DAVID SPEERS, PRESENTER: With me now the Shadow Treasurer, Chris Bowen, a very good evening to you.
CHRIS BOWEN, SHADOW TREASURER: Good evening to you, David.
SPEERS: Will you support these tax cuts?
BOWEN: We will support the tax cuts which apply on the first of July 2018, this year. People are doing it tough, wages growth is low – the tax cuts are by and large targeted, they’re modest. Four dollars a week for somebody under $37,000. Ten dollars a week for someone on a slightly higher income. But, a couple of points about the other tax cuts. I mean, firstly, I think the Australian people are entitled to say, hang on, you’re telling us you’ve got to be re-elected twice? Malcolm Turnbull has to be re-elected twice before we get the tax cuts in 2024? Point two, do you know what the economy is going to be like in 2024, David? I don’t. Scott Morrison doesn’t. If I tried that, you would laugh me out of the building as being irresponsible saying: ‘We can’t give you a tax cut now, but we promise you one in 2024’.
Now, this is a Government, David, before I finish, that 12 months ago to this day, was telling us they needed to increase income tax by $44 billion by increasing the Medicare levy, 12 months later they say ‘oh we got that wrong, we don’t need that anymore.’ Now they’re saying ‘we know what will happen in 2024’.
SPEERS: Well if it’s that risky, Chris Bowen, to lock in something this far out surely you’ll vote against those, that, element of the tax cuts?
BOWEN: We are not on board for voting for those tax cuts.
SPEERS: So that’s a no?
BOWEN: We’ll have more to say about our approach to cost of living and our approach that we’ll be offering the Australian people, we’ll have more to say on Thursday night, we’ll have more to say next week, we’ll have more to say in weeks following. We’ll have plenty more to say before the election.
SPEERS: But you want to put the top rate up, so there’s no way you’re going to back a tax cut for the high income earners?
BOWEN: We are not convinced of the case for voting for the other tax cuts which come in in 2024.
SPEERS: Because of the delay before they come but also because high income earners in your view don’t deserve it?
BOWEN: No, we believe that providing the tax cut to people earning more than $180,000 isn’t justified – that’s from previous Budgets, we would restore that. But David, as I said, if I came to you and said I know what’s going to be the situation in 2024 and I can promise you, you vote for us the next two elections and I’ll give you a tax cut.
SPEERS: So if it’s a take it or leave it, which is what the Treasurer is suggesting, or he’s saying it’s the whole package they’ll introduce and putting the heat on you to back it or not?
BOWEN: Well if he wants to stand in the way of Australians getting a tax cut on the first of July 2018 by not agreeing to a compromise to split the legislation let him explain it to the Australian people.
SPEERS: You’ve been waiting to see the Budget figures before confirming your position on company tax cuts as well. At the moment, Labor’s position is to only back them for businesses up to $2 million, already legislated though tax cuts for those up to $50 million, you can see the Budget figures now, can you clear up what your position is?
BOWEN: In fairness, we’ve seen the Budget today. We’ll have more to say, we’re not making that announcement tonight.
SPEERS: Well, okay, do you need more information?
BOWEN: We’ll choose when we make announcements. In fairness, today’s the Government’s day. Budget day is the Government’s day. We don’t make announcements on Budget day. We respond to what we see in the Budget. We’ll chose our own time to make our own announcements.
SPEERS: Well we’ll wait for that one. The surpluses, getting back to surplus a year earlier, net debt coming down, at least in terms of the peak and a percentage of GDP as well, do you welcome that?
BOWEN: Well, the best international economic circumstances in a decade, and all we get David, is a wafer thin surplus, a wafer thin surplus, and it doesn’t get to one per cent of GDP until the end of the decade. Now, Peter Costello used to get surpluses as high as two per cent of GDP and we are saying, as a nation, we are being told by the Government, the best international economic circumstances in a decade, we can’t get to one per cent surpluses.
SPEERS: So will you have bigger surpluses?
BOWEN: We will return to Budget balance the same year as the Government, based on their Budget baseline.
SPEERS: And then have bigger surpluses?
BOWEN: And I’ll have more to say about our fiscal approach. But we’ve done the hard yards, David, we’ve made the tough decisions – negative gearing reform, capital gains tax reform, dividend imputation reform. We’ve made the tough decisions which means we can have a more responsible approach when it comes to the Government. We can support tax cuts responsibly.
SPEERS: Well you may call them tough decisions, the Government certainly says it’s higher taxing, do you think there is a level at which taxes as proportion of the economy are too much taxes?
BOWEN: Well you shouldn’t levy any more tax than you need to fund important services and see important Budget repair and healthy Budget surpluses. We’ll have all our policies out, you’ll be able to asses them against the GDP. All this, you know, breathless rhetoric from the Treasurer. I mean, Peter Costello had tax-to-GDP ratios higher than the one he is implementing five times.
SPEERS: Okay. But let me tell you this.
BOWEN: Five times. I don’t think that was regarded by the Liberal Party as an economic disaster.
SPEERS: No, correct. I was making that point yesterday myself. You back in 2013 though – when you were Treasurer, Chris Bowen said - “The Government’s medium-term fiscal strategy” – your Government’s strategy – “is to keep taxation as a share of GDP, on average, below the level of 2007-08”, which was 23.7 per cent.
BOWEN: Yes, and I was reflecting the Government’s position at the time
SPEERS: So what’s changed now? The Budget is actually in better shape.
BOWEN: Well, since then the Budget deficit is eight times bigger than it was projected to be at this point, and in the last five years – I make no apologies for taking the Labor Party’s policy, recognising the challenges in the Budget, and doing things that I know.
SPEERS: So now it’s okay for taxes to be higher?
BOWEN: Well, David, you cannot accuse us of being dishonest to the Australian people, or not being up front with our plans. I very much welcome – I relish an election campaign based on the alternative Budget plans of the Government and us. That is the election campaign we will fight, and fight vigorously, and I believe we can win.
SPEERS: Alright. Just finally though, this Budget gets us back to surplus a little earlier, so a bit of improvement on the bottom line. Debt is looking a little better, there’s enough for tax cuts, there’s enough for more infrastructure, and a few other things as well. Surely that is not a bad Budget, is it?
BOWEN: Well, David, a Budget which still gives away $80 billion in corporation tax cuts – haven’t learnt their lesson. Even worse, energy supplements taking away $14 a fortnight from pensioners and Newstart recipients. Making Australians work until they are 70 to get the pension, and despite – I’m not sure the Treasurer knows what he is talking about – despite what he said to you in an interview a few moments ago, it does not apply in thirty years’ time. It starts applying in 2025. He might want to check his facts.
SPEERS: Shadow Treasurer Chris Bowen. Thank you.
BOWEN: Thanks for that.