The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
Picture of Wayne Swan

Wayne Swan

Deputy Prime Minister and Treasurer

3 December 2007 - 27 June 2013

2 July 2012

Interview with Ashleigh Gillon

Sky News

SUBJECTS: The importance of carbon pricing reform, jobs growth under a carbon price, Tony Abbott's dishonest campaign, tax reform, Tony Abbott's tax cut for Clive Palmer, polls, Eurozone outlook

PRESENTER:

Earlier I spoke with the Treasurer Wayne Swan. I started by asking him if he really thinks Australian voters will dramatically change their mind about the tax before the next election.

Treasurer, thank you for your time. We've known about the compensation plans for months now, but still today we have two thirds of Australians opposing the carbon tax. Do you really expect that will change a lot before the next election?

TREASURER:

This is a very significant economic and environmental reform which does have a small impact on the overall price level. But of course there's been a lot of distortion in particular from Mr Abbott about the impact.

So I think the lived experience of millions of Australians will be that the price impacts that are taken into account in terms of additional assistance through the tripling of the tax-free threshold, the additional family payments will be evident to Australians. That'll be their lived experience.

PRESENTER:

You've modelled the household impacts but what about the impacts on jobs, have you done any specific modelling which tells you how many jobs are going to be lost as a result of the carbon tax?

TREASURER:

Yes we have and what it shows is that jobs will continue to grow strongly in this country over the next decade. We've done a lot of modelling in terms of economic growth, in terms of jobs growth and in terms of income growth. It is the case that it will continue to grow strongly.

PRESENTER:

As we know Tony Abbott keeps saying that he'll repeal the carbon tax. Labor seems very critical of that, certainly suggesting that he won't carry through with it. Why is that? Why do you think that repealing the carbon tax should be or is in the too hard basket?

TREASURER:

I think business is aware that we're putting in place a carbon price which is going to drive the investment, most particularly in energy efficiency and renewable energy. Trying to rip that out would create an enormous amount of uncertainty.

The reason why many businesses support a carbon price is it provides the investment certainty so that they can grow. It generates the investment in renewable energy and more efficient energy use practices.

This does provide the certainty and I think there'll be many businesses out there including the ones in the paper today, who will be opposing Mr Abbott tooth and nail if he tries to rip it out.

Australians also will be shocked to hear that he plans to get rid of the changes in the tax system which are very, very important for people on low and modest incomes - not paying a dollar of tax until $18,200.

PRESENTER:

You mentioned the tax breaks for low income earners but for the first time in years we're actually seeing an increase in marginal tax rate, the 15 per cent rate is going to 19 per cent. The 30 per cent rate is going to 32.5 per cent. Why were those tax hikes necessary?

TREASURER:

We've put in place a tax cut which flows through right up to $80,000. The fact is that people up to that level will see the tax cut. There has been adjustments in terms of the marginal rates but that's because the tax-free threshold has increased from $6,000 to $18,200. So anyone earning up to $80,000 will be better off.

PRESENTER:

If you do lose the election as the polls suggest, Labor wouldn't be able to hold on to this carbon tax policy would it? Wouldn't you need to do what the Coalition did in terms of essentially acknowledge the Coalition's mandate on this issue?

TREASURER:

I'm not going to speculate about that. But the fact is and you've just said in this interview that there are a set of arrangements that are put in place which support investment, particularly in energy and power generation. A set of arrangements in the tax system which encourage workforce participation.

They're all pretty important, and we think Mr Abbott would be mugged by reality if he were to be elected Prime Minister of Australia, which I regard as still highly, highly unlikely. Because his behaviour during this debate illustrates he's not fit to hold high office of Prime Minister.

PRESENTER:

What also appears likely if these polls are right is that you actually won't have a seat after the next election, you would be voted out. Clive Palmer has said that he's planning to run in the seat of Lilley. We're expecting an announcement from him further on his tomorrow. Do you have any inside word on whether or not he will indeed run?

TREASURER:

Well we certainly hope he doesn't skulk off and run away from this contest. He's going to be the biggest beneficiary of the tax cut Mr Abbott is going to give which is a tax cut to the big miners.

He's going to abolish the mining tax that will be a huge benefit to Mr Palmer and Gina Rinehart. So I hope he doesn't run away from a contest in Lilley because I want to have that contest with him about these very important issues that matter so much to the people in the electorate that I'm privileged to represent.

PRESENTER:

If the polls don't improve, it's likely we'll see more pressure on Julia Gillard's leadership isn't it?

TREASURER:

I don't accept the premise behind that question. The fact is that we are putting in place a very important economic and environmental reform. It has always been the case in the past when governments have moved to put in place big reforms like this and it's stripped some paint off. There's no doubt it's done this but what we've done is the right thing by the country and I believe that that will be rewarded at the next election.

PRESENTER:

Treasurer, just finally the end of financial year. What do you expect? Do you think the uncertainty on global markets is going to continue or are you feeling more optimistic?

TREASURER:

Look I was encouraged Ash with the events over the weekend. We did see the beginning of the important breakthrough there at the meetings that took place in the European Union…

[INTERVIEW CUTS OUT]

PRESENTER:

Clearly some more gremlins in the system. The interview with the Treasurer, Wayne Swan. Apologies to him, some follow up questions asked didn't make it into that.