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Transcript of joint press conference: Sydney: 15 December 2015: MYEFO; 12 month anniversary of the Sydney Siege; Malcolm Turnbull's 15 per cent GST on everything

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SUBJECT/S: MYEFO; 12 month anniversary of the Sydney Siege; Malcolm Turnbull’s 15 per cent GST on everything


Just over 12 weeks ago, Malcolm Turnbull proposed new economic leadership for Australia. 12 weeks on, today is the first test of Malcolm Turnbull and his economic team on new economic leadership and it is not a great outcome at all for Australians. The deficit is up, debt is up, spending is up, growth is down. These are the results of the last two and a half years of Abbott-Turnbull Government. Two and a half years ago, the Liberal Government called the economy wrong. We were coming out of the mining boom, prices for commodities were falling, and there was a time where it was necessary to make a transition to beyond the mining boom. But the 2014 Liberal Budget did exactly the wrong thing, it called the economy wrong. We were told then there was a budget emergency which justified harsh and terrible cuts, broken election promises, some of which still ricochet around the Senate as the Liberals try and persist with these harsh and unfair measures. Then in 2015, the same Liberal Government to which Treasurer Scott Morrison and Prime Minister Turnbull were senior cabinet ministers declared the budget emergency was at an end. But now today, we hear that the deficit's up, that indeed wage growth is stalling just above inflation, that we are seeing confidence down, we are seeing capital expenditure down. So this Government is taking us in a path of cuts now which is not what Australia needs at the moment. Put simply, the Liberal Government's Budget is on a road to nowhere with no prospect of improving. Today we see the suggestions of the Government to improve the budget emergency. Instead of looking at multinational taxation, or superannuation tax concessions, the Liberals are at it again. They are

proposing the harshest cuts to the people least able to protect themselves. Some of the specific measures which the Liberals are proposing to hurt Australians include a $650 million cut from Medicare by slashing bulk billing and diagnostic imaging services for people who are receiving cancer treatment. In addition, there will be cuts to radiation and oncology programs. Also, for aged seniors with complex needs, they will receive hundreds of millions of dollars of cuts. Why is it that the Liberal Party, when in Government, their only idea for the future of Australia when there is a problem of their own making, is to force cuts on to those least able to protect themselves.

Now, I'd like to hand over to my Shadow Treasurer, Chris Bowen, to talk further about today's statement.

CHRIS BOWEN, SHADOW TREASURER: Thanks very much, Bill. Today's mid-year economic update is a report card on the progress of the Liberal Government in meeting their promises when it comes to the economy. And the report card is a great big failure. We know that according to the Government's own figures, we face a future of higher deficits and lower growth. What we are seeing is two years of economic and budget mismanagement by the Liberal Government, as Bill has said. This update shows that Malcolm Turnbull and Scott Morrison have presided over a budget deficit blowing out at the rate of $120 million a day since the last Budget. The deficit has blown out by $26 billion over the last seven months and of course, the Budget deficit for 2015-16 has blown out by $33 billion since the time of the last election. And the blowout in the budget deficits over four years of $26 billion of course comes on top of this Government already doubling the deficit. Now, deficit reduction and returning to surplus was at the heart of this Liberal Government, and it begs the question - if they have no plan to return to balance, what is the point of the Turnbull Government? Now, the Government's fiscal strategy lies in tatters today. The Liberal Party promised a budget surplus of 1 per cent of GDP by 2023-24. That was the centerpiece of Tony Abbott's policy speech. That commitment has been included in every Budget and every update since the election. It's been the centerpiece of their fiscal strategy. Today, it was dropped. Today Treasurer Morrison has been reduced to promising a return to surplus "as soon as possible", when revenue exceeds expenditure. Their fiscal strategy is simply non-existent. Now, of course, the Liberals promise to turbo charge our economy, to drive growth and reduce the deficit. The Treasurer keeps talking about real momentum in the Australian economy. The fact is today's update includes yet another down grade of growth, falling 0.25 per cent in the current financial year, and 0.5 per cent in 2016-17. These come on top of the downgrades in growth at the last Budget. Of course, under the Liberal Government, we have seen a consistent downturn in living standards, falling by 3 per cent under this Government, when they rose by 6 per cent under Labor. And nothing's been more ridiculous than the spectacle over the last couple of months of Scott Morrison, our rookie treasurer, saying Australia doesn't of a revenue problem, when he has presided over a revenue write down of $33.8 billion. As Bill said, there are some savings announced in this statement, and let me turn to the matter of spending versus savings.

Firstly, the Treasurer was boasting today that he got spending down from 2 per cent to 1.5 per cent per year; patting himself on the back, talking about how hard it was. Well, he's being extremely mendacious. If you look at the last Budget, table one of statement 10, it showed spending was increasing at 1.1 per cent, now this Budget update shows it increasing at 2 per cent and the Treasurer's patting himself on the back that he's got it down to 1.5. He's only reducing it after he doubled it. The has Government claimed to have provided savings to off set their spending since the Budget. Well, this claim is as dodgy as Serena Williams in a charity fun run. What the Government has done, has changed its accounting when it comes to free trade agreements, and it has then announced a whole range of savings measures. Some of these were worse than what was contemplated by Joe Hockey and Tony Abbott. We are deeply concerned, as Bill said, by the changes to cancer, pathology funding, Medicare, aged care workforce. And, of course, the biggest save is increase compliance when it comes to social welfare. Well, of course, Scott Morrison is a one-trick pony. We have heard it all before. This Budget update, these are from the Budget when Scott Morrison was the Minister for Social Security. When it comes to finding savings, he's got one trick and he rolls it out every time. And that is increase compliance when it comes to social security. Well, Scott Morrison can talk up a storm, but he delivers a light shower. He can talk up rhetoric when it comes to being tough on people on welfare, but as Bill said, when he has the opportunity to get tough on multinational tax evasion, when he has the opportunity to get tough on things like high-income superannuation concessions, he squibs it every time. That's why it's very clear that treasurer Morrison is WTH - worse than Hockey. Of course, the Government had alternatives today, they have could have adopted Labor's plan for multinational tax, higher income superannuation, tobacco, they could have adopted those plans. They would have received bipartisan support, yet they have chosen yet again to simply preside over blowouts in the budget deficit while attacking those who can least afford it the most.

SHORTEN: Just before we make questions, I'd also I think it's appropriate today being the one-year anniversary of Martin Place, just to make some comments about this sad anniversary. A year ago, 17 people, some of whom were friends, some of whom were strangers, were thrust into an unimaginable nightmare of one madman's making. For 16.5 hours the world watched, waited and prayed for a safe ending. Sadly, that was not to be. Today, we remember two remarkable people - Katrina Dawson, barrister, mother, daughter, wife, and Tori Johnson, manager, soul mate, son. Today, we stand with all of those who love these two precious people and all those who were loved by these two precious people. I don't think any of us will forget in the days after this terrible event, when the eyes of the world were on Sydney, and on Australia, Australians came forward to Martin Place not with hate in their hearts, but with flowers in their arms. And this precious patch of Sydney, became a field of flowers. Now it's a more permanent memorial, as befitting that field of flowers. But for me, for my family, for the Labor Party, and I think for all Australians, the world saw that Australians will greet evil with love, that we will combat violence with bravery, and we won't change who we are, but we do remember the sad and terrible events of a year ago.

Thank you, now perhaps if there are questions going back to MYEFO.

JOURNALIST: Mr Shorten, has the Government got the balance right when it comes to protecting growth and cutting spending?

SHORTEN: Let's face it, this is a Government who doesn't know what they want to do and doesn't know how they are going to do it, other than slap a 15 per cent GST on everything, and now it appears they are worse than Hockey. They are putting in cuts now which are harsher than anything which former Liberal Prime Minister Tony Abbott could have dreamed up. Let's recognise that Malcolm Turnbull and Scott Morrison, they were ministers, senior ministers at the cabinet table of Abbott and Hockey for the last two years before they took over. Over two years ago, the Liberals said there's a budget emergency. They used that remember to justify the Commission of Audit and the terrible cuts, the cuts to Medicare, to schools, the cuts to family payments, the $100,000 university degrees, making people go six months without any Government payments at all. But then in the 2015 Budget, the Liberals declared budget emergency mission completed, all good and they still called the economy wrong. We said in our reply to the Budget in 2015, that the Government had heroic assumptions. They projected growth would be here and we said it would be here and it turned out to be here. We said that the Budget was based upon dodgy optimistic figures about the price of iron ore and other commodities. The Government said they'd be up here, the truth is we said they'd be down here and they are down here. So now we are back to a emergency debate again by the Government to justify these horrible cuts. The lesson of today's MYEFO statement is that Malcolm Turnbull and Scott Morrison are proposing cuts which are harsher than those of Tony Abbott and Joe Hockey. After two and a half years the Budget's going nowhere. The Liberal Government have achieved precisely nothing and Australia's going backwards.

JOURNALIST: Mr Shorten, do you see any evidence in this MYEFO that this might be a pre-election MYEFO? Are you expecting that we'll have a Budget handed down by Mr Turnbull or do you think it's readying for an early election?

SHORTEN: It would be political cowardest of Malcolm Turnbull and the Liberals not to bring down a Budget in May. I say that because they have made such a dreadful mess of the last two and a half years. Malcolm Turnbull likes to pretend that it's the most exciting time to ever be an Australian, it's not exciting if you are receiving cancer treatment now under Malcolm Turnbull's Australia, it's not exciting if you have your children and family day care under Malcolm Turnbull, it's not exciting if you want your kids to work hard and school and go to university and not pay $100,000 degrees. Malcolm Turnbull needs to pass the test of economic leadership. The whole case for Malcolm Turnbull dumping Tony Abbott, was new economic leadership. But as my colleague Chris Bowen has said, under Malcolm Turnbull's new economic leadership, we are going backwards faster than we even were under Tony Abbott.

JOURNALIST: Mr Bowen or Mr Shorten, do you think the Government's done enough to retain our AAA credit rating?

BOWEN: Of course, keeping the AAA credit rating is important, it's a bipartisan objective. It is appropriate that both Bill and I as alternative Prime Minister and

Treasurer be very responsible in our remarks about the AAA credit rating. Certainly the ratings agencies can speak for themselves, they often provide further commentary after updates of this nature. But it's appropriate and important, of course, the three AAA credit ratings with a stable outlook were achieved by Labor and of course we want to ensure and see their continued existence.

JOURNALIST: We had a meeting between the Federal Treasurer and the State counterparts last week, which seemed to be quite warmly received from both sides of the aisle, including Labor state treasurers and it seems there was an agreement that the focus must be on for any taxation reform, not raises the overall portion being paid towards taxation, not to address it as just getting more revenue, but coming up with a more efficient tax base. Do you agree with that, that we should be actually looking at raising the overall rate of tax that Australia is paying?

BOWEN: Well I don't think I can share your assumption about the meeting, because the Liberal Premiers also went to that meeting asking for funding for their health challenge. And Gladys Berejiklian, the Treasurer here in New South Wales said we face a funding crisis for health and it's caused by Canberra. Of course their proposal is to increase the GST to 15 per cent to fund health. That involves an increase in the tax ratio. So I can't share your conclusion that everybody sat around and shook hands and said yeah, we know what we can do, we won't increase the tax to GDP ratio because I don't think that's what happened. Obviously, I have said unlike Scott Morrison, who continues to claim there's no revenue problem, despite presiding over these massive downgrades in revenue, that you've got to have proper revenue measures on the table and spending measures on the table. Scott Morrison is all things to all people - all over the shop when it comes to his commitments when it comes to tax. He says an increase to the GST without increasing the tax to GDP ratio, that means (a), no money for States for their health and education and certainly, no compensation for pensioners, veterans and carers because all that implies that every single dollar raised out of an increase in the GST goes to tax cuts. The only way you can do that is for the first two propositions not to be not true.

JOURNALIST: What about the argument though that if you get a more efficient tax base in order, in place, that you'll see a higher economic growth, which in turn will see greater revenue to the Federal Government and to the States and that seems to be the focus of the Federal Treasurer, by changing the tax mix you don't need to raise the overall proportion, but to actually get higher growth.

BOWEN: With respect, there are two separate things, can you have more efficient taxes, discussion about more efficient taxes? Of course you can, of course you can. But then you have the other discussion about the State's funding needs, caused by the $80 billion worth of cuts to health and education, which Tony Abbott and Joe Hockey may have introduced but Malcolm Turnbull and Scott Morrison now own. They are their cuts. They are defending them. I note that going into that meeting, Scott Morrison said, "I'll be walking out if they want to talk about the $80 billion worth of cuts to health and education". Well that's did last very long. That's when he was dragged to these other discussions about percentages of income tax, etc. Let's see

how that process unfurls, but very clearly, when Scott Morrison claims Australia doesn't have a revenue problem, he is just plain wrong.

JOURNALIST: Where would a Labor Government find the kind of savings announced today?

BOWEN: We have got more measures on the table than the Government. We have announced a multinational tax plan, we've announced a high income superannuation plan, we have announced a tobacco plan, which is not universally popular with everybody, but we recognise that tough decisions are necessary. We've announced we would not proceed with the Government's emissions reduction refund, there is a big pot of money that the Government is spending which we would reverse. We've announced we would not proceed with the reintroduction of the baby bonus. They say there is all this need to cut spending and they are going to deal with the National Party, and isn't that going well, Liberal and National relations just at the moment, deal with the National Party, they want to reintroduce the baby bonus for $1,000 for the first year of a child's life. We oppose that. So we have been leading the debate when it comes to measures to improve the Budget bottom line. We have dragged the Government kicking and screaming on multinational tax and high income superannuation in particular.

JOURNALIST: Do you think Labor's made a mistake by explicitly ruling out a rise to the GST? Government keeps saying everything for them is on the table, they are happy to have a discussion no matter what it is, and to have that discussion with the States to try to get the most efficient tax system possible. Has Labor ruled itself out by even that discussion by so quickly knocking back any suggestion that you can have a raising of the GST but with enough compensation to make sure that people aren't worse off?

SHORTEN: Let's be really clear here - if people vote Labor they know what they are getting. They know they won't get an increase to 15 per cent in their GST. We will live with the consequences of ruling it out because we think it's a bad idea. But it goes to a bigger economic story in Australia. For the last two and a half years you have a Liberal Government who doesn't actually know what they are doing. They find it impossible to stick to one course of action. The 2014 Budget was all about budget emergency and the harsh cuts and breaking election promises. 2015, there was all the fist pumping in the air, the puffed up triumphantlism of Tony Abbott and Joe Hockey and the whole cabinet saying we have dealt with the budget emergency and now we are back at budget emergency again. But that's not the only example of a Liberal Party who don't have economic leadership. They don't know where they are taking this country. Because you've got Malcolm Turnbull, I think now arrogantly, engaging saying everything's on the table, including the GST. A GST increase to 15 per cent is just nuts. It's a bad idea. Why is it this Government, they say they know what they are doing. But when it came to infrastructure, they were happy to pay a billion and a half dollars to the Victorian Liberal Government and it turns out that wasn't the right thing to do. They persist with attacking higher education. They are going after cancer treatment victims and the payments that they get for radiation and diagnostic services. You've got a Government who says on the one hand there's a

budget emergency justifying those terrible cuts I just referred to, but on the other hand, when it comes to multinationals, they give them a leave pass. They are not chasing multinationals to get them to pay their fair share. They are still persisting with direct action, which is an international joke, they still have a Windfarm Commissioner. This is a Government who will have a windfarm Commissioner on one hand, but chase down payments going to people requiring Medicare support for our diagnostic images and pathology for the treatment of cancer.

JOURNALIST: Given your answer that you won't be supporting the incentives that have been proposed, is it a [inaudible] to be going after preventive tools such as diagnostic, pathology and radiation services?

SHORTEN: I have to say, we weren't admitted into the lock-up. We'll study what they say carefully. But all of my instincts and indeed all of my decency tells me that if you have got to make a tough decision and the choice is getting multinationals to pay their fair share of taxation, or starting with people who are battling critical medical treatment, like cancer, I know which one I'd pick. I'd go after the multinationals first.

Thanks everyone.