WEDNESDAY, 9 MAY 2018
SUBJECTS: 2018 Budget
KIERAN GILBERT, HOST: Returning to the budget now, and with me is the Opposition Leader Bill Shorten. Thanks very much for your time. The Government says it's all or nothing when it comes to the tax plan.What's your response?
BILL SHORTEN, LEADER OF THE OPPOSITION: This Government's prioritised big business over battlers. I think they would be crazy to tell people on low incomes that because we don't immediately rush to sign up to fictitious tax cuts in seven years’ time that somehow they should miss out in six weeks’ time with $10 a week.
No, I think that what this Government needs to do is actually negotiate with Labor. The old Scott Morrison foot stamping, sort of shouty negotiations - this budget was handed down last night. Mr Turnbull wouldn't even answer on radio today how much the cost of his, I think fairly mythical tax cut plan is. It's a $140 billion we understand. So he wants us to sign up to $140 billion dollars.
GILBERT: What do you disagree with in it though? Because if you look at the various points the second phase locks in the bonus –
SHORTEN: I take the finances of the nation very seriously.
SHORTEN: And just saying that putting a gun to our head and saying that some people won't get $10 a week unless we agree to sign over $140 billion of taxpayer money. The detail does matter.
I mean, the Government's cooked this up, you and I know the Government is itching to go to an early election if they get a lift in their popularity ratings. So what they want to do is have the nation engage in a debate about, I think, very over the horizon tax cuts in seven years’ time.
The real issue now is why is the Government persisting in giving $80 billion, most of which will go to big business? Why are they cutting the pension supplements for energy bills for pensioners? Why are they still cutting hospital funding and school funding?
This is a Government who is hopelessly out of touch.
GILBERT: When you say it's over the horizon, governments are meant to plan aren't they in terms of this, it’s seven years. We're talking about reform as of July 1 this year and 2022 is the next phase.
SHORTEN: July 1 is fine.
GILBERT: Well one of the components of the next phase - you got increasing the 19 per cent threshold from 37,000 to 41,000. That basically locks in that low income offset bonus, why wouldn't you support that sort of thing?
SHORTEN: Well let's take one step at a time. First, we haven't even given our budget reply on Thursday night, so people can tune in at 7:30. But when it comes to tax relief, if it wasn't for Labor, every Australian will be paying half a per cent more in income tax from last year's budget.
So I've seen the Government say you must do this, and then they change their own mind when Labor shows a degree of resoluteness. The real issue here is can this nation afford to give $80 billion away to the top end of town?
GILBERT: But it's a tough decision for you though, isn’t it, because we know an election is either going to be September, October or May next year, for you to say to people “we're not going to vote for that phase one of this tax plan because you're not going to give the tax reforms further down the track –”
SHORTEN: Let me be very clear. Let me be very clear, we've already worked out that we’ll support phase one, no problems. So why is the Government holding millions of people hostage from getting $500 merely because they're insisting that we sign up practically sight unseen to spending $140 billion in 7 and 10 years.
I mean why don’t they just legislate Malcolm Turnbull as Prime Minister for the next seven years. You want to look over the horizon.
People have got to vote two or three times for Malcolm Turnbull before they see some of these tax cuts. You and I know that's just not going to happen.
GILBERT: In terms of the flattening of the rate though, previously you've argued personally that you think it's a good idea.
SHORTEN: Do I think that we should try and lower marginal rates of taxation? Yes, but I also do so on the basis of fairness.
Do you know there'll be kids this year finishing Grade 6 at school - they will complete their whole secondary education before Mr Turnbull's miraculous tax cuts come in. But in the meantime their school funding will be cut. There are people waiting now to have hip replacement, knee replacement surgery. Why is it that their needs are not factored in by this Government?
GILBERT: I'm just trying to drill into what the Labor Party is opposed to in the plan, because you talk about fairness but without going into ancient history as you have previously argued for a top rate of 30 cents in the dollar -
SHORTEN: I'll give you a very straight answer.
You don't spend $140 billion overnight just because Mr Morrison says it's a good idea.
GILBERT: So you still might back the whole thing?
SHORTEN: We are absolutely committed to tax reform, but what we're not going to do is just steam roll into writing a check for future generations of Australians of $140 billion just because the Government wants to get some sort of sugar hit on a promise that they've got no way of enforcing in seven years time.
What if they roll Turnbull? Does every other Liberal leader they might come up with committed to doing this option or another option? So you and I know that the Government want us to have the discussion we've just had about what happens in seven years, and use that as some sort of badge of tax correctness, patriotic tax correctness, do you support this?
The fact of the matter is, what's in the national interest right now? It's helping provide some tax relief, but it's also in dropping the corporate tax cuts. It's properly funding hospitals. It's making sure that our schools are properly funded. Why on earth does this Government want to give us the world's practically oldest retirement age? They're cutting energy supplements, cost of living supplements from pensioners. This Government wants you to ignore all the things they've done wrong on the potential mirage. It is not free beer tomorrow. This is free beer in seven years time from the Government.
GILBERT: You've argued, again, you've said previously and this is even before you went into Parliament, you spoke about the need for aspirational tax rates as well - 30 per cent. I mean do you still support that for the top end because high income earners, and I know it's not your constituency -
SHORTEN: But if you want to quote me, quote all of me. I wanted people on more modest income to pay less income tax. But you've also got -
GILBERT: 10 to 20 per cent to 30 per cent is what you suggested.
SHORTEN: - but you can only do, what you can afford to do. And you and I know, that this Government is relying on getting to surplus on the basis of workers getting wage rises and therefore paying more taxes.
Did you notice in the budget that the Government is predicting wage rises of three and three and a half percent over the forward estimates? What's the evidence that's going to happen?
It hasn't happened for the last couple of years despite big corporate profits.
The Turnbull Government are pretty funny actually. Someone there has got a sense of humor. They have cut penalty rates, they make it hard for workers to go to -
GILBERT: They didn't, the Independent umpire did.
SHORTEN: They could have stopped it. They could have stopped it, and they haven't. Do you know a shop assistant working on a Sunday, courtesy of the penalty rate cuts, has lost, if they do an eight hour shift, $77. And Turnbull's answer? " We will give you $10 back."
GILBERT: You say, you can only do what you can afford to. You can afford to scrap the deficit levy because you know the Government is paying for the NDIS without that Medicare levy. You announced that - why is Labor keeping that? Is it just that class warfare thing?
SHORTEN: No. What we want to do -
GILBERT: Why wouldn't you reduce it - you support lower taxes.
SHORTEN: There's a trifecta of objectives. One is to make sure that we're in balance, the budget has the reserve to cope with global shocks. I mean this Government's all blues sky for the next seven years. They've assumed no global shocks.
Second thing is to make sure we properly fund hospitals and schools and look after pensioners. And the third thing is to see what we can do to give some income tax relief for low and middle class families and workers. That's what we're about.
Now, we're in a better position to do it than the Government, because this Government has made no hard decisions, except looking after their mates at the big end of town and making cuts to schools and hospitals.
GILBERT: On Newstart the Government's copped flak for not increasing that. Why don't you just come out tomorrow night and say Labor will increase it, not have a review, just increase it.
SHORTEN: Well we do think there is a problem with Newstart.
Unlike the Government who just - you'd have to torture them and extract their fingernails to get them to admit there's a problem. Do you know there's Government politicians who pretend they can live on $40 a day. That just shows you how out of touch they are.
But the real issue is you review the adequacy of our payments system to make sure we're getting it right, you do the research first before -
GILBERT: But you give a commitment you will increase it?
SHORTEN: I give a commitment that we’ll review it, it and obviously I start from the viewpoint that $40 a day is pretty hard. It doesn't matter what you think about the reason why the person is unemployed, at a certain point, decency has to kick in.
But let's go back again to this whole budget. This budget is giving $80 billion away most of which goes to the top end of town. They're now providing $10 a week potentially for people on $60,000 and $70,000 a year. The Commonwealth Bank under this Government's forecast corporate tax cuts, it's getting $7.5 million a week - $10 for a worker $7.5 million a week for the Commonwealth Bank. Who is kidding who here?
GILBERT: In terms of the overall debt reduction though that's a good thing isn't it? That’s coming down as of this year?
SHORTEN: Debt reduction is important but you know our debt is now over half a trillion dollars - let me put that in mathematics which every person can appreciate - $20,000 for every man woman and child in Australia.
These guys have set new records. Net debt has doubled, we've got one of the fastest growing debt rates amongst the advanced economies, half of the -
GILBERT: They've turned the corner on it they now say?
SHORTEN: Let's wait and see.Let's wait and see. I mean, every year they've said they're going to do miraculous things. And frankly the only thing which has happened in this budget is that China is buying more of our commodities.
GILBERT: You spoke about decency, what about foreign aid? Is that a priority for a Shorten Labor Government if you win the next election, because this is flatlining at the moment. We promised that we'd make it 0.7 per cent of gross national income as part of the Millennium Development Goals. We're nowhere near that, it's 0.2 percent. Is this a prioroty for you?
SHORTEN: There's no doubt to be fair, the economic circumstances since the GFC have changed what people hope they could do. But I will put this general principle about foreign aid.
Foreign aid is also good politics. We've all saw the shock and outrage that there were discussions potentially between Vanuatu and China about putting a new base in Vanuatu. One of the issues is not China's fault, or Vanuatu's fault, but if Australia abandons and leaves the region then we create a vacuum which others will fill.
So I just say to some of those people who say foreign aid is just a waste of time. It is not only a good thing to do to help people, but it's also I think good strategically for foreign relations.
GILBERT: So it will start to increase again if you win.
SHORTEN: We're going to crunch our numbers and see what we can do. But I don't start from the ideological predisposition that foreign aid is just unworthy or unnecessary.
GILBERT: And finally on the Iran nuclear deal, the Prime Minister says he regrets the decision of Donald Trump. What's your reaction to this decision by the US President.
SHORTEN: I think it's potentially very destabilising. I haven't been briefed by the Government. I don't know if the Americans told Australia one of their closest allies what they were going to do before they did this. But it is destabilising. There's no doubt.
If there's concerns about Iran ripping up an agreement, I'm not sure is the first reaction. So let's wait and see what detail emerges but on this I share the Prime Minister's concern.
GILBERT: And you could be Prime Minister as of Christmas or next year. Are you able to go to the White House and meet with President Trump? You called him - was barking mad?
SHORTEN: There and views which he's expressed which I think most Australians don't agree with.
GILBERT: But would you go and meet him and be civil?
SHORTEN: Absolutely, civil.
GILBERT: Of course, you're always civil, but -
SHORTEN: Thanks for that KG.
GILBERT: But can you establish a decent relationship?
SHORTEN: I'm sure we can. I think the relationship between Australia and America is deeper than personalities. So that's no problem. But what I'd like to do before we contemplate meeting The Donald in the White House - let's get our budget in order. And what I'll do before I do that is we'll say no corporate tax cuts for the big end of town. Let's put some money back into our hospitals and schools and look after working people.
GILBERT: Mr Shorten thanks for your time appreciate it.