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Transcript of interview with Marius Benson: ABC News Radio: 28 August 2013: Election 2013, paid parental leave, carbon tax

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Senator Mathias Cormann Shadow Assistant Treasurer Shadow Minister for Financial Services and Superannuation Coalition Campaign Spokesman

Wednesday 28 August 2013 7:15am

ABC News Radio with Marius Benson

Subjects: Election 2013, paid parental leave, carbon tax



Mathias Cormann, it seems a little counter-intuitive that by providing a very expensive service, the paid parental leave scheme, you can actually boost the Budget bottom-line. It will be coming in at better than no cost. You are also cutting the carbon tax but retaining personal compensation and that too will boost revenue. Can I begin with that paid parental scheme and just stay with me while I just go through the numbers of the costings you have put out. Now over two years the cost of the paid parental leave scheme, $9.8 billion, just on $10 billion. You reduce the cost of that down to $3.3 billion by simply taking out the existing costs of schemes that are now existing. You are then facing a cost of $3.3 billion. Take from that what you get from the company levy, that’s $4.4 billion and you come out ahead by $1.1 billion. You are in the black 1.1.


Indeed. What we have said all the way through is that our paid parental leave scheme is fully costed by the Parliamentary Budget Office and it was fully funded. The figures are now out there for all to see and it just shows that Labor’s scare campaign was just that, a dishonest scare campaign.


But does that mean that the actual net cost of the scheme is $3.3, you get from the company levy, the 1.5 per cent levy on the biggest companies, 4.4. You are coming out ahead courtesy of that company levy. You are stinging the companies for more than the paid parental leave scheme costs?


Obviously we have got a number of priorities here. Firstly the paid parental leave scheme is an important economic reform which will help us grow our economy more strongly. Secondly, right now the Budget is in a mess, courtesy of six years of Labor’s waste and mismanagement… interrupted


But let me adopt the voice of the 3,000 biggest companies in Australia and say ‘you needed a 1.5 per cent levy to pay for a paid parental leave scheme. In fact you only need about a 1 per cent levy. Why hit us with 1.5 per cent’?


What we are doing is sound financial management. Obviously we are taking a very conservative approach to all of this. We want to make sure, unlike Labor, that the Budget actually gets back on track to a believable surplus. What we are putting out here today is the evidence.


There is a bit of a caveat generally on this saying that the costings, they don’t include the effect of the general corporate tax rate reduction. You are cutting the company tax rate from 30 per cent to 28.5 per cent, that’s not factored into the costings.


That is a separate policy announcement. We have clearly identified when we released that policy, which is part of our plan again to boost economic growth and create more jobs, we’ve identified separately that the costs of that policy is $5 billion over the forward estimates. We have already announced $17 billion worth of savings over the forward estimates and Joe Hockey and Andrew Robb will have some more to say about all this later today.


But are you being too selective. Are you announcing the good news that puts you in the black and ignoring the tougher news that puts you in the red?


Well not at all. What we have done today is essentially show the detail in relation to the paid parental leave costings and how it is funded. We have also, very transparently, released the cost of cutting the company tax by 1.5 per cent.


Just briefly on the carbon tax. You are scrapping the carbon tax. You are forgoing any revenue from that but you are retaining any compensation for people generally for the carbon tax, although they won’t be paying the carbon tax and you are still coming out ahead, in terms of revenue to the public purse.


Indeed. Something that is not widely understood is that with the mining tax and the carbon tax packages, Labor came up with multi-billion dollar new taxes, which were bad for the economy, but which also left the Budget worse off overall. When it comes to the carbon tax package, yes we have said that we would keep income tax cuts and pension increases without a carbon tax because that helps people with their cost of living pressures. But of course all of the other compensation attached to the carbon tax, if you are not going to have a carbon tax you do not have to provide free permits and other transitional assistance to businesses that no longer have to pay the carbon tax. There is a significant saving to the Budget which comes from that and there are more savings from shutting down things like the Climate Change Authority which will no longer be required.


Mathias Cormann thanks again.


Always good to talk to you.


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