FRIDAY, 12 MAY 2017
SUBJECT/S: Labor’s Budget reply, 2017 Federal Budget for millionaires and multinationals, Superannuation raid for housing deposit, Medicare levy, Drug testing for welfare recipients
DAVID LIPSON, PRESENTER: Angus Taylor, Andrew Leigh, welcome to Lateline. Andrew Leigh, I want to start with you. Something you had to say on morning radio with Dan Bourchier of ABC Canberra about the government's housing affordability plan. You said it was a raid on superannuation of young people. Can you explain that?
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: David, our superannuation system ought to have one purpose, which is to ensure the security of people's retirement. It shouldn't be raided in order to support the buying of first home buyers.
LIPSON: How is it a raid if it’s money that’s going in over and above compulsory super contributions?
LEIGH: There ought to be one purpose for superannuation, David. This is raiding people's superannuation accounts in a manner that Malcolm Turnbull last year said was "a thoroughly bad idea".
LIPSON: It's only raiding them after they decide optionally to put money into their superannuation, as I say, over and above their compulsory contribution. So how is that a raid?
LEIGH: David, let's not split hairs. This is the superannuation account.
LIPSON: No, it's an important detail.
LEIGH: This is a superannuation account being used to support home purchases. The fact is not only did Malcolm Turnbull say it was a thoroughly bad idea but every serious economist who looks at this recognises that all this is going to do is inflate prices. It's has a microscopic degree of government support as Bill Shorten said last night. We’re talking about something in the order of $500 per house.
LIPSON: But you said this morning it was money coming out of your superannuation savings.
LEIGH: And it is.
LIPSON: That’s not right though.
LEIGH: It is. It's coming out of the superannuation account. You can read the Budget papers.
LIPSON: I have read them, believe me.
LEIGH: This is not a second account. This is not a first home saver account. This is your superannuation account. This is Malcolm Turnbull effectively saying to young Australians you can be poorer in retirement if you want to buy a home now because he won't crack down on negative gearing and the Capital Gains Tax discount which together have acted to blow up the housing market. That's the solution to housing affordability in Australia. That's the reason why tomorrow across Australia investors will be beating out first home buyers: because investors have access to some of the most generous tax concessions in the world.
LIPSON: Angus Taylor, a response to that and the claim that superannuation should only be only be used for one purpose.
ANGUS TAYLOR, ASSISTANT MINISTER FOR CITIES: Well, this is an extraordinary claim. I mean, Andrew Leigh, the Labor Party clearly doesn't actually understand the policy. The policy is very simple. If people want to contribute over and above the compulsory superannuation guarantee of 9.5%, they can choose to do that. Into an account which will enable them to collect together over time money for a deposit. It is in addition to the compulsory super guarantee. And so what Andrew Leigh is demonstrating is they don't understand the policy. The extraordinary thing, David, is they rejected the policy before they even actually understood it.
LIPSON: Angus Taylor, the Opposition keeping the deficit levy and only increasing the Medicare levy for people earning over $87,000 a year, Bill Shorten says he's had that costed and that it will bring in more revenue, $4.5 billion more revenue, than your plan. Does that make it the fairest of them all?
TAYLOR: I haven't seen those cost beings but what I will say is this. Under Labor the NDIS was not fully funded. That's very, very clear. It is now fully funded and let's look at the numbers. There's half a per cent additional Medicare levy, the wealthiest will play the most, Deloitte talked about this morning, where the top half a per cent will pay 7% of the total costs of the NDIS but everyone's contributing because ultimately it is an insurance scheme which every one of us might want to call out at some point in our lives, either ourselves or through our kids or those we love. As an insurance scheme I think this is absolutely the right way of doing it.
LIPSON: Speaking of kids, though, you're now looking at a Budget that's going to hit… a net debt that is going to hit $725 billion. You have introduced three big new taxes to help pay some of that off. But it's still going to keep rising into the foreseeable future. This move to the centre that the government has made, does that risk alienating some among your base?
TAYLOR: Well, look, I don't like debt. Obviously debt is something that the best that can be said about it is if you've got an asset back and backing it, and good of amount of that does have assets backing it, but the truth is to get rid of debt is to get back to surplus. We will get back to surplus in 2021 and it's also clear Labor, from the speech last night is making no commitment to get back to surplus. You payback debt by getting back to surplus. That's exactly what we're doing.
LIPSON: Andrew Leigh, with the Coalition going to the centre, the Labor Party could have made the decision to out do them on Budget repair. And really shake things up. Instead of that the Labor Party's gone further to the left and promised to essentially outspend the Coalition. How is that fair to the generations to come that will have to pay off this debt?
LEIGH: As you correctly noted in your question to Angus, we do outdo them. Our package of maintaining the deficit levy and restricting the Medicare levy increase to just the top fifth of wage earners raises more over the medium term than does the Coalition and it does it in a fairer way. You talk about moving to the centre, but I don't see anything centrist about a $65 billion handout to multinationals. I don't see anything centrist about a tax cut that delivers $16,400 to a millionaire on 1 July while on July 2, a weekend worker on penalty rates could lose as much as $77 a week. This is a government of millionaires and multinationals that is taking $22 billion away from schools, that's $2.4 million from every school.
LIPSON: Just on the school measures, Tanya Plibersek on this program a week ago said she couldn't possibly know how much money would be needed to return into the school system when I asked her to commit to that $22 billion funding. Have a look.
[CLIP] TANYA PLIBERSEK, DEPUTY OPPOSITION LEADER: We don't know whether it will be less than $22 billion or more than $22 billion. We have states and territories yet to agree to this. There's a COAG meeting in a couple of months time. Will they agree?
LIPSON: Andrew Leigh, in a week she's somehow found the $22 billion, in fact, is that the appropriate number? What's changed in that week?
LEIGH: Well, David, we're not the only ones with uncertainty about the government's figures. The New South Wales Liberal government yesterday wrote to all of its principals urging them not to trust the Federal Government's figures on school funding.
LIPSON: If you're uncertain about the figure why did you come up with a $22 billion figure?
LEIGH: We said categorically we will put back into the schools the money the Coalition has ripped out. And this is very alive for principals.
LIPSON: What's changed? This is the core of my question. A week ago you said you couldn't possibly know what that figure would be because you don't know where the Government's going to end up. Now all of a sudden it is $22 billion.
LEIGH: David, we are making a pledge to school communities that we will put back in the funding that the Coalition take out.
LIPSON: Where will the funding go, to government or non-government schools?
LEIGH: Well, it will go right across the board. I was speaking to the principal of a low-fee Catholic school in the north of my electorate who was saying this is starting to bite for him. He told the story of one parent who has and come in, whose husband had lost the job. They were struggling to pay the school fees as they were.
LIPSON: But it's an arbitrary figure.
LEIGH: He said to me how will the family afford the fees when this government takes money from his school budget and he has to raise fees? Labor is making this very clear pledge that we will stick to needs-based funding and will ensure schools get the resources they need. We can do that because we will ensure we don't go ahead with this massive $65 billion corporate tax cut.
LIPSON: Angus Taylor, do you think the education plan needs a bit of tweaking, are you fully comfortable with the money being taken away from Catholic schools. There's a few in your electorate.
TAYLOR: There's no money being taken away, let’s be clear about this. We are increasing the funding for schools from $17 billion to $31 billion.
LIPSON: There is money taken away from what was promised by Labor.
TAYLOR: There are no cuts to this. They were unfunded promises and this was the issue with Labor.
LIPSON: But they were still promises.
TAYLOR: …with NDIS or health or education. Well a promise is not a promise if it's unfunded. It has to be funded and they weren't. The important part of this, these are very significant increases in funding. They're supported by David Gonski, of course, and they are needs-based. We are finally getting the system right and I know in my electorate we are seeing very significant growth in every school in funding - Catholic, independent or government.
LIPSON: I want to play you a grab of the Prime Minister Malcolm Turnbull today speaking about the welfare crackdown for people who are found to be using drugs. Here's what he said.
[CLIP] MALCOLM TURNBULL, PRIME MINISTER: If you love somebody who is addicted to drugs, then you would do everything you can to get them off drugs. This is a policy that is based on love.
LIPSON: Angus Taylor, stripping welfare from someone who is addicted to drugs, is he kidding when he says this is based on love?
TAYLOR: Well, look, I have had people close to me who have suffered from addiction. And it is tough. It is tough. And the truth is tough decisions have to be made.
LIPSON: And if they lost their welfare?
TAYLOR: Well, the point I'm making is welfare involves mutual obligation. That's how it works. That has been the basis of our welfare system for a long, long while. But I think the Prime Minister is absolutely right. This is something we have to do without any pleasure when we want someone who we love to be better.
LIPSON: Andrew Leigh, what does Labor make of this measure?
LEIGH: Let me tell you about a real person who will be affected by this. I was contacted this week by a constituent on the pension. Her 33-year-old daughter has been addicted to drugs, mostly methamphetamines, for most of her adult life. Occasionally she turns to prostitution in order to buy drugs. My constituent said to me, "If you take away her welfare for failing a drug test, as she may well do, because she's been addicted to drugs for the last 15 years, then all she will have to pay for food is my pension."
I don't see how that makes Australia better off. This policy could well increase homelessness. It could well increase crime as it leads people to resort to breaking and entering into people's homes in order to make ends meet. We need policies that are going to address homelessness and yet at the very time when Malcolm Turnbull is saying "This is a budget that will address homelessness" and talking of his commitment to mental health he's announcing a policy which will make homelessness and mental health worse in Australia.
LIPSON: Andrew Leigh we'll have to make that last word. We are out of time, Angus Taylor and Andrew Leigh, thanks for your time.
LEIGH: Thanks, David. Thanks Angus.
TAYLOR: Thanks for having me.