VAN ONSELEN:
We're joined now by the Assistant Treasurer, the new Assistant Treasurer, David Bradbury. Firstly Mr Bradbury, congratulations on your promotion.
BRADBURY:
Good to be with you.
VAN ONSELEN:
Secondly, I probably should as a disclaimer make the point that I wrote an article shortly after you were promoted having a little bit of a crack at your choice of being there as the Assistant Treasurer and asking the question, why wasn't the former economics Professor Andrew Leigh put in, but I now realise you are a former tax lawyer at Blakes so I take that back.
As a former tax lawyer this discussion about the mining tax and this idea that it might not bring in the revenue that Treasury claims, how do you respond to that?
BRADBURY:
I think that there are a range of contradictions in the criticisms that are being made. On the one hand, we are hearing from all the big miners that they take the view that this is such an egregious tax that they are going to go to the High Court, they put their hand in their pocket, their deep pockets spend a lot of money - you don't run a High Court challenge without spending a lot of money - to try and challenge this tax. Now, I think Australians would look at that and say well, if they are going to go to those lengths, it must be a tax that is going to raise some revenue.
VAN ONSELEN:
I think that is right, most probably more so in the long term but isn't the big issue here that miners I think can see that over time they are paying a large amount of tax as a result of this mining tax but in a short term they think they think of the arrangements as such, that they can offset a whole punch of those potential tax payments which would mean in the short term importantly politically the Government has more difficulty getting back to surplus.
BRADBURY:
Well look, I guess what happens in terms of actual revenue that is raised with the mining tax; we stand by the forecast that we have in place. They are based upon the advice that we have received from Treasury - that is what Governments do, they rely upon Treasury's forecasts. In terms of -
VAN ONSELEN:
We know how rubbery that the forecast from Treasury can be, both good and bad.
BRADBURY:
But the key point is in terms of our commitment to retuning the Budget to surplus that remains a guarantee, an objective that we will deliver on. People can try and cease upon all of the speculation that exists around how much the mining tax will raise, but if the core allegation is that that will inhibit us from returning the Budget to surplus then that's wrong. We are determined to get the Budget back into surplus. There is a whole range of good reasons why that needs to happen, principally because we need to make sure that we provide our economy with the fiscal space that it needs. If you look at what is happening around the world at the moment, if there is a shock, an external shock that we face we need to do what we can to provide the fiscal space that we need so that we can intervene at the appropriate time and take the sort of action that we took on one previous occasion which kept hundreds of thousands of Australians in work.
VAN ONSELEN:
Which would mean the Budget falling way out of Surplus and back into deficit wouldn't it?
BRADBURY:
But, that is why it is imperative that we target the expenditure cut measures that would inevitably arise as a consequence of the process we are going through. We have contained expenditure in a way that few governments in the past ever have, I heard Paul's comment a bit earlier about this new paradigm of the Labor Government high taxing, high spending. I have got to take issue with it. Because in one sense, at the moment tax revenue as an overall portion of GDP are much lower than where they were when we came to office. The person out there on $50,000 a year as of the first of July this year will be paying $40 a week less tax because of tax cuts delivered by this Government. When it comes to expenditure restraint, no government in recent memory has imposed this sort of discipline on expenditure growth and imposed the restraint that we have. So I think there is a narrative emerging out there. A key challenge for us as a Government is to puncture some of the fallacies that lie at the heart of that narrative, because in reality we are in, comparative terms, low taxing. Sure we have introduced some new taxes but you have got to look at the overall burden of taxation. It is lower today than it was when we came into office and when it comes to expenditure we are running a fiscally tight program here. We are doing it in a way that if you look side-by-side, our Government, the Howard Government, we are actually imposing more discipline over time than they did.
KELLY:
If we look at the corporate tax cuts, the Greens said they wanted a corporate tax cut just limited to two small businesses which creates the idea of a two-tier system. I presume that is intolerable as far as the Government is concerned.
BRADBURY:
Well, we don't support ultimately having a two-tiered arrangement in place. We had initiated a program of early relief for Small Business but there are obviously considerable benefits from an efficiency perspective, a sense of simplicity across the tax system to have the single rate in place. I think one of the interesting points about the debate we have had over the last week is that Tony Abbott and the Coalition have really tied themselves into a knot on this issue. Now, on the mining tax I understand the history. It wasn't a particularly a popular thing at the time it was introduced. I have got to say that when I am out there talking to people in the community there are very few people that say to me that they don't believe we should be introducing this tax, that they think there is merit behind it. But now what we have, is not only do we have a Coalition Opposition saying they are going to oppose tax cuts for business, an article of faith, or allegedly an article of faith, for Liberal people, that are opposed to a tax cut for business, but on the other hand they are out there supporting the retention of these increases to superannuation. Now Tony Abbott when he came into Parliament in the mid-1990's said that when it comes to compulsory superannuation it was the biggest con job foisted onto the Australian people. Now he finds himself in a position where he is actually supporting the retention of those super increases, but opposed to a cut in business tax, but without the measures to fund it.
KELLY:
Just come back to the corporate tax cut, this is your legislation, this is Labor's problem. The Greens have said all or nothing, how do you respond to this?
BRADBURY:
Well, look Paul I remember those years in Opposition when people like you said this was Kim Beazley's problem, when tax cuts were brought before the Parliament it was Beazley's problem as much as it was anyone else's problem. I think most businesses out there have to ask a simple question: Tony Abbott says look, trust me, you elect us and we will give you tax cuts. The problem is if that this Parliament runs its full term you are talking about a couple of years before anyone has the opportunity to receive any tax relief, assuming that Tony Abbott actually delivers that tax relief. Businesses all around this country, particularly those that are doing it tough, that are not in the fast lane of the resources sector, they are asking the question - on what basis is Mr Abbott prepared to block tax relief?
KELLY:
Of course they might be asking that question, but you come back to the point: this is Government legislation. At the end of the day, there is no prospect at all that Tony Abbott is going to change his mind so what do you do? How do you solve the problem?
BRADBURY:
But why is there no prospect that he is going to change his mind? And it's because -
KELLY:
So that is your entire policy direction, wait for Tony Abbot to change his mind?
BRADBURY:
No, no, it is because the commentariat has taken this view that this bloke is so negative that they will give up on him, they will let him off, they will give him the get out of jail free card, and frankly it is not acceptable. There are millions of businesses around this country who are doing it tough. We are a Government that have come to the table with a tax cut that we want to deliver to provide real relief, and then you have got Tony Abbott out there that says, 'not my problem'. Well I tell you what, every single person that gets elected to this Parliament, they've got a job to do. They are not here to exclusively serve the political interest of the Liberal Party they are here to serve their constituency and the tens of thousands of businesses in each and every member's electorate are crying out for some support. We don't intend to do what some others might be willing to do and that is to give him a get out of jail free card, we are going to hold him to account and we are going to put as much pressure as possible and if means we keep bringing this back to the Parliament then I think we should be doing that to maximise the pressure and to expose just what a shonky policy position this is for the Liberals.
VAN ONSELEN:
I accept what you say about Tony Abbot and I accept what you say about businesses doing it tough, and I also accept that there are a range of concessions for small business in the package that comes with the mining tax, but you also have to accept that business is crying out about the fact it is going to be a huge cost impost on them for super to go from nine to 12 per cent, how do you respond to that?
BRADBURY:
And bizarrely that is the bit of the package that Tony Abbott supports, bizarrely.
VAN ONSELEN:
Sure but, and look I accept that and Abbott has to be held to account for that perhaps more than he has been, but by the same token the Government spent a long time arguing that the nine to 12 increase was some sort of - implied at least - it was paid for by the mining tax, now business is coming out and rain very hard in making the point, no it is business that has to pay for this.
BRADBURY:
Well I think it is a bit disingenuous that for those that come forward now and say, 'oh we have just realised how this actually operates'. This has been very publicly known for some time now, and let's be clear about the assistance and the support that the Government is providing. Every dollar that is put aside out of someone's remuneration towards superannuation receives the benefit of a tax concession. That costs the Government. That costs money out of the public purse. We think it is a good thing because we want to encourage retirement savings, so we do that. So there is a cost to Government. If you want to support an increase in superannuation, Government has to pay a cost. Do we pay for those dollars that are put aside? No we pay for the tax concession not that dollars put aside. But let's also understand what's proposed here. Yes we are going from nine per cent to 12 per cent but not overnight. This is over the best part of a decade, the first increase being only a quarter of a per cent increase in the superannuation bills that employers are going to have to pay. Just to put that into some perspective, if you have a total payroll in your business of $100,000, that extra quarter of a per cent is going to be a $250 increase, so we take the view that these are modest increases scaled in over a period of time and it is important to also remember that these will be matters that will be the subject of discussion between employers and employees as they negotiate their future rate and arrangements in the future.
VAN ONSELEN:
Alright, David Bradbury we appreciate you joining us on Australian Agenda, we are out of time. Thanks for your company we hope you can join us again sometime.
BRADBURY:
Thanks very much.