FRAN KELLY, HOST: Chris Bowen is the Shadow Treasurer. Chris Bowen, welcome back to Breakfast.
CHRIS BOWEN, SHADOW TREASURER: Always good to be back Fran. Good morning.
KELLY: Let's deal with the PM's promise of last night, he wants to give tax cuts to middle income earners. There haven't been substantial tax cuts for households for six years when Labor was last in power. Will you match the PM's pledge?
BOWEN: Well Fran, let's be clear about what's happening here. Firstly we have a Government whose policy is to increase personal income tax. They have legislation on the books to increase the tax paid by every Australian.
KELLY: What, with the Medicare levy?
BOWEN: Correct. And that is a fancy way of saying an income tax rise. So somebody on $55,000 for example would be paying $275 a year. Someone on $80,000, $400 a year extra. So for the Government to say we want to cut income tax, the first step would be not to proceed with the increase Fran.
KELLY: Well hang on though, the Government announced that increase in the Medicare levy to pay for the National Disability Insurance Scheme.
BOWEN: Well thats their rhetoric Fran but it's a personal income tax rise which goes to the Government. That's what happens. Now it will raise $43 billion over the next decade so for the Prime Minister to come out with a sound grab, a thought bubble last night and say "I believe in lower tax at the same time as there is legislation on the books which has not yet been passed, maybe if we were sitting next week we would have debated it, has not yet passed the Parliament to increase personal income tax. This Government has no credibility. Now what we have here Fran is a rather desperate and pathetic attempt to change the conversation. A fistful of dollars waved around, no detail, no plan, to try and change the conversation from the fact the Government is falling apart before our eyes. That's what we have here. That's what's going on and reminding the Australian people that actually we are voting for lower tax now by opposing the Medicare Levy increase for everybody under $87,000 is the first step and Malcolm Turnbull and Scott Morrison have no credibility. They've done one tax-cut which has been more than taken back, more than taken back by the Medicare Levy increase.
KELLY: It's not news to anybody though that there is a big swag of Australians, middle income earners who will be hit hard by bracket creep if we ever get wages growth again. The Parliamentary Budget Office crunched the numbers recently and found that within four years another 900,000, nearly 1,000,000 middle income owners will be hit and hit very hard by bracket creep, they will shift from a marginal tax rate of 32.5% to 37%.
KELLY: They deserve a break, the Parliament needs to be looking at this doesn't it?
BOWEN: The Parliamentary Budget office did find, you are quite right Fran that everybody will be paying more tax, every quintile but the largest increase is proposed on the middle quintile earning about $46,000. Now these are the people that we are trying to protect from the Medicare levy rise to start with. Now in terms of tax policy going forward, we have more tax policy detail out there, more economic policy detail out there than any Opposition in living memory. Of course we will have more to say but we are not going to jump to the sort of pathetic fistful of dollars distractions, the thought bubble throwaway lines by the Prime Minister in a speech to say "don't look over here where my Government is falling apart, look over here I'm going to have some sort of tax-cut but only after I have first passed a tax rise".
KELLY: The International Monetary Fund has been on it annual mission to Australia and it has concluded and I'm quoting here: "that more comprehensive tax reform has the potential to increase investment and labour demand and reduce inequality". Labor is campaigning hard on taxing income inequality, would a tax cut be a worthy down payment on delivering that agenda?
BOWEN: Well Fran the IMF has made various points, several of which we agree with. They have called for in the past, they have called for tax reform yesterday, they have called in the past for negative gearing reform for example. Labor is the only party of Government, the alternative Government with that plan on the table. The Government refuses to tackle that. We are actually doing the hard yards Fran. We are actually going through the detail of tax policy and announcing the very detailed plans as we go and proceed to the next election. The Government is engaging in thought bubbles and throwaway lines. What you have to do is if you're going to have detailed comprehensive tax policy it's all got to add up at the end of the day. The Governments at the moment doesn't. Their only way of proposing a personal income tax cut is first to increase personal income tax. It's like you know Uncle Arthur's car yard where he puts the price up one-day and the next day offers a big sale and discount on the price as he increased the day before. I mean this is the pathetic snake oil that Malcolm Turnbull has been reduced to in a desperate attempt to try and change the political conversation.
KELLY: You are listening to R.N. breakfast, it's 18 minutes to 8. Our guest is the Shadow Treasurer Chris Bowen. Chris Bowen, next week's sitting of the House of Representative's has been cancelled. Labor said yesterday, Bill Shorten said Well our MPs we are going to show up anyway. Is that still the plan because it is an expensive one.
BOWEN: Well Fran first of all I mean let's be clear, we are in banana republic territory here. The Government ---
KELLY: Well, is Labor going to show up next week?
BOWEN: Well the Shadow Cabinet will be meeting as normal, as normal--
KELLY: But not the whole caucus?
BOWEN: Bill made the point yesterday that we are ready, we are ready for work. We are meant to be in Canberra, all of us, all the Caucus is ready for work. Now of course we will talk to caucus colleagues and the crossbench about the best way of proceeding further. We are not interested in stunts we are interested in being ready for work. Ready to do our job, to vote on legislation. That's what we are meant to do, that's what we are paid to do. Fran, the sitting calendar comes out last October, every MP knows that they're meant to be in Canberra next week. Every MP knows that that's our job. Government, Opposition, crossbench. Now the Government in this sort of tinpot dictatorship banana republic move says we might not like the results so we won't sit. It is extraordinary and unprecedented in modern Australian political history Fran.
KELLY: It's not unprecedented to change the Parliamentary schedule because it's already changed a couple of times over the last couple of years.
BOWEN: With agreement.
KELLY: With agreement, exactly and the Government says that Labor was briefed about this a fortnight ago.
BOWEN: No Fran, that is a lie. It was floated with Bill Shorten and he rejected it. More than that Fran, more than that this is a clear breach of a good faith agreement between the Government and the Opposition about how to handle the citizenship crisis. We said we wanted MPs to disclose on 1 December and the Government agreed with that. Now they've walked away from that. Now Malcolm Turnbull can't be trusted to keep an agreement with the Labor Party, with the Australian people or with anybody when it doesn't suit his political interests. We sat down with the Government and we negotiated a resolution to the impasse on citizenship and we said it is unacceptable for you to delay the disclosure of every single MP, we want it to happen on 1 December. Now, after much kicking and screaming they agreed with that. They floated not sitting and Bill rejected it in those discussions. For Malcolm Turnbull to say I consulted Bill is just fundamentally dishonest Fran, to try and incorporate Bill Shorten into his dodgy and slippery political tactics is just fundamentally dishonest on behalf of Malcolm Turnbull.
KELLY: As you say the Prime Minister has revisited the declaration date for citizenship for those in the Reps, it's now December 5, it was December 1. Is everything an impediment in your view, even if the House of Reps isn't sitting for Parliamentarians to lodge their disclosure, their citizenship disclosure forms on December 1. They don't have to be in Parliament to do that, do they?
BOWEN: Well again Fran the Labor Party will be ready to disclose, we are currently talking to colleagues about our exact handling of all this but we have been ready for some time to make all the relevant declarations and disclosures. The Government are the ones with things to hide here and this is just an extraordinary yet again, another delaying tactic on what has been a long national nightmare, the citizenship crisis made worse by Malcolm Turnbull mishandling of it at every single turn. Now bad things happen Fran, difficult things arise. Governments deal with it. Prime Ministers deal with it but they should be making the situation better not worse. At every single turning, Malcolm Turnbull because of his fundamentally flawed judgement has made this citizenship crisis worse at every opportunity.
KELLY: The Prime Ministers judgement is that this is the best way, to leave the Senate to do the work on same-sex marriage is the best way to get this done before Christmas. You don't accept that?
BOWEN: Well how can a not-sitting Parliament be the best way of doing anything?
KELLY: Well because you are better off shifting Thursdays to the back end of the year when the Senate has done its work and they hand it to the House of Reps.
BOWEN: We want to see marriage equality pass before Christmas of course and we will do whatever it takes to get it done but that doesn't mean all the other business of Government stops. I mean there is meant to be I think 53 pieces of Government legislation that we could be debating next week.
KELLY: Okay, one of the things that might be come up though and we spoke about this on the program yesterday to a National Party Senator threatening to do it is a private members bills for a Commission of Inquiry into the banks. There will still be one sitting week for the year starting 4 December for the Reps and the Reps could sit for an extra week if needed so says the Government. Will Labor cooperate with the Nationals and try to bring on debate on a Commission of Inquiry into the banks?
BOWEN: Well I haven't seen any proposed National Party legislation yet but we've shown in the past we are willing to work with parties of goodwill to get to a Royal Commission or a Commission of Inquiry. Our preferred position is that the Executive call a Royal Commission. I mean if Malcolm Turnbull and Scott Morrison had done that back in the day when Bill Shorten and I first said it should happen, it would now be over Fran. They had the recommendations.
KELLY: But they haven't done it and Barry O'Sullivan says he's going to do it. Will you back him?
BOWEN: Well I'll have a look at his legislation if that's what he's going to do and if it's well-crafted and well-designed we will work with them on a second best result, the best result would be a Royal Commission called by the Executive.
KELLY: Will Labor plan to put forward a bill for a Royal Commission?
BOWEN: Well a Royal Commission can be called only by the Executive, but a Commission of Inquiry, a Parliamentary Inquiry, there are other options available to the Parliament and in the absence of the Executive, the Government acting as they should in the Parliament will rightly have to consider its options and we will work with the National Party, with the Greens, with the crossbench and people of goodwill to see what can be done for a sensible outcome.
KELLY: Chris Bowen thank you very much.
BOWEN: Good on you Fran.