More hot air from Hockey on tax cuts - AM Agenda





SUBJECT/S: Taxation reform; China free-trade agreement; NDIS; Canning by-election

KIERAN GILBERT: This is AM Agenda. Thanks for your company this Monday. With me now is the Shadow Assistant Treasurer, Andrew Leigh, and in Melbourne we've got the Assistant Social Services Minister, Mitch Fifield. Thanks for your time gentlemen. Mitch Fifield, first to you: more calls for tax cuts from the Treasurer but how are they going to be paid for? He's got the idea but not necessarily the solution here.

MITCH FIFIELD, ASSISTANT MINISTER FOR SOCIAL SERVICES: Kieran, as you know we are for lower and simpler and fairer taxation in Australia. We've demonstrated that with the abolition of the carbon tax and the mining tax. We will have more to say in the future about personal income tax through the taxation white paper process. But we're not hearing any talk from the other side about how to reduce Australia's levels of taxation. Labor still want to bring back the carbon tax, they want to call it a different name, they want to call it an ETS. So I think the people of Australia really have two competing visions when it comes to taxation.

GILBERT: But I guess the question is, Senator Fifield, how do you fund this when it would run into the billions to bring the Australian marginal tax rate down to, say, a nation's like New Zealand for example.

FIFIELD: Kieran, I'm not here today to announce a Coalition taxation policy. We have the tax white paper process which is there for a reason. It's meant to gain views from the Australian community and Australian business as to how they think our taxation system can be more competitive. There are a number of stages to that tax white paper process and we will have more to say about personal income tax as part of the process.

GILBERT: Well it's a starting point I guess. Andrew Leigh, the point is that compared to other nations our marginal tax rates are not competitive, are they?

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Well Kieran, if you look at what they call the tax wedge across the OECD, Australia is below average for income taxes. Our total tax take puts us in the bottom handful of countries in the advanced world. 

We should always be trying to craft a better income tax system but if the average Australian had a dollar for every time they were promised tax cuts from Joe Hockey, they'd be as rich as he is.

The simple fact is, Joe Hockey is all hot air and no action when it comes to tax reform. Labor has announced our multinational tax plan and our superannuation plan. These are tax reforms that make a difference to the budget bottom line but are also fair and sustainable. 

GILBERT: So you're happy with the status quo in terms of the marginal tax rate?

LEIGH: I certainly believe it would be great to bring them down. But there's that old Milton Friedman line: "to tax is to spend". So effectively, if Mr Hockey intends to cut one area of taxes, he needs to either show us which spending he plans to cut, which other tax he's going to raise or how debt is going to blow out. Under Mr Hockey's watch we've seen the tax share go up, not down. His budget paper shows very clearly that he's taxing more highly than the Rudd or Gillard governments before him. Which again, shows the lack of seriousness from Mr Hockey when it comes to tax reform.

GILBERT: Ok let's go to Senator Fifield. On the broader issue of reform, we're seeing business groups this morning on the front of the Financial Review, this reform summit to be co-convened by The Australian and the Australian Financial Review. They're saying they're willing to put their interest to one side to see growth-oriented reform undertaken. But it seems there is just very little common ground right now on anything whether it comes from industrial relations or wide scale tax reform. It's a good idea to have the reform summit but is there any sense of optimism that there'll be some common ground here, Senator Fifield?

FIFIELD: Look Kieran, I think the reform summit is a good thing. It's always a good thing when journalists and business leaders take an interest in public policy and want to help create an environment that's more conducive to good policy and to reform. What we need is growth to create even more jobs in the Australian economy. There are some really practical things that can be done which we're in favour of and which the Labor Party are against. Legislation to bring back the Australian Building and Construction Commission to bring productivity back to building sites to eliminate militant trade unionism. That's something really practical. Another thing is if Labor would support us with the registered organisation legislation that would see union leaders subject to the same penalties and the same expectations that are there for company directors. Labor could get on board and support the China Free Trade Agreement. We've negotiated three important free trade agreements. Labor seem to have great difficulty in embracing something which should be a self-evident good for the Australian economy in the form of the Australia-China Free Trade Agreement. There are some really practical things that Labor could do to help support growth in Australia so I don't agree that basically we are on the same page here. I think we're –

GILBERT: Alright on the FTA – Andrew Leigh, I can't see Labor blocking this. And certainly as an economist yourself and a former adviser to a trade minister, there is very little chance that you would endorse Labor attempting to block or repeal this Free Trade Agreement?

LEIGH: Labor's got a strong track record on free trade with Labor governments that put in place big tariff cuts in 1973, 1988 and 1991. Our concern with this trade agreement doesn't go at all to the tariff cuts. It goes to the immigration measures and the measures which would potentially allow companies to sue the Australian Government. That's again our concern with the Trans-Pacific Partnership being negotiated in secret. Labor's concern is not over the trade liberalisation parts but they're over the threats to our intellectual property system.

GILBERT: Do you welcome the business group saying that they will put self-interest to one side as the debate around reform cranks up on Wednesday at this summit to be convened by the Australian Financial Review and The Australian?

LEIGH: Absolutely. And Kieran, like Mitch, I really welcome the contribution of business groups to the ongoing policy conversation. But we need to be careful idolising the Paul Keating days. When Parliament passed the legislation to enact the Mabo decision, the Liberal leader at the time said that it was "a day of shame”. Today we've got a Liberal Prime Minister going to visit Eddie Mabo's grave. That reflects how far the Liberal Party has come over that time but no one should look back to the Labor reforms of Native Title as had been backed in a bipartisan way. Same with Medicare, superannuation, capital gains tax, fringe benefits tax, the assets testing of the pension –

GILBERT: There's another reform that both sides have agreed to up until this point. But Senator Fifield, with Joe Hockey saying that he's going to promise tax cuts at the election. If you look at the big spending initiative that the Government has committed to, in the last few weeks you seem to be wavering on in terms of the timeline for the National Disability Insurance Scheme. Is the NDIS going to be delayed here to fund tax cuts in the short term?

FIFIELD: No, Kieran. That's the short answer, that's the long answer, that's the unequivocal answer. We, as a Government, are not looking for ways or reasons to delay the NDIS. We are determined to see the NDIS rolled out in full. I've been working extremely hard to see that become a reality. I wasn't put in the job as Minister for Disabilities to do anything other than to deliver the NDIS and to do it in full.

GILBERT: I know you're committed to it but the suggestion is that the Expenditure Review Committee and the others in your government are trying to make savings from it. You're saying this morning that is not going to be the case.

FIFIELD: Kieran, we are not looking to pull money from the NDIS. I am conducting negotiations with the state and territory jurisdictions so we can work out together the roll-out plans for the NDIS beyond the current trial sites to take the scheme nationwide. There is immense good will from my state and territory counterparts. If we want to see this become a reality, it will become a reality.

GILBERT: You just heard that, you must be reassured by the Minister responsible this morning, Andrew Leigh? He's saying that there will be no savings made as some suggestions around the place this morning must have indicated.

LEIGH: Kieran, I've got no concern with Mitch's goodwill on this important issue but you can hear there in his language when he said ‘we're not looking to’, an unwillingness to stick to the agreed timetables. When he was asked about this in the Senate he was unwilling to commit to the NDIS rollout timetable that we'd thought was a bipartisan timetable at the last election. This is such an important reform and the notion that it's going to be slowed down will be deeply concerning with the millions of Australians with disabilities.

GILBERT: He hasn't said it's slowing down, he said he's still committed to that timeline.

LEIGH: He hasn't recommitted to the timelines that were bipartisan at the last election.

GILBERT: Senator Fifield, your response to that? Because my read on what you said is that you're still committed to the timeline but you haven't given a guarantee that you'll necessarily meet it because of the state negotiations.

FIFIELD: Well the timeline for the NDIS, the target date, is 2019. That is imbedded in the heads of agreement between the Commonwealth and the jurisdictions. That is the target, that is the objective that I am working towards with my state and territory counterparts. I can't put it more clearly than that, Kieran.

GILBERT: And just to reassure one final time for those with family and loved ones with disabilities this morning, that this NDIS is not going to be the victim of a cost saving in order to fund tax cuts?

FIFIELD: No Kieran, absolutely not. The NDIS is the core business of government, that is helping people who face extra challenges for reasons beyond their control. It's one of the reasons why people pay their taxes, people are very happy to pay their taxes to support something like the NDIS. I'm in this job to see it through, to see it delivered in full. That's what is going to happen.

GILBERT: Good on you, that's good to hear and let's hope that you achieve that timeline despite Labor's doubts. Let's go to the by-election now, the Canning by-election in WA. There was a very impressive speech by the Liberal candidate over the weekend, Andrew Leigh, in response to some reports about his time as captain of the SAS in Afghanistan. It was a forceful response to the reports in the Fairfax papers at the weekend. You'd have to be impressed by Andrew Hastie, Captain Hastie - the Liberal candidate - for what he's said on the weekend?

LEIGH: I'm certainly not going to question somebody who has served overseas for his country, Kieran. But this by-election is about who is best able to represent Canning on the issues of jobs and health and education. Labor's candidate Matt Keogh grew up in the electorate, lives in the electorate and knows the electorate. He's concerned about the 30,000 additional West Australians that joined the unemployment queues since the last election. Concerned that the Abbott Government's cuts to hospitals and schools are hitting West Australia at a time when the Western Australian budget can least afford it.

GILBERT: But on Captain Hastie, you saw the reports in Fairfax about the actions of those in the SAS contingent, a company that he was Captain of. He responded to them forcefully. Your reaction to the way he handled that very difficult situation?

LEIGH: Look, he did and I think that was a perfectly appropriate response. My feeling though is that the people of Canning need more than a rubber stamp for the Abbott Government's cuts. They need a candidate like Matt Keogh who will actually stand up for their community at a time when Western Australian jobs are under threat. Stand up against the idea that unemployment is just the fault of the individual, and that one month waiting period for young unemployed people will somehow starve people back into work. This idea that unemployment is the fault of the individual rather than a lack of demand is a real problem for Australia.

GILBERT: Well Senator Fifield, what’s your view on this crucial by-election? It’s crucial for a number of reasons, for the Prime Minister, for the Government generally – it comes at a very important time for Mr Abbott. It would be encouraging to see the likes of Andrew Hastie, very impressive at the weekend.

FIFIELD: Andrew Hastie is a first class candidate. He has served his nation in uniform as a distinguished former officer. He served in the SAS, he's a decorated individual and I've got to say, one of the really pleasing things for me over the last few elections is the number of people who've served in the Australian Defence Force who are putting themselves forward for Parliamentary office. There was a time where we were getting extremely low on the number of members of Parliament who had actually worn uniform and served. I think it's a great thing. People like Andrew Nikolic, people like Linda Reynolds and I'm very hopeful that Andrew Hastie will join them and bring that perspective to the Parliament.

GILBERT: We'll see on September 19th. Certainly a strong candidate and Labor has got a good candidate as well. It's going to be a very interesting campaign over the next month or so. Mitch Fifield, Andrew Leigh- gentlemen, thanks so much for that and have a good day.



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