E&OE TRANSCRIPT

TV INTERVIEW

SKY NEWS, AM AGENDA THURSDAY, 27 JULY 2017

SUBJECT/S: Citizenship, tax reform, inequality

TOM CONNELL: Joining me now is the Shadow Finance Minister Jim Chalmers from our Brisbane studio. Jim Chalmers, thanks for your time today, now I suppose the key lesson in all this citizenship stuff is you can't really guarantee Labor doesn't have a similar issue. I'm assuming you yourself have made any checks if you needed to.

JIM CHALMERS MP, SHADOW MINISTER FOR FINANCE, MEMBER FOR RANKIN: We've got really robust processes Tom in the Labor Party. In my case, I think both my parents' families have been in Australia since the middle of the nineteenth century. I was born and bred in my own electorate, so I'm pretty confident that I'm in the clear. I think the lesson from the last couple of days, and certainly Matt Canavan's case, is that the Prime Minister knew about this for a couple of days before that announcement was made. If there are any other Coalition MPs in the same boat, as Matt found himself in, I think it's important that the Government, the Prime Minister, come clean and say who else might be at risk.

CONNELL: They did of course want to wait for confirmation though, that's fair enough isn't it? If Labor had an issue I'm sure they wouldn't do it before they'd checked if that actually was the case.

CHALMERS: The point I'm making Tom is that this is an extraordinarily chaotic process from the Government, especially after being so critical of the process in the Greens Party. I just think the country would like a bit of certainty. What's been created here is a whole lot of uncertainty. If there are other Coalition MPs in the same boat we should hear about it. Of course Matt Canavan's case now goes to the Court of Disputed Returns and so we await the outcome of that process. But I think it's not good for the system to have all of this kind of uncertainty. To the extent that others may be in the same position we should know about it.

CONNELL: I want to ask you about trusts. Now obviously we're going to wait and see what's announced on Sunday. But can you just give us an insight into who's been consulted to make sure there's not going to be unintended consequences of whatever Labor intends to move on here.

CHALMERS: Well as you indicate Tom, there's been no announcement on trusts. What we've been saying all week and what we've been saying indeed for a couple of years now, is that when the Budget's in the mess that it is under this Government and we've got a tax system that is unfair, it makes no sense to continue to give the biggest tax concessions to those who need them least. That's been our approach to things like negative gearing and capital gains, also the management of tax affairs. All of those kinds of policy areas, we've got a really good track record of looking at these areas and dealing with them. In the course of that, obviously, there's consultation, there's discussions both internally and externally but I don't intent to go into any announcements that we may or may not make in the coming weeks and months.

CONNELL: You mentioned unfairness, there's still unfairness in the tax system. So what is that specifically?

CHALMERS: I was just pointing out Tom that that's been the approach that drove us with negative gearing and capital gains and the management of tax affairs. I think any objective observer of our tax system would conclude that when the Budget's a mess - we've got gross debt going through half a trillion dollars for the first time in Australia's history - and we've got a tax system which doesn't necessarily do the best job of giving the tax concessions where they could do the most good, where they're most effective, where they go to people who need them most, that's a general observation we've been making for some time now. That's what guides us as we go through the tax system and we look at what else might be able to be done.

CONNELL: Clearly though Labor is saying there are other elements that are not fair. Can you make the case in a broad sense what you're talking about here? It's the people at the top end are getting more concessions then the bottom end? What are you saying specifically?

CHALMERS: As we've been discussing since Bill's very good speech last week, we do have a substantial problem with inequality in our society and in our economy. We won't get the economic growth that we need in Australia unless we grow together. One of the issues in play here is with limited taxpayer dollars, with a very, very tight Budget, we want to make sure that our investments are going where they can do the most good to boost inclusive growth, to reward people's efforts and to make sure that there's a decent social safety net for those at risk of falling behind. And I think on all three of those fronts, inclusive growth, wages and reward for effort, and the safety net, this Government's taking Australia in the wrong direction. Theirs is a recipe to make inequality worse not better. There are a lot of levers at the Federal level that we need to look at to make sure that we're not just making Australia fairer but that we're getting that right kind of inclusive economic growth as well. 

CONNELL: Their line obviously is you're not focusing enough on growth. Now the Government's most obvious policy on growth is a company tax cut which Labor disagrees with at least part of, but clearly there's an argument there that company's get a tax cut it will help growth. So, what's Labor's biggest pitch or best policy on growth?

CHALMERS: You're right to say that the Government thinks that we will get economic growth in this country from a $65 billion gift to big business and by cutting wages for people who work on weekends. I think that's, you know even the Commonwealth Treasury has said the impact of that tax cut would be negligible at best and many years down the track and nobody has convincingly shown that cutting wages for weekend work will boost growth. So that is the Government's approach. You asked me about our approach: what I would say is we will not get growth in this economy unless we have the demand that comes from decent wages, people being paid for their efforts, and we won't get growth in this economy unless we boost productivity. You boost productivity by investing in the genuine drivers of economic growth. That means people's skills in the training system and the education system. It means decent infrastructure like Cross River Rail. It means investing in research, the intelligent application of technology, like the NBN. All of these sorts of things are far more important to boosting inclusive growth in this country than that $65 billion gift to big business or cutting people's wages. 

CONNELL: You mentioned for example education, I mean the company tax cut only kicks in after a certain number of years when Labor put out modelling over its education during the election, I think the overall benefit was going to come in after eighty years. So that's long term as well isn't it? Do you have a short term growth strategy?

CHALMERS: There was a really important survey, in the same election campaign, of Australia's top economists and they said you would get a much more substantial growth dividend from investing in education than you would from the Government's proposal to give big companies a tax cut. That is our belief too. You're much better off investing in people. Growth in this country has to come from the bottom up not from the top down. That's how we get growth that people have a stake in, where people are rewarded for their efforts to compete and they've got the right way to harness the technological advances in this economy. That's far more important than a $65 billion tax cut which will damage the Budget and do very little to grow the economy.

CONNELL: We're right out of time. Labor frontbencher, Shadow Finance Minister Jim Chalmers, thanks for your time today.

CHALMERS: Thank you Tom.

ENDS