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Transcript of interview with Patricia Karvelas: ABC RN Drive: 8 February 2016: a 15 per cent GST; Labor's savings; Morrison lacking consistent economic policy framework; superannuation tax concessions; negative gearing



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CHRIS BOWEN MP SHADOW TREASURER MEMBER FOR MCMAHON

E&OE TRANSCRIPT RADIO INTERVIEW ABC RN DRIVE MONDAY, 8 FEBRUARY 2016

SUBJECT/S: A 15 per cent GST; Labor’s savings; Morrison lacking consistent economic policy framework; superannuation tax concessions; negative gearing.

PATRICIA KARVELAS, JOURNALIST: Welcome back to R.N. Drive

CHRIS BOWEN, SHADOW TREASURER: Thanks Patricia. Happy New Year.

KARVELAS: Happy New Year to you too. Are you ready to claim „mission accomplished‟ in the GST debate?

BOWEN: It is just extraordinary Patricia that after two and a half years in office the Government‟s answer to everything is “It's all on the table”. They don‟t actually have a policy. We know what Scott Morrison wants to do, we know what Malcolm Turnbull wanted to do which was to increase the GST. It appears that what Malcolm Turnbull described as a not particularly scary scare campaign actually has led to Government MPs lobbying him very strongly not to proceed with an increase in the GST, not because they think it is a bad idea, not because they think it is a poor policy but because they are worried they are going to lose their seats.

KARVELAS: But that's not quite true because the Prime Minister yesterday in his interview with Insiders on ABC-TV made clear that it was not just about any campaign but actually about the economic bearings, that he didn't feel that it satisfied the

economic test. Isn't that what he should be doing?

BOWEN: Well Patricia, Malcolm Turnbull saying it's not a political decision is the most ridiculous thing he has said since he said there was no factions in the Liberal Party and his own members laughed at him. Some of the arguments that he has run are exactly the arguments the Labor Party has run for the last 12 months. We‟ve said, I've said on

behalf of the Party that it would create a great money churn; that 60% of the revenue raised would need to be spent on compensation and what's the point? It's just a money-go -round. It would create tax system churn. The Liberal Party laughed at me when I said that, now they are saying the same thing. We said there was no growth dividend from increasing the GST. We‟ve been saying that for months and months, that increasing in the GST does not lead to a higher economic growth. Malcolm Turnbull is now saying the same thing, none of those arguments are new. The only thing that is new is that there is a Liberal Party revolt on his hands.

KARVELAS: Well perhaps he has arrived at the same conclusions or some of the same conclusions based on evidence that he has received. He said he wants to make decisions based on evidence. Isn't that the kind of test that people should be applying to

policy and shouldn't everything be on the table? I mean, isn't it sort of a backward step to want to control the debate so that all ideas are not considered?

BOWEN: No it's not about controlling the debate Patricia, it's about the Government of the day actually having a concrete proposal to put to the Australian people. I mean we've got this extraordinary position where the Government has less policy up for discussion than the alternative Government after two and a half years with all the resources of the Treasury and the bureaucracy at their disposal. I could talk to you about our high income superannuation policy, the Government can't. I can talk to you about our multinational tax policy, the Government can't. I could talk to you about our abolition of the Emissions Reduction Fund, the Government can‟t. I mean these are policies that we have announced, costed, released. The Government just has one answer which is just “Oh, everything is on the table.” Well it‟s not good enough for the Government to just say “We don't have an idea; everything is on the table”

KARVELAS: So what does it mean for the GST scare campaign or the campaign against the GST however you want to define it that the Labor Party has been running? Is it over now given that what you're saying which is affectively that the Prime Minister doesn't want to proceed with it?

BOWEN: Well we will continue to prosecute the case of course not just on the GST but a whole range of issues both our positive plans and our concerns about Government policy. Quite clearly you've got the Treasurer who still wants to increase the GST. When the Treasurer wants to do something that is important I can hear the gangplank being sawed away behind him by Malcolm Turnbull. He's put himself out on a limb and he doesn't have the support of his Prime Minister it might appear. But look we are up for this debate . As I said there is one reason that Malcolm Turnbull is wobbling on this; this is the force of the Labor Party's arguments and the strength of our campaign

KARVELAS: Chris Bowen the debate is now shifting to other tax savings like superannuation concessions. Now Labor‟s policy announced last year would save I think $14 billion over a decade. The Australian newspaper says the Government is

looking at saving $6 billion a year with the policy it's considering. Will you take a second look at your policy given that those kinds of numbers?

BOWEN: Well Patricia again it's extraordinary. When we, you are right about those figures, spot on, but when we announced that policy the Government frothed at the mouth, said it was outrageous, it was punitive, said it was an attack on superannuation. That was led personally by Scott Morrison and now they, if you believe what you read and we have no reason to doubt it, are considering a policy which goes, yes you're right, a lot further than what we….

KARVELAS: So isn't that a good thing? Governments changing their minds making better policy decisions?

BOWEN: Well Patricia, you want a Treasurer with a framework. You want to a Treasurer with some beliefs not a Treasurer who condemns me and our policy one day and then adopts a policy which goes much further the next. And if the Treasurer doesn't actually believe in any fundamentals of economic policy then we‟ve got a problem as a nation. Now on the policy, we have we looked at this closely and of course we considered going further as part of our proper due diligence and policy development process but the further you go the more you affect middle income earners.

Now we said that the tax concessions were unfair and unsustainable for high income earners. We had no interest in reducing the concessions for middle income earners. To get that sort of money the Government would have to go way down the income scale and reduce the tax concessions for people way down towards average earnings. Now I fail to see the public policy merit in that. We want people on low and middle income earners getting a bit of tax concession through superannuation so that they don't necessarily rely on the full aged pension; that's in their best interest and the best interest of the long-term budget. We don't need very generous high income superannuation tax concessions because they become an estate management tool; not a tool for saving for a dignified retirement to avoid recourse to the full aged pension. That's what our policy is based on. Now if Scott Morrison is going to really raise that much money, he's going to be affecting people on middle incomes. We will have that debate.

You are asking me to respond to a policy the Government hasn't announced. Our policy has been out for very close to 12 months now. The Government spent the best part of 12 months bagging our policy. Now they are in a fit of desperation adopting our policy and perhaps going further.

KARVELAS: I want to get your views on negative gearing. I just spoke to Kelly O‟Dwyer and asked what her views were on negative gearing because consistently we are hearing reports that it is very much on the table and that very much different options are

being modelled. Kelly O‟Dwyer says it doesn't pass, she's not convinced. I asked her, I put to her that the test the Prime Minister talked of, the economic test. Does it pass that economic scrutiny? Does it prove that it's worth it and she says she is unconvinced. Are you convinced that negative gearing needs to be approached. What‟s Labor‟s view?

BOWEN: I've said consistently again Patricia that negative gearing should be on the agenda. I've said consistently that any sensible discussion about tax treatment in Australia would include negative gearing.

KARVELAS: So what's sort of parameters will you put on it because I know you've said that before but what might your policy look like?

BOWEN: Well I've also said a couple of key principles. One, that people who've made existing investments in good faith should have their investments protected. They've made those investments in good faith so that should be part of your policy development. And secondly that we need to ensure that what you do you have consideration to housing supply. They are the principles that I have previously announced as underpinning our policy development. Negative gearing does need to be discussed, there will always be some degree of negative gearing in Australia but we need to assess whether we have the appropriate and fit for purpose policy when you consider all of the budgetary pressures. When you consider the issue of the housing affordability, we in the Labor Party look for measures which are positive for the budget but also have a positive social impact. And work on that has been going on, we‟ve not just been bagging it, quite on the contrary. We took the leadership role and said “Look, it might not be universally popular but this needs to be on the agenda”. We've been doing that work, the Government is coming very very late to this discussion.

KARVELAS: Chris Bowen thanks for joining us.

BOWEN: Always a pleasure Patricia

ENDS

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