1 February 2016

Interview with Chris Uhlmann, Capital Hill, ABC

Note

SUBJECTS: Tax reform; the Budget; Small Business and Family Enterprise Ombudsman.

UHLMANN:

Kelly O’Dwyer, welcome.

MINISTER O’DWYER:

Great pleasure to be with you Chris.

UHLMANN:

Can you give us some sort of idea, at least on the timing, of what the GST debate is going to look like from the Government side this year? When will we see some kind of meat on the bones of the Government’s tax plan?

MINISTER O’DWYER:

The Government is very keen to have a discussion with the Australian people about some of the problems that we face, some of the challenges that we face with our economy. One of those challenges is that our taxation system is not as competitive as it could be. We know that average income earners are going to be heading into the second highest tax bracket as of next year – that’s the average income earner. Many years ago, about 15 years ago, 80 per cent of taxpayers were paying less than 30 cents in the dollar. That’s clearly not true today. We need a taxation system that is fit for purpose, that is competitive, that encourages people to work hard and be rewarded for their effort, that encourages small business to set up, risk their capital and again for people to be rewarded for their effort. So that’s what we’re looking at – we’re looking at how we can lower the overall taxation burden, make sure that we have a competitive taxation system and make it fit for purpose in today’s world.

UHLMANN:

That’s not the only problem though isn’t it? You’ve got a revenue problem which has been there for some time now. You’re the Assistant Treasurer, essentially the Minister for Revenue, so you’ve got to plug a fairly large revenue hole – that’s got to be part of the equation as well doesn’t it?

MINISTER O’DWYER:

Certainly you consider all aspects of the Budget but let's be very, very clear – you can't simply tax and spend which is what the Labor Party proposes to do. Every dollar that they propose to raise in tax they have spent not one time over but about four or five times over. We do have is an issue with our Budget in that we are spending more than we are bringing in which means we have to get our spending under control. That is something that we are focussed on, that is something that we have been doing, making sure that we don't add to that recurrent expenditure is a critical focus of our Government right now.

UHLMANN:

Ok. Can we just go back to where we began though, when will we see some meat on the bones of the Government argument? When will we actually see what the Government is proposing? Because all we have are some indicators that you're thinking about it.

MINISTER O’DWYER:

What I’ve said is one of the issues we're trying to solve for, I've talked about the need for us to be more competitive, I've talked about what our aims are, the criteria against which we will judge any potential tax reform but it's very important that you don't rush these debates, Chris. It's not simple – tax reform is complex. You need to go through a very significant process in order to ensure that you carry everybody with you on that journey. I can give you this guarantee - before the election the Australian people will be in absolutely no doubt about our policy on tax reform, we will be very clear and very upfront about that. There will be no surprises, they will know very much the direction in which we will take the country.

UHLMANN:

We have a Budget in May. It will be before May, at the Budget in May, after May…

MINISTER O’DWYER:

I think I've answered your question already.

UHLMANN:

Talking about the GST though, everyone does have a different idea about how it could be split up. We see the States want to spend it on health and education, you'd like to see personal income tax lowered, you’d like to see company tax lowered. All those things can't happen can they?

MINISTER O’DWYER:

Well it’s very interesting, we are spending more on health and on education than we have done at any time in the past. We're spending more on it. So for all this discussion about how we're not spending enough money on health and education, we're actually spending more than we ever have. There is a debate about whether you should increase rapidly the growth of spending in both of those areas and Labor of course have made an announcement that is completely and utterly unfunded and will add to our spending problem and our structural budget problem.

UHLMANN:

They would say that they've found $70 billion of saves to pay for it?

MINISTER O’DWYER:

As I’ve mentioned to you before, they've spent that more than five times over. The problem with the Labor Party is they don't know how to add up and this is the issue we've faced in coming into Government, that we've actually had to deal with the deficits, the debt that they have accumulated over all of those years. We’ve had to deal with that prudentially, put the Budget on the path of repair and we also have to make sure that we provision for those important things like health and education but simply making empty promises is not the solution. We need to also be very clear, when it comes to spending, that the spending is good spending. The idea that you simply throw money at a problem and say that that will mean that you definitely get good results is not true. Everybody knows that, everybody who goes out into the shops to purchase something that just because you spend more money on something doesn't necessarily make it better. So we need to make sure that the quality of our spending is right. 

UHLMANN:

Now you've appointed a Small Business Ombudsman, Kate Carnell, who is formerly head of the Australian Chamber of Commerce and Industry. What will this job do?

MINISTER O’DWYER:

This is a very significant announcement. Kate Carnell is the new Australian Small Business and Family Enterprise Ombudsman. She will be a critical advocate for small business. We have given her additional resources to be able to be someone who can handle the disputes and complaints that small business make without having to resort to costly litigation. She'll also be somebody who makes sure that Commonwealth laws and regulations – and some State laws and regulations – make sure that they're not providing a disadvantage for small business but in fact providing the right settings for small business to not only survive but thrive.

UHLMANN:

You're the party of small Government though, isn't this just more Government?

MINISTER O’DWYER:

No, this is a really important tool for small business. Small business is a critical part of our economy. More than two million small businesses exist in Australia, we want there to be even more. They contribute more than $340 billion to our economy and we have more than 4.5 million jobs as a result of small business. We want that to grow. We want that to be even stronger and we know that Kate Carnell in her new role, somebody who was a former small business woman herself as a pharmacist in the ACT, understands those issues and will be the very powerful advocate that small business needs.

UHLMANN:

Thank you very much, Kelly O'Dwyer.

MINISTER O’DWYER:

Thank you.