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Transcript of interview with Mike Carlton and Sandy Aloisi: Radio 2UE, Sydney: Tax cuts; Joe Hockey's comments; Fair Work Act.



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INTERVIEW WITH MIKE CARLTON AND SANDY ALOISI

RADIO 2UE, SYDNEY

1 JULY 2009

SUBJECTS: Tax cuts; Joe Hockey's comments; Fair Work Act

MIKE:

Treasurer Wayne Swan is on the line. Good morning.

TREASURER:

Good morning. How are you going?

MIKE:

Alright. You didn't win lotto either, I gather?

TREASURER:

No, I didn't win lotto.

SANDY:

Because there was a Queensland winner, Treasurer. We thought it might have been you.

TREASURER:

Well, there was a number of Queenslanders out at Logan City last night at the Community Cabinet, but I don't think anyone there won lotto.

MIKE:

It was your birthday yesterday, wasn't it?

TREASURER:

It was. Pretty handy date, isn't it?

SANDY:

Yeah. Belated happy birthday, Treasurer.

Transcript of 01/07/2009

Page 1 of 5 Transcript - Tax cuts; Joe Hockey's comments; Fair Work Act - Interview with Mike ...

TREASURER:

Thank you very much.

MIKE:

Why are you and I and the other rich people getting tax cuts of $41 a week and the poor ordinary wage slugger is getting a lousy $2.88?

TREASURER:

Well, because you've got to look at the tax cut in sequence. There were very substantial tax cuts last year for low- and middle-income earners. Over and above that there have been payments particularly to those on lower incomes through the economic stimulus package. If you look at the tax cuts combined - last year and this year - they are overwhelmingly tilted towards people on low- and middle-incomes.

MIKE:

If I was earning under $80,000 I'd say, whoopy, a tax cut of $2.88. I don't think I'd be dancing in the street.

TREASURER:

But you've got to look at it combined with last year. There have been very substantial increases for people on lower incomes. The Low Income Tax Offset has increased substantially. That came through last year. There's a further increase in that. You've got to look at them combined. And also, you've got to look at the economic stimulus payment. There has been a very substantial increase in disposable income for people on lower incomes. I'm proud of that and I'm happy to defend it.

SANDY:

Can we still afford the tax cuts though, Treasurer, given though the financial crisis we're going through?

TREASURER:

Well, what we've got to do is always put incentive in the tax system. I think that's important. People who work hard do deserve some reward when they work a few additional hours. If you look at the way in which we've reformed the tax system, that's what's happening. That's important. That's an important part of making the system work well for all of the people.

MIKE:

Yeah.

SANDY:

Is it responsible?

TREASURER:

Of course it's responsible. Absolutely. Because the other thing we need is we need economic

Page 2 of 5 Transcript - Tax cuts; Joe Hockey's comments; Fair Work Act - Interview with Mike ...

stimulus as well. As you know, there's been a very substantial…

MIKE:

What - the economic stimulus of $2.88 a week?

TREASURER:

Well, it's not $2.88 a week. I'll just go through it again for you, Mike. The truth is that a lot of people on low incomes have had a very substantial increase in disposable income. All of those payments - the tax cuts last year, the economic stimulus as well, the tax cuts this year - have meant a very substantial increase for people on the lowest incomes. It's something I'm really proud of as Treasurer. And I can't let you say that that hasn't happened because it has, and the people who've received those increases know it.

SANDY:

I'm just surprised, Treasurer, that we're getting a tax cut. Don't get me wrong, I love the idea, but just given what we've gone through, would the Government have considered perhaps rescinding on that promise?

TREASURER:

No, we didn't, because that was a commitment that we made to the Australian people, and we have delivered. As you well know, we did make savings elsewhere in the Budget, both last year and this year. We changed priorities.

MIKE:

I was a bit intrigued to see this morning that Joe Hockey, your opposite number on the other side, has been dumping a bit on the Howard Government's financial management. Did you see that?

TREASURER:

It's quite extraordinary. I mean, he's gone out this morning and said we should have dumped the tax cuts. But the other thing that he did yesterday was he said that he was prepared to take on much higher debt. As you know, they've been running this shabby fear campaign on debt for the last few months, and he went out and urged the Government to borrow essentially as much as an extra $60 billion to purchase private securities, whilst at the same time going in the Parliament, day in, day out, criticising us for the responsible borrowing that we are doing to stimulate demand. It is quite extraordinary from Joe Hockey. I think he was pretty sloppy yesterday. In addition to that, he also had a crack at the spending priorities of the former Howard government.

MIKE:

Yeah, I thought that was fascinating. He said that maybe they gave too many tax cuts, didn't save enough, didn't do enough on infrastructure.

TREASURER:

Well, what he basically said was that the Howard government was spending unsustainably at the top of the mining boom. This was the criticism, as you might recall, that Peter Costello made of John Howard in that Howard biography.

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MIKE:

Yeah.

TREASURER:

So he's out there criticising the spending of the Howard Government. He's out there saying the Government should borrow more. He's basically in one hit out yesterday demolished the economic record of the Howard government.

SANDY:

Well I think, Treasurer, I think what he was doing was acknowledging that it's very difficult to look into the crystal ball, and perhaps had the Howard government realised what we're going through now, they wouldn't have put tax cuts in place for several years, and you as the Treasurer now should have considered withdrawing them.

TREASURER:

What we've been doing, Sandy, is we've been actually re-arranging priorities. We've delivered the tax cuts, but we've made spending cuts elsewhere in the Budget. And plus we've put in place a medium-term fiscal strategy of bringing the Budget back to surplus. But Joe Hockey came into the Parliament day after day after day saying that we shouldn't responsibly borrow because of the global financial crisis, and yesterday he's now admitted that he would borrow up to an extra $60 billion. It's quite extraordinary.

MIKE:

Alright. The new Fair Work Act comes in from today, the thing that replaces the old rotten old WorkChoices, but are you worried that this might lead to a wage blow-out? Some unions are going to go in hard and fast for pay rises.

TREASURER:

Well, I think we've got a pretty good system. We've got a fair and balanced system. I think people do need to exercise restraint in this environment, and I don't necessarily think it's the time for anyone to go out there making extraordinary demands.

MIKE:

Alright. The AMWU, the Manufacturing Workers Union, is going to ask for 4 per cent from today. That's a lot of money in these times.

TREASURER:

It doesn't mean to say they'll get it, does it Mike? I mean…

MIKE:

No.

TREASURER:

…the thing is that we've got enterprise bargaining out there. They've got to go out and bargain. The bargaining rules, I think, are fair. So, I don't think it's a time for anyone,

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2/07/2009 http://www.treasurer.gov.au/DisplayDocs.aspx?doc=transcripts/2009/101.htm&pageID...

whether it be an employer or an employee, to be out there making extraordinary claims. But as you know, there's a bargaining process. People will make their ambit claims, but what the economy needs at the moment is restraint from everyone.

MIKE:

Yeah, and that includes the unions. Treasurer calls for unions to exercise restraint?

TREASURER:

Well absolutely I think everybody in this environment needs to exercise restraint. You know, I've been really pleased by what's been going on in the Australian community in recent times. Everybody has been pulling together. There are many employers out there who have been keeping people on despite very difficult circumstances. That's been a good thing. I think it's important that everybody shows some restraint, because if we pull together, we can continue to have the sort of outcome we've had in the last few months where you've got the IMF and the OECD all saying that Australia is the top performing advanced economy in the world. We could only achieve that if everybody's pulling together.

SANDY:

Treasurer, thanks for your time. Happy new financial year.

TREASURER:

It's good to be with you.

MIKE:

Thank you. Treasurer, Wayne Swan.

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