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Transcript of doorstop interview: Fairfield West: 24 October 2013: NSW bushfires; Government's plan to abolish the SchoolKids Bonus; increase taxes for small business and retrospectively tax low income earners; and the RBA.

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SUBJECTS: NSW bushfires, Government’s plan to abolish the SchoolKids Bonus, increase taxes for small business and retrospectively tax low income earners, RBA.

CHRIS BOWEN: Thanks for coming everybody. I’ll cover three things today.

Firstly, on the South Coast of New South Wales the distressing news that it appears a helicopter fighting the bushfires has gone down with grave fears held for the pilot. Obviously, all our thoughts are with that situation: with the pilot, with the rescuers, with the pilot’s family. Obviously, a brave individual fighting the fires doing their bit and it appears that grave concerns are held for them. And our thoughts are with them as they are with all of the bushfires right across New South Wales. A magnificent effort yesterday of course in very difficult circumstances. What could have been a catastrophic situation largely averted and that is a tribute to all who were involved and all our thoughts are with them, with the communities, right across New South Wales.

Secondly, earlier today the Treasurer along with other Ministers released the draft legislation for the repeal of the Minerals Resource Rent Tax. I note that this was done by press release and Ministers have declined the opportunity to appear before journalists to answer questions. Interestingly, the press release makes no reference to the fact that the legislation contains massive hits on ordinary everyday working Australians. They talk about the repeal of the Minerals Resource Rent Tax but they haven’t been upfront and revealed that the legislation contains significant hits on Australians. They haven’t been upfront

about the fact that it involves abolishing the Schools Kids Bonus. Around $400 for a primary school student, $800 for a high school student, adding up to $15,000 for an average family with two children on the income which receives the SchoolKids Bonus being abolished through this legislation.

The hit on small businesses abolishing the instant asset write-off increases of the previous Government, a hit on 2.7 million hard-working, Australian small businesses right across the country, and an attack on 110,000 businesses that claim losses in future years.

So this is very concerning legislation indeed. Obviously, we’ll look at the details and obviously we’ll have a Shadow Cabinet conversation about this draft legislation. However, we have a fundamental view in the Labor Party that the minerals of Australia belong to all Australians. There’s an obligation of the government to ensure that the wealth is spread right through Australia from the mining boom. And there’s an obligation to ensure support for Australian families, support for Australian small businesses which this Government is kicking with this legislation. So we’ll be looking at the legislation with those thoughts very front of mind.

The final point I want to make today is this. Earlier today the Reserve Bank of Australia released its Annual Report. I note that the Governor in the Annual Report talks about the need to replenish its funds and makes reference to the fact that when I was Treasurer the dividend was paid in full. Nowhere in the Annual Report does the Governor of the Reserve Bank make a claim for $8 billion or almost $9 billion needed urgently. Nowhere in the Annual Report does it say that such a replenishment is needed this year.

Accordingly, I repeat my demand of the Treasurer to urgently release the correspondence between himself and the Reserve Bank to urgently release the Treasury advice as to whether such [inaudible] is required this year, because the Treasurer has made claims that this has been requested by the Reserve Bank. Well he should back up those claims. No such request was made of me when I was Treasurer or of my predecessor Wayne Swan. If such a request had been made it would have been granted. The Treasurer yesterday spent $8 billion of tax payer’s money, made a transfer to the Reserve Bank, blowing out this year’s budget deficit by more than $8 billion dollars. A decision for him, a decision he took, which he must take responsibility for and he must much more fully explain to the Australian people.

Happy to take some questions.

JOURNALIST: Chris Bowen, the ABC has heard that the Labor Government was told by Reserve Bank sources very clearly in 2011-12 that it wanted to hang on

to profits, so while it may not have been a specific request to prop it up, it wanted to hang on, and yet your Government still took $0.5 billion…

BOWEN: Well this has already been, this has already been very properly aired through the public. Now the payment of dividends by the Reserve Bank to the Government of the day has happened in time immemorial, it happened under the Howard Government, it happened under the Rudd and Gillard Governments appropriately. It’s been publicly commented on before that the previous Treasurer decided that some contribution to the budget was appropriate in that year, and that has been commented on.

But half a billion dollars in one year is not justification at all, at all for the Treasurer today and yesterday to claim that as justification for why he needs to spend $8 billion dollars now, those sums just don’t add up. And Joe Hockey, I must say, is being entirely political and entirely irresponsible with his claims, you should not play politics as Treasurer of Australia with the position of the Reserve Bank Fund. He’s playing cheap politics; he’s behaving more like he was in Opposition that would be required of the Treasurer of Australia.

JOURNALIST: Well in that light then, the Reserve Bank warned in its 2012 annual report, that the coffers essentially needed replenishing, why then didn’t your Government do that?

BOWEN: Well we did, we did by agreeing that all profits will be retained. Wayne Swan did that in other years, I think you’ll find in the year before that $500 million dollar transfer all profits were retained, all profits were retained last year as is reflected in the annual report issued by the Reserve Bank today acknowledging that.

JOURNALIST: So you will deny then that the Labor government planning responsibility for propping it up, but given that some sources were saying they wanted to hang on to their profits….

BOWEN: Well I make this point very, very clearly. At no point did the Reserve Bank of Australia ask the previous Government for a top up over and above their profits. They didn’t ask Wayne Swan, they didn’t ask me. I make that point very, very clearly to you, without qualification. Just a few weeks ago we were in office, and it wasn’t asked for, now if that situation has changed, and the Reserve Bank has asked the new Treasurer for that sort of top up, well the Treasurer needs to be much more upfront and transparent with the Australian people about.

JOURNALIST: On another matter Chris Bowen, you said that you will have a talk with your colleagues; will they agree to scrap the mining tax?

BOWEN: Well I think you’re pre-empting a Shadow Cabinet discussion there, but I’ve made clear some fundamental principles, the fundamental principal we believe that the Minerals Resource Rent Tax is appropriate in terms of spreading the benefits of Australia’s mining industry right across Australia and fundamental, a fundamental view that things like abolishing small business tax breaks and abolishing the Schoolkids bonus are fundamentally wrong. And I make this point, the Schoolkids bonus wasn’t even paid for by the Minerals Resource Rent Tax. For the new government to conflate the two issues shows a cynical and arrogant approach.

JOURNALIST: But is there any point in keeping it if it doesn’t appear to be making any significant money?

BOWEN: Well every new tax takes time to kick in, I draw your attention to the Petroleum Resource Rent Tax introduced many many years ago which didn’t make too much money in its early years but has been of huge benefit to the Australian people in all the years since. So they do take time and the Minerals Resource Rent Tax is based on profits, so when profits are up, then revenue will be up, and this isn’t a tax for the next six months or even the next four years, it’s a tax for the long term future for Australians of all generations.

JOURNALIST: Is it fair to say you’ll block the bill or legislation in the Senate?

BOWEN: There will be a Shadow Cabinet discussion and a caucus discussion about the details of the legislation, but I’ve outlined some fundamental markers to you.

Okay, thanks very much.