E&OE TRANSCRIPT
TELEVISION INTERVIEW
SKY NEWS AM AGENDA
THURSDAY, 4 APRIL 2019
 
SUBJECT/S: 2019-20 Budget; Budget Reply; income tax cuts; NDIS

LAURA JAYES: Let's bring in Jim Chalmers, the Shadow Finance Minister. On the tax relief for those under $40,000, how much tax do those under $40,000 actually pay at the moment?
 
JIM CHALMERS, SHADOW MINISTER FOR FINANCE: It depends on their level of income, but obviously most of them are on that lowest tax threshold. And what we're saying is that for 2.9 million working Australians, they were largely left out of the Budget on Tuesday night.
 
JAYES: But how much tax do they pay on average? It's about $1000.
 
CHALMERS: It depends on their level of income, obviously, but they're on that lowest tax bracket. And true to form, Scott Morrison and Josh Frydenberg and the Liberals, those people don't get a look in in the Budget. So we want to fix that. More broadly I think, there are differences on tax, and a lot of the commentary this week has been about how the Liberals largely matched our policy for people on middle incomes, and we obviously support that. We support those tax cuts which would go through for the 1st of July this year. But there are big differences at the other ends. And we think that people earning up to $40,000, predominately women - 57 per cent women - a lot of them working mums working part time. We think that they deserve a fair go, and we don't think that the Government should be prioritising people on $200,000 and $300,000, which is what their tax package does.
 
KIERAN GILBERT: Their package would see a retail worker on $35,000 a year get $255 in tax relief compared to $350 in Labor's original plan. How much are you going to bump that up by? Will you go further tonight?
 
CHALMERS: We'll release all of the numbers tonight. But we will do better for those workers, and that's a good example. That worker that you mentioned gets $255 a year from the Government. If you're on $200,000, you get $11,000 a year from the Government. There's big differences.
 
GILBERT: But that person might also get family payments and that sort of thing at that level, wouldn't they?
 
CHALMERS: Of course. But that doesn't mean that they don't deserve a fair go in the tax system. Scott Morrison with his usual rhetoric is always talking about a fair go. He wouldn't know the fair go if it hit him in the face. The fair go means people on low and middle incomes get tax relief before people on $200,000 and $300,000. That's the difference between the Liberal Party, which always looks after the top end of town, and the Labor Party, which will always look after battlers in our community.
 
JAYES: But if you're talking about fairness in the tax system, those earning under $40,000, they do deserve tax relief, absolutely. But they get things like family payments and child care subsidies. So, do you know how many are actually net beneficiaries of the tax system, rather than net contributors? They wouldn't pay much tax when you take into account all those payments.
 
CHALMERS: I think to some extent that's beside the point. For two reasons - we want to prioritise people on low and middle incomes...
 
JAYES: Why? If they're not paying tax, why should they get tax relief? Is it essentially a way for you to boost the wages of these people with a direct subsidy almost?
 
CHALMERS: That's what I was about to say. So there's two reasons to do it. First of all, it's fairer when there's tax relief to go around, you prioritise people on low and middle incomes. But secondly, there's an important economic reason to do it. And that is that people on low and middle incomes are more likely to spend their money in the economy. If you look at the Budget on Tuesday night, which downgraded growth, downgraded wages, and downgraded consumption - consumption's the majority of our economy - if we want to get this floundering economy moving again, we need to give people disposable income growth. And that means making sure people who are more likely to spend it in the economy are the first port of call when it comes to tax relief.
 
GILBERT: Labor won the fairness debate over the last year, but the Government's neutralised you on that, haven't they in terms of their move this week?
 
CHALMERS: (Laughs) No.
 
GILBERT: Well they've doubled the low and middle income offset.
 
CHALMERS: I don't think so. The difference is, Australians will judge this Government not on what they say six weeks out from an election; they'll judge this Government on six years of cuts and chaos. Australians have known consistently that this Government will always prioritise the top end of town at their expense. They have known that every day for the past six years. The difference between the Labor Party and the Liberal Party is we care about people on low and middle incomes every day. This Government just pretends to when there's an election in the offing.
 
GILBERT: Why will you essentially have a 49.5 per cent highest marginal tax rate? Is that fair?
 
CHALMERS: Our Budget Repair Levy is designed to be in place until we have strong, sustainable surpluses...
 
JAYES: OK, what's that? Sorry, I don't want to interrupt you, but I just want to know what a strong, sustainable surplus means. It's going to be $7 billion next year according to the Government's figures. You're promising to go further than that. So say it's around $10 billion, maybe? Maybe more or less? Is that a strong sustainable surplus in your view?
 
CHALMERS: It's best to think of it in terms of the proportion of the economy. Our rough rule of thumb, and these things are not set in concrete, but our rough rule of thumb, has previously been one per cent of GDP, which we don't hit until 2026 or 27 on the Government's most recent figures. But the Budget Repair Levy is still important for two reasons. One, the surplus which is forecast, not delivered, as Josh Frydenberg has told you many times, forecast for the end of next year is $7.1 billion. It's built on a big underspend in the NDIS. It's built on heroic assumptions for wages. It's built on all of these sorts of things, and there's a lot of global uncertainty. So we need to make sure that we can get the Budget on a strong, sustainable path. That's what our tax reforms are all about.
 
GILBERT: This tonight, potentially, would give you an extra $150 billion of wiggle room if you don't back stages two and three, that's across 10 years and that's on top of the $200 billion you've got through your other tax measures. Is that figure right? $150 billion more that you would have in terms of room to move?
 
CHALMERS: We haven't gone through our usual processes the decisions about the later stages of the Government's tax plan. But we've made our view pretty clear for some years now that we don't think if you're on $200,000 or $300,000 a year that you should be getting $11,000 a year tax cut. But we'll go through the usual processes. We'll reconcile all of the numbers. But we will take to the election a more responsible approach to the Budget than our opponents. That's because we are making the tax system fairer. We do want to pay down debt, which has doubled over the last six years under the Liberal Party. And we do want to make room for our other priorities - hospitals, schools, TAFEs, universities, three-year-old kindy. 
 
GILBERT: Given all that room to move, as Laura said there, in terms of the top rate, are you still concerned about that sort of aspirational voter? Because if you're on $180,000 a year now, or $150,000, you want to earn $200,000, don't you? So that's that whole notion that John Howard tapped in to.
 
CHALMERS: The word "aspiration" has been ill-defined by the Liberal Party. The Liberal Party doesn't understand aspiration. Aspiration is looking after your kids, making sure they've got a good start, they go to good schools. When they're sick, they get looked after. To make sure when you work hard, you get rewarded for it. That's aspiration, and Labor is the party of aspiration. And that's because we believe in social mobility, we believe that you should have the opportunity to work hard and get ahead. The Liberal Party talks about aspiration as if they've learned it from a focus group, but in the Labor Party we understand it, we feel it in our communities. That's the difference.
 
JAYES: What do you offer those earning above $125,000-$126,000 a year? Is it wrong to say that Labor has really drawn a line in the sand here and that's the dividing line between rich and poor? Because that seems to be where your policies focus, under that line.
 
CHALMERS: I'm glad you asked me that, Laura. And we get asked that from time to time. I think if you're on a good wicket in this country, good on you.
 
JAYES: But what's a good wicket? 
 
CHALMERS: I'm not going to put a number on it, but if you've studied hard and worked hard and you have a great job and it's well paid, I say terrific. My job as the Shadow Finance Minister and hopefully one day the Finance Minister, with Chris Bowen and others, is to look at a Budget which is pretty tight and work out what the priorities are. Nobody can accuse of not making our priorities clear. Our priorities are people on low and middle incomes. Our priorities are hospitals and schools and universities and TAFEs. That's what we think are the most important things that we can spend public money on. The other guys think that the most important thing to do is to shower largesse on the top end of town and hope that it trickles down.
 
JAYES: But what is the top end of town? Who are you speaking to when you say that?
 
CHALMERS: Clearly, someone on $300,000 or $400,000 does not deserve a much bigger tax cut than people who are battling week to week. That's our view.
 
JAYES: But what about below $180,000 or $126,000?
 
CHALMERS: I'm not going to put numbers on it. I don't think that's a useful exercise.
 
JAYES: But you do put numbers on it in terms of where you target this tax relief. So there are numbers on it, you're just not really willing to say that.
 
CHALMERS: No, no, our view is that if you're on a low or middle income, then you deserve tax relief before people on the very highest incomes. 
 
GILBERT: You mentioned before the NDIS. Do you commit to returning every dollar that's been removed? There's an argument that it's been $1.6 billion...
 
CHALMERS: That's not an argument, that's a fact. 
 
GILBERT: No, you're right. That number has been reduced by that figure. So will you put all of that back in?
 
CHALMERS: It was a $3.4 billion underspend this year, and it's forecast to be $1.6 billion next year - it could be bigger or smaller than that. That is an enormous amount of money, and the main reason for it is because people are being forced to wait longer for the care that they were promised. There were a lot of reasons for that. I heard Tanya Plibersek on your program a little while ago rightly identify the staffing cap that the Liberals have put on the NDIA, and that's a big problem.
 
GILBERT: Will you reverse that?
 
CHALMERS: Yes, we'll reverse that.
 
GILBERT: And people will get the services when they need them and therefore there won't be the underspend. Do you commit to that?
 
CHALMERS: We are going to make the NDIS better. We're going to take the staffing cap off, that will be part of the fix. We will obviously have an open mind to all of the ways that we can fix the NDIS. But the first step is to actually listen to people with a disability. The Government spent all of these years saying that the costs had blown out. We now know that's a lie. The costs were actually coming in under what were forecast. We don't want to make people wait longer than they were promised.
 
GILBERT: That health announcement that's coming tonight, how big a thing is this? Because we've been told there was a big health announcement.
 
CHALMERS: (Laughs) I like it how Kieran puts that in the end like "oh by the way, while I've got you..."
 
JAYES: (Laughs) Yeah, by the way... I liked it!
 
CHALMERS: You have to tune in tonight, Kieran.
 
GILBERT: C'mon!
 
JAYES: (Laughs) So, no?
 
CHALMERS: Tune in tonight. We've always made a priority of health. It's one of our highest priorities. You'll hear more about it tonight. People on Tuesday night...
 
GILBERT: How much? How much will it cost?
 
CHALMERS: (Laughs)
 
JAYES: (Laughs) Sorry, what did you say?
 
CHALMERS: People on Tuesday night were crying out for a leader who understood their concerns in health and education, energy costs and climate change and wages. They didn't get it. They'll get it tonight.
 
JAYES: We can keep it between us.
 
CHALMERS: (Laughs)
 
JAYES: No? OK. Jim Chalmers, thanks so much appreciate it, we'll see you soon.
 
CHALMERS: Thank you.
 
ENDS