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SKY NEWS BUSINESS - SWITZER

Posted May 02, 2016

 

SWITZER: Mr Bowen, thanks for joining us.

BOWEN: Great pleasure, Peter.

SWITZER: Chris, what is the big issue that you’re worried about in the releases ahead of the Budget?

BOWEN: I want to see changes that are good for Australia, and we will back those parts which are good for Australia, and good for hard working Australians. I’m worried to see a Budget which doesn’t protect our AAA credit rating going forward. The Treasurer has had a clear warning from Moody’s recently that he needs to have revenue measures as well as spending measures. I’ve been saying that for two years. Both Liberal Treasurers Joe hockey and Scott Morrison denied that reality. Tomorrow is a chance to accept the reality. I doubt we’ll see that, but we’ll see. Also, a Budget which properly funds schools and hospitals. Now schools are a great investment in our future, an investment in our future productivity, an investment in our future economy. If Malcolm Turnbull and Scott Morrison think that schools are currently adequately funded, they’re just plain wrong.

SWITZER: Government spending as a percentage of GDP is at 25.9%, which is at a historic high, even compared to the eighties. Now you’d have to admit Chris, that former Treasurers have also contributed to the size of that spending – are you guys going to be negative on the government if they cut back on spending?

BOWEN: There have been spending cuts in the last Budget which we have supported, where they’ve passed the test. Now you’re right to point out that spending is running at a very high level historically. It is running at levels as high as the GFC. Labor did step in and act, and avoided recession. We make no apologies for that, it was the right thing to do. But this Government is running spending at the same level.

Just a couple of weeks ago we had Scott Morrison in that 47 minute disaster at the National Press Club say ‘we’ve saved $80 billion but we’ve spent $70 billion’. Nobody forced them to spend that money. They were government decisions that Scott Morrison and Joe Hockey have made, and we know that even since the last MYEFO this government spending extra money – not offset, not paid for. We’ve been announcing our own measures, we’ll continue to do that, and tomorrow night, in Bill’s reply on Thursday night and beyond, we’ll accept and support sensible measures regardless of whether they’re government or Labor measures.

We’ll accept and support sensible measures, but we’ll oppose which affect the wrong people in the wrong way.

SWITZER: So therefore some of the policy initiatives put forward tomorrow night, say, around superannuation, capital gains, and things like that; if you guys don’t like the, you guys won’t support them – so effectively, they won’t become policy, they’ll simply become election promises?

BOWEN: The whole Budget is election promises, Peter, that’s the reality. The Government, through Malcolm Turnbull’s pretty cynical manipulation of the timetable has made this an election policy launch. This is not a proper Budget in terms of well thought out policies for Australia’s future. This will be an election policy launch. On superannuation, we’ve lead the debate. We announced our policy last April. Scott Morrison personally railed against those policies, said it was ‘a grab’, an attack on retirement incomes. Tomorrow he is going to do the same, or something very similar. He will be adopting Labor policies. We will welcome that. We will support the government where they adopt Labor’s policies. On other measures we reserve the right to have a good look at them.

SWITZER: Will you oppose a cut in the company tax rate?

BOWEN: I don’t think that a cut for the company tax rate of Australia’ largest companies is a priority at the moment. We’d all like to see taxes lower rather than higher, but when you’ve got the AAA credit rating under pressure, you’ve got the government cutting school and health funding, you got the government – in the past – talking about cutting the age pension for old people. All these pressures on the Budget having been doubled – now is not the time, in my view, to prioritise a cut in the corporate tax rate and we will respond accordingly.

SWITZER: Would you support the idea of raising the tax threshold on the $80,000 tax bracket?

BOWEN: I want to see the detail. I’m not going to give the government blank cheques on any personal income tax measures. I want to see what is involved. I want to see the impact on the Budget bottom line, and I want to see to what it means to wage earners. We’ve seen speculation about tax cuts which are less than a milkshake, which would still be very expensive for the Budget. I want to see it, and our Expenditure Review Committee of Shadow Cabinet will make an appropriate determination.

SWITZER: What about the suggestion that Treasury’s are running with an economic growth number that is of 2.75% rather than 3.5% that was predicted in the last Budget. Would you think that’s pretty close to the mark, 2.75%?

BOWEN: Again, I’d want to see the figures and I’d want to see the justification. The Government was boasting as late as today about economic growth at 3%. I’d want to see it. It’s an opportunity to remind you Peter of my policy in the Budget that I deliver, the growth forecasts would be costed by the Parliamentary Budget Office at arms length from the government of the day. I won’t be pulling a figure out of the air, it will be done independently by the Parliamentary Budget Office and that will then feed into our Budget forecasts and parameters.

SWITZER: What about transition to retirement pensions. Would you, if you were in his position, get rid of that?

BOWEN: Again, Peter, we’ve announced our high income super policy – we’re not proposing any changes here. If they’re proposing changes, we’ll look at them. We’ll look at the package for superannuation. I’ve said repeatedly that low income earners don’t get anywhere near enough of a tax concession under this government. This Government has abolished the Low Income Superannuation Contribution from 2017 onwards. I hope they rethink that, I hope they revisit that, because we want to see people who are working hard on lower incomes get a little bit of tax support for their retirement. We want to see them assisted in getting off the full age pension. This government thinks it’s okay that they get no support, that anybody on a low income gets no support for their retirement. I don’t think that’s fair or reasonable. I’ll look at the entire package again and the Shadow cabinet will reach a conclusion.

SWITZER: Do you like the idea that they might extend the Joe Hockey $20,000 Instant Tax right off for small businesses buying equipment and whatever?

BOWEN: That of course was permanent under us, when we were in office. It was a permanent arrangement. Joe Hockey made it a temporary arrangement, big-noted himself and said how wonderful it was and in the fine print it was just as temporary measure. If the Government wants to make it permanent, again, well I’ll look at it in good faith. I always thought it was curious that it was only temporary measure under a Joe Hockey arrangement.

SWITZER: Now correct me if I’m wrong, but your amount wasn’t $20,000, it was a bit smaller wasn’t it?

BOWEN: That is true, but it was a permanent arrangement under us. We introduced took it from $1000, as I recall, to $6500 then to $10,000, but made it permanent.

SWITZER: So if you were in Scott Morrisons position, would you be out there saying that you’re out there to try and create growth and jobs? Is that the most important thing this Budget needs to achieve?

BOWEN: Yes, but I’d be doing more than talking about it. I mean Scott Morrison is pretty clever at the three-word slogans, but talking about it isn’t delivering it. Saying we need an ‘economy in transition’, assisting an ‘economy in transition’, jobs and growth, you know he’s got one volume and one speed this bloke. He just thinks that talking about, saying it repeatedly it will make it happen.

Well, being Treasurer is not like that. Being Treasurer does require a lot more imagination than that.

More importantly, being Treasurer requires the policy settings to support that. This guy has tried everything under the sun – corporate tax cuts were going to deliver jobs and growth, lifting GST was going to deliver jobs and growth, big personal income tax cuts funded by GST increase were going to deliver the jobs and growth, getting rid of the excesses in negative gearing would deliver jobs and growth, state income taxes were going to deliver jobs and growth at one point. All these ideas he’s tried, and then had to walk away from.

Labor in stark contrast has announced our policies, we haven’t had to step back from a single one of them because they’ve withstood the scrutiny.

SWITZER: Mr Bowen, thank you for joining us. I look forward to your performance over the election campaign.

BOWEN: No doubt I’ll be back on chatting to you, Peter. No problem at all


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