Bill's Transcripts

TV: 7:30 - Budget Reply 2015






SUBJECT/S: Budget Reply 2015


HOST, LEIGH SALES: Mr Shorten's in our Parliament House studio. Thank you very much for joining us this evening.




SALES: In your speech this evening you identified that the end of the mining boom will wipe $96 billion off the Budget bottom line but against that pitch you went on to announce a range of new spending with no mention of what you'd cut to pay for it. You killed your credibility right there, didn't you?


SHORTEN: You've covered a few issues there. What I said tonight in my Budget Reply was that I believe that the Government's missed what's happening in the real economy, on Tuesday night in their budget. The big change which is happening is we're seeing a massive contraction in investment into our economy because of the decline in investment in mining. So what we need is a plan for the future, a plan for confidence, so that we can accelerate investment in our cities and our towns and our service industries and benefitting from the rise of Asia. The Government didn't address confidence, instead they've got a trifecta of sort of sneaky tricks in their budget to underpin their finances, and that's what we spoke about tonight, you know, it's their old cuts reheated. They're attacking the States for $80 billion and they're really relying on bracket creep to fund most of their revenue.


SALES: Well, on that point, you've heavily criticised the Treasurer for that yet you've offered no remedy for it. What do you say to the suggestion that until you can offer your own solution to the problems you identify, again you have limited credibility?


SHORTEN: Well, first of all, I did something tonight which Tony Abbott was incapable of doing in opposition –


SALES: Well hang on you raised bracket creep. What are you planning to do about bracket creep?


SHORTEN: Well that's exactly what I'm going to answer. I raised tonight our taxation system, including bracket creep, including the need to perhaps turbocharge long-term confidence and we need to have a bipartisan approach on taxation. We've got a bipartisan approach on national security. But I think a lot of Australians would like to see Tony Abbott and I sit down and work through the future of our tax system –


SALES: What are you proposing on bracket creep?


SHORTEN: What I'm proposing is that we sit down with Tony Abbott and look at all of what we’ve got to do and see what we can do collectively.


SALES: What's your idea that you’re going to bring to the table on bracket creep?


SHORTEN: Well the first thing I said tonight was specifically about small business. I think that Tony Abbott and I need to sit to sit down and work out if it's possible in the life of this Parliament or the next to reduce the small business tax rate, that's for incorporated businesses under $2 million, below the 28.5 per cent. I gave Tony Abbott some credit, I said listen 28.5 per cent is a start, it's a headline, but we need to go further.


In terms of bracket creep, what I offered today was to help the bottom line of the Budget by $21 billion. I do not understand for the life of me why Tony Abbott persists in defending loopholes which see people with multimillion dollars in their superannuation accounts getting paid by all the other taxpayers in Australia. That would help the bottom line and then that'll let us address these other matters.


SALES: You've proposed cutting the tax rate for small business by 5 per cent. The Government's plan is 1.5 per cent. Where is your modelling on that to show that the benefit to the economy of your 5 per cent proposal will outweigh the lost revenue?


SHORTEN: Well first of all what I said is that Tony Abbott and I need to talk about it. You can only do the big changes, the big reforms together. One of the things which –


SALES: Let me ask you again to please address the question which is: where is your modelling to show that that would be a good idea for the economy?


SHORTEN: Well, I have the same logic that the Government has. Surely if the Government believes that reducing the tax rate by 1.5 per cent will provide some confidence, my proposition is that what we need in this country is greater long-term confidence. Now the Government –


SALES: So what you're suggesting is that therefore, there's an increment there if you go up by 5 per cent, that therefore it's going to have an incremental effect?


SHORTEN: I think it's a big statement and I think it's important for confidence –


SALES: But what you’ve said there, I’m sorry to interrupt, but what you’ve said there is basically that that's your gut feeling. I'm asking where your evidence for that that 5 per cent figure?


SHORTEN: No, it's not a gut feeling. If you speak to any small business person in the high street, if we can lower some of their headline rates of taxation that lets them reinvest it in the capital of their business or helps with their cash flow. Now, I think that this is not a simple matter or a one night matter. It needs to be worked through, but what I also raised tonight and this goes to the sort of person I am, Leigh, and why I'm offering myself up for the leadership of this nation. It's no good just having Tony Abbott and I or Labor and Liberal always trying to take pot shots.


What I did tonight is something Tony Abbott didn't do in four Opposition Leader reply speeches. I said there were parts of his budget upfront that we would go with. You know, any observer of Australian politics will tell you that what I’m trying to do is say that sure we’ve got real concerns that this budget fundamentally misses the mark. It fundamentally doesn't have a sustainable plan for growth, all the experts have panned it already economically. But what there was that was good in it, I'm putting my hand up and saying I'm willing to just work with the Government and on an issue like taxation reform, which has bedevilled governments of both sides, tonight what I did was tried to break the political mould.


SALES: Let me ask you about the National Disability Insurance Scheme. Is Labor still committed to rolling that out as pledged during the Gillard years?


SHORTEN: Yes, we are.


SALES: Okay, the spending is all heavily back loaded. The cost of it will rise tens of billions of dollars up to the end of the decade. Where's that money coming from?


SHORTEN: Well first of all, we supported and to be fair the then opposition and now government supported an increase in the Medicare levy to help pay for that. I also –


SALES: The Medicare levy would have to go up to 5.5 per cent to cover the cost of it.


SHORTEN: Leigh you know that's not what we did but you know that we supported an increase in it. What –


SALES: How are you going to cover it?


SHORTEN: Alright, I will just try to answer your question. What I believe is that we can't afford not to have a National Disability Insurance Scheme. I believe that we already have a highly inefficient system, states and crisis dictating priorities. Right now as we talk to each other on television, you've got tens of thousands of older Australians having that sort of late-night anxiety about who's going to care for their adult child. There is a forgone cost of not having a scheme which empowers individuals and their families. So I think that when you look at the cost over the long run I have no doubt it's sustainable and by the way Leigh –


SALES: Well Mr Shorten I don't doubt what you're saying there but aren't you short-changing the very people that you're talking about if you can't outline how you intend to fund exactly what you say they so desperately need?


SHORTEN: Well, I believe that we will fund it and I know that we can fund it and we will have properly costed policies at the election. But Leigh –


SALES: Okay, we just have to take your word on it for now, is what you're saying?


SHORTEN: No Leigh, what I'm saying is look at our record. I am really glad that I and the Labor Party pioneered a National Disability Insurance Scheme. I get that there are some people who look at the line items and say, you know, is this the right priority or is something else the right priority? I'm saying to you there is a huge inefficiency in our current disability system, and we will keep championing it, and to be fair, the Government, that's one area which the Government hasn't cut.


SALES: Less than two years ago, Australians voted to get rid of the Labor Government that they didn't like. Leaving aside leadership instability, what will be your point of difference to the Rudd Gillard Government?


SHORTEN: Well first off what I'm interested in is my point of difference to Tony Abbott. The Australians spoke and they gave Tony Abbott a mandate –


SALES: But Australians need to know that when they vote for you they're not voting for a return to the Rudd Gillard era that they didn't like?


SHORTEN: Well, we're a far more united team and all your journalists who work for the ABC in Canberra would attest to you from all their conversations that's the case. I think that when you look at the current tensions in the Liberal Party where clearly Scott Morrison was parading his wares to say he could do a better job than Joe Hockey, clearly Malcolm Turnbull is a bit frustrated he’s not sitting at the desk instead of Tony Abbott. You know, I think when it comes to leadership instability, we're not the game in town anymore Leigh.


SALES: You were talking a lot about modern in your speech. Yet if you want to talk about modern Australia only 17 per cent of workers are members of unions, yet Labor is still very heavily tied to unions, your MPs are overwhelmingly drawn from the ranks of unions. How can you claim to have any understanding of modern Australia when your own team are unrepresentative of its reality?


SHORTEN: Well first of all look at our policies. We're standing up for modern Australia in terms of making sure that our children in the schools learn to code so that they are part of the 21st century and they have a literacy in computers which other advanced nations have –


SALES: And how will you be paying for that?


SHORTEN: Well, we costed that. It's $353 million over the forward estimates.


SALES: And where will that money be coming from?


SHORTEN: Well that's a good chance for me to talk about the superannuation concessions and going after multinationals who are not paying their fair share. We've actually broken the political mould here again Leigh. Do you know we've put forward $21 billion, that's right, $21 billion of proposals to save money to the bottom line –


SALES: And there’s a $35 billion deficit?


SHORTEN: Yes, but do you know what's interesting about that number? It was only $17 billion last year and under Joe Hockey's last 12 months it's gone up to $35 billion and I’d think you'd have to be a supreme optimist to think that the forecasts in the current Budget, the parameters, the assumptions, are not weighted at the blue-sky end. And I have every concern that we will see investment in non-mining not grow as fast as they say. Do you know the Treasurer's staking Australia's future on an increase in nominal GDP growth of a whopping 4 per cent?


There's more hope than experience in the numbers in that budget, but when we talk about the Budget, when we talk about NDIS, when we talk about the past and future, one thing that this government has been very lazy about is they've just taken $80 billion of the money which they would've given to the states if they'd been a normal government and they've taken it away from hospitals and schools. We are looming for a fiscal cliff in terms of hospitals and schools, because of this government's harsh broken promises.


SALES: Bill Shorten we're out of time, thank you for joining us.


SHORTEN: Good evening Leigh, thank you.