ABC RN Breakfast 7/5/19

May 07, 2019

SUBJECTS: Marginal seats in Queensland; Morrison’s preference deals with Hanson and Palmer; Senate crossbench; Labor’s mandate to crackdown on tax loopholes; housing affordability; RBA rate decision; economy not working for working people; Liberals’ $77b tax cut for top end of town
FRAN KELLY: Jim Chalmers is the Shadow Finance Minister and Labor's Campaign Spokesperson. Jim Chalmers, welcome back to Breakfast.
KELLY: Before we get to Labor's planned tax changes, there are a string of marginal seats in Queensland which could turn this election, including seats like Capricornia where Cathy van Extel's just been travelling through, and Flynn, and Dawson. Do you expect the strong support for One Nation and Clive Palmer's United Australia Party we just heard there from a string of voters will erode Labor's chances of picking them up. Have you given up on those seats now?
CHALMERS: Certainly not, Fran. I think we'll be very competitive in regional Queensland, whether it's Capricornia or up and down the coast there. And the reason that we are is because, as I think Ken, Spencer and Alan all in Cathy's story talked about, there's a real issue and a real concern around wages. They don't want to see the kind of dodgy labour hire practices or the bad behaviour by multinationals. They don't want to see the dodgy visas which are undermining people's wages and conditions in regional Queensland. That's a really important factor that is playing into the contest. 
KELLY: Spencer and others also talked about preferring Pauline Hanson and Clive Palmer because they tell the truth, because they're honest. And this has been a problem for Labor on the Adani coal mine, about whether you're tell the truth or whether you're telling one story somewhere and one story somewhere else.
CHALMERS: Well even in Cathy's story there were mixed views about the impact of the Adani mine on the election.
KELLY: Of course. 
CHALMERS: I think it is because people take a broader view. They don't vote on just one issue. They vote on wages, but they also vote on whether or not we can make their hospitals and schools better, and whether we can fund childcare better, and all of these other important things. So I think the heartening thing about the story that we just heard from up in Capricornia is that there are a range of views that people are factoring in. Yes, people will from time to time toy with the minor parties. I would urge people to think very carefully before they do that. We don't want a three-ringed circus of Morrison and Palmer and Hanson. We don't a Coalition of cuts and chaos. Every time these people go down to Canberra they put their hand up with the Liberals, and the Liberals have done a lot of damage to regional Queensland.
KELLY: They might do a lot of damage to your plans too if you won Government and they're on the crossbench because you'll face a Senate crossbench which is from what we know so far is largely hostile to Labor's tax reform agenda. So if they don't let your tax changes through on things like negative gearing or franking credits, where will you find the money to pay for your promises on childcare and hospitals. Won't your fair go for all come to nothing?
CHALMERS: It remains to be seen, Fran, the discussions that we'll have with the Senate colleagues, whether or not they'll bear fruit. You play the cards you're dealt in the Senate, that's how it always has been and how it always will be. It's no surprise that Clive Palmer and One Nation want to side with the Liberals again. That's how they go about things, and Clive Palmer himself would be among the biggest beneficiaries of the tax cuts for top end of town, which are central to what the Liberals are taking to the election. So that's not a massive surprise.
KELLY: But it's not just Clive Palmer. It's One Nation, it's Centre Alliance, it's Cory Bernardi - all of these so far on the record as not supporting your franking credits or your negative gearing policy in its current form. 
CHALMERS: And no doubt all of those kind of discussions will continue, Fran.
KELLY: Are they going on already? Have you started reaching out to the crossbench to try to cut some deals?
CHALMERS: I haven't.
KELLY: Has anyone?
CHALMERS: It's entirely possible that the Senate colleagues have.
KELLY: Well do you know if they have or not?
CHALMERS: I don't know if they have, no. Our tax policies have been on the table now for some time - in some cases, for some years Fran - so there's been discussions obviously over that time. We've made it very clear for a long time now what our policies and plans are. One of the reasons that we did that, firstly, because we wanted the Australian people to have an opportunity to hold those policies up to the light and to judge us on them. And also because we want to seek a mandate in the election, and that's what Chris Bowen was saying yesterday in his debate which he won against Josh Frydenberg.
KELLY: Well he was saying that. I'll come to the mandate in a moment, but you can have all the policies and plans you like, but you won't necessarily get them through the Senate, and we know that. And the former Deputy Secretary of Finance, Stephen Bartos, says for instance the biggest question mark over Labor's Budget sustainability is successfully legislating its tax measures through the Senate. So, if you can't get them through in their current form, are you prepared to negotiate for instance on your franking credits? Would you have a better chance of getting some of the change through if you grandfathered all of the people who currently receive the credits. Are you prepared to compromise?
CHALMERS: No, our intention is to implement the policies that we're seeking a mandate for. And of all of the things that you can say about Labor, Fran, you couldn't say that we haven't been upfront about some quite difficult and quite courageous tax changes that we are proposing to better fund hospitals and schools and infrastructure and childcare. 
KELLY: Sure, but when has that cut it in the past? I mean, Malcolm Turnbull went to the last election campaigning for corporate tax cuts. Labor didn't support them. He was upfront about them. You didn't give him that mandate.
CHALMERS: What we've said, Fran, is that this is what we intend to do. We intend to speak with Senate colleagues about it. It's the reality of politics in Australia that you need to get your changes through the Senate. That's self-evident. We'll put our changes out there. We'll argue for them, we'll have the necessary discussions, but we intend to pass the tax changes that we proposed and took to the election.
KELLY: Let me try one more. Pauline Hanson and Centre Alliance are on the record already as not supporting your plan to limit negative gearing to new homes, but they are open, they've already said, to capping the number of investment properties that could be negatively geared, possibly around two. I know some years ago Labor looked at that option, would you be prepared to revisit that?
CHALMERS: We intend to legislate the plan that we're taking to the election. 
KELLY: You're listening to RN Breakfast. Our guest is Jim Chalmers. He's the Shadow Finance Minister. Chris Bowen, as you say, at the Press Club talked about Labor having a mandate and a moral authority to have its entire tax reform agenda passed by the Senate should you win. But if you don't secure a majority in the Senate, then you don't have public support for your policies, because the people didn't vote in the Senate to give you that mandate, did they?
CHALMERS: I think it would be very hard to argue that, Fran.
CHALMERS: If we won the House of Representatives election on the 18th of May, people would have gone into the ballot box with the little pencils knowing what Labor's policies and plans were. If they give us a mandate in the lower house to implement those policies and plans, then we intend to rely on that mandate to get things through the Parliament. I think the Australian people are sick and tired of what happened under Abbott in 2014, where he went to the election and said no cuts to health and education and pensions and all the rest of it, popped up after the election with an entirely different agenda. We've rejected that approach, Fran. We've said, in some cases two years ago, three years ago, what our tax policies are. We've been arguing for them on an almost daily basis since then. And if we do get over the line in the election, we would expect that mandate would be recognised. 
KELLY: You could have a better chance of legislating your plans with the current crossbench. If you win in one-and-a-half weeks' time, how much of your agenda will you try to get through the Parliament before the new Senate's installed on the 1st of July? Is that a plan?
CHALMERS: We've made it clear that we would like to legislate - or we need to legislate - the tax cuts for low and middle income earners. That's obviously one of the priorities that we would have. But we've got a range of priorities around penalty rates and other things. Some of those things need to be done immediately.
KELLY: Had a lot of texts and tweets this morning urging us to stop just talking about tax credits and stop talking about negative gearing, which don't affect most Australians, but to talk about the issues that do. Can I ask you about one issue, because just last week Anglicare issued a report that said that not one property in our capital cities was affordable by people on Newstart and only two per cent of properties in our capital cities, I think, we're affordable to those on the minimum wage. Of all the money Labor has announced in its spending on health and hospitals and childcare, what are your policies on social housing and affordable housing?
CHALMERS: This is a crucial area, Fran. I agree 100 per cent, and one of our key policies is to expand the National Rental Affordability Scheme, which costs $280 million over the forward estimates and about $9 billion over the medium term. What that does is it effectively subsidises rent for builders and community groups who want to build rental properties and rent them out. The Federal Government subsidises the rent so that people can have affordable housing. Where that really makes a big difference in my experience when this program has run in the past is making sure that workers can live near where they work. As everyone knows, around Sydney and Melbourne, even with the softening of the market, it's very hard for people to live near where they work and the National Rental Affordability Scheme is a big part of addressing that. 
KELLY: Just coming back more broadly to the economy. The markets are factoring in, we heard earlier and almost 50 per cent chance of an interest rate cut today. Do you think the Reserve Bank would dare intervene in an election campaign in such a conspicuous manner? Are you expecting a rate cut today?
CHALMERS: Obviously the Reserve Bank's entirely independent, it's a matter for them. The markets are factoring in some prospect of a rate cut and we'll know what the outcome is at 2.30pm. But whatever the outcome is, Fran, it doesn't change the fact that the economy's not working for working people. We've got stagnant wages, insecure work, slowing growth, poor consumption, and people are running down their savings to pay for the essentials of life.
KELLY: But we've also got economic headwinds coming our way. Is this the time for a $50-$60 billion spending spree when you can't be sure you'll be able to pay for it?
CHALMERS: It's the right question, Fran, because there's two ways to go about this, and I'm glad you asked. There's two ways to respond to the challenges the Reserve Bank are trying to deal with as well. Our way, which is to boost wages and help people with the cost of living and prioritise low and middle income earners with tax cuts because the spend it in the economy, to get consumption going again; invest in infrastructure and human capital; and strengthen the Budget by closing down tax loopholes. That's how we would go about responding to the challenges the Reserve Bank have identified. The worst thing you could do is what the Liberals are proposing to do. They want to give a $77 billion tax cut to the people in the top income tax bracket - the least likely to spend in the economy - and they want to fund that with another $40 billion worth of cuts to hospitals and schools. That would be a disaster for the economy. That would make the challenges that the Reserve Bank are identifying worse, not better.
KELLY: Jim Chalmers, thank you very much for joining us.
CHALMERS: Thank you, Fran.