WEDNESDAY, 14 MARCH 2018
SUBJECTS: Labor’s dividend imputation reforms; Adani; Land400 vehicle contract.
MILTON DICK, FEDERAL MEMBER FOR OXLEY: Good morning everyone and welcome to a great local business in the Oxley electorate. I'm really pleased to be able to represent a community that has over 8,400 small businesses which are the backbone of our local economy. I'm also really pleased to welcome Bill Shorten, the Leader of the Opposition and Chris Bowen, the Shadow Treasurer. This is Bill's fourth visit to the Oxley electorate over the last year and a half and he knows what local business is about and what, particularly local businesses in this community needs. That's why I'm really pleased to showcase a local business in this area but also hear about Bill and Chris' positive plans for delivering real reform and support for local business. So I'll invite Bill to say a few words.
BILL SHORTEN, LEADER OF THE OPPOSITION: Thanks, Milton and good morning everybody, it's great to be at Mr Spanner Automotive. We got a tour from Ian, we got to meet some of his great high quality, professional mechanics, Grant and George and Luke and others.
We're here today promoting Labor's Australian Investment Guarantee. Yesterday I announced that if Labor is elected at the next Federal Election we are going to create a 20 per cent tax deduction, on top of existing deduction schedules, for businesses to invest $20,000 or more. Our proposal to reward businesses for investing in new technology, new plant and equipment, new software, our proposal will promote economic growth in Australia.
I'm really excited that the Australian Industry Group, the Council of Small Business Organisations of Australia, the Food and Groceries Council have too unanimously backed in Labor's proposal to add the Australian Investment Guarantee to support Australian businesses to invest in new technology and new productivity. Labor's got an economic plan for Australia. Our plan involves provoking and stimulating growth, ensuring that we increase productivity, ensuring that people get a fair share in improved wages, and making sure that we get the budget under control, so we can deliver an economy which works for working people in this country.
Yesterday's announcement, seeing what we can do in the mechanic repair industry in Australia - 22,000 mechanic and repair businesses in Australia. Labor wants them to get ahead, to be able to invest in the future, and Labor has got the plan to help our small businesses move forward. I'd now like to ask Chris Bowen to talk further about our economic reform plans for ordinary and middle class Australians and then we're happy to take questions.
CHRIS BOWEN, SHADOW TREASURER: Well thanks very much Bill. As Bill said it's great to be able to be here to talk about the Australian Investment Guarantee. The government gives away $65 billion in corporate tax cuts in the hope and the prayer that it'll be invested. We say we'll provide tax relief on the condition that it's invested in Australia, and that's what our investment guarantee does, and it will spur investment and it will spur growth.
Now of course it's funded, in part by the other measures we announced yesterday, our reforms to dividend imputation, and the other key difference to the government is that their tax cut for big business is unfunded, we take the decision, the responsible decision that we have to pay for our reforms. Now as is usual as Labor leads, the Liberals lie. That is what is happening today, and let me just deal with some of the mistruths that the Treasurer and the Prime Minister are sprouting today in relation to Labor's policy.
We welcome the Prime Minister and Treasurer's recent new found interest in low income earners, but they cry crocodile tears. Now this - what they are doing is playing the same trick, the same sophistry as they attempted in their scare campaign on negative gearing, claiming that taxable income means low income. Now the Prime Minister didn't even go through the rigmarole of using the term taxable income this morning, he just said low income earners are affected. Now that is a lie.
Let's go through the facts. You can have a very large superannuation balance in Australia and be on a low taxable income because much of it is tax free. That's the lie that the Treasurer and the Prime Minister are perpetrating today and again they perpetrated it on negative gearing. They have no ideas of their own, no plans, no policies, all they engage in is scare campaigns. Now the fact of the matter is that the dividend imputation refundability costs the budget presently close to $6 billion a year and that's projected to rise to $8 billion. I heard the Finance Minister on radio overnight saying that's not much money. Well it might not be much money to him, but when they try and take money off people, and they say that the budget needs to get back to surplus, and then they say there's lots of money involved, but $8 billion which goes to some of Australia's highest wealth individuals is apparently not much money.
Here are the facts: 50 percent of the benefit of dividend imputation refundability in the superannuation system goes to the top 10 percent of self-managed super funds - the top 10 percent, 50 percent of the benefit. If you look at the top one percent of self-managed super funds they are drawing the refund after not having paid income tax on average of $83,000 a year. That's more, much more than the average wage. The Prime Minister and the Treasurer say that's okay, we're not going to do anything about it, the Budget can afford it. Well we say that's not okay, we say it needs reform.
Now we recognise that reform is difficult, Bill and I and the Labor Party don't engage in these reforms lightly, we engage in these reforms because they're necessary. And we will deal with these scare campaigns and let me say this. I welcome a debate about pensioners in Australia, because if the Treasurer wants to debate me about pensioners we'll have that debate. And we'll point out that this is a government which took nearly 100,000 people off the pension entirely in their sweetheart deal with the Greens in relation to pensions, that affected much more than 300,000 people. This is a government that today wants to take the Clean Energy Supplement off 400,000 aged pensioners. You want a debate about pensioners, we're up for it. I welcome debating the Treasurer any point, any time, any place about pensions because our plans for the economy and for pensions will stack up against theirs any day of the week.
Our plans are responsible, funded and well designed and we are more than happy to take them to the election, being upfront with the Australian people unlike the government, which said no cuts to pensions before the 2013 election and then embarked on these cuts to pensions. We are being very upfront with the Australian people and we welcome the debate about our plans.
SHORTEN: Thanks Chris, are there any other questions on the Australian Investment Guarantee or any other matters?
JOURNALIST: As Mr Bowen has said Malcolm Turnbull has said that it's pensioners and self-funded retirees that will be affected by the tax reform plan. Are you certain that everyone who will be affected will be able to afford it?
SHORTEN: Well, let's put some facts on the table. One, under our proposal not a single dollar will be taken away from shares paid to people. Two, not a single dollar will be reduced in people’s superannuation. Three, not a single dollar extra in tax will be paid by people and four, our changes are not retrospective. What we're doing here and I think for a lot of people who haven't heard about dividend imputation, are saying what's all this fuss about. Well that really highlights the first point we're making. 92 per cent of Australians are not getting a tax refund after they pay no income tax. But let me put it in even plainer English. How can it be fair that a few people are able to get a tax refund when they paid no income tax? That is effectively the loophole we're shutting.
Now, we're not saying it's illegal, but we're just saying it's a tidy little arrangement which the nation can no longer afford. Why should the mechanics here, who are supporting their kids, working hard in their trade, they pay their income tax. Why is it that they can't get a tax refund if they have paid no income tax? This is a particular benefit which was created by John Howard at a particular time when the Commonwealth Government had a lot of money. Well times have changed, and if you've got to make choices - I make no apology for choosing to make sure that we spend more on child care in this country than we do on giving tax refunds to people who have paid no income tax. I make no apology for saying that we should spend more on our Federal Police keeping us safe, than we should spend on giving people a tax refund who have paid no income tax. I make no apology for saying that I think our schools and our universities, our hospitals, our aged care facilities, are more important to me than giving tax refunds to people who have paid no income tax.
Going to the specific of your question. There are some people who will lose some government money. But they're getting this government money and they're paying no income tax, so you're getting a tax refund even though you’ve paid no income tax. I think most Australians, when they discover this system exists, will probably want to know why they didn't know about it before and secondly say well that doesn't make sense.
So Labor is up for a tough debate. We understand that Malcolm Turnbull will fight tooth and nail to protect the wealthy at the expense of workers, farmers and small business. Labor has got different priorities. For me, big corporations and the very rich can take a back seat, and I want to look after the workers, the farmers and the small businesses of this country who don't have access to all the same tidy arrangements where you get a tax refund even though you’ve paid no income tax.
JOURNALIST: Mr Shorten is that policy that we're talking about, is it calculated on the basis that this group of people, self-funded retirees are unlikely to vote Labor as some commentators are suggesting?
SHORTEN: No, not at all. Our policy is calculated on the basis that we've got 105,000 older Australians waiting for aged care. Our policy is based on the fact that for working mums in this country, it's more expensive for them to go to work than actually stay at home because childcare is so expensive. Our policy is based on the fact that we want to give a good business, like this automotive repair business, a reward for investing in new machinery. Our policy is based on the long-term national interest. I understand that Mr Turnbull is the shop steward for the very rich and for big corporations in this country, and what he's trying to do is say that – trying to sell to people a lie that somehow this nation can keep handing out tax refunds, in some cases up to $2.5 million, to people who've paid no income tax. We just can't do that.
JOURNALIST: Hundreds of thousands of pensioners and self-funded retirees will lose money. Is this not putting greater pressure on Australia's welfare bill?
SHORTEN: I'll get Chris to supplement this but I tell you what, when you give millionaires hundreds of thousands of dollars of taxpayer money, that's not welfare for the low income, that's millionaires' welfare. And yes, we are going to stop multimillionaire welfare funded by the taxpayers of Australia but I'll get Chris to talk a little further.
BOWEN: Sure, thanks Bill. Of course, the Parliamentary Budget Office considered all the interactions that apply in this policy, all the impacts on government payments across the board and still found that this measure makes the Budget $11 billion better off over the forward estimates. So far from putting more pressure on the Budget, this is a vital measure to take pressure off the Budget and assist Labor's plans for a return to surplus.
JOURNALIST: Will more people become reliant on the welfare system?
SHORTEN: I have to say, if millionaires are getting hundreds of thousands of dollars of taxpayer money, that's not a welfare system I'm going to back. Why is it that Malcolm Turnbull will fight for millionaire welfare but not the welfare of battlers? You may not have noticed, but today was the last day, or yesterday was the last day where you could put in submissions to the national wage case for the minimum wage. To my shock, Mr Turnbull's Government has put in a submission to the minimum wage which doesn't support increasing the minimum wage. No, when Mr Turnbull says he cares about the battlers, you know he's having a lend of you. The fact of the matter is, he wants to give $65 billion of taxpayer money to the largest corporations in Australia. That doesn't look after the little bloke. What he wants to do is keep buttressing a system, feather-bedding a system, where millionaires who have got millions of dollars in retirement, good luck to them, who own a lot of Australian shares, get a reward for having a lot of Australian shares. So not only do they get the ownership of the shares, that's fair enough. Not only do they get dividends paid by the companies of the shares that they hold, but they also get another payment from the Government. What a great scheme, and I understand why some people don't want to let it go, but we've got to look behind the sound and the fury of the outrage of some people, in many cases very wealthy people, getting a whole lot of money from the taxpayer.
I make no apology. I want to make sure that we get the aged care waiting lists down. I want to make sure our schools are properly funded. I want to reduce the elective surgery waiting times for hip and knee replacements. I want to make sure we can properly fund Medicare. I’ll tell you what is affecting pensioners, the fact that the government wants to create the world's oldest retirement age at 70; the fact that power prices are out of control. The fact that this government has increased the out of pocket expenses to see the doctor and to see the specialist. My priorities are founded in the day to day experiences of people doing it hard. Mr Turnbull is just looking after the top end of town.
JOURNALIST: Your Queensland Labor colleague, Anthony Lynham, who is the Mines Minister here says the Adani project has jumped through every environmental hoop the Queensland Government and the Federal Government has set for it. It has all the environmental approvals that it requires. On what basis do you say you're still sceptical that it doesn’t stacks up environmentally?
SHORTEN: I have said my piece on Adani and I think I have made my view very clear. My interest is that we don't put all our eggs in one basket in terms of job growth in this state. That's why Labor has proposed fair-dinkum regional jobs which don't depend on foreign billionaires who keep missing deadlines to create jobs in Queensland. The widening of Townsville Port, the second stage roadwork in Mackay, in Gladstone, the Port Access Road, making sure that we build the long overdue Rookwood Weir in partnership with the Queensland Government. Now, I have said my piece on Adani, yes I am a sceptic of it and I think a lot of Australians are. But what I have also committed to, is saying that if we form a government, if all the work is done and all the contracts, the approvals, I'll make it very clear, we're not going to enter into sovereign risk.
JOURNALIST: So just on that point, you said that you won’t rip up contracts for Adani but specifically, does that mean that you'll rule out using the EPBC Act to revoke the federal environmental approvals for Adani if there is new information that comes to light?
SHORTEN: We are not going to change any of the existing laws under which -
JOURNALIST: Will you -
SHORTEN: Sorry, I am going to answer your question and it is the last time I am going to go to it, because I have said I have spoken a fair bit about it, but out of deference, I'll just go to this point. We will not change the existing law or the existing rules. We won't change the existing goal posts for Adani or for anyone else, full stop.
JOURNALIST: But under the existing EPBC Act, you don't need to change the goal posts, you can still revoke the federal environmental approvals if there is new information. Would you consider doing that?
SHORTEN: Let's be blunt, that is a hypothetical, if there is new information. We won't change the law, we won't change the rules, we won't create sovereign risk, full stop. But what we will do is, I have seen what happens in Townsville when we relied on the word of Clive Palmer and some of you will have covered the story. When a town just relies on one particular so-called entrepreneur to look after people, and then a whole lot of people are unemployed or left with broken promises and broken hopes and broken dreams, what sort of leader would I be to sell people just one plan? I am committed to making sure that Townsville has its port widened. I am committed to making sure that Gladstone has the Port Access Road it deserves. I am committed to second stage of roadworks for Mackay to allow the product from mines and agriculture, coming over the mountain to the Mackay, can use that port. I am committed to building Rookwood Weir with the state government because that will turbocharge 2,000 jobs in the lower Fitzroy. We are committed to making sure that Townsville has water security. These are the measures which a fair-dinkum government would pursue rather than just relying on one project.
JOURNALIST: Do you believe the decision to award the Land400 Phase 2 Defence contract to Queensland was a politically motivated means to sure-up votes in marginal seats?
SHORTEN: Listen, I have got two very basic principles when it comes to defence contracts. One, is the equipment we are giving Aussie diggers the best in the world, because then it's only just good enough for me. That is my first principle. Is the tanks and the armoured vehicles, are they good enough, are they the best in the world? Because when they are the best in the world, they are only just good enough for the men and women of our Defence Force. And my second principle, equally strong, we should be spending that money in Australia. Whether or not it is in Queensland, Victoria or anywhere else, what matters to me is that the money gets spent locally. Australians can build the best material in the world, we have in the past and we will in the future.
So I have got two tests, and I think this project certainly passes both. Is it the best in the world, because it is only just good enough for our men and women of the armed forces, and secondly, is it Aussie built? And this will be.
JOURNALIST: Could we get back to the imputation tax change. Would you be willing to stake your chances in this election on the policy?
SHORTEN: Labor has got an economic plan – that’s a pretty bold question so let me go to the heart of it. Labor has got an economic plan which is about stimulating growth, fairer wages, increasing productivity and making sure that the Budget is in a strong position, and on that basis we will deliver an economic plan which delivers for working and middle class Australians. I do think we need to have a fairer tax system. My priorities are looking after middle and working class people. I need to clear room to make sure that we can provide income tax relief for people on lower wages, I want to make sure that we can secure the Budget going forward, so Australians are not paying big interest payments on reckless spending. And I also want to make sure that we're a government who looks after our own, that we don't leave anyone behind. The way we do that is we shut down unsustainable tax concessions which disproportionately favour the wealthy.
Let me remind you of what our reforming Labor Opposition has said. Negative gearing, we're going to back first home buyers over property speculators; income splitting in trusts, in family trusts which allow some people to be able to minimise their income and allocate some of their income, technically to other members of their family, which is not something that most Australians can do. We're opposing a $65 billion corporate give away, because that's just shipping Australian taxpayer money overseas, and we've also said that we want to stop a system which whilst it's been perfectly legal, and I can understand if you're receiving a tax refund even though you've paid no income tax - I can understand why you're not happy to lose it. But in all fairness, why should the mechanics here or the nurses at the local hospital, or the police making our streets safe, why should they be paying income tax to Canberra so Mr Turnbull can shovel a lot of that money out to wealthy people who are paying - getting a refund for paying no income tax. It's a matter of priorities I'm choosing everyday people, Mr Turnbull is choosing corporations and the top end of town.
JOURNALIST: You say it disproportionately affects the wealthy. It applies (inaudible). Should those retirees be drawing down on their assets to fund their retirement rather than using these tax brackets?
SHORTEN: Well I think Mr Turnbull owes Australians an explanation on why he kicked 100,000 people off the aged pension, why he kicked 270,000 to a lower part pension. I think he owes pensioners an explanation on why he's frozen the patient rebate which pensioners get, for the last four years. I think he owes an explanation to 400,000 pensioners on why they're not getting an energy supplement, even though he can't control energy prices. Labor is focused on the ordinary people of this country. The people who don't get in the headlines, who don't necessarily get all the attention. I want to make sure that in this country, a fair go for everyone actually means that, not just someone who can afford the best accountant, someone who has the most shares, someone who has the most wealth, being able to effectively opt out of a tax system which still has too many loopholes.
JOURNALIST: Pensioners need every penny, would you consider an exemption for full pensioners?
SHORTEN: Well first of all when we talk about full pensioners, a very small number - it's not even one percent, a far smaller number will be marginally affected. We're offering the best deal for pensioners in this country. We're the ones who want to keep paying them an energy supplement; we're the ones who want to decrease the gap between the rebate they get and their out of pocket medical expenses; we're the ones who want to reduce aged care waiting lists. And the other thing is we want to make sure that their grandkids can get a job in this country, we want to make sure that their sons and daughters who are running Australia's small businesses have got the incentive to invest, and we also want to make sure that wages get moving again in this country. This is a nation that is capable of doing great things, but what we've got at the moment is a government who is stalled. They're more into infighting than making hard decisions. They look at the current unfair tax system and what they see is an issue too hard to fix, we look at the current unfair tax system and we think it's too important not to fix.
JOURNALIST: Dora the explorer - just quickly.
SHORTEN: Alright just for Dora.
JOURNALIST: Yes just for Dora. Shouldn't the Federal Government give a large tax offset, one off, to the producers of Dora the Explorer to secure production in Queensland?
SHORTEN: I'd have to look at the financial arrangements of that. We'd have to see if it stacks up commercially, we'd have to see if it's in the national interest. Although I haven't given Dora a great deal of thought since I was watching it a couple of years ago when my daughter was four.