're going to increase your tax by 2.5% that is not only a big call but politically it's a dangerous one.
CHALMERS: Well we haven't come to a position yet on that, Kieran, for all of the reasons that I've explained. You're right to point out that the global economy is defined, really at the moment by uncertainty. We've had a remarkable period of global growth which has fed into our own economic numbers and our own budget numbers and helped the Government's budget considerably. But there is a lot of uncertainty too. In uncertain times you need to make sure that where we are investing public dollars we're doing that carefully and responsibly and we're doing it in a way that also lets us build up those buffers that we need in the budget in case the global economy does go south. That's the responsible approach that we've taken all along, really for five years now. That's the responsible approach we'll take as we carefully consider what's being proposed today.
JAYES: I know you're going to consider this with your colleagues Jim Chalmers, but what's your view? Do you think it is possible that Labor goes to the election promising higher taxes for big business?
CHALMERS: I don't speak to my colleagues through the media Laura, as I'm sure you appreciate. We'll have a proper conversation about it. I'll make my views known there. I've given you an indication of the sorts of things that we will weigh up. Yes we've always preferenced small- and medium-sized businesses over Scott Morrison's top priority, which is to give billions of dollars to the big banks and foreign multinationals. We've always said that small business are a higher priority than big businesses but we've got to weigh that up against all of those other considerations: the fact that debt has doubled under this Government: the fact that we've got to make room for priorities like schools and preschools and hospitals and all of the other aspects of Bill's Fair Go Action Plan.
JAYES: Bill Shorten is particularly vulnerable on this issue. There is some recent history here that he made a captain's call then he was later rolled by Shadow Cabinet about where the threshold would be for small business. Will you look at this as well, this new plan by the Government, I know you want to consult your colleagues but for example 2.3 million businesses with a turnover of less than $5 million would get this plan. Is there a chance if you don't want to go through the whole package that you could split it out and support those small businesses with a turnover under $5 million?
CHALMERS: We'll have a conversation about what's being proposed today Laura. I don't really intend to go through all of the various possibilities and I don't accept the way you've described...
JAYES: But you’re not ruling it out?
CHALMERS: I don't accept how you've described how we came to our position. I think we take these decisions collectively, we take responsibility for them collectively. We landed on a position that we would maintain the tax cuts for small and medium businesses that had been implemented by the time that we came to office, in the event that we were elected at the next opportunity. There are lots of different permutations that we can consider and we will do that. First things first, we need to know how the Government will pay for it. They've got record debt, which is twice what they inherited so they have a responsibility to tell the Australian people whether these tax cuts for small businesses come at the expense of more cuts to hospitals and schools.
GILBERT: Just before you go, I do want to get your thoughts on this drop on the Dow, down more than 800 points, more than three per cent. Tech stocks obviously were a large part of that but it seems as well that the markets are a bit rattled, understandably Jim Chalmers, by the spiralling trade war between the US and China?
CHALMERS: I think that is part of the story Kieran, but there is also a story there about American interest rates, which is important as well. The global economy is defined by uncertainty. Not just China-US but also what's happening on the Korean peninsula, what's happening in Europe and particular in the UK with Brexit. All kinds of political turbulence in countries like Brazil. Right around the world we are seeing a lot of uncertainty and the markets are reacting to that as we would expect them to. What has been unexpected to date is that the global economy has been remarkably resilient and that's why we've got billions of dollars rolling into the federal Budget. That's why we've got, at the headline level at least, some relatively strong economic data here in Australia. Our responsibility as the alternative government in these uncertain times is to do what we can to build up those buffers in the budget. That means making the tax system fairer, it means paying down debt which is at record levels, and it means making room for the things that we as a society truly value, which is educating our kids, giving them the best possible start in life.
GILBERT: Shadow Finance Minister, Jim Chalmers live from Brisbane, we'll talk to you soon.
