Sky News AM Agenda (28)

18 May 2017


SUBJECT/S: ACCC; need for a banking royal commission; Turnbull’s tax cuts for millionaires; Labor fully funded the NDIS; AAA credit rating; record low wages growth; bank levy


KIERAN GILBERT: The Shadow Finance Minister Jim Chalmers with us. Mr Chalmers, are you reassured by the Government's and Rod Sims from the ACCC's focus on the banks in terms of possible mortgage rate increases? These were laws, these price signalling laws put in place by the former Gillard Government.


JIM CHALMERS, SHADOW MINISTER FOR FINANCE: We do want to see the ACCC have the maximum powers that they can have and we want to see the ACCC use those powers when it comes to the banks. Obviously, all of these sorts of things are no substitute for a royal commission. But to the extent that they can help people get to the bottom of issues around mortgage pricing, interest rates pass-through then obviously that's a good thing.


GILBERT: You'd need your own monitoring of costs if you do get the royal commission up because the banks, you would imagine, are going to pay for their lawyers same way, aren't they? If you do win and hold a royal commission, they'll be passing those costs through.


CHALMERS: That remains to be seen, Kieran. I don't think that's necessarily a consequence of a royal commission. A royal commission will primarily get to the bottom of a lot of this bad behaviour that has been uncovered in the last couple of years and will recommend ways forward to prevent it happening again.


GILBERT: The debate about marginal tax rates, we've seen the suggestion from Mr Bowen yesterday that it will be an argument between one rise versus another rise in marginal tax rates. But there is scope, isn't there for the Government to undercut you here with tax cuts in an election year?


CHALMERS: I think a lot more will be said about income taxes between now and the next election. But as it stands, the choice that people will face at that election is between Malcolm Turnbull's plan to make multinationals and millionaires pay less while middle Australia pays more and our plan, which will have middle Australia pay less and multinationals and millionaires pay more. That's the choice that people will have at the election. It's not true to say that taxes across the board will be higher under us. For middle Australia, taxes will be lower and the way that we pay for that is to ensure that people who earn more than $180,000 a year pay a little bit more.


GILBERT: It depends where you define middle Australia though, isn't it? Because someone on $100,000 will be in Brisbane or Sydney - they're hardly wealthy in that sense, are they? Or high income earners given the costs in the eastern seaboard, so they're going to face higher tax under Labor if you win.


CHALMERS: Under both sides those over $87,000 will pay a bit more in the Medicare levy. What I'm saying is that if you make between $21,000 and $87,000, you'll pay less tax under Labor. If you make more than $180,000, you'll pay less tax under Malcolm Turnbull. That's really the choice it boils down to at the election.


GILBERT: What do you say, Jim Chalmers, to those in the disability sector who want certainty here in terms of funding for the NDIS? Will Labor be willing to compromise here to ensure that the funding is guaranteed? I know there's an argument as to whether or not Labor provided that funding in the first place, but in order to ensure bipartisan support for this into the medium and longer term, isn't it incumbent on both sides to give a bit of ground here to ensure the NDIS is funded?


CHALMERS: Obviously we want to see the NDIS fully funded. It was fully funded under us. The political lie, the political fabrication that gets told is that it wasn't. People should stop making that accusation because it's not true. When we get to funding the NDIS going forward, if the Government was fair dinkum about finding extra money for the NDIS, they'd start with that $65 billion tax cut. And what we say is the tax hikes on middle Australia in the Government's Budget are not about funding the NDIS; they're about funding that tax cut for the top end of town. The Government should be more honest about this. There are a lot of lies being told about NDIS funding. We designed the thing. Bill Shorten and Jenny Macklin and others designed the NDIS. Nobody is more committed to the NDIS than the Labor Party and people should stop pretending otherwise.


GILBERT: To a couple of issues now in relation to the Budget. I want to ask you about the banks as well in terms of foreign banks because I didn't ask you about that and certainly the Government's got its view as to whether or not they should face the bank levy. But first of all, the AAA rating - another tick of approval from Standard & Poor's that's making it a full-house when it comes to the ratings agencies.


CHALMERS: Well it was hardly a tick of approval Kieran, it's still on negative watch.


GILBERT: They've reaffirmed the rating.


CHALMERS: Well they're still very concerned about some of the forecasts in the Government's Budget, including that very important wages growth figure. We've got record low wages growth in this country, we've got record underemploymet, an unemployment rate as high as during the GFC, hours worked per person have never been lower. All of these factors mean that the forecasts for wages in the Government's Budget, which have it going from 1.9 at the moment, to 3.5 per cent growth by the end of the forwards, the ratings agencies and others including us are very worried about those forecasts. Because when wages growth is as low as it is, obviously that has implications for household spending, it has implications for the tax take and all of these sorts of things. So Standard and Poor's, they might have reaffirmed the rating, but they kept the Government on negative watch, because some of those measurements of wages and others appear to them to be a bit too optimistic.


GILBERT: And finally, going back to where we began in some senses on the banks - you want the foreign multinational banks to be levied, the same bank levy as our big four and Macquaire. The Government says they're not subject to the guarantee, the implicit guarantee that Government provides the big banks. Why do you think that foreign banks should be paying that levy as well?


CHALMERS: What Chris Bowen said yesterday at the Press Club is that we think that should considered. It could be considered as part of a Senate inquiry. One of the consequences of the Government rushing out this measure without thinking too much about it, without doing the necessary consultation is that some of these factors weren't sufficiently considered. So we think that could be part of the conversation. No doubt if you had a Senate inquiry, you could invite people to make their case. We won't oppose the bank levy, but we do have a range of questions that could be answered at an inquiry like that.


GILBERT: Shadow Finance Minister Jim Chalmers, appreciate your time. As always we'll talk to you soon.