CHRIS BOWEN, SHADOW TREASURER: Good morning. Well today we will see the release of the Productivity Commissions report into productivity and economic growth and a speech by the Treasurer. Now Labors yet to see the Productivity Commissions report. We will work through it carefully as we always do. Based on the reporting we have seen today, this will be an humiliation for the Treasurer and for the Government. When it comes to economic growth, they are a one trick pony. They have one shot in the locker and thats a $65 billion corporate tax cut. Based on reporting, the Productivity Commission will say that the key to Australia's economic growth and productivity is human capital. I read on the front page of the Financial Review, in a very good article by respected journalist Phil Coorey, the reported speech will more closely mimic Labor's inclusive growth strategy which is based on a smarter, healthier population.
Well that is welcome. But what we have got is five years of wasted government under Tony Abbott and Malcolm Turnbull. In 2008, under the Labor Government, COAG agreed that human capital was the key source of economic growth. The Commonwealth and the States agreed on an agenda to invest in human capital, in our people. The Liberals tore up in their 2014 budget, cutting health, cutting education and they continue with that agenda. They want to cut universities, they can't get it through the Senate, but that is what they want to do. They want to invest less in schools than is necessary. And of course they lurch from crisis to crisis in health.
Labor has always understood that investment in people and our human capital is the key to economic growth. We understand that in schools, universities, in health. And we understand it, of course, in the NBN which is falling apart before our eyes.
So we welcome the Productivity Commission report. Obviously we have not been provided with the courtesy of a copy at this point. But when we get one we will work through it carefully, we will look at its recommendations in detail. But if this reporting is correct, and I have no reason to doubt it, it is humiliating for Scott Morrison. All he has got is this corporate tax cut. He wants to reduce the taxes on Australia's businesses by $65 billion and increase them on Australias workers by $44 billion over the next decade with his Medicare Levy rise. On workers who earn as little as $21,000. If he talks about inclusive growth today, if he talks about putting people first, let him explain this, why is he standing by and watching penalty rates be cut? Why is he standing by and watching wages growth at record lows and then cutting wages through the penalty rates cut? Why is he taxing Australians who earn as little as $21,000 a year more, while giving a $65 billion tax cut to big business? That is not inclusive growth. That is the opposite of inclusive growth.
This Government doesn't get it. It will take more than a Productivity Commission report for this Government to get it. If there is something sensible in this report, we will welcome it. Based on this reporting, it, as Mr Coorey says, will closely mimic Labor's agenda. Labor has led the debate and set the agenda since 2013. We will continue to do so. We leave this Government in our wake when it comes to setting the agenda with inclusive growth and investing in our people through human capital. Well I hope that Scott Morrison gets the message today. I hope that he listens to that inclusive growth agenda. And more importantly I hope he changes his policies to reflect that.
Happy to take some questions.
JOURNALIST: So can we just clarify your position on the company tax cuts. So youve got a position on the books for tax cuts only for $2 million turnover or less. But the issue obviously going forward into the election, is that the Government has already introduced legislation that would go beyond that. What is your actual position, are you going to increase a little bit? But even if you do that you are still going to have some companies that would actually face a tax increase.
BOWEN: There are a couple of issues here Sam, in fairness. There is the issue of the unlegislated tax cuts, the Government is seeking to legislate further tax cuts for businesses between $50 million and $1 billion. Which is currently before the Parliament. Which we very clearly and strongly have opposed. There is the issue of what has already been legislated, now you are right to say that our position has been to support tax cuts for businesses under $2 million. We have indicated, that for what has been legislated, we will do the responsible and careful thing, assess the state of the Budget, see what is in budget updates and make our position very crystal clear before the election.
JOURNALIST: What I am thinking about, is that if I think if 16-17 is the $10 million, and 17-18 is the $25 million. So even if you went up to $10 million, for example, you would still be looking at, after the election, then those businesses in the $10 million to the $25 million space, actually giving them a tax increase.
BOWEN: Without going through the weeds and making policy announcements this morning, I have outlined very clearly and consistently what has been our responsible process, to examine the state of the books in terms of what has already been legislated and to make further announcements. And nobody will be in any doubt what our position is as they vote at the next election.
JOURNALIST: Okay but as a statement of principle, you are prepared to go to the next election saying for a certain
BOWEN: Well we have made clear our view that the corporate tax cuts are a bad investment in Australia's future. $65 billion on a hope and a prayer that they trickle down to further economic growth. The Governments own modelling shoes 1 per cent over 20 years and thats all theyve got.
JOURNALIST: So as a matter of principle you are prepared to go to the next election with a policy that would increase tax?
BOWEN: I think I have answered the question Sam.
JOURNALIST: For some small and medium businesses. So thats a yes?
BOWEN: I think I have answered the question Sam. With the process Ive outlined we will take a responsible approach. We believe in Budget repair.
JOURNALIST: Right. What is the timeline, because those businesses that are already getting that tax cut, they would presumably, I assume, want to have some form of certainty, so what is the timeframe in which you are going to announce that?
BOWEN: The next election is presumably next year. We have shown, very clearly, that we are very willing to get our policies out early. I put you to that no opposition has put policy out this early when it comes to the economy compared to us. Not since 1993.
JOURNALIST: Do you know how many businesses there are in the $2 million to $25 million...
BOWEN: Yes, we have all those figures and we will bear those in mind as we make those policy decisions.
JOURNALIST: So how many businesses are we talking about that would face a tax cut and increase?
BOWEN: Well I am not going through the detail and the weeds this morning because I am not announcing what our policy this morning. I have welcomed the Productivity Commission report.
JOURNALIST: Can I ask a question about your current policy then? It is to offer businesses with a turnover of up to $2 million, but the Government has obviously announced a tax for people with $50 million turnover or less
BOWEN: Their policy is that everybody gets a tax cut.
JOURNALIST: Whats legislated, lets focused on what is legislated. How many businesses would currently face a tax increase if you stuck to your $2 million threshold?
BOWEN: You are asking a hypothetical what Labor's policy might be, Sam, and I make very clear to you this morning that we are taking a responsible approach. We could have ruled out any tax cuts. What we have said is that we do recognise what has been legislated and the responsible thing for us to do is to wait and see the state of the books, Budget updates move around.
We have further policy announcements to make which will be in this space and not in this space.
JOURNALIST: Businesses out there are looking for clarity.
BOWEN: We understand that. As a general principle, we have been more than willing to be upfront with policies very early in the term. We announced in negative gearing, capital gains, family trusts way before an election. Now when it comes to this measure I remember in May the Government was beating its chest and saying we had to clarify and we need to keep the heat on them, but actually what we are doing, the position now is exactly the same as it was then. We will work through this carefully and responsibly and when we are in a position to make the best judgement, at the appropriate time, we will have more to say.
JOURNALIST: What do you think about your friend Kevin Rudd doing the rounds in his book tour, saying he put Kevin Rudd in the Treasury portfolio as an extended joke?
BOWEN: I dont think thats what he said Sam, but as a more general principle, Kevin is more than entitled to put his view forward but I'm not that interested in the history wars, Im interested in the future wars.
JOURNALIST: The Productivity Commission report on health is recommending cuts to waste. Are you worried that that equates to a cut to healthcare?
BOWEN: We have not seen the report, I havent been given a copy, I have read Mr Cooreys report and other reports about what is in it.
If it puts human capital at the forefront, we welcome that. There will be particular recommendations which we will have views on but I've not seen it, all I have seen is the reporting of what is in the Productivity Commission report. The general tenor I welcome but that's not to say it's a blank cheque and we agree with everything in it. We will take a responsible point of view and work through it.
JOURNALIST: Are you worried that they might be stealing your thunder? In terms of what is essentially a socially progressive push according to the reports today?
BOWEN: Five wasted years. Five wasted years of this government. They said in 2014, the answer was cuts to health and education and they have kept that up and now they say the answer is a company tax cut which costs $65 billion. I mean, bring it on. If the Treasurer wants to debate this with me, bring it on. Who has the most comprehensive inclusive growth agenda and who puts human capital and people first and at the front of the agenda? Let's have a debate. That would be great. Far from being worried about it, I welcome it, I relish it.
JOURNALIST: Just going to the modelling issue with the Government's energy plan
BOWEN: You just missed a comprehensive press conference from Mr Butler, Sam.
JOURNALIST: By all accounts, well the Government doesn't have any modelling, they have a bit of modelling
BOWEN: Correct. They have got some analysis.
JOURNALIST:...theyve cut and paste some bits of analysis together. As a statement of principle, is Labor's objective in relation to energy, bringing prices down? Do you want to match the government in terms of if they are claiming that they could reduce power prices by $115 a year at some point, do you want to match that or is your goal is different?
BOWEN: We believe that there are a couple of keys to reducing prices going forward. Certainty and proper structure around renewable investment. The fact of the matter is that renewable energy is the cheapest and cleanest way forward.
The question is, what is the structure to that investment in renewables? The Government appears to have given up on renewables. Malcolm Turnbull used to believe in renewable energy, he no longer does. We don't believe these things are a choice. We believe you can have the right policy settings which are good for the environment and put downward pressure on prices.
The Government so far has managed the worst of all worlds as they flail around and provide a lack of certainty.
JOURNALIST: Is there an option where you try to match their price savings? Do you plan to match their price savings?
BOWEN: It's hard to match their savings when the bidder keeps changing its policy. The Government has changed policy weekly. Mark was pretty generous saying every six months. It's almost weekly.
A couple of weeks ago, Sam, we were here in this Parliament and being told the answer to all Australia's problems is to force AGL to invest in the Liddell power station. That was a few weeks ago. What they say now might not be what they say in two weeks, it might change after this morning when Tony Abbott and Craig Kelly and those other claimer change deniers realise what is going on and have more to say.
Let's wait and see where this ends.
And the other point is this, Malcolm Turnbull has decided on a plan and a process in which he has announced changes to state legislation. Theres actually no changes to Commonwealth legislation, it wont come to the Parliament for a vote. It will only be through changes to state legislation and hes chosen to do that with no consultation with the states. So he has a long way to go through COAG.
So before we get too caught up on the endpoint, let's just let the process which he has started of a COAG negotiation, which he has unilaterally started, of changes to state legislation where he doesnt get a vote, let's see that play out.
I have to get to a Caucus meeting. Thanks.
