ABC NEWS BREAKFAST
FRIDAY, 12 MAY 2017
SUBJECT/S: Labor’s Budget reply, 2017 Federal Budget for millionaires and multinationals, Medicare levy
MICHAEL ROWLAND, PRESENTER: Shadow Assistant Treasurer Andrew Leigh joins us from Parliament House in Canberra now. Andrew Leigh, good morning to you.
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Good morning, Michael.
ROWLAND: Why have you decided to support that rise in the Medicare levy to fund the NDIS in part and only make higher income earners pay it?
LEIGH: Michael, our approach is always to be as constructive as possible, and in this instance we have decided that four out of five taxpayers shouldn't be paying the increased Medicare levy. The NDIS was fully funded. Let's not let that lie slide. When Labor put it in place, we put it in place along with a series of savings and a very clear plan to pay for it. The Government's proposal is to jack up taxes on all working Australians. Labor would shield four out of five workers from that increase in the Medicare levy.
ROWLAND: Two things there, if it was fully funded, why are you supporting this measure in part that will, in the Government's word, fund the NDIS?
LEIGH: This is not going to fund an unfunded scheme, this is going to deal with the Government's debt and deficit blow-out...
ROWLAND: They have made it clear this extra increase, the half a per cent, will be directed solely to the NDIS.
LEIGH: They are creating a series of pretend funds. Let’s be absolutely clear.
ROWLAND: It is not a pretend fund. The Government has said this is going to the NDIS.
LEIGH: Michael, these are accounting tricks the Government would like you to believe. Fundamentally, what is happening here is we have a Government that has increased the deficit tenfold for the 2017-18 fiscal year. A Government that has increased debt by $4000 for every one of your viewers. It has been unable to manage the Budget. In that context, they are raising taxes. Last year Scott Morrison said it wasn't the time for raising taxes on hard working Australians. Apparently because this year is the year for raising taxes on hard working Australians! You saw a different approach from Bill Shorten. He is saying we believe millionaires can afford to pay more tax but people on average wages shouldn't be paying more tax.
ROWLAND: And on that front, the Labor Party says if elected, it will reimpose that 2% levy on high income earners and that will expire at the end of June this year. The Labor Party is prepared to fight the next election promising the highest marginal tax rate, factoring the Medicare levy and deficit levy, of 49.5 per cent.
LEIGH: If you look at a bank CEO, Malcolm Turnbull is proposing to give them a tax cut of around $170,000 on 1 July. Meanwhile someone on weekend penalty rates on Sunday the 2nd of July will see a reduction in their pay packet of up to $77 a week. This is a significant issue of fairness for us. We don't believe that the only people who should be paying less tax in Australia are the top end of town. This is a top 1 per cent tax cut that the Prime Minister wants to push through on 1 July.
ROWLAND: The Government a accusing Labor of trying to start a class war by focusing the tax burden on high income earners. How do you answer that?
LEIGH: Michael, we have seen an massive increase in inequality in Australia. It’s been a terrific generation for the billionaires – not so good for the battlers. We have seen increases in wealth inequality and income inequality. In that context to say that the people who ought be getting a tax cut in Australia are the millionaires and the people who should pay more tax are the workers is absolutely the wrong plan for Australia. Bank CEOs can afford to pay a little bit more tax. I can afford to pay a little bit more tax. Somebody who is an apprentice on $30,000 a year, we don't believe they should be paying more tax.
ROWLAND: Now, lots of debate before the speech last night in Parliament about the true cost of the Government's plan to cut company tax rates for all companies over 10 years to 25 per cent. It has already got through the parliament care of the cross benches, cuts for companies earning up to $50 million in turnover, a 2.5 per cent tax cut. If Labor is elected, would you rescind that tax cut?
LEIGH: We will take those tax policies to the next election. What you saw very clearly yesterday was a demonstration that the Government's big business tax cut will cost the Budget a bomb. $65 billion for huge businesses, generating – on the Government’s own modelling – almost no impact on growth or on wages. The first order beneficiaries of this tax cut are foreign shareholders. Not domestic shareholders because of dividend imputation. So $65 billion, most of which immediately flows offshore. This is a Budget for millionaires and multinationals. Last night you saw an approach by Bill Shorten saying we would do things differently. We have the most serious crackdown on tax havens that any country has deployed. Bill Shorten's announcements on tax havens show very clearly that Labor takes seriously the white-anting of our global tax system. We are calling on firms to report as a material tax risk to shareholders if they have dealings in tax havens. We are saying we need greater transparency in the system. Because of tax system has to work for everyone. We can't allow the top end of town to use loopholes that aren't available to ordinary Australians.
ROWLAND: Thanks Andrew Leigh for joining ABC News Breakfast this morning.
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