FRIDAY, 15 APRIL 2016
SUBJECT/S: Scott Morrison’s sextupled budget deficit; economic management; entitlements for Queensland Nickel workers.
MARIUS BENSON: The Federal Treasurer Scott Morrison redirected the Government's budget direction yesterday when he briefly and critically declared that the government is planning some tax increases. At least that is the general reading the Treasurer indicated yesterday when he said this. Listen closely, it is quick.
MORRISON: Of course there will be revenue measures in the Budget.
BENSON: 'Of course there will be revenue measures in the budget', said Scott Morrison. I did say it was brief. On that basis however, and subsequent briefings from the Government, there are reports that the Government is set to curb tax breaks on superannuation for the wealthiest contributors, as well as increasing cigarette excise. For a Labor view on the Budget battle – the Budget just over two weeks away now, the first Morrison-Turnbull Budget - I'm joined by the Shadow Assistant Treasurer Andrew Leigh. Andrew Leigh, good morning!
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Good morning, Marius.
BENSON: Labor's principal response to the latest words on the Budget seems to be a small amount of gloating saying “Look, they're doing we said we'd do”.
LEIGH: It is just a gentle head-shake and a smile. Let's go back through all the trial balloons that has been floated since the Turnbull-Morrison team come to office. We had a 15% GST, dealing with bracket-creep as the great moral challenge of our age. We’ve had suggestions of state income tax rises and company tax cuts. When Labor in last November unveiled our policy around cigarette excise, Kelly O'Dwyer called it ‘another tax take’ and Susan Ley called it 'a grab for money'. Now they seem to be turning around and adopting this very same approach.
BENSON: And presumably if they do go for the cigarette excise increase and the trimming of superannuation tax breaks they will enjoy the support of Labor.
LEIGH: Well let's wait and see what they do. You'd be a fool to support any particular balloon the Government floating on any day. Because rather than laying out a clear plan and backing-in their argument in the tradition of great economic reformers in Australia, the Government always seems to go for the cheap headline rather than go for the long game reform. We have got a fresh new team in the Treasurer's office preparing their first budget. A team in the Prime Minister’s office who are coming up again to their first election. It's almost like the Government has put the training wheels back on.
BENSON: Can I ask you this, because there is some common ground emerging between you and the Government in terms of tax breaks, but there seems to be one key difference which is that Scott Morrison says maybe there'll be some tax increases - that seems to be what he is implying anyway. That is what he is understood to be saying now. Maybe there will be some increases in taxes, but overall there will be no increases in the overall tax burden. Labor is not saying that is it? You're open to the idea of overall increasing taxes?
LEIGH: We believe that we need to decrease spending in some areas and raise taxes in other areas, Marius. We certainly don't be believe that the Government is right to have their Emissions Reduction Fund. We think that is just a slush fund for polluters. We don't think $160 million for a marriage equality plebiscite that will be ignored by some Liberal MPs would be a good use of tax payer money. We do think it is appropriate to close loopholes on multinationals and I have been surprised the Government have been attacking us for that particular policy. Now this is the Government which has sextupled the deficit. This deficit for this year is more than six times larger than predicted to be when the Government came to office. And we now have warnings from credit rating agencies that if the Government continues with these debt-deficit blowouts, it could take Australia down a dangerous road.
BENSON: But can I just go back to that point of the overall tax rate - because all of these numbers to-and-fro and it is baffling for people trying to follow them and there is an inevitable amount of uncertainty about budget plans anyway - but there is a commitment from the Government that overall the tax rate will not increase. And Labor, you are not making that commitment because in the past. When I’ve spoken to you, you said there was nothing sacrosanct about the existing percentage of GDP taken in tax.
LEIGH: I think, Marius, the right way to do things is to look at what Australians would like the Government to do and make sure the taxes we have are as efficient as possible, as low as possible to meet that goal. But in Australia many people I've chatted to want a Government which is committed to needs-based funding in schools. They want to make sure that emergency and elective surgery waiting lists in our hospitals are not blowing out. So we need to make sure we've got the revenue streams in order to make that possible.
BENSON: Is it reasonable though for people - and polls indicate that people hold the broad view that the Coalition is better at governing and managing the economy than Labor - for people to take a dim view of Labor's economic management? Because, as Joe Hockey in the past used to say with glee, it was Wayne Swan, the previous Labor Treasurer, promised 300 times that there would be a surplus and the Labor Party never returned the budget to the black. So they are not to be believed about the future?
LEIGH: The reason why Wayne Swan won the world's best finance minister award is that he got Australia through a global downturn without going into recession, saving 200,000 jobs and tens of thousands of small businesses. There is no Liberal Treasurer alive who can make a claim like that. The legacy that we have in this term of parliament has been that Labor, from Opposition, has put on the table a range of sensible economic measures ranging right through the curtailing the excesses in negative gearing and the Capital Gains Tax discount and closing multinational tax loopholes. We made tough decisions, Marius, and we haven't just floated ideas in the newspaper. We actually stood by them. At the same you've got a Government which has overseen a 4 per cent fall in living standards since they come to office, which has massively increased the deficit, and now seems to still be flailing around to find an economic plan – even with the iron ore price adding heartily to the Government's budget bottom line.
BENSON: Andrew Leigh, can I just close with one other point away from the budget which is the Federal Employment Minister Michaelia Cash has confirmed the Government will pay to meet the needs of the Queensland Nickel workers to meet their entitlements as they lose their jobs out of the Clive Palmer fallout. 800 workers, $74 million. Two ways of looking at that, that is the workers are entitled to their entitlements and it's a good thing the Government steps in, the other is that taxpayers here is just picking up the tab for Clive Palmer. How do you view it?
LEIGH: Through Labor's Fair Entitlements Guarantee, workers pay in to make sure there is a backstop in the event like this. Bill Shorten wrote to Malcolm Turnbull on a number of occasions urging him to act, to make sure that these workers receive their entitlements. That Fair Entitlement Guarantee procedure is fair for all workers for instances like this, and we believe the Prime Minister and Minster of Employment should've acted sooner.
BENSON: Andrew Leigh, thank you very much.
LEIGH: Thank you, Marius.
MEDIA CONTACT: NICK GREEN 0402 575 042