LEON DELANEY
On the phone, David Bradbury the Assistant Treasurer, good morning.
DAVID BRADBURY
Good morning Leon, good to be with you.
DELANEY
How are you today?
BRADBURY
I'm well thanks, how are you?
DELANEY
Not too bad. I'm just wondering David, are families who live on the North Shore in some way, not real families?
BRADBURY
Look I know what you're referring to there in the Prime Minister's comments but that's certainly not what she was intending to convey...
DELANEY
Do you think she chose her words poorly, then?
BRADBURY
Well no, I was in Parliament yesterday and one of the members there was calling for a national apology to the members of the North Shore, I think we've got to keep this in a little bit of perspective here. The point that the Prime Minister was making was that we are, through our budget, not only returning the budget to surplus but making sure that we're spreading the benefits of the boom to low and middle income families and if anyone wants to go out there and deny young families with young children the School Kids Bonus that we're trying to deliver I think needs to consider whether they're in touch with the cost of living pressures that many families out there in the community are facing.
DELANEY
So was it a cheap shot then to suggest that families from the North Shore were not really real families?
BRADBURY
No I don't think that's the case.
DELANEY
Was it a throwaway line that was misconstrued?
BRADBURY
Well look there is a lot of discussion today about class warfare...
DELANEY
Yeah there is and I think that has a few people steamed up.
BRADBURY
Yep and just on class warfare I ask people to look at this objectively. We are putting in place a mining tax that will impact on a very small sector of our economy, albeit a very profitable one. There are out there a few individuals in particular that have done very well from that sector and we congratulate them for their efforts but they are achieving profits as a result of being able to dig up resources that are owned by the Australian people. Now we want to spread the benefits of the bounty and the boom that this country is experiencing and that is why we are distributing and spreading family payments to families on low and middle incomes. Mr Abbott is out there proposing to effectively give a tax cut to those wealthiest people who are benefitting from extracting resources that are owned by the Australian people and he wants to fund that by ripping away funds that we're trying to pass on to low and middle income families. Now I would think many people out there would see that as class warfare, in a pretty nasty and destructive way for working families around this country.
DELANEY
Alright, now if I accept the proposition that taxing the mining sector which you say is a small part of the economy, I would have said it is a substantial part of the economy, not the biggest but certainly a substantial and important one...
BRADBURY
It is an important one.
DELANEY
Exactly, so I don't know if I'd call it a small sector but if I accept the proposition that we should ensure in some way that the benefits of that prosperity are evenly applied to the community in some way, we still don't have to accept to give cash handouts to individuals instead of investing that money in to community infrastructure that is desperately needed like highways and hospitals and so on.
BRADBURY
Yep and look the premise of your question is wrong on a couple of counts. The first point is that we are spreading the benefits of the mining tax to some things as infrastructure, we are funding infrastructure as a result of that. That is something that we've already announced, it's not announced again in the budget but we are spending money as a result of that on infrastructure. The other things we're doing is we're making structural changes to the tax system that will support businesses, growth, investment and job creation, the creation of wealth. Now we're not a party that is opposed to the creation of wealth, we are one of the few countries that has grown and it is a result of investment, growth and wealth that we are now 7% larger as an economy than we were pre-GFC where very few economies around the world have even returned to their pre-GFC levels. The other point that I would make is that investments we're making in business tax relief and that is in the form of the instant asset write off which will benefit small businesses and the loss carry back provisions, these are structural changes that will set the Australian economy up to tackle some of the future challenges we face. I don't accept the premise that we're not applying the benefits of the mining boom for those purposes. Can I also make a point about the bonus payments, the bonus payments are not funded by the mineral resource revenue, it's the increase in Family Tax Benefit Part A and the supplementary allowance that are funded by the mining tax revenues.
DELANEY
There are bonus payments associated with the carbon tax then there are Family Tax Benefit increases that we're also talking about, which are funded by the abandonment of the 1% company tax cut which was promised that the Government has now dropped in the face of a little opposition.
BRADBURY
First point there is, just to confirm, the School Kids Bonus is not funded by the mining tax. That is a refinement of an existing program that we have called the Education Tax Refund. So that is just to clear that up. On the question of the company tax cuts, you said we dropped it in the face of a little opposition, well I think...
DELANEY
That's like the mining sector is a little part of the economy, David.
BRADBURY
Well we had the Liberal Party out there, the party supposedly of business, out there deciding that they were going to kill off a tax cut for companies. We're not in the business of flogging dead horses, this was a dead horse and it was killed off by Tony Abbott that when he decided the Liberal Party would go into the Parliament and knock it over. Now, we couldn't get the Greens to support it either, so we're pragmatic people in the face of that challenge we still wanted to spread the benefits of the mining boom, we'd already secured the passage of the mining tax initiatives, so we could wait until the next election and try to introduce that tax cut at a time when we didn't have to rely on Mr Abbott to have support for it, or we could take advantage of the opportunity we have now to spread the benefits of the mining boom and really inject a degree of confidence into the consumer sector. The household sector has been very cautious in recent times, partly because of a big correction in terms of the way in which households are now starting to save more, paying down their own debts.
DELANEY
And that is only reasonable that they do that. But the question I would like to ask you is about the School Kids Bonus. I understand it is a redesign of an existing benefit where people could previously keep their receipts and claim the benefits on their tax return, now instead of that they get a cash bonus up front. Now the criticism that is being levelled is that it might not necessarily be spent on school expenses, it could be spent on a new blu-ray player, it could be spent on a trip to a fancy restaurant, it could be spent on anything, so is that not important that if it's meant to be spent on education, shouldn't you have a way or targeting that?
BRADBURY
A couple of points to make there Leon and the first one is that say you're sending a kid to school, I've got 4 children of primary school age, I wouldn't be eligible for this benefit I would make that point, but anyone sending children to primary or secondary school, take primary school, $410 is the amount that is involved here. Now by the time you pay for their school shoes, their uniform, their bag, their books, forget about giving them a computer or an internet connection at home, you've already clocked up that money. Now the difference between this payment and some of the other payments, this to some extent was modelled around something like the child care tax rebate. Now with child care, it is actually so much easier to show the flow of receipts and demonstrate the payments that occurred because systems are put in place at all of the child care centres. For a parent trying to keep all of the receipts, you know, Johnny comes home and needs a pair of socks, you go down to the shops and buy a pair of socks. He needs a new set of pencils, you run down to Office Works and buy a set of pencils, you had to keep all of these receipts but the worst thing about it is that you didn't get access to that money until the end of the tax year. Now, we've had a look at this, we saw that many people were finding it a bit too difficult to access the money that we wanted to provide to them to assist them with their children's education expenses, and we decided that this was a much more effective way of getting the money out there. And look, Tony Abbott is out there saying Australian households and Australian families can't be trusted to manage their own budgets, I think they need to ask in the face of the $70bn black hole that he has in his costings, why on earth would they want to trust him to manage the nation's finances?
DELANEY
Well I guess we will certainly see whether people want to make that choice or not at the election next year but it is still some way down the track. Look I've had a bit of traffic about a similar topic over the last couple of days, yesterday someone rang me up criticising a change to the apprenticeships scheme, this is not a recent change but it was a while ago I think, where previously $800 was provided for tools to be purchased for an apprentice, the tools remained the property of the employer until such time as the apprenticeship was completed. The rule was changed so the apprentice actually got the cash so he could spend it on whatever tools he chose or something else if he chose and then of course he owns those tools from day one and there were reasons for that change. But a lot of people were critical of that idea that a cash payment is made with no strings attached, no checks and balances, no way of targeting it, and no way of ensuring the money is spent on what it is meant for and they have the same criticism of this School Kids Bonus you've just announced.
BRADBURY
Yeah and I can understand the criticism that people are making, but on the point of education costs, it really is just a matter of looking at it and saying well for the amount of money involved here, you know, the costs associated with getting your kids in to school and sustaining them through a school term, I think it is really hard for anyone to make the case, short of that very small proportion of cases out there that might involve DOCS or Community Services getting involved where parents are not doing the right thing, there is a basic and minimum level of spending involved in keeping your kids at school and getting them off to school every day and providing for them, that it is really difficult to make the case that that amount of money is not being spent on children by families. We can put in place a bureaucratic system that makes them have to substantiate the cost and makes them have to wait 12-18 months to get the money in their pocket but in the end you have to weigh up and balance the competing perspectives here and this is not like the baby bonus. When people were talking about the baby bonus they were suggesting that this might influence the extent to which people might have...
DELANEY
Did you just agree with Tony Abbott? Because Tony said this is not like the baby bonus and when asked how it's different he said it just is.
BRADBURY
And I'm going to tell you how it is different, I'm not going to tell you that they just are, I'm going to tell you how it is different. In that, some people out there might make an argument that a baby bonus encouraged people that weren't necessarily in a position to have children, to go and have children, people argue that. I think it's a very long bow to argue that somebody is going to go out and have a child so that 6 years later they might get a bonus payment to pay for their education. I think that is a silly suggestion and if anything, demonstrates that there is an even stronger argument here for saying let's give timely and targeted assistance to people and put the money in their pockets when they need it most, and that is January and July so that when these expenses roll in, when they're just trying to do in the hurley burley of getting the kids off to school so many families in this country have to face that they've got a little bit of assistance. That's what we want to do and getting it through the Parliament now means they will get that.
DELANEY
Alright David thank you very much for calling in.
BRADBURY
Thanks very much Leon.