FRIDAY, 11 MAY 2018
SUBJECT: Labor’s Budget Reply.
SABRA LANE: We’re joined by the Shadow Assistant Treasurer Andrew Leigh in our Canberra studio. Good morning and welcome.
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Good morning Sabra.
LANE: Labor is promising to double the cash hand out to middle and low income families, but not higher income families. Does Labor loathe aspirational working Australians?
LEIGH: Not in the least, Sabra. We’re just prioritising middle Australia, people who have seen sluggish wages growth over the course of the last decade. We’ve seen wages rising much more rapidly at the top than at the bottom and we’ve got a time now when inequality in Australia is at 75 year high. The fair go is under threat and Labor is prioritising looking after middle Australia with a tax cut that as you say is better, bigger and fairer.
LANE: But there’s nothing for those on $120,000, earning that kind of money a year. Why are they missing out?
LEIGH: There are more opportunities for their kids to go to university. There are more opportunities for them to get lifesaving MRI scans. Under Labor, we’ll invest in the roads that they use and ensure they’ve got a high quality national broadband network. Australia will be a fairer country under Labor, but we’ll also be a more productive nation. I know as somebody’s who is in the top couple of per cent of the income distribution, the benefits for all Australians flow right through. I’m very fortunate where I am in the Australian population. I believe I can afford to pay a little more tax in order to get those services we need, in order to make sure we get great teachers in every school.
LANE: So your message to those earning $120,000 is buck up?
LEIGH: Those earning a couple of hundred thousand dollars would be paying a marginal tax rate that is the same that Tony Abbott put in place when our debt was lower than it is now. Don’t forget, net debt has doubled under the coalition-
LANE: We’ll get to that in a minute.
LEIGH: Well, the only people who have gotten a tax cut under the liberals have been those at the very top.
LANE: This plan will cost $19.2 billion over the four year forward cycle. How much will it cost over 10?
LEIGH: I don’t have the 10 year number for you right now. We were doing these numbers obviously rapidly between the budget and budget reply, working with the Parliamentary Budget Office.
LANE: So you don’t have those numbers just yet.
LEIGH: Over the course of the four year forwards, the cost of our tax cut is $5.8 billion and obviously we’ll release those 10 year costings. But you can understand Sabra, this is quite an unusual situation as the budget reply comes down a mere two days after the budget.
LANE: How much does it leave in your election war chest?
LEIGH: We’ll have the opportunities to make further promises, but we’ll do those in a fiscally responsible way. That’s because we’ve made these tough decisions around negative gearing, trusts, closing multinational tax loopholes. We’re not giving $80 billion to the big end of town. We’re not giving $17 billion to the banks.
LANE: Mr Shorten says that debt will be paid off faster. When will the debt be paid off under Labor?
LEIGH: Under Labor, we’ll hit surplus in the same year as the government, but we’ll continue to pay down debt faster. And you can see that, Sabra-
LANE: Just to that point, when then? By asserting you’ll pay it off faster, you need to give voters an idea of when you’ll do it.
LEIGH: Obviously, these very long term projections depend on forecasts going well outside the medium term. But what you’ve got under Labor is a set of decisions that build over time. Our negative gearing decision, our family trust decision, our multinational tax decisions – they increase revenue to the budget, they allow us to pay down debt faster. But conversely, the Coalition’s decisions around company taxes, around their regressive tax plan, they cost the budget more over time. So the relative position of the two parties widens substantially as you go further out.
LANE: Mr Shorten’s been very critical of the government’s plan to get rid of the 37 per cent tax bracket, but he hasn’t explicitly ruled it out. What’s Labor’s position on this?
LEIGH: We need to see the costings. We haven’t seen from the government the breakdown of their step one, step two, step three tax changes. We’ve asked in Question Time, they’ve been very cagey about it. You wouldn’t expect us to make a decision on a plan whose numbers haven’t even been broken out for us.
LANE: But still, that’s an asterisk. Labor can still pass this package. By hinting last night that you won’t see other taxpayers held hostage, Labor could still let this pass through parliament.
LEIGH: We could rubber stamp a plan without knowing the cost, you’re absolutely right about that. But I don’t think that would be responsible, Sabra, I don't think-
LANE: You still could do that?
LEIGH: We could act irresponsibly but we won’t. What we will do is pass through the government the first stage of the tax cuts, to take effect on the first of July this year. Middle Australia will get tax cuts with bipartisan support and I don’t think anybody wants to play this game that Scott Morrison seems to be engaging in, in which he won’t deliver those middle income tax cuts unless we support tax cuts not due to happen until 2024. It’s a kind of Fish Called Wanda approach, you know – do the right thing or I’m going to eat your goldfish. I don’t think even Scott Morrison is going to stick to that ploy.
LANE: Alright. Shadow Assistant Treasurer Andrew Leigh, thank you very much for joining AM this morning.
LEIGH: Thanks, Sabra.
Authorised by Noah Carroll ALP Canberra