KIERAN GILBERT:
First of all the big story in the News Corp papers, the Herald Sun, the Tele and the Courier Mail relate to this Parliamentary Budget Office modelling of Labor’s tax plans. Can you talk us through it? Is this from the PBO?
TREASURER:
It extends the Parliamentary Budget Office costings out just one extra year and at the last election we told the Australian people that Labor would have a $100 billion extra slug on families, on small businesses right across the economy. Well, updating that now it is over $150 billion when you include the small business family trust taxes, and their new superannuation taxes, you add to that their taxes on investment, their taxes on housing, lifting the top marginal tax rate. This is a six shooter tax slug. There is a tax winter coming under Bill Shorten if he ever becomes Prime Minister.
GILBERT:
This is using the previous PBO modelling.
TREASURER:
That’s right.
GILBERT:
And then extrapolating that out a further year.
TREASURER:
And of course there will be further work done on these things but the point is that Labor wants to completely take the speed limits off tax in our economy. They are abolishing the tax to GDP cap. We have it set at 23.9 – it is gone under Labor. Taxes can run as fast and as hard and as high as you like and at the last election that got up to 25.7 per cent share of the economy. Now, if you just take the speed limits off tax in your economy the economy eats itself. It is like a snake eating itself from the tail. That is the Australian economy under Bill Shorten.
GILBERT:
They would argue though a couple of things. One, at least there is some structural improvement in the Budget bottom line, whereas your forecasts for surpluses are thin. They are talking about improving the structural position.
TREASURER:
But they make no assumption about the burden – in the current financial year that burden would be equivalent of 25.7 per cent of the economy, an extra $31 billion in tax. Now, you think you can just smash that on the top of the economy and it has no effect on jobs, no effect on incomes, on effect on growth? You have got to be kidding yourself. These guys think you can just turn the tax dial to 11 and nothing happens.
GILBERT:
They are saying they are targeting the higher income earners, the wealthy while protecting middle to low income earners by protecting them on the Medicare levy and so on.
TREASURER:
It’s a complete con. What they are doing is they are putting small business taxes back up. So, if you are a small business your taxes go back up. If you own an investment property and let’s not forget that around two-thirds of people who own an investment property have a taxable income of less than $80,000, hardly a millionaire you’re getting slugged on that…
GILBERT:
Well, they are not really because it is grandfathered for those who [inaudible].
TREASURER:
Anybody who wants to invest in negative gearing under Labor, anyone, who goes and invests in negative gearing…
GILBERT:
Prospective.
TREASURER:
To get ahead, do what they want to do, just like nurses and teachers and police officers have always been able to do in the past. Remember one in five police officers negatively gears. So, that is off the agenda for them.
GILBERT:
But they’re not going to be affected are they because they are grandfathering…
TREASURER:
No they will if they want to go and do it. So, it is ok for someone to have done it in the past but now if you are a nurse and are going through training college at the moment or you are going through university you are not going to be able to do it in the future because Bill Shorten is going to wipe out your plan to build your own wealth and savings for the future. So, this is a six shooter tax plug on the Australian economy and you cannot put that much tax on the economy and expect it not to threaten jobs, threaten growth and threaten wages.
GILBERT:
You have your own fair share of tax slugs as well though in the Budget, from memory.
TREASURER:
This is on top, this is on top of what all the current Budget settings are.
GILBERT:
So, the $22 billion in tax increases in the Budget this is on top of that?
TREASURER:
This is on top of that. So, they are at least $150 billion worse on tax.
GILBERT:
Your argument turning negative so early, is this reflecting a Government that is struggling with its own agenda?
TREASURER:
No, because we have a clear plan to bring the Budget back into balance. We are submitting ourselves to a tax discipline which says that taxes will be no higher than 23.9 per cent of the economy. Labor are abolishing those speed limits and they are a threat to our economy and I think it is important to point these things out.
GILBERT:
Finally, the Catholic Archbishop of Sydney is worried about the impact of a ‘yes’ vote on same sex marriage on the freedom of not just what is discussed in churches but the impact on Catholic schools, hospitals, welfare services – do you share those concerns?
TREASURER:
I have articulated those concerns in the past but my job as Treasurer is to focus on the nation’s finances and jobs and the economy. I will let the Australian people and everyone else have their say on this. That is what the plebiscite is about.
GILBERT:
So you won’t be out there advocating a no vote?
TREASURER:
I will be voting no but that will be my participation.
GILBERT:
Treasurer, I appreciate your time.
TREASURER:
Thanks a lot.