HOST:
I'm joined by David Bradbury who is the Assistant Treasurer. Mr Bradbury, good morning.
BRADBURY:
Good morning, how are you?
HOST:
Well thank you. You heard some of what Greg Hunt had to say this morning; can you just first outline some of these tax cuts and payments that will be introduced to help ease any impact of the carbon tax on households?
BRADBURY:
Sure. I dropped out a couple of times listening to Mr Hunt so I didn't hear all of what he had to say, but in terms of what we're proposing it's important to understand the tax reforms that will be introduced from 1 July are the latest instalment in the tax reforms that we've been implementing as a Government. There have been successive tax cuts, of which these are the latest. If you look at someone on an income of $50,000 a year from 1 July they will be paying $40 a week less tax under our Government than they would have been when our Government came to office. So tax cuts will be flowing through from 1 July to many people. In addition to that we are increasing pensions and family payments and those increases will start flowing through in the coming weeks. Many recipients will receive a Clean Energy Advance, that'll be a bonus payment. Depending on your circumstances, that will be a couple of hundred dollars, then you will notice in ongoing payments there will be increases that will flow through over time. So one of the really significant changes we are making is in relation to those on low incomes, particularly part time workers, working mums and retirees, we'll be tripling the tax free threshold which means that there will be hundreds of thousands of Australians that will no longer be paying any tax as a result of that measure. But most importantly, more than 1 million Australians will not be required to submit a tax return. So this is tax reform, of course it comes as part of the assistance we're providing to households and retirees to cope with the challenges of moving to a clean energy future, but it is tax reform nonetheless.
HOST:
Is the biggest challenge here, I know that you have to fight a battle to win over public support for a carbon tax and no doubt you would be keen for these measures to go at least part of the way in doing that, but is the challenge here trying to explain how the carbon tax will impact them and therefore how these payments or tax cuts will benefit them? Because I've already had a couple of text messages through to me this morning, one from Francis who says, "as farmers, we have no idea how the carbon tax will affect us, good or bad". And Steve, similarly, in Woodvale said, "is there somewhere we can find out details about this particular package?" Do you think people really know how it is going to impact them and therefore how these benefits might help them?
BRADBURY:
I think for a lot of Australians they really don't know and the nature of the political debate has been so partisan around this issue that it has really not allowed for the provision of information. There has been a lot of conflict and a lot of rhetoric but the provision of information has been somewhat lacking and that's what we're trying to do...
HOST:
And whose fault is that? Is that a fault of the Government, is that a lack of ability to communicate clearly your message which some may say has been a problem from the very beginning?
BRADBURY:
Yeah look people are open to make those sorts of criticisms. I take the view that we can always do better on these things and part of the reason I'm talking to you today is to try and communicate some of that. On the point of how this will impact people, it's important to understand that to the extent that this price will be charged, it will only be charged on about 500 of the biggest polluting companies in Australia. Of course, some of those companies will avoid those costs by reducing their emissions where they can do that cheaply, but to some extent they will have to pass on some of those price increases. The Treasury modelling suggests that across the household budgets of most Australians that you would be looking at an overall increase in your prices of less than 1 per cent. So this is not a huge impact, if you look at the impact of something like the introduction of the GST that had an impact of about 2.5 per cent on the cost of living for people. So this is a modest impact, but there will be an impact. That's why we've decided to ensure that the money we're raising through that charge on big polluters is passed on in large part to provide support to households so that they're not only able to meet any of those increased costs, which will be modest, but in some cases, in fact a large number of cases, people will receive more assistance than is estimated their costs will increase by. That's the people that receive a 20 per cent buffer on top of what they're expected to receive in increased prices.
HOST:
Sure. I'm speaking to David Bradbury who is the Assistant Treasurer. David Bradbury how much will the Government be spending to advertise these benefits?
BRADBURY:
We haven't made final decisions on that but I think it's appropriate that we do have an advertising campaign. The question that you just asked, which was a very valid one, was that there are many people out there who are wondering what this means for them. I think it's important that we use the free and the paid media opportunities that are available to try and communicate that message.
HOST:
Is it a multi-multi-million dollar spend on this?
BRADBURY:
I can guarantee it won't be anything in the order of what you saw from previous Governments whether it be Workchoices or GST or things of that nature. I think it's appropriate that we have the opportunity to convey messages to people, to give them the information they need. At the same time in the context of challenging fiscal circumstances, we'll be responsible in the way in which we do anything on that front.
HOST:
There is a concern the tax will cost or see an increase of $10 a week in household costs but the pension I think under these benefits you've announced today will only increase just over 2 per cent. Is that the case? Is there a disparity in some areas?
BRADBURY:
If you're a pensioner or a self funded retiree that's receiving the Commonwealth Seniors Health Card, then you're looking at receiving, if you're a single pensioner or single self-funded retiree, you're looking at receiving assistance to the tune of up to $338 a year. If you're a couple and you fit in to one of those categories, you're looking at assistance of up to $510 a year. That is even more than we expect will be the impact of a carbon price on your total cost of living increase. So what we're trying to do, particularly with groups like pensioners and self-funded retirees on health care cards, that we provide them with more than enough assistance and to be honest, the benefit of getting one of these advance payments, these lump sum payments, is that if you're a pensioner and you have the ability to purchase some of those goods around the home that might allow you to maintain the levels of comfort you need but do it in a more energy efficient way, then it may be this extra couple of hundred dollars you receive may assist you in making that purchase upfront to help you save some money down the track.
HOST:
David Bradbury thanks for your time this morning.
BRADBURY:
Thanks very much.