Income tax relief

Well our big tax reform is a win, a real win for hard-working Australian families.

We’ve just been talking to Leena and Eoghan and Lyla and they are going to benefit from the incentive that our tax plan gives. It will help them meet their household expenses and of course they’ll also benefit in October from our childcare reforms, when little Lyla goes into childcare as her mum, Leena, goes back to work. So this what we’re doing, we are providing support for hard-working Australian families through tax reform, supporting them, their aspirations as they’re working and saving, planning to make a better life for their little family and Lyla and for their future and also of course with our childcare reforms. Over a million Australian families are going to be better off as they start from the second of July. Massive reforms supporting hard-working Australian families.

Aspiration is not a mystery to us. It’s a mystery to the Labor Party, they're denying it, they’re standing in the way of reforms to support Australian families. What we're doing is providing Australian families with the support and the encouragement they deserve. At the same time, we're providing record funding and support for essential services; whether it's child care; whether it's hospitals; whether it's Medicare; whether it's national security; whether it's education, infrastructure. We're providing record funding in all those areas and at the same time we're bringing the Budget back into balance a year earlier.

So we're living within our means and you can see how important that is for this young couple and particularly for their daughter. She's nine months old. She doesn't want to grow up to be paying off the debts that our generation has run up. So what we're doing is we're bringing debt down, net debt is peaking this financial year, which of course is nearly over and then it will come down year after year.

That's what good strong economic management, economic leadership delivers. Record jobs growth, tax relief, record investment in essential services and government living within its means.

So it's great to be here with them. It's great to be here with you Craig, Minister for Small and Family Business. He’s a guy that really understands what enterprise aspiration is all about.

Craig how do you feel about the big win for Australian families last week?

Look PM it's great to have you here in Reid and we've met Eoghan, Leena and Lyla today and they're completely typical of the families from this part of Sydney that are you know, facing that the cost of living pressures. We're obviously going to help them in two particular ways as they were very clearly explaining to us. Personal income tax relief for them and childcare support when little Lyla starts in childcare in October.

You know, you mentioned too the Labor Party completely at odds misunderstanding the aspirations of families like this and others in my electorate of Reid. I do note however, obviously for whatever reasons, Anthony Albanese has a somewhat different approach. He gets the fact and especially in small and family business land, that it’s businesses is in the electorate of Reid, small and family businesses, that will provide job opportunities into the future for Lyla and her generation, entrepreneurs taking on bank debt backing themselves and employing people is where the jobs of the future will come from.

There's obviously a clear divide between now and the next election of a government that is pro healthy businesses. Because if you leave more money in businesses or individuals - wage earners’ pockets - we believe PM, and you and you say this every day; they are the people who have earned the money, they are the people best placed to spend it.

So it’s always great to have you with us, come any time.

It's great to be here. Any questions?

You said you’d like to bring forward the seven year implementation of income tax cuts if the economy allows. Does the opposite apply? If Australia is hit by economic troubles that you might have to consider delaying them?

Well absolutely not.

Can I say to you we're very confident in our economic forecasts. We've been very conservative with them. And you can see since I've been Prime Minister and every Budget update, our forecasts have proved to have been conservative, so that our forecasts for example of Budget balance have improved with each update.

If the, if the economy were to soften in the years ahead the last thing you'd want to be doing is putting up tax. Right? You’d want to encourage - provide as much encouragement and incentive to people. So these settings are right.

Look we are, we are always focused on what we can do to ensure that Australians can keep more of the money they earn. But of course we have to get the balance right. We've got to make sure that Australians keep as much of the money they earn. It’s not the government's money, it's theirs. And at the same time we've got to make sure that all of our essential services are well funded - as they are. We've got to make sure that we bring the Budget back into balance so that little Lyla doesn't have a mountain of debt to pay off when she grows up. And we've got to keep investing in all of the infrastructure we need in the 21st century.

So you’ve got to do all those things at the same time. We've got the balance right now and we look forward to the benefits that will flow from the tax reforms we’ve made.

We’ve heard that childcare centres are hiking up their prices before the subsidy kicks in, is that going to defeat the purpose of the change?

Well the childcare subsidy, as you know, is set as a percentage. For people on lower incomes it's 85 per cent, then it steps up, comes down to 50 per cent for people on higher incomes and then declines down to 20 percent. And I think it cuts out at the household income completely at $352,000. So it benefits the vast majority of households, but it is set as a percentage of an hourly rate - which I think is currently $11.77 an hour. So a childcare centre that was to increase its hourly rate substantially is not going to result - it won't attract any additional subsidy for its parents over and above the $11.77 rate that's set in the plan.

Is it going to do much for the hip pockets of the parents though?

Well again I've seen those reports. But how accurate they are I don't know. There's lots of pressures on every business of course but the child care reform is actually designed to constrain price increases because it is set as a percentage of a hourly rate up to a maximum. So if you're entitled to say 50 per cent subsidy, it's 50 per cent of no more than the set hourly rate, which is currently $11.77 an hour as I recall.

On the company tax plan.

Yeah.

Mathias Cormann this morning said you won’t be splitting that plan. Does that mean it’s all or nothing this week?

We have a comprehensive plan to ensure that Australia's company tax regime is competitive. We have to recognise that if you want to ensure that you continue to attract investment in a global economy into Australian businesses, you've got to have a competitive tax rate.

I mean we currently have, leaving aside the smaller businesses with turnovers up to $50 million a year, where we have secured a tax reduction for - and by the way they employ more than half of the private sector workforce, so that's a big part of it - but for larger companies they're still paying 30 per cent company tax. That is the second highest in the OECD. Only Portugal has a slight, somewhat higher company tax rate.

Australia is the best country in the world. We are the most successful multicultural society in the world. We've got so many things going for us. But we've got to ask ourselves; do we really want to have one of the highest company tax regimes in the world in a competitive environment? And we believe we've got to have a competitive company tax rate and that's why we are continuing to press for a reduction over time to 25 per cent for all companies.

But if you don’t get it through this week will you walk away?

We are committed to this reform.

Will Anthony Albanese as Labor leader actually be a bigger political threat to the Government than a Shorten-led opposition?

Well the only alternative at the moment is a anti-business, anti-jobs, anti-investment, higher-taxing Labor alternative.

I mean look, the choice has never been clearer. You have on the one side, you have our government which is supporting business, backing hard-working Australian families, reducing tax, supporting investment, guaranteeing essential services, delivering record jobs growth - last year the highest jobs growth in Australia's history. And at the same time stronger economic growth, 3.1 per cent GDP growth. So we said jobs and growth was our goal in the 2016 election - on several occasions I recall saying that.

It’s now an outcome.

it's an outcome and we're delivering that. What's Labor offering?

Let's go through it. They want to have higher taxes on businesses, on families.

They want to have higher taxes on investment. What do you think that's going to do to the property market? Their new investment taxes.

They're raiding the savings of self-funded retirees, they're going after people's savings who have in good faith saved up, put their money into Australian shares, getting the benefit of the franking credits as has been bipartisan policy for years, Shorten now wants to grab that away from them.

There is no part of the economy that he does not want to tax more. And what's that going to do? That will mean less investment, fewer jobs, lower economic growth and therefore lower government revenues, which means you can't afford all the essential services that we're supporting.

I mean the fact is - Labor doesn't like us saying it but it's true - they deferred the listing of life saving drugs on the PBS when they were in government because they were running out of money.

Now we are able to manage the economy and the Budget so we can list those lifesaving drugs as and when they're recommended. Now that's what happens when you've got a stronger economy. You get more jobs, you get better government revenues, higher government revenues.

We've got record jobs growth and the lowest percentage of people of working age on welfare in 25 years. That's why government revenues are stronger. So our economic plan is working. It's delivering more jobs, more investment, stronger economic growth and we're able to deliver lower taxes and we're able to deliver record funding for all of those essential services and bring the Budget back into balance earlier.

Now that's the difference between strong economic management and Labor's hopeless economic management or mismanagement.

I mean the Labor Party has demonstrated again and again, they are hopeless at economic management. They failed in government and their alternative plan in opposition, from opposition would be even worse.

No wonder Anthony Albanese is criticising it. I mean he must be he must be just tearing his hair out to see the way Bill Shorten is abandoning literally years of, of what the Labor Party used to stand for.

I mean the Labor Party used to be all about people getting ahead, backing families, aspiration. You know that's what they used to talk about. You remember Mark Latham's ‘ladder of opportunity’, you remember Neville Wran talking about how, you know, he wants to support the battlers and Bob Hawke trying to get people to encourage everyone to, you know, to have a go and get ahead. That's what they used to be about. Now they say aspiration is a mystery and they want to wage a campaign on aspiration, on investment, on jobs. A young couple like this are apparently going to be the next target of the Labor Party.

I mean it is a party that has basically abandoned everything it stood for. And that's why I said people like Chris Bowen have really got to ask themselves what are they doing in politics if they are going to say that somebody who is earning $90,000 a year is a filthy rich plutocrat that's got to be soaked with more and more tax?

I mean they have completely missed the mark and their anti-business agenda is one that is starting to tear the Labor Party apart.

Just one more.

Last week the Victorian Government passed historic indigenous treaty legislation. What concerns do you have for the implications of financial compensation payouts for both state and federal governments as a result of that as well as for indigenous participation in law making as your currently considering as with (inaudible)

Well look place based agreements, whether they're called treaties or Makarrata’s have been around for a long time. And you know, I welcome them.

But obviously every one depends on its own terms. The Kenbi land claim which was settled with the Larrakia people in Darwin, a very important settlement I was involved in, the final conclusion of that.

And of course the big settlement between the state of Western Australia and the Noongar people in WA was again a very successful negotiated outcome.

But these, agreement-making, particularly when you're relating to native title, to land, to waters, these are part of the landscape of agreement-making and indeed of reconciliation right around the country.

So I can't generalise about them other than to say that we always welcome people sitting down, negotiating and reaching agreement, that's something to be welcomed.

Okay thanks a lot.