Doorstop interview: Liberals’ twisted Budget priorities

JIM CHALMERS, SHADOW MINISTER FOR FINANCE: Thanks for coming out to Springwood today. Just wanted to make a few comments about the Budget in a few days' time then over to you. Malcolm Turnbull's highest priority in the Budget in a few days' time won't be tax cuts for workers; it'll be tax handouts for multinationals and the big banks. The defining feature of the Budget on Tuesday night will be an $80 billion handout to big business, including $17 billion to the four big banks, which have been exposed at the Royal Commission as responsible for so many of the rorts and rip-offs in the financial system.

 

How do we know that it's Malcolm Turnbull's highest priority to give tax breaks to the top end of town? His Finance Minister Mathias Cormann said only yesterday about the company tax cuts that they are, quote, "the most important tax cuts of all". So you'll hear a lot of talk about how Malcolm Turnbull all of a sudden wants to give tax cuts to middle Australia, but remember, this is a stupendously out-of-touch Government whose highest priority is to shower largesse on the top end of town at the expense of schools and hospitals in middle Australia. The Finance Minister has belled the cat and said that their highest priority is that $80 billion tax cut to big business, including $17 billion for the big banks. The Budget on Tuesday night should support our hospitals and our schools and our people, not reward the big banks for their dodgy behaviour.

 

Obviously, we will look at whatever is proposed on Tuesday night when it comes to tax relief for working people. We have said all along that working people should be the priority and not the top end of town. We make this point: Only Labor can responsibly deliver tax relief for middle Australia because we've done the work to close down the tax concessions which overwhelmingly favour those who need them least. Only Labor can deliver tax relief for working people. Working people will always be better off under Labor because we're prepared to make the hard decisions elsewhere in the Budget to properly fund tax relief for those who need and deserve it the most.

 

The reason we have record and growing debt under Malcolm Turnbull and Scott Morrison and Mathias Cormann is because they continue to defend the big tax concessions at the very top of the tax system. We have a deficit for this year which is eight times bigger than it was in Joe Hockey's first Budget in 2014. We have a Government who said we had a Budget emergency when net debt was half what it is today. Net debt has doubled on Mathias Cormann's watch. And we have gross debt which has crashed through half-a-trillion dollars for the first time in Australian history and doesn't even peak in the Government's own Budget papers over the next 10 years.

 

So the test for Malcolm Turnbull in his make or break Budget on Tuesday night is whether or not he's listened to the Australian people; whether he will reverse those $715 million in cuts to hospitals; $17 billion in cuts to schools; the attacks on pensioners; and whether he will reverse that $80 billion tax handout to big business in this country, which would reward the big banks with a $17 billion tax cut for the top end of town. That's what Malcolm Turnbull's Budget will really be about no matter what he tries to pretend on the eve of an election in this make-or-break Budget.

 

JOURNALIST: We're expecting income tax cuts in next week's Budget. Would Labor support moves to give immediate tax relief to lower income earners?

 

CHALMERS: We've said all along our priority is low- and middle-income earners. We've said that all along, not just with our words, but with the policies that we've proposed. Middle Australia is crying out for support after five years of being treated so shabbily by the Turnbull and Abbott governments. So we'll see what the Budget says in black and white on Tuesday night, but we have always said that we would prefer to see any tax relief go to those who need it most - the people of middle Australia - and not continue down this path of trickle-down economics from Malcolm Turnbull, which says up until now that the biggest tax relief goes to those who those who need it least. In the Budget on Tuesday night, even if there are tax cuts for people who work in this country, there will still be an $80 billion handout for the top end of town; we will still have the biggest tax concessions going to those who need them least; and the difference between Labor and Malcolm Turnbull is that we've done the work to make tax cuts for middle Australia responsible and affordable and sustainable. Mathias Cormann and Scott Morrison can't make that same claim.

 

JOURNALIST: Would you expect the Government to raise the lowest income tax brackets?

 

CHALMERS: We'll wait and see what the Government proposes on Tuesday night. It's not much use, us speculating. All we've got to go on so far are some details whispered to a newspaper today. We're prepared to wait until Tuesday night. We'll consider what's put forward. We'll evaluate it very carefully as we always do and we'll come back with a considered response in due course. But we'll always look more favourably on relief for low- and middle-income earners than we would on what has been Malcolm Turnbull's form to date, which has been to favour the top end of town with tax cuts.

 

JOURNALIST: Touching on what you said earlier, the Government is reportedly considering lowering taxes for high-income earners within the next five to six years. Is that fair?

 

CHALMERS: Again, we'll wait to see what the Budget says on Tuesday night. But the Government's form all along has been to prioritise the highest incomes in the tax system. They gave a $16,000 tax break in the last Budget to millionaires in the highest tax bracket. We said at the time that wasn't fair, particularly when we've got record and growing debt and much bigger deficits than the Government inherited from Labor. We will generally take a dim view of tax relief which continues to prioritise the top end of town. We will always be more favourable about tax relief which is directed towards low- and middle-income earners.

 

JOURNALIST: The Government yesterday announced a wholesale review of the Australian Public Service. What do you make of it?

 

CHALMERS: The review of the public service shouldn't be another excuse to cut back further on key services. We've got under this Government a public service which has been hollowed out, with consequences for advice to Government, service delivery to the Australian people, and with consequences frankly for the morale of the public servants themselves. We don't want to see this public service review used as an excuse to further cut services or to delay action on the extraordinary blowouts in spending on contractors and labour hire, which we've seen under this Government. This Government has spent more and more money getting less and less for it in the public service. And that's because they've imposed an arbitrary cap on staffing levels, which has meant that agencies are spending billions and billions of dollars more on labour hire and contractors, paying more for less, paying more for inferior outcomes. This review shouldn't be an excuse to delay action in that important area, or another excuse to further cut back on services out in our communities.

 

JOURNALIST: Is David Thodey a good person to be leading that review?

 

CHALMERS: We weren't consulted in any meaningful way on the make-up of the review panel. I won't go through each of them and say whether we would have appointed them or not, but I think if the Government wanted this to be a genuinely bipartisan attempt to improve the quality of public service in this country, we would have been meaningfully consulted about the make-up of the review panel, and we would have been meaningfully consulted on the terms of reference as well. And those things didn't happen. There are some people on the panel who are good people who we've worked with before. We make no judgement generally on individuals on the panel, but I think if the Government wanted something good to come of this review, something bipartisan where we could all move forward together, they wouldn't have just gone ahead and appointed people without any meaningful consultation.

 

JOURNALIST: If the High Court rules Katy Gallagher as being ineligible to sit in Parliament, should Susan Lamb, Justine Keay and Josh Wilson refer themselves given the cases are similar?

 

CHALMERS: Trying to predict or pre-empt the outcomes of the High Court is a mug's game. We know that because Malcolm Turnbull was so spectacularly wrong about Barnaby Joyce's eligibility. So I won't get into predicting or pre-empting the outcome of the High Court. We've only got a few more days to wait now. We've got some terrific colleagues that you just mentioned and Katy Gallagher is really an outstanding person making an outstanding contribution. So ideally Katy Gallagher will be part of our team going forward, but there's no use commenting on all of the various scenarios which can come out of the High Court on Wednesday.

 

JOURNALIST: Do you think the Government has the capacity to potentially bring forward the surplus?

 

CHALMERS: The Government's got billions and billions of dollars rolling through the door courtesy of really terrific global conditions. They've got billions coming through the door, not because of any economic genius of Scott Morrison or Malcolm Turnbull or Mathias Cormann, but because the global economy is in probably the best condition it's been in for the last 10 years or so. Deloitte Access Economics and Chris Richardson have pointed out just the extraordinary amount of money that is rolling in the door. So the Government's run out of excuses for the fact that we've got these bigger deficits and record and growing debt. They've got very favourable global conditions, and the reason that we've got this record and growing debt and these deficits, which are far inferior to what they inherited, is because they continue to give these big tax breaks to the top end of town. We will see the profile of the deficits and surpluses on Tuesday night. It's up to the Government to explain where they've landed and how, but I think most objective observers would appreciate that, with billions of dollars rolling through the door as they are, the Government's run out of excuses for what has been a pretty extraordinarily poor performance of managing the Budget.

 

JOURNALIST: Are you potentially painting yourself into a corner here if the Government does announce that they're bringing forward the surplus? Wouldn't it show that they've actually had quite remarkably good economic management?

 

CHALMERS: I don't think any objective observer could come to that conclusion. We've got a Government here who campaigned on there being a Budget emergency when net debt was almost exactly half what it is now. Net debt has doubled on their watch, and that won't substantially change on Tuesday night, even with these billions of dollars rolling through the door. Nobody is anticipating a substantial improvement in net debt. So they have been an extraordinary failure on the Budget front. Even just judged against their own measures, they said that they'd have these big surpluses of one per cent of GDP. Joe Hockey even promised to have surpluses by now. By their own measures, their own yardsticks, they have failed substantially. And even with the billions of dollars coming through the door, that won't meaningfully change on Tuesday night.

 

JOURNALIST: Are you worried about the Government dropping the Medicare Levy? Much of your own comments have been on the extra burden that would place on the Average Joe. It now appears that they've got extra money at their disposal. Does that stymie your attack somewhat?

 

CHALMERS: No, we welcome the Government's humiliating backflip on the Medicare Levy. We've been calling for it for some time. We have said all along that they should never have proposed that tax hike on millions of Australian workers in the first place. So to see them humiliate themselves with this backflip on the eve of an election is welcome news from our point of view. But they've still got big tax breaks at the top end of town. They've still got that $80 billion tax handout for big business. They're still giving $17 billion to four big banks, despite all the rorts and ripoffs which have been uncovered at the Royal Commission. So I think when you look at them on their performance on tax across the board, I don't think anybody takes them especially seriously anymore; remembering they're talking about tax cuts for workers today. It was only a week or so ago that they wanted to jack up taxes on the very same people. So I think right around Australia people don't take Malcolm Turnbull and Scott Morrison especially seriously on tax anymore.

 

JOURNALIST: What do you make of, or what's your response to the front page of the Daily Telegraph today, the allegations that Bill Shorten snubbed troops when he was over visiting the diggers during ANZAC Day?

 

CHALMERS: That was a disgraceful slur on the Leader of the Opposition. It was disgraceful and wrong. The Defence Department has put out a statement today saying that there was a stuff up and they've apologised to Bill Shorten for the stuff up. I know Bill really well and I know he takes his responsibilities as the alternative Prime Minister of Australia very seriously. And the idea that he would knowingly miss an opportunity to catch up with Australian troops doing such important work in the Middle East is as absurd as it is wrong. There is absolutely no chance in hell that Bill would knowingly miss an opportunity to catch up with some of Australia's finest people in harm's way in the Middle East doing great work for Australia. So it was a disgraceful slur. It was wrong. The Defence Department, to their credit, has put out a media statement this morning saying that there was a stuff up; that Bill did not knowingly miss an opportunity to catch up with some of our soldiers, and they've apologised to Bill for that. That's appropriate. The story should never have been published in the first place, but having been published, I think the Defence Department today has knocked it on the head.

 

JOURNALIST: I guess the thing is it doesn't look good when he's simply gone shopping though.

 

CHALMERS: I just don't agree with you. He spent the 24th and the 25th in Afghanistan visiting our troops, including ANZAC Day. Bill takes his responsibilities as the alternative Prime Minister of Australia incredibly seriously. He thinks the world of our troops in harm's way in the Middle East. There's absolutely no chance that he would knowingly miss an opportunity to spend time with them if they wanted to do so. The story was a slur, it was absurd, it was wrong. The Defence Department's apologised for the mix up.

 

Thanks everyone.

 ENDS