SUBJECTS: Budget Reply, Resources Super Profits Tax.
LYNDAL CURTIS:
Chris Bowen, welcome to AM.
CHRIS BOWEN:
Morning, Lyndal.
CURTIS:
Tony Abbott’s promising to match your promise of a surplus in three years. Isn’t he just as believable as you?
BOWEN:
No, because he last night had an opportunity to lay out a plan and what we got was half an hour of sound bites, negativity and one liners.
CURTIS:
This was his reply; this is not the full plan. The Opposition’s got things to come, doesn’t it?
BOWEN:
They said ‘we’ll get back to you shortly’ on a lot of the detail. Now, that’s not acceptable for an Opposition. I’ve been involved in crafting Opposition replies to Budgets. If the Labor Party had tried that during our time in Opposition we would have been laughed out of Parliament House.
CURTIS:
Did any Labor Opposition lay out their full economic plan?
BOWEN:
They certainly laid out costed, funded proposals, including savings, laid out plans which had been properly analysed and costed. We didn’t get one last night, not one single costed or funded savings. We’ve just got sound bites.
CURTIS:
[inaudible] Tony Abbott put $4 billion on his jobs freeze on public servants.
BOWEN:
That’s just a sound bite, it’s not a saving. There’s no detail, and I heard you asking him about detail, and you asked in vain. There just is no detail, no analysis behind it.
Now, we have an efficiency dividend, we have a spending cap: all things which are designed to promote efficiency in the public service. They’re properly well thought out and costed plans. He’s just got a sound bite, saying on top of all that we’ll just bash Canberra and get rid of public servants. I mean, it’s the last refuge of an Opposition without policies.
CURTIS:
But you put a big mining tax on the table and a lot of the detail is still to be worked out. Isn’t that –
BOWEN:
We put out a tax proposal, which has funding analysis, which has projections in the forward estimates, and we’ve said quite properly – and you’d criticise us if we didn’t – we’ll sit down with the key stakeholders and talk about implementation detail. That’s a lot different to the alternative Prime Minister of Australia in his alternative Budget, saying, ‘We’ll get back to you shortly because we haven’t been able to think of anything’.
CURTIS:
But the Treasurer couldn’t say yesterday whether phosphate will be subject to the tax, mining of sand and gravel will be subject to the tax.
BOWEN:
I think you’re comparing apples and oranges, Lyndal. With respect, we’re having the alternative Prime Minister of Australia on his one opportunity, I mean, we’ve had three replies to Rudd Government Budgets from three different Leaders of the Opposition. This one was the most important and it was by far the worst. No costed proposals, no savings and no plan for the future. It was back to the future, talking about getting rid of NBN, e-health in hospitals, going back to the old days. Typical Tony Abbott, but no properly thought out costed plans.
And we now know he really wanted to have a cash splash of $10,000, which remind us of his Cabinet colleagues saying he used to come into ERC with these grand unfunded plans with no idea of public finance. It just shows how risky he is.
CURTIS:
Are you in trouble if the Opposition makes the election all about the mining tax?
BOWEN:
We’re more than happy to conduct an election about our plan for a more efficient and fairer tax system, including the super profits tax on resources. We’re also happy to conduct the election on the implications of not going ahead with that tax, which means no tax cut for small business, no boost to the superannuation savings of Australians and no infrastructure fund. And also, Tony Abbott’s proposing an increase in the corporate tax cut; we’re proposing a reduction. There’s now effectively a four per cent gap in the corporate tax rate between our plan and theirs.
CURTIS:
Tony Abbott hasn’t put cuts in corporate tax off forever. He’s saying he’ll do it when he can afford it.
BOWEN:
He’s said he won’t do it; he’s got no plans to do it. We have a properly constructed and timetabled plan to do it, and he says he’ll increase corporate taxes with all the implications that has for wages, all the implications that has for investment across the entire economy.
CURTIS:
Your Budget relies on the continued success of the mining industry. Isn’t it inconsistent to base growth figures on the mining industry but also put a tax on it, say ‘we want the industry to grow but we’re going to tax it’?
BOWEN:
No, not at all Lyndal. The estimates in the Budget are quite conservative; they’re broadly in line with private sector estimates. And also, the opposition has confused this essential point: they’ve confused terms of trade, which are set by international demand, with domestic activity and domestic arrangements. Now, they’re quite different.
The estimates in our Budget, the forward estimates, don’t rely on outlandish claims. And again, it’s the last refuge of an Opposition, when you’ve got nothing of substance to attack, attack the modellists who, by the way, were the same modellists who did their Budget projections.
CURTIS:
But don’t you have a problem? Isn’t there a chance a mining company that has a choice of investing in Australia or investing in another country where the tax rate is lower, why wouldn’t they choose the other country?
BOWEN:
Well, we have done extensive modelling which shows that mining activity would increase over the medium term. Why? A) because of the corporate tax reductions; and B) because of our changes to mining tax, which do a lot of the things that the mining industry has been calling for, for as long as I can remember: giving rebates to explorers, encouraging exploration, encouraging those risky activities at the early stages, things that the mining lobby, for as long as I can remember, for as long as I’ve been involved in economic policy, have been begging for.
So we don’t do this lightly. We do this under advice and under consideration, and we do so in the knowledge that the modelling shows mining activity would increase.
CURTIS:
Chris Bowen, thank you very much for your time.
BOWEN:
Nice to talk to you, Lyndal.