LAURA JAYES, HOST: Chris Bowen, thank you for your time. If the Government does reconfigure its company tax cuts to target low and middle businesses, will you need to re-think some of your announced spending measures?

CHRIS BOWEN, SHADOW TREASURER : Well, Laura, I will answer that question, but firstly, if Malcolm Turnbull drops these corporate tax cuts, he should be dropped with them. What does this man believe in? He used to believe in climate change, he no longer does; he used to believe in a republic, no longer does. If his signature economic policy goes, he needs to go too, and perhaps a new Prime Minister would have spending commitments which we would need to factor in.

To answer your question though Laura, the company tax cuts that we opposed are just one of the elements which mean we have a better set of Budget books than the Government. Now of course, we also oppose stages two and three of the Governments income tax cuts; of course we also have plans to reform negative gearing; family trusts; dividend imputation; capital gains tax. So our commitment to have bigger budget surpluses over the forward estimates and substantially bigger budget surpluses over the decade, as well as to fund health and education, stands and remains and that will be what we take to the next election.

JAYES: It does depend though how the Government, how Malcolm Turnbull chooses to re-cast these company tax cuts, if indeed he does, but I guess my question is are you willing to look at Labors plan? If the Government changes its spending portfolio, is Labor willing to do the same?

BOWEN: My answer is that I dont believe we need to Laura, because of all of the commitments we have made, all of the announcements were already made when it comes to better budget books. Of course, we oppose the bulk of their company tax cuts, but thats not the only difference between us and them. If we hadnt done the policy work elsewhere then I think your question would be 100 per cent, right on the money. But of course, as well as opposing company tax cuts, as well as opposing stages two and three of the income tax cuts, weve done the policy, weve put them to the Australian people on Saturday, but we will put them to all the Australian people on election day so that a whole range of commitments that we've made, which mean that we can have bigger budget surpluses over the forward estimates and fund health and education, as opposed to what the Government has got, which is a worse set of budget books, not funding properly health and education because of their unfunded large tax cuts.

JAYES: So is that a first year commitment? Is that your biggest priority, a better set of budget books than the Government?

BOWEN: Well we have a range of priorities but we have made clear, yes we believe in proper funding of schools, fairer funding of schools, we think that's a very important economic and productivity reform for our future. Of course that is a key priority for us. We also believe in better funding for health and hospitals. But I've made very clear, a firm commitment for bigger budget surpluses over the forward estimates compared to the last Budget. That's a commitment that I made, it's a commitment that the Labor Party has made, and will continue to make to the Australian people. The difference is Laura, I can tell you what we will take to the election. Bill Shorten can tell you what we'll take to the election. Malcolm Turnbull can't, Scott Morrison, I don't know if he's doing interviews today, but he should be able to be very clear about what policy they are taking to the election at this point. I've heard nothing from them about that.

JAYES: So there will be no changes from Labor in the policies you've already announced going into the next election?

BOWEN: No. We don't need to Laura. We don't need to. Our commitments stand, withstand the scrutiny, they withstood the test of time and my commitment about the fiscal impact, the bigger budget surpluses, doesn't need to be revised either, even if the Government drops their signature economic policy, which would be a pretty seismic event in and of itself.

JAYES: One of your signature policies is the negative gearing policy though. It wouldn't have escaped your attention that Sydney prices, house prices, in particular have dropped quite significantly this year. Is there no room for you to review that policy?

BOWEN: Well again Laura, we don't need to. For a couple of reasons. One, we design these policies to last for a long time. I mean negative gearing policy isn't and shouldn't be changed very regularly. Now last time it was changed was about thirty years ago. Of course the market goes up and down many times over thirty years. Of course it will be different in different markets over that period. It will be different in different markets Sydney versus Perth for example, on any given day. Now of course we have seen some of the heat come out of Sydney in particular, but I still talk to young people who are struggling to get into the housing market, but they still say they want to be on a more level playing field with investors. So our policy which was designed carefully for a whole range of circumstances, of course is what we will take to the election.

JAYES: I mean looking at some of these figures, it's quite scary if you do own a home, potentially in Petersham, it was the worst hit with prices falling 15.2 per cent, the greatest decline in any suburb across Sydney. We are also talking about Earlwood, Balmain, Annandale, Russell Lea, the list goes on. And that is just Sydney. Now some of your reports, some people, some reports say including the Grattan Institute says that your policy could see a further drop in house prices. The Grattan Institute says 2 per cent, other think tanks have put it as high as 9 per cent. So what will your policy do to house prices? Will there be a further drop with negative gearing when you institute it?

BOWEN: Well in fairness Laura the Grattan Report was in relation to another suite of reforms similar to ours but not the same as ours. Weve made it very clear, the work we have done shows what we would have in a rising market is more heat coming out of the market because of our reforms but our reforms are about housing affordability

JAYES: What does heat coming out of the market mean? Have you done modelling on what your negative gearing policy would do the housing market? Would there be a further drop?

BOWEN: Well Laura there has been plenty of analysis out there about our negative policy, its been modelled by independent people including the Australian National University

JAYES: Okay but who are you basing your policy on? Whose?

BOWEN: Well because our policy, Laura, because our policy is grandfathered. It will be a shock to the market if it wasnt grandfathered. If we said we are going to take away negative gearing for existing investments then people would be inclined to sell their investment perhaps and that would be arguably a shock to the market as well as being unfair because it would be a change to circumstances in which people have made those investments. We have grandfathered that policy which also means that it is carefully calibrated and would put first homebuyers on a level playing field with investors. It is the right policy for first homebuyers, it is very much the right policy for the budget bottom line. It is one of the reasons why I can say to you that we will have a better budget bottom line than the government and still make our important initiatives and commitments to health and education because of negative gearing reform, because of capital gains tax reform, because of family trusts reform, because of dividend imputation refundability reform and because we are opposing the unfair elements and the elements which will cost the budget very substantially of their personal income tax cuts.

JAYES: Okay I just want to be absolutely clear on this, that you are not open to reviewing that negative gearing policy, the capital gains tax policy even if Sydney house prices fall again dramatically in the next six months?

BOWEN: Yes, because we dont need to Laura because it is designed for a whole range of market circumstances. You could introduce a policy now, the market could change in three or four years time. It doesnt mean youre going to go back and re-write your negative gearing rules. You design your

JAYES: Its a tougher sell now, do you concede that? Now that the heat has come out of the market?

BOWEN: Well Laura without, I hope, without getting ahead of ourselves I believe we have won the policy debate around negative gearing reform. It was highly controversial when we announced it but think-tank after think-tank, international body after international body has endorsed our reforms or called for similar reforms. We have the most generous property tax concessions in the world, in the world. With the budget under such pressure we dont believe they are sustainable and we also dont think its sustainable that with still first homebuyers doing it tough, even with those figures that you quote there are still first homebuyers who say Well Im struggling to get into the market. Its going to be a long time before I get into the market. Housing affordability has not gone away as an issue Laura. If you ask me if its a tougher sell now I would say to you housing affordability has not gone away as an issue in this election.

JAYES: Shadow Treasurer Chris Bowen we are not an election yet but we might be towards the end of the year in fact

BOWEN: Well weve just come out of one Laura, weve just come out of a mini one.

JAYES: Christopher Pyne said May so there you go. Chris Bowen thanks so much.

BOWEN: There you go. We are ready whenever it is, were ready whenever it is, thanks Laura.

JAYES: Im sure you are.