JOHN MORRISON:
One person who will know is Assistant Treasurer David Bradbury, his electorate is around the Parramatta area, David Bradbury good afternoon, thank you very much for your time.
DAVID BRADBURY:
Good to be with you John, I should say that I'm a little bit further out west I'm around Penrith at the foot of the mountains.
MORRISON:
Yeah I was just giving it for our state wide audience so we could locate it quickly just in between those areas. Look it is and I imagine you would have been a little bit sensitive to it as well this issue of class war that it is all the rich who live on the North Shore and all the battlers live out west. It's far from that.
BRADBURY:
Sydney is a funny place in that sense, that it's a bit of a tribal arrangement all across the metropolitan area, but I think the point the Prime Minister was making that this suggestion that somehow families, particularly low and middle income families, who are principally the beneficiaries of the School Kids Bonus that they are not in need of that assistance or don't need that support is just ludicrous. I think it is just extraordinary and the point that she was making is that Mr Abbott has been out and about consistently talking about the impact of rising costs which many people are feeling out there in the community, and then when it comes to actually delivering the benefits of this particular bonus then he has taken the view that he wants to vote against it. So I think it is really against that backdrop that the comments have been made.
MORRISON:
But doesn't it bring into, and I won't harp on this point I'll just ask you one more area, but doesn't it bring into the area that you're be-lining some Australians that they're not in the real world where you would find just as many people battling on the North Shore of Sydney that you would find battling in Western Sydney?
BRADBURY:
Well look, I heard one Member of Parliament out there today saying that there needs to be a national apology to people on the North Shore and I thought, let's not get carried away here, I think we've got to put a bit of perspective on what was said and to be honest, I think the important thing to know is that we're out there trying to spread the benefits of the mining boom and there are low and middle income earners all around the country that are doing it tough. They see an economy, for all of its fundamentals being strong, they aren't seeing the benefits being spread to their household and that is what, in large part, we're trying to do with this budget.
MORRISON:
Yeah to some degree, in part, if you've got the school children, the secondary school children getting $820 and those in primary school $410, it's a costly campaign to convince that $2.1bn and it was Anglicare today who said this budget was as pandering to middle income earners and doing very little for those most vulnerable. Principal *inaudible* was saying you're trying to look after all Australians and the Prime Minister used the phrase there, working families, that we haven't heard for some time. Anglicare make a good point, don't they?
BRADBURY:
Well that's an interesting perspective and I think there are a lot of people out there that would say, well I don't get any benefit from this because I'm earning too much money to be in receipt of those payments as well, so I think there are arguments on both sides of this but I would also make the point that we're not just talking about the School Kids Bonus, there is the enhancement of the Family Tax Benefit and importantly for the group that you're talking about and the group that Anglicare are talking about, there is the supplementary allowance that will be paid to those that in receipt of government support and will boost their incomes to provide some assistance there. So I think there is a targeting of the benefits we're providing, that means that some people that may not necessarily be high income earners are not receiving benefits, but if we want to have a sustainable social safety net, then the reality is you can't be handing out benefits to everyone and we have to make sure they are appropriately targeted to, I think most people looking objectively at it would say need that assistance the most.
MORRISON:
David Bradbury we've been talking about businesses here and small business has been in contact with us, smaller corporations who were looking forward to some relief with the cut to the company tax, it's not there the money has been used for other parts but you would know from your own electorate too, full of small businesses and small companies, just how essential reducing any types of costs will be to those businesses in surviving in this period. Do you have grounds to feel aggrieved that what was promised to them 12 months ago is now not being delivered?
BRADBURY:
Well if they feel aggrieved with the government, then I'm sorry that that is the case. But equally, they should feel aggrieved with the opposition who are the reason why we were not able to get this through the Parliament and that is the reality of it. Now we're not against progressing a cut to the company tax rate, that is something we are looking at through a process we've established in consultation with business that's called the Business Tax Working Group. But can I make this point as well that for a large number of small businesses, they're actually not incorporated, so they're not companies...
MORRISON:
No I appreciate that, that's why I said small companies.
BRADBURY:
Yeah and one of the things we're doing that will not only benefit small companies, but small businesses more generally, are going to make a huge difference. There is the instant asset write off initiative that we've got and a lot of small businesses aren't aware of this but it is a tremendous help to them, what it means is that if they invest in a capital asset or equipment for their business if they're a small business for less than $6,500 instead of writing that asset off over a number of years, they'll get an instant write off when they do their tax that year, that really provides that cash flow benefit. The other thing we're doing and we have funded this out of the money directed from the company tax cut, is we're funding an initiative called loss carry back. This will only help companies but what it means is if you've had profitable years and you have a year where you're doing it a bit tough, you can actually carry back your loss and offset that against your tax. It is something that at the moment you can carry forward losses, but you can't carry them back. But it does make good sense.
MORRISON:
I can understand that but I think companies would still be looking for that break and it may come with the program you say to do that. You also talk about there may be room for interest rate cuts but the big part of this is depending on the economic conditions and that's obvious there, there can't be government policy it can only be a preferred position by the government, whether banks actually decide to pass it on as we've seen, what is it 18 banks so far out of all that number only 2 of them have passed on the full amount.
BRADBURY:
Look that's right and we certainly believe that is important to keep the pressure on the banks. You know, their commercial operations and to some extent commercial operations will sometimes get away with what they think they can get away with. But what we've actually done is we've put a fair bit of effort into trying to make it easier for people to take their business elsewhere. One of the things we did is banned exit mortgage fees, and of course that doesn't relate to fixed rates where people lock in on the basis that they are fixed in, but on variable rates. What that means is that people have a greater capacity as they watch the monthly movements in interest rates to the extent that it moves, they can keep an eye out on which banks are moving and which ones aren't, and I know it's still a challenge to do it but if you see someone out there particularly the smaller lenders and I know a number of the smaller lenders, they are delivering their interest rates in some cases 1% lower than what the big banks are. So it really pays to shop around, we encourage that. But the important point about the budget is by ensuring that we return to surplus we are giving the Reserve Bank more room to cut the cash rate if they choose to. If they do that, then we will certainly as much as we can be putting pressure on the banks to pass that on. But what we've seen in the past is that is a significant contributor to the costs that the banks face and when you cut the cash rate it does have an impact and ultimately does lend to cuts in commercial rates.
MORRISON:
Yeah we just know that it's difficult and you would appreciate that too, that changing banks is very difficult for anybody to do and that's not something you're going to do every couple of months either.
BRADBURY:
No look it's not easy and I understand that from my own person situation and you know there are things there that governments can't fix either. I know with my bank, I know where all the ATMs are and I don't like paying the ATM fee. So to swap to another bank I've got to go through all the rigmarole and so we make all of these choices. But I guess we just want to make sure that people aren't locked in unfairly.
MORRISON:
Let me ask you two more quick points. It was described I think in the Herald and I'm sorry I don't have the exact quote with me now, I think it was Peter Hartcher who wrote it, it was an election budget without an election coming. Is this to win directly back the base of people you may alienated one way or another, perhaps through the carbon tax or through other different areas?
BRADBURY:
Yeah look I think there is no question there are plenty of people out there at the moment that are feeling as though they are no benefitting from an economy that by all objective standards, is a stand out across the world. This is the challenge that we've got as a country, that is that our economy when measured side by side with any other advanced economy in the world, we're just head and shoulders above...
MORRISON:
That might be true David but in relation to how people are dealing with the current position within this economy, it's tough and they're feeling alienated.
BRADBURY:
No that's the very point I make. The challenge is that our economy is head and shoulders above all the others but still for many households' people are looking at their personal situation and they're saying, well we are doing it tough. So we've got to try and manage the broader picture of keeping the economy strong and getting us in to surplus, now that did require cuts but we tried to target those cuts in places that wouldn't have an impact on families and small businesses in a serious way and we've tried to ensure that the benefits we are reaping particularly in terms of the boom, are being spread to assist those families and small businesses. It's a difficult balancing act but we've done our best and I think we've done a pretty good job.
MORRISON:
Let me briefly ask you too, one last final point, and it is of course the fact the spectre of Craig Thomson and Peter Slipper hanging over the Parliament and I know only moments before I came in to start the program that Rob Oakeshott has fired a warning shot across the bows of the government that depending what he said he may or may not continue to support the government. This must be hamstringing the government to some position.
BRADBURY:
Minority government is a great challenge and we live with that every day. But the great paradox of minority government in this government is that even though the numbers have been quite tight and they continue to be tight, we have a program that we've been getting through the Parliament that is unmatched.
MORRISON:
Look in fairness you have, but the Thomson/Slipper saga is taking the wind from your sails on just about every occasion. Even yesterday during the handing down of the budget, we came to the point where we were talking as equally about that as we were about the budget.
BRADBURY:
It makes it difficult there is no doubt about that, but life wasn't meant to be easy and we're trying to do the best we can...
MORRISON:
You're telling *inaudible* Malcolm Fraser...
BRADBURY:
Well I've got my trousers up. Look I think the that I'd make is that we're governing in difficult circumstances, we're not the only government in the world at the moment doing that but we're getting on with the job and I think we're doing a really good job of it and if people look at the budget we've handed down, I think most people looking objectively at it would say in difficult budgetary circumstances, we've managed to get the budget right and I hope people form that view.
MORRISON:
David Bradbury, appreciate your time this afternoon, thank you for joining us on State wide Drive.
BRADBURY:
Thank you John.