THURSDAY, 11 MAY 2017
SUBJECT/S: Budget 2017
LEIGH SALES, HOST: And after a mad dash from the House of Representatives, Bill Shorten joins me now from our Parliament House studio. Thanks very much for being with us.
BILL SHORTEN, LEADER OF THE OPPOSITION: Good evening, Leigh.
SALES: You have announced your support for a 0.5 per cent increase in the Medicare levy, but only for the top two tax brackets. Why isn't it fair for all Australians to help pay for the NDIS scheme? Disability can affect all Australians, after all?
SHORTEN: Well first all, the disability insurance scheme was fully funded when Labor was in office and, secondly, I think there are other ways to help fund all of the requirements of government, including the disability insurance scheme. For instance, why is the Government giving away $65 billion to large companies in the next 10 years?
SALES: You haven't addressed my question. Why shouldn't all Australians help pay for that scheme?
SHORTEN: All Australians are already paying for that scheme. What I don't think is fair is putting the burden on people on $50,000 a year when this government is giving millionaires a tax cut on 1 July.
SALES: When Julia Gillard was the Labor Prime Minister, she proposed raising the Medicare levy by half a per cent to help pay for the NDIS but it applied to everybody then. What has changed?
SHORTEN: What has changed is that this government has the ability to not go ahead with its corporate tax cuts –
SALES: No, but what has changed in your thinking?
SHORTEN: Well I think there are other sources of raising money for NDIS and other programs of government, including schools funding. I don't think we need to levy nearly 10 million workers when, in fact, there are other ways to raise that money.
Let's make it really clear here. We are champions of NDIS, you have been good enough to interview me about it in the past. I just don't buy the argument that the only way that NDIS or other schemes of government can get funded is by increasing the taxes of people on $50,000 or $70,000 a year. There are smarter ways to do it and fairer.
SALES: If all Australians pay the extra 0.5 per cent Medicare levy, that covers the $50 billion, or so, shortfall in the NDIS funding. If it is only applied to the top two tax brackets, as you have proposed, how much will that cover of that $50 billion?
SHORTEN: First of all, I don't accept the assumption that the scheme is unfunded. But secondly, we have done modelling from the Independent Parliamentary Budget Office and we think our way delivers comparable outcomes without having to slug – increase the taxes of a whole lot of people who haven't had any wages growth for the last few years.
SALES: You keep relying on, pointing out that the NDIS was fully funded, you don't accept that it's unfunded, but you are relying on numbers from 2013, that was four years ago, the Budget has changed considerably since then. We also know that the NDIS has blown out. To say that it is fully funded under Labor is just meaningless?
SHORTEN: Well first of all, I don't accept that the scheme has blown out in the way which you say. But secondly, I do agree with what you said that the Budget has changed. This is an incompetent government who has wasted the last four years. Growth stagnating, unemployment is up, underemployment, casualisation are up.
This is a government who is increasing taxes. My concern is they are increasing taxes on the wrong people. We are all for making sure that millionaires pay their fair share. We don't think this is the right time to give large companies corporate tax cuts. The nation can't afford it.
For me it is a simple choice. It is about priorities. If I have a choice between not giving a tax cut to a large multinational, many of whom aren't paying enough tax now, or giving a tax rise, increase in what people on $60,000 and $70,000 pay, well, I am the Labor guy, I'm going to look after the workers and the teachers and the tradies of this country. And yes, I think some of the big companies don't need, like the big banks for example, they don't need a reduction in what they pay in tax.
SALES: If you want to keep talking about taxes, Labor wants to keep the deficit levy as well, when are you going to square with people and say, these things aren't really temporary levies, they are permanent increases to the top marginal income tax rate?
SHORTEN: No, I wouldn't be as pessimistic as you, your question assumes that the government will never get back into surplus. We'll certainly want to look at it. We would look at it again, when we were back into surplus.
SALES: OK, when you say you'd look at it, I mean, it's called a deficit levy, presumably if you are in surplus it is gone?
SHORTEN: Well I think that would be the right time to reconsider having a deficit levy, exactly.
SALES: What do you mean reconsider, why can't you just go, yep, we would get rid of it?
SHORTEN: I am agreeing with you. And that's what I find funny about what Mr Turnbull's done. He has declared mission accomplished on budget repair. He is not renewing the budget deficit levy. The problem is that the deficit is much bigger.
SALES: When has he said mission accomplished on budget repair?
SHORTEN: That is the consequence of cancelling the budget deficit levy and not renewing it, isn't it?
SALES: The deficit levy comes off from 1 July, that is already legislated. So are you going to the next election promising a two per cent tax hike for the top marginal taxpayers?
SHORTEN: Yes we will support – that was the decision tonight which I announced tonight, that we do support a budget deficit levy. Again it is about choices. If I have to choose between cutting Medicare or cutting the NDIS or asking people who are very well off to pay a little bit more, I guess I am going to come down on the side of the social safety net. On the side – there are a lot of people in this country who don't earn a quarter of a million dollars or $1 million. These are the people who I am conscious of, who – there was nothing for them in the Budget, nothing for the cost of living. Their kid can't get into the housing market, they're going to be asked to pay more to go to university and their penalty rates are getting cut from 2 July.
SALES: In April 2014 when news of the deficit levy first leaked you said, we will fight a tax on ordinary Australians. A tax increase is a tax increase is a tax increase. Again, I go to the point, what's changed in Labor's thinking that you no longer hold that view that a tax increase is a tax increase?
SHORTEN: Well first of all, we ended up supporting that budget deficit levy back in 2014. So we agreed with it then. And we have had a good look at the books of this government. I mean, this government has increased debt massively. They haven't run the economy well. They are a big-taxing, big-spending government. Debt has got bigger and in the meantime there was nothing in that budget of any consequence for middle class and working class families except a hike in their Medicare levy.
SALES: Labor is going to support the new tax on banks, yet you said that in your speech that if the banks pass on so much as one cent that should be the end of this Treasurer and Prime Minister. You are going to back them in voting for it, applying your own logic, that should be the end of you too?
SHORTEN: Well you assume that therefore the Government isn't going to be able to control the banks. I have got great scepticism –
SALES: No, no, I am just applying your own logic. You said if the banks pass it on it should be the end of the Treasurer and the Prime Minister, you are voting with them on this legislation so it should also be the end of you, applying your own logic?
SHORTEN: Well, fair is fair. It's their idea, they're guaranteeing Australians. Don't worry just about me, worry about Australians. And they are saying that the banks won't pass this on. I think Mr Turnbull needs to work with Labor to make sure the banks don't pass it on. I'm a bit worried how strong Mr Turnbull is because he has fought so hard against a banking royal commission.
SALES: Do you really want to have an economy where the Government strong arms the banks and intervenes in how the banks operate their businesses?
SHORTEN: I don't want to have an economy where the excessive economic power of the banks remains unchecked.
SALES: Why do you support the bank levy then if you are concerned it will be passed on?
SHORTEN: Well, it’s an issue, but I also think the banks shouldn't pass it on. I don't think the banks should just simply slug mortgage holders and credit card holders and account holders.
SALES: Well you when you were in government couldn't stop the banks from, for example, raising interest rates outside the Reserve Bank's moves?
SHORTEN: This is one of the issues which I think annoys Australians, that the banks don't seem to be too accountable to too many people. That is why I don't understand why Mr Turnbull and the Liberal Party and the National Party are so hell-bent on stopping a royal commission. This show has been very good at covering some of the financial scandals which have happened in the past. The victims want their day to tell their story and I don't know why Mr Turnbull is so against a banking royal commission.
SALES: Are you suggesting that, say, if Labor were in government that you could be held accountable as Prime Minister for actions that the banks take or don't take?
SHORTEN: I'm saying that if I form a government, I will have a royal commission into the banks. I think it is long overdue to examine the excessive economic power of the banks and how they use it, and what are the best responses to ensure that customers get a fair go. I'm not inventing the stories of tens of thousands of people. Small business people. People who are retirees or near retirement who have simply been ripped off. Their stories are heart breaking and nothing less than a royal commission will satisfy me and Labor.
SALES: Just one brief question, two years into a Labor Government, if you form government at the next election, would the budget deficit be larger or smaller than it would be under the Coalition?
SHORTEN: We will have to look at all of our numbers as we get closer to the election. But let’s be straight, there hasn't been a projection this government made which it has kept. Remember they used to bag out Labor in the terms of economic management. Well this is a government who has got higher unemployment than they projected, lower wages growth than they've assumed, and they are precariously relying on our global terms of trade, the ability of a high export prices for our iron ore and coal and commodities. This government doesn't have a plan to create genuine domestic growth.
Tonight I outlined a plan to make sure that Australians can get into their first home, to make sure that we doubled down on funding education, universities and schools. I want our schools to be the best in the world. I also said that we have got to have a system that puts the climate change wars to an end.
We are about the future. Mr Turnbull's Budget was an attempt to bury its past, rewrite history and pretend they have turned over a new leaf on fairness. But on everything, cuts to schools, unis, home buyers, climate change, Medicare, taxation, this is a government who favours the big end of town over everyone else.
SALES: Bill Shorten, thank you very much for joining us this evening.
SHORTEN: Thank you.