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Budget 2005: Opposition Leader discusses the budget.

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Subjects: 2005 Budget

BYNER: (tape starts) …the last thing you said to me, ‘here’s an idea Howard, pinch this’. He seems to have done it because employers will be offered a slice of competition bonuses worth up to 2,750 for apprentices under

reforms to reward companies that invest in training. Are you happy with that?

BEAZLEY: Well, that is what they promised in the last election so we always knew that was coming along. But we have got to get the apprentices to finish, that is the main battle and the trouble is, this is a missed opportunity this Budget. What we have is a Reserve Bank saying you have got to do something about skills, you have got to do something about infrastructure and saying that, knowing full well that that particular promise and a number of others are already out there. So, they are effectively saying you have got to do more and there was no more in the Budget. We gave them a good idea and, guess what, they didn’t pitch it.

BYNER: Now, one important point is the fact that you are already on the record saying, ‘look, $6.00 a week - milkshake and a cup of tea or coffee and it is gone’. But the Prime Minister was just saying that Bill Shorten, who is one of

your very loyal Party members, made the point that many of the people that he represents in industry were paying the top marginal rate of tax and needed relief. Are you happy that they have now got it?

BEAZLEY: I have said that things ought to move in that area as well but get a sense of proportion. Neither Bill Shorten nor myself, whoever said that, politicians ought to be taken out of the top tax bracket and proportionality ought to apply here. What we have got is people at the top end getting $65.00 a week plus and the average taxpayer under whom this nation is built and who does the work that keeps this nation going is getting $6.00. Now, this was an opportunity for tax reform which is a bit more of an issue than simply tax cuts.

BYNER: What would you have done?

BEAZLEY: Well, what we are suggesting to the Government is that they should redo this package, concentrate on those impediments, those disincentives -

BYNER: Which are?

BEAZLEY: … to people in middle income earners because of the operation of the tax and social security system which see some people on average incomes affectively experiencing marginal rates of 60 to 70 cents in the dollar start to deal with those tapers, give them encouragement and then, of course, give better tax encouragement to people on average weekly earnings. And then you can think about a few of those other things.

BYNER: Could I just clarify something here and I am always interested to get an answer. At what level of income do you believe somebody is rich?

BEAZLEY: Well, you can actually tell who is getting what when you take a look at the percentages of people earning particular amounts and 80 per cent of the taxpayers in this country, 80 per cent of the people in this country are earning amounts of money which means that their tax cut will be $6.00 a week. So, 20 per cent are earning more than that and of those in the top tax bracket you are probably talking in the realm of about six or seven per cent.

BYNER: Would you abolish taxation up until $12,000 given that that is the subsistence rate?

BEAZLEY: Look, I think what I would do is focus on that middle income area you know. People who are the average householders because they are if you like the normal Australian family. It is them that I would want to be focusing on particularly when they are in families and they are experiencing huge loses from family payments when they work a bit of overtime.

BYNER: What do you feel about encouraging mothers with children past five to go back into the workforce and indeed the mature age workers of 50 or 53 or even late 40s who already have a problem now because they can’t get jobs, in many cases because of their age?

BEAZLEY: Well, encouraging is the word not compelling and it is a question of sticks or carrots - plenty of stick in this Budget and not much carrot. Basically, they have got to get the skills. It is as simple as that. And one thing Mr Howard has never been able to understand is the difference between a part-time job and a career. He values doing part-time work in a McDonalds or whatever and I am not belittling those jobs, it is important that people get the opportunity for work and say becoming a plumber, becoming an electrician, becoming a skilled worker at a time when the country really needs a lot more of. Now, it is hard to get people skilled in those areas but if you are going to a

woman who is already doing a very important thing and that is bringing up the next generation of kids and saying it is in your interest to be in the system, well she has got to have a training opportunity.

BYNER: So, you would have put more money into training?

BEAZLEY: Well, absolutely, absolutely. And I would have been supported in that regard by the Reserve Bank, by the OECD who are saying it is the training now, stupid. It is the skill, stupid. They are not going in there and saying what we need is a huge amount of high income tax cuts. They are going in saying what you need is tax cuts at the middle level and you need to do a lot more about training and you need to do a lot more about infrastructure.

BYNER: Would you be surprised to know, Kim Beazley, that I have got very good feedback from a lot of people, some people in apprenticeships, the proper professional apprenticeship training isn’t being delivered and the auditing process to make sure it is a little lack and slack. Have you heard this?

BEAZLEY: Yes, I have. I have heard that. There is an awful lot that has gone wrong over the last few years. The Government has switched to something they called the Modern Apprenticeship Training System and they had many reasons, some of them prejudice, others commendable for doing what they did but the auditing process disappeared when that happened and as a result, lots of things are going wrong.

BYNER: Who’s responsibility is that?

BEAZLEY: That’s the Government’s responsibility. That is what we are paid to deal with.

BYNER: Don’t the State Governments administer that?

BYNER: To a degree they do. But we have been doing a lot federally through what used to be the ANTA, the Australian National Training Authority, which the Federal Government predominates in. So, the Federal Government has, at least since Paul Keating’s day, tried to exercise a position of leadership in the skills area and what they have been steadily paring back is the support that Paul Keating or the previous Labor Government gave the TAFE system. The consequence now is that, frankly, the only answer on skills that the Treasurer had in his Budget speech last night, and I was amazed to hear it, his answer on skills was to import them.

BYNER: How many more people do you think we are going to get into work with this Budget?

BEAZLEY: I don’t think anyone with this Budget. Not much. I think had we done something serious in the area of training, I mean really serious like the Reserve Bank says we should, then probably quite a lot.

BYNER: My other point is that when we move to try to get tax reform and the statistic you would be aware of, there was once upon a time were 22 workers to each person on welfare and now there are five. Even if you were the Prime Minister and you had a Treasurer under your control, you surely would have addressed this, would you not?

BEAZLEY: Well, you can’t have that situation - now it is five and it is getting worse and will continue to get worse, no. We do have to ensure that people stay in the workforce for the full amount of their working lives. We do have to encourage people to participate in the workforce. The taxation system plays a role there and the sorts of tax reforms that we would want to see would play that type of role. But the other thing that plays a role is, is the government taking training seriously? I know that you talk about this a fair bit on your program, you are one of the few I might say, but anyway you talk about this a fair bit. The Government is just so far behind where it needs to be on this if we are going to get people encouraged to stay in the workforce and not go on to benefits or go on to benefits too early.

BYNER: The Prime Minister argues that this Budget that he has delivered with Peter Costello will encourage people to do overtime. Do you believe that is so?


BYNER: You don’t?

BEAZLEY: It might encourage people to do overtime that are earning $120,000 a year. It might encourage them too. But mostly you find people at that level will do overtime because they love their jobs.

BYNER: If you were in Government, would you allow families to split their income?

BEAZLEY; You don’t have to do that. If you get the balance right between the Family Tax Benefit System and the Income Tax System, you can effectively give people and families a much better outcome encouraging them to

earn more money and you can get the benefits of the sort of split basis. But the truth is this, if you are in a family were mum is earning $45,000 and dad is earning $45,000, the two benefits you will get is $6.00 a piece in each of your tax payments but if you are earning $90,000 plus you get an awful lot more than that.

BYNER: Mr Beazley, both the Prime Minister, and he was on this morning just before you, and Peter Costello across the nation have been ducking questions about whether this is Peter Costello’s last Budget. What do you think?

BEAZLEY: Well, Peter Costello a couple of weeks ago was saying that this was his last Budget. It has got to be said that if you are actually looking at the politics of this Budget which has come as a surprise to many people. If you watch the Liberal Party backbench as they saw themselves taken out of the top marginal tax bracket and as they saw a huge benefit coming through in the superannuation system, Peter Costello was pretty popular. And there is no doubt at all that the Budget has certainly been well received on an individual basis by members of the Liberal Party backbench.

BYNER: But wouldn’t you have reduced the top marginal rate realising, and these are David Koch’s figures, that when we had the Fraser tax cut in the mid 80s, which was a moment in time, you were earning a certain amount of money and if you kept that going, you would now be earning a $165,000 before the top rate cut in.

BEAZLEY: Like I said, I don’t say you should do nothing about that particular level. What I am talking about is proportionality and focus. The focus of this Budget is almost entirely on people in that bracket and not on the average earner.

BYNER: Mr Beazley, thanks for joining us and I hope when you come to Adelaide you will pop in and say hello.

BEAZLEY: I will certainly do that, Leon.