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, theyre 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, youre telling us youve 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 dont. Scott Morrison doesnt. If I tried that, you would laugh me out of the building as being irresponsible saying: We cant 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 dont need that anymore. Now theyre saying we know what will happen in 2024.
SPEERS: Well if its that risky, Chris Bowen, to lock in something this far out surely youll vote against those, that, element of the tax cuts?
BOWEN: We are not on board for voting for those tax cuts.
SPEERS: So thats a no?
BOWEN: Well have more to say about our approach to cost of living and our approach that well be offering the Australian people, well have more to say on Thursday night, well have more to say next week, well have more to say in weeks following. Well have plenty more to say before the election.
SPEERS: But you want to put the top rate up, so theres no way youre 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 dont deserve it?
BOWEN: No, we believe that providing the tax cut to people earning more than $180,000 isnt justified thats from previous Budgets, we would restore that. But David, as I said, if I came to you and said I know whats going to be the situation in 2024 and I can promise you, you vote for us the next two elections and Ill give you a tax cut.
SPEERS: So if its a take it or leave it, which is what the Treasurer is suggesting, or hes saying its the whole package theyll 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: Youve been waiting to see the Budget figures before confirming your position on company tax cuts as well. At the moment, Labors 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, weve seen the Budget today. Well have more to say, were not making that announcement tonight.
SPEERS: Well, okay, do you need more information?
BOWEN: Well choose when we make announcements. In fairness, todays the Governments day. Budget day is the Governments day. We dont make announcements on Budget day. We respond to what we see in the Budget. Well chose our own time to make our own announcements.
SPEERS: Well well 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 doesnt 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 cant 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 Ill have more to say about our fiscal approach. But weve done the hard yards, David, weve made the tough decisions negative gearing reform, capital gains tax reform, dividend imputation reform. Weve 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 its higher taxing, do you think there is a level at which taxes as proportion of the economy are too much taxes?
BOWEN: Well you shouldnt levy any more tax than you need to fund important services and see important Budget repair and healthy Budget surpluses. Well have all our policies out, youll 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 dont 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 Governments medium-term fiscal strategy your Governments 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 Governments position at the time
SPEERS: So whats 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 Partys policy, recognising the challenges in the Budget, and doing things that I know.
SPEERS: So now its 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, theres enough for tax cuts, theres 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 havent 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 Im 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.
