CHRIS BOWEN, SHADOW TREASURER: Well thanks for coming. The rolling mess of the Budget costings on the bank tax go to Scott Morrisons competence and frankly his honesty. Now the Government rushed the bank tax in, we know that. We know there was no consultation with business, we already knew that this was a tax put into the Budget at the last minute but we now know more. We now know that theres a $2 billion hole in this bank tax.
The big four banks have disclosed how much they will pay to the Australian Stock Exchange. They are obliged under Corporations Law and under the Australian Stock Exchange rules to tell the truth to the Australian Stock Exchange. The banks know their balance sheet better than Scott Morrison knows the balance sheet. Now they have disclosed that they will pay to the Government $965 million in total between the big four banks, theres only one bank left to report, and its very much smaller than the big four banks. Now this is way short of the $1.6 billion that was meant to be raised this year, and leads over the forward estimates to a $2 billion black hole. Weve seen Morgan Stanley, weve seen Deutsche Bank, who have no vested interest in this matter they are not going to pay the bank tax confirm that theres a shortage in the bank tax.
Now let me make a couple of points. We then saw the Treasurer yesterday move the goal posts and say the $1.6 billion ticket doesnt count, its the $1.2 billion figure that counts which is the cash accounting method under the Budget. Let me be very, very clear. This was fundamentally dishonest by the Treasurer in the Parliament. Either he knew or did not know that that $1.2 billion figure was short of the final quarter because the final quarter is paid in arrears, after the end of the financial year. So the Treasurer either doesnt understand how the Budget works or he misled the Parliament and he misled the Parliament knowingly.
Now the Treasurer has to explain which it is because one of those things is true. So as I said at the outset this now goes to the Treasurers competence and his honesty. Now if the Treasurer had just come clean and said we relied on Treasurys best estimates, its the best work they could do in a hurry, it appears it might be wrong, we would have at least given him some points for honesty. But he should learn the lessons of history, the cover up is worse than the crime. He has compounded his incompetence by dishonesty. Now the Treasurer now is too late to fix this issue but he now must at the very least do certain things. He must release the legislation urgently. He expects the Parliament to vote on this legislation, he refuses to show it to the Parliament. Anybody who has seen it has had to sign a confidentiality agreement. This is a piece of legislation that the Parliament will soon be asked to vote on. Members of Parliament will be asked to vote on, and its falling apart as we watch, and he refuses to release the legislation.
Secondly, just admit the black hole. Its there in black and white. The banks, as I said, have a legal obligation to report correctly to the stock exchange. Theyve done that. Its an open and shut case that the Treasurer has a black hole on his hands and he should admit it, and then he should indicate how he will fill it. Will he increase the rate of the bank tax? We dont know whether the rate will be set in the legislation or whether it will be up to his discretion. Will he increase the rate? Will he change the base? Will he include other liabilities? Or will he indeed include other banks, smaller banks to try and make the money? Or will he cut in other ways and bring back cuts from the 2014 Budget? Will he attack low and middle income earners to pay for the shortfall or will he let the deficit and debt blow out further.
So let me be very clear, The Labor Party said on Budget night we would support the bank tax and we will. But the Treasurer cannot use that as an alibi, as an excuse for his incompetence. It is not a blank cheque for his incompetence. It does not mean that he doesnt have to answer questions about the costings and the forecasts. He seems to think that the Australian people, the Labor Party, the Parliament should get over it. Well I tell you what, he owes the Parliament an apology. He owes you an apology, members of the media. Hes office has provided serial different alibis. We were told the first year figures are low but the growth in credit will deal with it, you were all told that in briefings from the Treasurers office. Then the goal posts were changed, he picked up the goal posts in Parliament and moved from the accrual method of the Budget to the cash method of the Budget, he did that to you as well. He owes you an apology and he owes your viewers and readers an apology as well, the Australian people.
But most of all he needs to fix it, he needs to clean it up, to come clean. He cannot take the support of the Labor Party as an alibi for his rank incompetence and especially his dishonesty.
Happy to take any questions.
JOURNALIST: Is Labors support rock solid given that you haven't seen the legislation and given that as you state there is this black hole?
BOWEN: Well, well support the legislation. We want to see it. I think thats a legitimate request Lane. You know as Members of Parliament to see the legislation we are going to be asked to vote on. But we make clear, while we wouldnt design it this way, we wouldnt have done it this way, the Budgets under great pressure. The AAA rating is under pressure. The Government needs to be able to go to the ratings agencies and show that they can get some things through. We will let this through, but dont let this Treasurer think for one moment that that is some sort of blank cheque for his incompetence. We will vote for it but we will hold him to account.
JOURNALIST: Two questions Mr Bowen. Since you support the principal of the levy and I appreciate that means you support getting $6.2 billion over four years, is there an argument to increase the rate if thats whats needed to get to 6.2 and is there an argument to extend it to foreign banks if that can also be a way of ensuring the revenues coming in?
BOWEN: David, Im not going to get into hypotheticals about the rate but the Treasurer was sworn in as Treasurer. Hes the one whos got to come clean with you, with the media and with the public about the shortfall and explain how hes going to fill it. If hes going to increase the rate, come and argue it. Come and see me. Come to the Labor Party and say Weve got this wrong. We realised we stuffed this up, were going to have to increase rate. Well have that discussion. Were not going to get into hypothetical. On Foreign Banks, as I said at the Press Club, I think the domestic banks have raised some legitimate issue for consideration which the Senate Inquiry should look at. In terms of competition with foreign banks, we havent had the opportunity to think through, to see the costings to think through the implications. That would be irresponsible to jump to a conclusion about that but they raise legitimate issues that should be considered.
JOURNALIST: I was just wondering whether there was division in the Labor Party on the Medicare levy?
BOWEN: No, look theres been some reporting on that. Im not going to go into who said what in Shadow Cabinet. Ill just say this, Ive been a member of Cabinet, a member of Shadow Cabinet, Ive been involved in difficult discussions, Shadow Cabinet discussions on all matters recently have been good willed. You would expect the Shadow Cabinet to look at issues, to consider them, to weigh up different options. Im not going to go into Shadow Cabinet matters, either in front of the cameras or not in front of the cameras other than to say everybody in Shadow Cabinet is totally focused on the job of holding this Government to account and discussions around the Shadow Cabinet table are based on what they should be. You wouldnt expect the Shadow Cabinet to be an echo chamber, a rubber stamp. You would expect proper discussions and we had those discussions.
JOURNALIST: But beyond that, have colleagues raised concerns with you?
BOWEN: No, the support for the policy is very, very strong.
JOURNALIST: Labor said in 2013 that a universal increase in the Medicare levy was only a dollar a day for a lot of workers, for many workers and that was fair enough. Now somehow $1 a day is no longer a reasonable case. Why is the argument that you made in 2013 no longer good in 2017?
BOWEN: David, real wages are going backwards, point one. Point two, every Australian earning $80,000 got a tax cut last year. You got one, I got one. Every Australian earning $80,000 got a tax cut last year. Every Australian earning more than $180,000 gets a tax cut on the 1st of July. Ill get one. Not sure about you. But when youre looking at the Government now arguing for a tax rise, well lets go to the tax cuts that this Government is delivering. We supported the $80,000 and above tax cut, we dont support the $180,000 and above tax cut but lets look at the context. Real wages going backwards, Australians doing it tough on low and middle incomes. This Government promised sweeping tax cuts for all, they had introduced tax cuts last year and have taken them back and more this year with the Medicare rise. We will raise more money than the Government over the ten years but we will do it fairly with a progressive tax rate. Then both sides, David, will go to the next election with personal tax rises. Thats pretty unusual in Australian history. Both sides will go to the next election saying We will put up personal income tax. The Government will put it up for everybody earning more than $21,000 a year, we will put it up for people earning more than $87,000 a year.
JOURNALIST: Mr Bowen, if I could just go back to the bank levy. Do you understand why people might be confused on Labors position given you do support a levy?
BOWEN: I can understand why people would be confused about the Governments position. I mean I can understand why people would be confused about the Government changing the figures constantly. I mean we had the corporate tax disaster last sitting week which was the worst, most ridiculous Question Time Ive witnessed in 13 years in Parliament. And then we see the Treasurer frankly flailing around today, unable to answer basic questions. Now the Labor Party will hold this Government to account. Ill hold this Treasurer to account. He is meant to know his Budget. His is meant to know the Budget rules. Either he doesnt or hes misleading the Parliament and the people and I will hold him to account in there and out here and thats what the Australian people expect of the alternative Government.
