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Transcript of joint press conference: Melbourne: 21 August 2013: PPL; Abbott's cuts to come; costings



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TRANSCRIPT OF TREASURER CHRIS BOWEN AND MINISTER FOR FINANCE AND DEREGULATION PENNY WONG PRESS CONFERENCE MELBOURNE

21 AUGUST 2013

E & O E - PROOF ONLY _____________________________________________________________

Subjects: PPL; Abbott’s Cuts to Come; Costings _____________________________________________________________

CHRIS BOWEN: For several years now, the Opposition has told us that their paid parental leave scheme - their expensive scheme - would be paid for by a levy on Australia’s big businesses. Mr Abbott told us there’d be no or little impact on ordinary Australians. Today, we know that is simply not true.

The decision by the Liberal Party not to provide franking credits for the levy paid by Australia’s businesses for their paid parental leave scheme means that the levy will be paid by every single shareholder in Australia. And in these days of modern superannuation, every single worker is a shareholder through their superannuation schemes. This represents a $1.6 billion a year hit on Australia’s investors. This is Tony Abbott’s giant raid on Australia’s investors to pay for his unravelling signature policy.

In 1987, a Labor Government, with Paul Keating as Treasurer, abolished double taxation in Australia. Meaning that when a company pays tax, the shareholder doesn’t have to pay it again. Today, more than 25 years later, Tony Abbott wants to bring back the double-tax.

Now, the Opposition makes much of their policy, which is “there will be no adverse unexpected changes for people’s superannuation under a Liberal government”. Well, guess what? This is adverse and it’s unexpected. It’s a big impact on the superannuation of all Australians. Why should a retiree whose been saving and working all their life pay for Tony Abbott’s paid parental leave scheme through a tax on their life savings? Why should they pay for this scheme that plenty of people in Tony Abbott’s own Liberal Party think is just plain crazy, and we know the National Party just won’t support?

This tax will hit self-funded retirees. They’ll have less income to make their ends meet. Because they’ll pay more tax, they’ll pay a double tax. Even self-funded retirees who don’t pay tax will be hit because they’ll get a smaller refund on the tax paid by the companies they’ve invested in.

Now, this is symptomatic of everything the Government has said about the Opposition’s policies in this election. They’re poorly costed, they’re unfunded and the Opposition will have to pay for them by tax increases and spending cuts. And they don’t want to tell you about it until the last 72 hours of this election campaign. They don’t want to be honest about it, because if they’re upfront about it people will be a lot less likely to vote for them.

This policy is policy on the run and it would be paid for by Australia’s ordinary, everyday investors. Just like ordinary everyday Australians will have to pay for their policies through their cuts.

The Minister for Finance will add in relation to their cuts.

PENNY WONG: Thanks very much for that, Treasurer.

Well, the Treasurer’s gone through one example of what happens when your numbers don’t add up and that’s the paid parental leave scheme that is Tony Abbott’s signature policy. What happens when your numbers don’t add up is other people have to pay - you’re making other people pay. Australians will pay for Tony Abbott’s signature scheme and his other unfunded promises through cuts to jobs, to services, to health, to education, and also through the tax hike that the Treasurer’s outlined.

Tony Abbott has a very clear game plan, and that’s to hide cuts from the Australian people until it’s too late. He doesn’t want you to know the true cost of his policies, and he doesn’t want you to know the truth of who will lose if an Abbott government is elected. And so, today, we are launching Tony Abbott’s Cuts to Come. A snapshot of the cuts that we know Tony Abbott plans to make should he be elected on September 7.

Well, we know he’d cut the retirement savings of millions of working Australians. He’s confirmed that. We know he’d cut the supplementary allowance that around 1 million Australian families receive. He’s told us that too. We know he’d cut at least 12,000 jobs - he said so. And we know he’d cut the SchoolKids Bonus.

Let’s be clear: the numbers on this slide are not our numbers. They’re the numbers announced and signed off by Tony Abbott and Joe Hockey - $17 billion of cuts. They’re their number in their words. I’d make the point that the Government does not accept the $17 billion figure, we think, in fact they haven’t made enough cuts to fund their policies to get to $17 billion, but we’re being

generous and we’re using their numbers. Just as $70 billion is also their number that both Joe Hockey and Andrew Robb have backed in.

So, the Coalition have fronted up to $17 billion worth of cuts. What does that mean? It means another $53 billion of cuts still to come. Another $53 billion of cuts that Tony Abbott and Joe Hockey have planned that they’re not coming clean with Australians about.

Well, Mr Abbott has given us some clues; he has flagged further cuts. We know that he wants to cut $500 million from the car industry - putting 50,000 jobs at risk. We know from the last election that the Coalition want to cut Trade Training Centres - a vital investment in the skills of young Australians. This cut would be over $1 billion over the life of the program.

The Coalition has also flagged that they’d cut Medicare Locals - $1.8 billion from Medicare Locals. This would make it harder for Australian families to see their doctor. And the Coalition, and particularly Mr Abbott personally, have been up front about not supporting investment in public transport - an essential element of reducing congestion in Australia’s cities. That would be around $3.5 billion of cuts. And if you add those up you’re looking at another $7.5 billion.

But those cuts together - what they’ve announced and what they’ve flagged or given a hint about - don’t even get the Coalition close to the $70 billion that they’ve said they’ll cut. So we will continue to monitor Tony Abbott’s cuts through the rest of the campaign because Australians deserve to know what they’ll lose if Tony Abbott wins.

Mr Hockey said himself on Monday night, during his debate with the Treasurer, that apart from defence and medical research, all other areas would be looked at. Well, what does that mean? Well, it means almost everything is on the chopping block. Joe Hockey says everything’s on the table. Well, what are they? Are they cuts to public housing? Cuts to health and hospitals? Cuts to student support? Cuts to universities? Cuts to industry assistance? Cuts to schools?

Tony Abbott says his policies are fully costed and fully funded - fully costed and fully funded. So he already knows what cuts he plans to make. He’s just not telling you what they are.

There are $53 billion worth of cuts Tony Abbott won’t tell Australians about. We think it’s about time he did. If you can’t be honest with the Australian people, if you try and deceive people about what your plans are, what sort of leader are you?

Happy to take questions.

JOURNALIST: (inaudible)

BOWEN: Well, as I said, since 1987 in Australia, when a company pays tax then the individual shareholder doesn’t pay that tax; they get a franking credit. And when their tax is done, that is taken off any tax that they have to pay. Now, Mr Abbott is apparently saying ‘I’m going to put a 1.5 per cent levy on Australia’s businesses and there’s going to be no franking credits so it’ll be paid again by Australia’s shareholders, investors, superannuants, mum and dad investors across the country’.

This is just extraordinary. This changes more than 25 years of Australian policy and it is a huge hit on Australia’s investors - $1.6 billion a year. Now, obviously it will depend on how many shares an individual owns, what their share portfolio is through their superannuation fund and what they hold directly, but the impact on Australia’s self-funded retirees will be very, very significant. The impact on Australia’s superannuants and people who are saving through their superannuation schemes for their retirement today will be very significant indeed, and of course we’ll have more to say about that.

JOURNALIST: Do you have any idea of roughly how much it will cost your average self-funded retiree?

BOWEN: Well, again it would vary from person to person and we’ll have more to say about that, but, you know, perhaps Mr Abbott could answer that question in tonight’s debate.

JOURNALIST: Any idea how it could have been better designed?

BOWEN: Well, it could have been better designed by maybe implementing the Government’s Paid Parental Leave Scheme. The first Paid Parental Leave Scheme in Australia’s history, which has helped 300,000 parents already in Australia and is not paid for by a levy through Australia’s business and on Australia’s investors.

JOURNALIST: You’ve been demanding to see the Coalition’s policies and costings, when will we see all of yours?

WONG: You have. To date, everything that we have announced is either fully provisioned for in the budget or we will or have lodged for costing with Treasury and Finance in accordance with the Charter of Budget Honesty.

BOWEN: See, this is the nonsense that Mr Hockey goes on about. He says ‘we can’t release our costings until we’ve released all our policies’. Well, yes you can. We’ve done it. We’ve released our costings as we go. It’s open to Mr Hockey and Mr Abbott to do exactly the same thing.

JOURNALIST: What do you think of this report in The Australian, that Labor needs to find $10 billion in long-term savings in the coming years?

BOWEN: Well, I saw that report it pointed out - according to the report, that the Opposition needs to find $20 billion - it alleged that the Government needs to find $10 billion. We are improving the structure of the budget by returning to surplus in 2016/2017 against declining terms of trade and declining growth in government revenue - that’s an improvement in the structure of the budget. That’s what we’re doing and we’re applying our fiscal rules and we’ve said we’ll apply the fiscal rules across the forwards and we continue, obviously, to apply the same regard beyond the forward estimates if we’re re-elected.

WONG: And I would make the point that in relation to DisabilityCare and the Better Schools Plan, the Government in its budget put forward a long-term funding strategy for both of those reforms and we put out the detail in the budget both of how the cost was being met over the forward estimates and the structural changes in the budget to fund it over time. That’s what responsible political parties, responsible leaders, need to do to show people how you are going to fund your plans. And what we’re seeing is that Tony Abbott’s got a very clear game plan: don’t tell people what your real plans are until it’s too late.

JOURNALIST: Are you expecting the levy to fully fund his paid parental leave scheme?

WONG: Absolutely not.

BOWEN: Well, Mr Hockey in one interview took four positions on that very question himself. The alternative Treasurer of Australia could not answer how his signature policy would be paid for. When he was asked on radio ‘Will the levy pay for 100 per cent of your scheme?’ his first answer was ‘Yes’, and his second answer was ‘Well, no, it might be 50’, then ‘it might be 60, it might be 70 per cent’.

Well, he, as the alternative Treasurer, might want to explain just how much of his scheme is paid for by his levy and he might want to explain how the rest is paid for. This underlines the point that the Minister for Finance and I have been making every day of this election campaign: they don’t want to tell you because if they told you what they’d cut to pay for your policies, you’d be much less likely to vote for them and they know it.

Okay, thanks for your time.

WONG: Thank you very much.

ENDS Communications Unit: T 03 8625 5111 www.alp.org.au Authorised by G. Wright, Australian Labor Party, 5/9 Sydney Avenue, Barton, ACT, 2600