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Budget 2018: Transcript of interview with Paul Allen: Bloomberg daybreak Australia: 9 May 2018



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JIM CHALMERS MP SHADOW MINISTER FOR FINANCE MEMBER FOR RANKIN

E&OE TRANSCRIPT TELEVISION INTERVIEW BLOOMBERG DAYBREAK AUSTRALIA WEDNESDAY, 9 MAY 2018

SUBJECT/S: 2018 Budget

PAUL ALLEN: Labor's said it's going to support the tax cuts for low- and middle-income earners, but not the whole package. Why is that?

JIM CHALMERS, SHADOW MINISTER FOR FINANCE: Well you're right that we're going to support the tax relief which comes into place on 1 July this year because that is directed overwhelmingly at low- and middle-income earners, and we've said for some time that we support tax relief for those Australians who have been doing it especially tough. There's multiple waves of tax changes being proposed here. Some of them are on the never never. We've got some changes being proposed which would only come into place if Malcolm Turnbull was re-elected two more times. So the point we're making about those tax cuts is they come in seven years down the track. We're not going to make a speedy decision in one day on tax changes which come in seven years down the track. We don't know what kind of condition the Budget will be in, what condition the economy will be in, and we're in no rush. We'll consider them but we're in no rush and we're not yet convinced about those other tax changes beyond the initial set.

ALLEN: On the subject of unknowns, as always there are some fairly heroic assumptions about wages growth, GDP projections, that sort of thing in this Budget. Do you think the Government's been a little overly optimistic?

CHALMERS: I am worried that particularly the wages growth assumption is very optimistic, but beyond that as well, we've had something like $40 billion in new additional taxes and charges come into the Budget, and yet still we've got record net debt, and gross debt over half-a-trillion dollars. And what we say about that wafer-thin surplus in 2019-20 is it's based on optimistic assumptions about wages; it's based on attacks on pensioners which won't pass the Parliament; it's based on what may or may not be a temporary spike in revenue coming from very positive global conditions; and

that first surplus is also based exclusively on one change which is bringing the tobacco tax collection forward a year. So the Budget is built on very shaky foundations, and we intend to put it on a more sustainable and stable footing.

ALLEN: This is a question I asked the Treasurer in the lock-up last night, and I said well, you've talked in the past about the effect on the Australian economy about the end of the mining boom, the GFC, but in this Budget there doesn't seem to be any provisions for future shocks, for example a trade war between US and China. Do you think there's adequate provision here?

CHALMERS: Precisely. That point that you make is well made. What we have here is a Budget where it gives away a lot of the temporary improvements in revenue. We've seen this story before in the Howard years. And what we need to do if we're going to give genuine, sustainable, responsible relief to low- and middle-income earners, is we have to make difficult decisions elsewhere in the Budget, which is what Labor's proposing to do by closing down some of the tax loopholes which overwhelmingly favour the wealthiest people in our community. The Government's taking a very different approach. They're giving these tax cuts on the back of optimistic forecasts, temporary spikes in revenue, and also they've factored into the Budget some measures which won't pass the Parliament - billions of dollars of measures which won't pass the Parliament.

ENDS

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Authorised by Noah Carroll ALP Canberra