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Transcript of interview with Barrie Cassidy: Insiders, ABC: 6 May 2018:2018-19 Budget; Liberal Party has no plan to pay down debt; Labor's fairer Budget reforms; Government's $80 billion corporate tax cut; Business Council of Australia's $1 million Newscorp advertising campaign; Labor's Australian Investment Guarantee; Newstart; Tim Hammond



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CHRIS BOWEN MP SHADOW TREASURER

ACTING SHADOW MINISTER FOR SMALL BUSINESS AND FINANCIAL SERVICES MEMBER FOR MCMAHON

E&OE TRANSCRIPT TELEVISION INTERVIEW INSIDERS, ABC SUNDAY, 6 MAY 2018

SUBJECTS: 2018-19 Budget, Liberal Party has no plan to pay down debt; Labor’s fairer Budget reforms; Government’s $80 billion corporate tax cut; Business Council of Australia’s $1 million Newscorp advertising campaign; Labor’s Australian Investment Guarantee; Newstart; Tim Hammond.

BARRIE CASSIDY, HOST: Chris Bowen, good morning.

CHRIS BOWEN, SHADOW TREASURER: Good morning Barrie.

CASSIDY: It is undeniable, isn't it, you will go into the next election as the highest taxing party across the economy?

BOWEN: Well, Barrie, when Scott Morrison talks about a tax cap or a handbrake on tax, what he is really saying is he is happy for future generations to pay down his debt, and he is also saying he is happy for the Budget surplus just to bob around half per cent of GDP, 0.5 per cent of our economy. That is to point it in context, very, very small compared to historical surpluses. It’s like leaving the surplus as a cork bobbing around on the ocean of international economic uncertainty. We need strong surpluses.

We need a Government prepared to take the tough decisions to return the Budget to surplus and healthy, sustainable, ongoing surpluses not razor-thin surpluses which are the subject to, in some cases still, quite an optimistic set of forecasts and the hope that the international economy doesn't turn down any time soon.

CASSIDY: Sure, but you're offering bigger spending on things like health and education. You are prepared to concede you are the highest taxing party and you need to be?

BOWEN: Well, Barrie, we will fund health and education, but the tax to GDP ratio won't be any higher than it needs to be to fund important services in health and education and

other areas and to return the Budget to healthy, sustainable, good surpluses, not the sorts of 0.5 per cent razor surpluses that Scott Morrison seems to be content with. It wasn't that long ago that his policy was the Government’s policy was, 1 per cent of GDP surpluses, they've walked away from that. They've changed their fiscal rules by all accounts, by everything you could read into the Treasurer's comments this week.

I very much welcome, Barrie, an election around Budget responsibility, a contest of Budget responsibility, and about economic policies including tax. It’s not just about how much tax you raise, it’s about how you raise it. We have led the debate, closing down and reforming the unsustainable tax loopholes and concessions, like reform of negative gearing, reform of capital gains, and reform of dividend imputation refundability. I very much welcome an election campaign which will be based around those issues and a referendum on the Liberal Government’s policy of an $80 billion tax cut for big business over the next decade which is unaffordable, which is on a hope and a prayer that it flows through to investment, compared to Labor's policy of targeted tax relief for corporations on the condition of investment in Australia.

CASSIDY: Are you prepared to commit to a tax to GDP ratio?

BOWEN: It will be clear to see at the time of the election, Barrie. What we will be doing is outlining all our policies including tax and spending policies, of course, and it will be easy to calculate. We will make it very clear, what our tax policies are, including as a proportion of the economy.

CASSIDY: That wasn't the question. The question was will you commit, will you commit to a figure, to a tax to GDP ratio?

BOWEN: We are announcing our fiscal rules and that will include, of course, how much tax as part of the economy, and that will be clear.

CASSIDY: As an ongoing commitment?

BOWEN: Well, Barrie, what we have done is outlined our policies over a 4 and 10-year period and we will continue to do that. I see the Government is now talking about a 10-year period as well, we welcome that, and our policies and our fiscal rules that Jim Chalmers and I will announce well in advance of the election, will be crystal-clear, and they will be crystal-clear both on a 4 and 10-year trajectory.

CASSIDY: Sure, but why won't you commit to tax to GDP ratio as a form of fiscal discipline?

BOWEN: Well our fiscal rules will have several elements to them including return to surplus, including our tax approach and including spending approach. It will be crystal clear. We've announced more policy at this stage of the term than any Opposition in living memory and we will continue to do so. We’ve led the debate and I very much welcome the debate with Scott Morrison anytime, anywhere. There will be plenty this week of course, about our respective policies when it comes to return to surplus.

Talk about a surplus which would be facing headwinds in the international economy, 0.5 per cent will be blown over in a light breeze, a light breeze of an international downturn at any time over the next 4 or 10 years. Over their own figures, they don't do better than 0.5 per cent of GDP, but I think Australia does deserve better than that.

CASSIDY: They might come in a year early on a surplus?

BOWEN: Of course we will see what he says on Tuesday night, but the key matter is not about whether you get to surplus one year earlier or one year later. It’s how long-term, sustainable and healthy those surpluses are, and if Scott Morrison is prepared to lock in Australia to razor thin surpluses over the next few, 4 to 10 years we will have a different approach.

CASSIDY: But based on the figures you've seen, the new revenue figures, do you think you can promise a surplus a year earlier?

BOWEN: Well, of course whatever the Government revenues increase for the Government, also increases for the alternative Government. We have the same baseline.

CASSIDY: But then it’s a question of priorities, whether you put the priorities on the surplus or the personal income tax cuts?

BOWEN: Our tests will be fairness and Budget responsibility, they are the two tests we will apply on Tuesday night and between Tuesday and Thursday in terms of our response. We want to see the tax system improved and made fairer. I think it’s fair to say we’ve made that a key priority, that’s crystal-clear. We also want to see Budget responsibility. We will test the Government's policies against those two yardsticks and our own policies, we will meet those yardsticks.

CASSIDY: Which is the more urgent, in your view?

BOWEN: Well, I think because we've taken the tough decisions, we've done the hard yards on things like negative gearing and dividend imputation, we can actually come to this debate with a different set of priorities to the Government, and we have more flexibility as to how we frame the Budget, the Government is constrained.

CASSIDY: That's what I am asking you, which is the priority? Which is the more urgent, the surplus or offering tax cuts?

BOWEN: Well, Barrie, because we've engaged in that difficult process and we’ve engaged in that reform process which the Government has single-handedly refused to do, we actually can have Budget repair and return to surplus and engage in tax reform which benefits low and middle-income earners as well. I can do that, Bill Shorten and Jim Chalmers and I can do it, but Malcolm Turnbull, Scott Morrison and Mathias Cormann simply cannot.

CASSIDY: Can you also go further than the Government in terms of personal income tax cuts?

BOWEN: Well, I'm sure you won't be shocked to learn I am not announcing our income tax policy on your show this morning. We will have plenty to say this week and we will have plenty to say in the period that follows as well. This is an important week, but we will continue to roll out our policies as we have done, right since 2013. Well in advance of elections to allow people to assess them and to vote accordingly.

CASSIDY: When you say you will have more to say this week, though, on Thursday night, what will we know? Will we learn whether you will outbid the Government on personal income tax cuts?

BOWEN: Well Bill Shorten has made the habit of making his Budget replies very substantial pieces of work including policy announcements. I’m sure this year’s will be the same. The key there is it's Bill Shorten's announcement on Thursday night, not Chris Bowen's on Sunday morning.

CASSIDY: But would you be in a position that soon to announce whether or not you undercut the Government?

BOWEN: Barrie, as I said, we could go around this in any number of ways. I'm not going to pre-empt what's in Bill Shorten's speech on Thursday night. Obviously he and I and senior Shadow Cabinet members have been discussing this matter for some time, and I'm not in a position to make those announcements this morning. What I am in the position to say is that you will see that we regard Budget responsibility more seriously than the Government, you will see that we have done the hard yards, not over recent days, but over recent weeks and months in providing that policy leadership, to put the Budget in better shape, to enable us to have a serious discussion about tax reform for low and middle income earners, providing that relief that they have not been receiving for years and also to engage in a better return to Budget responsibility than Scott Morrison appears capable of doing.

CASSIDY: On the company tax cuts, it appears as if now you’ve got a far more aggressive Business Council up against you. They're talking about giving $1 million to News Corp to put on a Sky News roadshow around company tax cuts. It could be quite effective?

BOWEN: Well, the problem that BCA has got, it's up to them to explain what they’ve done with News Limited, it’s up to them and News Limited to explain that, but the problem they've got is they've got a dud product. You could spend millions of dollars advertising a dud product. Australians know that giving away $80 billion dollars over the next decade in corporate tax cuts, with no conditions on investment, no conditions on wages growth is a poor decision, a poor investment. Our Budgets are under pressure. We have got to focus on what can lift the productive capacity of the nation. We do believe in investing more in schools, we do believe in investing more in TAFE, and we believe in tax reform for corporations on the condition of investment.

Our Australian Investment Guarantee says we will provide upfront deductions for investment, not provide windfall gains to investment decisions made many years ago, most of will flow overseas because of the nature of foreign investment in Australia. We

say to businesses if you want to invest in Australia, create jobs, create investment, that's great, we will provide tax relief, but it will be on the condition of that investment. We won't just simply hope that you invest in Australia as opposed to share buybacks or dividend increases for shareholders wherever they may be.

CASSIDY: On Newstart, and there were some calls this week for an increase to the Newstart from a couple of leading economists as well, the Labor Party is having a review into this. Do you really need a review to tell you that Newstart is inadequate?

BOWEN: We recognise that Newstart is too low, but we do want to engage in a proper process, a thorough process in Government, a review of Newstart interactions with the rest of the welfare system and with job-seeking. We want to engage in a proper and thorough review of that and that's best placed in Government, but of course, Barrie, first do no harm, we have opposed and will continue to oppose the Government's cut to Newstart, which the cut to the energy supplement is, the abolition of the energy supplement going forward. The Government still has legislation before the Parliament to do that. They should drop that on Tuesday night.

CASSIDY: The value of it has gone down a lot over the years and you accept now that it is too low. Could we take it from that that you will increase it?

BOWEN: The whole point of the review is to look at the system it in its entirety and that's what the review will do.

CASSIDY: The Labor Party conference will be recommending that, you would expect that, wouldn't you?

BOWEN: We will have a national conference in Adelaide, and there will be all sorts of issues to be discussed and traversed, they are always great gatherings. Whether it's Newstart or other things, the party will have a good debate.

CASSIDY: Does that influence you, if they were to take a decision that Newstart should be increased, to what extent does that influence the executive arm of the Labor Party these days?

BOWEN: Well, there is longstanding history of the Labor Party of the platform being the statement of values and the executive, the Shadow Cabinet and Caucus then goes about the policy of presenting detailed policy to the Australian people at the election and that system has worked for many decades and I'm sure that will continue to be the case.

CASSIDY: Just finally, on Tim Hammond the WA MP who gave it away this week because the lifestyle didn't work for him and his young family, travelling from Perth obviously. Given that, though, were you surprised that he didn't see out a single term?

BOWEN: To be honest, Tim approached both Bill Shorten and I about a month ago, and said he was struggling, his family was struggling and he needed to make this decision and they were considering it. Obviously both Bill and I worked hard to try to get him to change his mind because he is a huge loss to the Labor Party Caucus and the entire Labor movement I think. I’m sure his electors in Perth will understand that he

made a decision that he feels and his family feels is inevitable and unavoidable. He didn't do it lightly. They agonised over this.

All Members of Parliament of all sides spend a lot of time away from their family and they have time from time to time to reflect on that and consider how long that can go on. Tim had to do that earlier than most.

It is fair to say that Members of Parliament from jurisdictions like Western Australia and the Northern Territory do it tougher because it's just, for obvious reasons, the travel commitments have a bigger impact on their family.

Tim is a terrific fellow, one of my closest friends, I'm gutted that he is leaving the Caucus, but I'm delighted that his family has him back.

CASSIDY: How hard did you push him because it's possible there could be an election as early as September, October, and there’s the expense of that, it’s an inconvenience at the very least?

BOWEN: I wouldn't put it in terms of pushing him, I as a close friend of his, encouraged him not to be rash, to think it through carefully, to think about all the options going forward. Stepping down from the frontbench and staying in Parliament, for example, all those options. As a friend, I encouraged him to think about that and to only make the decision only after the most thorough examination, and he did that. He did that. He and Lindsay did that. I've got no doubt they didn't make this decision lightly, you don't make these decisions lightly and I think the people of Perth understand that and see the impact it has had on his family and completely understand the decision, as have people across the country.

CASSIDY: Thanks for your time this morning.

BOWEN: Thanks, Barrie.

ENDS

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