HOST:
Good morning and welcome to the program. One month until Wayne Swan's Budget and the sales pitch has already well and truly begun. The Government releasing details of payments to families and pensioners aimed at trying to soften the impact of the carbon tax and politically the Government's hoping it will help it turn around the carbon tax debate.
Joining me this morning to discuss this and other matters of the day, the Assistant Treasurer David Bradbury. Mr Bradbury, thanks for your time. It's really the Government's last chance to turn this debate around isn't it? There is a real risk that people have stopped listening, no matter what you do, no matter the compensation offered, that this tax will remain unpopular?
BRADBURY:
Good morning Kieran, good to be with you. We are getting on with the business of selling the reforms that we've been implementing and at the heart of those reforms are our efforts to cut taxes.
I think it's important to reflect upon the fact that since we came to office, $47 billion worth of tax cuts have been provided. They're personal income tax cuts that Australians all around this country are getting the benefit of. We have been cutting taxes because we think it's important to provide reward for effort, but in this latest instalment of tax cuts what we are seeing from 1 July this year, someone on an income of $50,000 a year will be getting the benefit of a $40 a week tax cut. So in total, that person would be paying $40 a week less in income tax than when this Government came to office. In addition to that, we are ensuring that we are putting more money in the pockets of parents who are in receipt of family payments and also pensioners, building on the back of our historic increase in the pension, we will now be increasing payments to pensioners and family payments.
Now, all of this is about recognising that all of these people are people out there in the workforce, are parents and retirees, that they are facing real challenges when it comes to the cost of living and we want to make sure that they have the support and assistance they need so that they can balance their household budgets.
HOST:
So explain to us how the payments are going to work, when they will kick in, who gets them, or are they means tested like the tax cuts?
BRADBURY:
You'll see that for the increases in support for pensioners and also those who are in receipt of the Commonwealth health card that those benefits will begin to flow in the coming weeks. Equally, those families that are entitled to Family Tax Benefit Part A will start to receive some of the benefits that will flow. In addition to that, when we get to 1 July, the next round of tax cuts will kick in and we'll be seeing Australians right around the country who are paying income tax paying less income tax.
A group, or one of the groups that will benefit most from this includes workers such as part-time workers, female workers, working mums and also retirees who will see that not only will they be paying less tax and for many of them will be paying no tax as a result of the tripling of the tax-free threshold, but what we will also see is that 1 million Australians will no longer be required to put a tax return in. This is not just about providing tax cuts, it is about tax reform. Taking a million people out of that income tax net where they don't have to go through that tiresome, burdensome process of putting in a tax return each year.
HOST:
Just quickly, on the payments though David Bradbury, what do people get, how much are these one-off payments really?
BRADBURY:
Well, it would depend on their circumstances, so there will be a one-off payment to begin with but also people's ongoing payments will be boosted by a supplement. But in total, you're talking about nine out of every 10 households will get the benefit of these payments, so it is widespread in terms of the support that is being provided. Circumstances will vary depending on the individual family arrangements but we are ensuring that somewhere in the order of 6 million Australians will get a tax cut. These benefits are very wide-ranging; I'm not going to try and forecast for every family out there what they'll be benefitting from but certainly there is a household estimator on the relevant website that you can search on the internet and that's a very good way to begin the process of working out what this means for you and your family.
HOST:
But it's a big if, isn't it, a big if as to whether people are going to be better off. The Government doesn't know how this is going to play out. It's all still a bit of a risk, isn't it, for the Government and the economy?
BRADBURY:
People can talk about what's better off or not, but let's just think about this: if, as a country, we continue to be as dependent on fossil fuels as we are today does anyone seriously think our cost of living's not going to increase over time? It's going to increase; it'll skyrocket, and that's why having a clean energy future, a future where we as a Government and as a community set ourselves on a path of broadening the base of energy needs upon which we rely is ultimately a very important way of not only securing our standard of living in the future but protecting against massive increases in the cost of living down the track as well. So I think it's important to recognise that the change of the sort that we are proposing , it's important, it needs to happen. It'll cost families, it'll cost retirees a whole lot more if we don't take that action, but as a Government we want to make sure that as we make the transition to a clean energy future that we do that in a way that provides the support and assistance that all Australians need.
HOST:
What about, you know as well as I do that all of the price impacts that, regardless of what's causing electricity price increases or whatever else, with the carbon tax coming into force on 1 July, this will be used and the reason given for any price increase that we see. We know there is a lot of pressure on electricity prices. Are you confident that the Government can turn this around, this argument, given that you've failed so miserably to this point on that score?
BRADBURY:
Kieran, the first point to make is that the overall impact on prices of the carbon price will be less than one per cent. Less than one per cent. We're talking about a modest impact. Of course, on electricity prices, which are a small proportion of the overall total household budget, we will be seeing a larger impact than that one per cent – 10 per cent in that first year is what's estimated. Now, of course the Opposition are going to blame everything that happens that might be adverse to the Australian economy over the coming year on the carbon price. Of course they're going to do that. In fact, you don't have to go back all that far ago to see that the Labor Party did that when the GST was being introduced. Now, that's what Oppositions do, they're here to try and scare people, they're here to try and make something into a mountain that is just a mole hill. It's important for us as the Government to get on with the job of governing. We're doing it in a responsible way. We're the only party that is setting a path towards Australia having energy security in the future, having a clean energy future. We're going to get on with the business of doing that and we'll do that in a way that respects the challenges that households are facing with their family budgets, but of course everything that happens that is adverse to the economy or Australia in the future will be blamed on the carbon price.
HOST:
Okay, but what you're doing as well is bringing a lot of the expense forward into the current financial year to make it easier to return to surplus. That's correct isn't it, with some of these one-off payments and so on done this financial year so they're taken off the bottom line in the next and that makes the Government's bid to get back into the black next year a bit easier?
BRADBURY:
Well, look I'm not sure what sort of mathematics underpin the assumptions that you've just put to me there. A dollar spent is a dollar spent, you've got to balance the books.
HOST: But it makes the deficit this year a bit bigger and the surplus a bit easier to achieve next year, that's the point.
BRADBURY:
Well Kieran, the arrangements being rolled out over the coming weeks are the arrangements that were set in stone when we passed the clean energy package. Any suggestion that there is somehow some sort of creative accounting going on here I think misses the point. If I could just make this point, though, Kieran, we're delivering the assistance up front and that is important that we do that. Let me just explain why it's important that we do that. There will be many people who will be receiving those upfront bonus payments that will have the opportunity to go and invest in items within their home that might actually reduce their energy needs and their energy reliance. If you're a pensioner and you receive a couple of extra hundred dollars in a bonus payment, that may be money that you can apply towards the purchase of a new fan or a new air conditioner that is more energy efficient.
HOST:
What about the Government's spending though in terms of State infrastructure, grants and so on. Has there been any movement in that area to bring the spending forward and make it a bit easier in 2012-13?
BRADBURY:
In terms of our commitments with the States, they're matters that are on the public record. We continue to engage in dialogue with the States about the delivery of key reforms. I might make the point that on a number of these fronts there has been abject failure on the part of the States to actually deliver on the requirements of those agreements that we've set in place. On other fronts where there has been success, the States have been very quick to try and get out there and claim the credit for it. Can I just make this point Kieran, I see regular reports on the nightly news here in Sydney of the New South Wales Government claiming credit for reducing waiting list numbers. I think they should, in all honesty, make the point that this Federal Government has injected an enormous amount of extra money to help deliver those targets as well.
HOST:
What about the diesel rebate, the Government apparently looking at slashing the $2 billion rebate for mining companies. Is that something on the cards? Certainly reports today suggest that would see a blow out in business costs, Treasury briefings suggesting that according to The Australian newspaper. Is that something that the Government's planning?
BRADBURY:
Look, Kieran I've seen some of this speculation around in the newspapers today as I've seen it in the past and it won't surprise you to know that my position when it comes to Budget speculation is that these are matters that will be dealt with in the course of the Budget. As much as I think this is a great program and I'd like to give you an exclusive, there's nothing to see here. We are going to continue on with the business of bedding down our Budget, which will be an important Budget, one that paves the return to surplus and sets up the economy for the challenges of the future.
HOST:
One final issue. Members of the HSU, the Health Services Union national executive will meet today to consider whether the embattled union leader Michael Williamson should be asked to step down. John Robertson, the NSW Opposition Leader believes he should, others are of the same opinion. What do you think?
BRADBURY:
I take the view that these are matters for the union and its members. Ultimately, the members who contribute the funds to run the organisation through their organisers, their elected representatives, that's how these matters should be dealt with. Frankly I don't think it's helpful for outsiders to be making those judgements. In the end these matters, I'm sure, will be resolved by the union and its members.
HOST:
David Bradbury, appreciate your time this morning, thanks for that.
BRADBURY:
Thanks very much Kieran.