THURSDAY, 10 MAY 2018
SUBJECTS: Labor’s Working Australians Tax Refund; 2018 Budget; Labor’s plan for a fair go for all Australia, not just the top end of town; citizenship
LEIGH SALES, HOST: Let's go now to the Opposition Leader, Bill Shorten. Thanks very much for racing up from the House of Representatives for us.
BILL SHORTEN, LEADER OF THE OPPOSITION: That's alright and Happy Birthday Leigh.
SALES: Thank you very much. Let me put to you the same question that I put to the Treasurer the other night. Given that the nation has a high level of debt, and the Budget is still in deficit, why is now the time to cut income tax?
SHORTEN: Because we've made hard decisions on economic reform. I mean, the fact of the matter is even though we've had some criticism from some people, we're going to wind back the overly generous dividend imputation rules, where people who don't pay income tax get an income tax refund. We're going to close down income splitting and discretionary trusts to cap that at 30 per cent, and importantly we are going to reform negative gearing as well. So what we've done is we've said that we want to reform the tax system and as a result, we can deliver more money for what I think is a great trifecta for Australia: restore the funding and reverse the cuts in schools and hospitals, be able to provide a much better income tax cut for people up to $120,000, and also be in a better position to reduce debt, because we have made hard decisions and we're not giving $80 billion away to the big end of town either
SALES: Well on that point about reducing debt and then obviously getting the Budget into balance, when would Labor return the Budget to surplus?
SHORTEN: The same year as the Government.
SALES: So, 2020/21?
SHORTEN: No, the government has said they will return it to surplus in 19/20, and so will we.
SALES: 20/20 you mean?
SHORTEN: They said they would do it in 2019/20. So it's the same as the Government.
SALES: Right, sorry, I see. If there is a blowout in that then, would you expect to follow them in terms of the blowout?
SHORTEN: Do you mean if the Government fail -
SALES: To reach surplus next year, would that be the same - you would not stick to your projection then?
SHORTEN: We depend in part upon the Government numbers, so if the Government has got its numbers wrong, well then that is a challenge for all of us. But beyond that, we're actually making long-term reforms and that's the difference. This government didn't do anything other than keep their old cuts. And what they are trying to do - they don't have a plan, let's face it. They are offering you $10 and hope that you ignore the cuts and everything is on the never-never. I mean, the full range of their much vaunted personal income tax scheme will arrive in seven years’ time. I don't think Malcolm Turnbull will be around in seven years' time. It's a promise on the never-never.
SALES: Well let's stick to what you've been proposing tonight. Your plan wouldn't benefit people who earn more than $120,000 a year. So let's take the example of a teacher. You might be a teacher, then a senior teacher, then a head of department and then a principal, and you might hope that through your own hard work and some lucky opportunities that one day you might earn $120,000 or more a year. You said in your speech that your plan is a fair go for everyone, but why is somebody in the position I have outlined not as worthy of a tax cut as a first year teacher?
SHORTEN: Well, your question presupposes we are not doing anything else for people. That principal also lives in a community where they want to have well-funded schools and well-funded hospitals. And the reality is there is only so much money you've got. I form the view and my Labor team forms the view that if we can look after 10 million taxpayers, and let's be straight, what happened is I have almost doubled the tax cut offered by the Government. I mean this government said we, Labor, doesn't support lower taxes. I've got the better offer for ten million Australians.
SALES: But I'm just asking if you are saying it's a fair go for everyone, it's not , it's not a fair go for high income earners?
SHORTEN: Well, no let’s be clear here, high income earners need our support less than low income earners. The fact of the matter is that if you are someone on a really good salary - and I'm not going to say $120,000 is an amazing salary - but if you are someone on $1 million, this government has reduced your taxes by $16,000. At the end of the day, you have got to make choices. The deal I'm offering Australia, is we will reduce the national debt more quickly because we are not getting a lot of money away to the top end of town. We will restore funding to schools, we will make sure hospitals and other services are properly funded which this government is cutting. This is a clear choice. This government is saying to people we will give you $10 and forgive us our cuts and our other decisions, and we are saying , no we will give you more, but that is also on the basis that we can fund our other schools and hospitals and essential services. That is the difference. It is a priorities game.
SALES: To come back to this point about fairness. An Australian on $200,000 a year pays $60,000 in tax. Somebody earing $60,000 a year pays $8000 a year in tax. So the higher income earner pays about - sorry, gets about four times as much income but they pay more than seven times as much tax. How is that fair?
SHORTEN: First of all, you forget the person on $60,000 also pays GST. You forget that this person's also paying higher electricity bills. Do you know living on -
SALES: But the person on $200,000 a year also has an expensive electricity bill?
SHORTEN: Yes but they have a greater capacity to pay, whereas someone on $60,000 Leigh, they're not making a lot of money, they're not saving a lot of money. Now this is not a competition about who has got a harder luck story. In government, you have to make choices. Mr Turnbull wants to reduce taxes for the top end, I want to do a better deal for ten million Australians, it's as simple as that.
SALES: You have announced you'll fund an extra 100,000 TAFE positions for locals. Unemployment is currently at 5.6 per cent. The Reserve Bank classifies 5 per cent as full employment. How are you going to fill those positions then, when we are almost at full employment?
SHORTEN: Nearly nine per cent of Australia are underemployed, Leigh. When we talk about unemployment, that number only catches part of the picture. We've got 700,000 plus people on the disability support pension, very few of them get the chance to work.
We've got job searches and seekers who have given up. And of course, we've got nine per cent of people underemployed and we've got nearly 4 million Australians in casual or are part-time work.
This idea that somehow everyone's on easy street pulling down $200,000 in Mr Turnbull's wonderful world - that is not the real world, there is insecure employment and people need to retrain.
There is a lot of people doing jobs that won't exist in ten years’ time. TAFE is the educational institute for older Australians to get that second chance and I can't believe the cuts this Government have made to TAFE.
SALES: On your point about insecure employment, since Budget night, a number of Senators have raised concerns about the fact the Government didn't raise the Newstart allowance from $40 a day, even John Howard who started work for the dole says Newstart should be raised.
Why is Labor hiding behind a review instead of saying, given you've got some money to spend here, we will do a $10 a week lift immediately and a review?
SHORTEN: It's a good question. The issue of Newstart is real. Unlike the Government, I don't pretend that it would be - that you could live on $40 a day.
SALES: Why haven't you lifted it tonight then?
SHORTEN: One, we're not the Government, two we need to review the payment system to work out what is adequate. But I certainly agree with a lot of the people who are saying it is an issue and you might, you probably didn't notice in my speech, I deliberately sent a message saying that job seekers living in poverty is an unacceptable set of circumstances.
SALES: Does that mean then, can we take it that you will offer an increase in Newstart before the election - you're just not prepared say yet what that would be?
SHORTEN: No, I'm not about to start spending billions of dollars on your show, even though I'm defending the ABC in another forum against your cuts. I do think it is an issue. What we are going to do is get the evidence and there is plenty there and look at what we can do, and let's be straight up, I like that John Howard says he cares about Newstart now. He had a chance for 12 years, didn't he?
SALES: On citizenship, which has been a bit of an issue this week, let me play you a clip of you speaking about citizenship in November last year.
JOURNALIST: Can you guarantee no Labor MPs or Senator also be caught up in this?
SHORTEN: I'm more than satisfied that Labor MPs through our vetting process will -
JOURNALIST: Can you guarantee rather that more than satisfied?
SHORTEN: Yes, I am. Yes.
JOURNALIST: Rolled gold?
SHORTEN: Yes, I am very confident and what's more is, when you have to look at the track record, it hasn't been Labor and its Ministers who have been the problem here.
SALES: We have seen this week that that was way off reality, you have lost four Labor MPs. The Coalition's already running that clip on social media as a form of attack, how is that not a dent in your credibility?
SHORTEN: Leigh, I don't quite agree when you said that was way off track, because there were facts which we now know in terms of the court’s decision which were not known -
SALES: Hang on, you said last year you had no problems at all, this week we have seen you had problems.
SHORTEN: Yes, but what you also said is what I said was not right. The fact of the matter is that the best legal advice we had, said that our people would survive what we thought to be the existing law. I'm very sorry that things have got to where they are, no question, and I wish I could have pre-empted or guessed the decision of the High Court.
I know Australians don't want to have to go and vote if they don't have to. So I'm sorry about that.
But the court did set a different standard, a new standard as far as we're concerned, and plenty of independent experts, maybe not the Government Ministers, but plenty of independent experts, maybe not Liberal ads on TV, but independent experts have made it clear.
SALES: If you look at the judgement, the High Court makes it clear it is not a new interpretation, it is upholding its previously stated position which is showing that you have taken reasonable steps to renounce your citizenship is not necessarily enough to meet the constitutional requirement?
SHORTEN: In good faith, our lawyers and our legal team presented their arguments, that wasn't our submission. The court didn't agree with our submissions and they have made their decision.
SALES: Regardless of whether it was your lawyers' advice or whatever, the reality is when we see what you assured Australians last year, you misled them?
SHORTEN: No, I go on the best advice I can get and I'm sorry that things have got to where they have got. I understand people's frustration and annoyance. I think that this Section 44 has been quite a tricky section of the Constitution.
If I had known then what I know now, then of course we would have said something different, but I didn't.
SALES: Is this a model for how you will deal with mistakes as Prime Minister, you will say something misleading and blame others instead of copping it on the chin yourself?
SHORTEN: No, if you are saying that someone has to be infallible to be Prime Minister, the last person to claim that died about 2,000 years on a cross. I'm not going to say I'm going to be infallible, but what I will do is act on the best advice and act in good faith, and that's what we've done in tonight's Budget: 10 million Australians better off under Labor.
SALES: Bill Shorten, thank you very much for making time to speak to us this evening.