HOST:
Joining us now is David Bradbury, Assistant Treasurer. David, thanks for joining us. If there's going to be a modest surplus, does that indicate it could be a fairly tough Budget? Good morning to you.
BRADBURY:
Good morning. Look, we've been very clear for quite some time now in saying this will be a tough Budget. The exercise involved in cutting expenditure in order to return the Budget to surplus has been a significant one. We expect there'll be cuts to be felt right across the economy, right across Government expenditure, but of course we've been focussed on making sure that as we make those cuts we hand down a traditional Labor Budget and that's one that looks after working families, people that need Government assistance, but also making sure that we provide all of the right incentives for small business and business to get on with doing what they do and that is generating wealth and employing Australians.
HOST:
You've announced – well, you haven't announced – you will announce later on, it's been leaked to the papers that there is going to be a new cash bonus for parents. Now, is that an admission that the old Education Tax Refund just wasn't working?
BRADBURY:
Well this is a refinement of the old initiative, the Education Tax Refund and it's worth understanding some of the history of that measure. That was something that we committed to delivering in Opposition and then in Government delivered. For the first time in our history we had an Education Tax Refund. In the early years we saw that there some refinements that could be made and we expanded the range of items that could be claimed under that, but what we're doing now is taking so much of the hassle that was associated with the original program away from people so that they will get this payment delivered automatically for those that are eligible. The first instalment will come through after we pass the legislation in June this year but thereafter payments will come through in January and July of each year, which we think delivers that assistance at the most important time for parents with children at school so that they can make all of the necessary provisions to get the kids with their pencil cases and school bags and lunch boxes all set and ready to go for the school term.
HOST:
How much is it for who?
BRADBURY:
All of those families that are entitled to Family Tax Benefit Part A, that's the current eligibility criteria for the Education Tax Refund. Those families will continue to be eligible, although we expect more people will actually benefit from this program because a number of families weren't claiming. In terms of the amounts, the annual amount for each primary school child will be $410 and for each high school child will be $820. That'll come through in the two payments and we think it's about delivering necessary relief at a time when families need it most and that's when they're getting the kids back to school.
HOST:
How will they prove they're actually spending that money on school requirements?
BRADBURY:
There won't be the same paperwork requirements that's been the case with the Education Tax Refund. We have to say this has been, for some families, a disincentive for them to actually claim the benefit because it's not that they haven't expended the money on school items but the idea of keeping those receipts the entire year and then reconciling it all when you put your tax in is something that, I think, has been a barrier to many families.
HOST:
Why? It seems a simple thing to do, we keep all our receipts for various things, why would that be a problem?
BRADBURY:
Look, I guess we'd need to ask the question why so many people that were eligible had not been claiming the refund as well.
HOST:
Well don't you think they're stupid if they didn't claim the refund?
BRADBURY:
It's not a question of them being stupid –
HOST:
Yes it is, because if you don't keep your receipts, legitimate receipts for your tax claim, then you're being stupid.
HOST:
There are a lot of other things in your life though, John-Michael.
HOST:
I know, but one of those things is keeping receipts.
BRADBURY:
I'd just make this point as well. For a lot of Australians, their tax arrangements are pretty straight forward and they're PAYG tax earners and certainly the tax reforms that we've been making in reducing the levels at which you first start paying tax mean that as of 1 July this year there'll around a million Australians that won't be required to submit a tax return and that is an important thing to recognise. For some people who have more complicated arrangements, then the notion of meticulously keeping your receipts and details is something that people take for granted. For many others, it's not something that historically people have been used to doing and clearly that has, for some people, been a barrier for them to access something that, when we put this proposal in place, we had envisaged that these families would be getting access to that assistance.
HOST:
So you're going to give people money and they don't have to prove what they spent the money on?
BRADBURY:
There is an issue here about how these families spend that money but in the end delivering it in an automatic way at this particular time of the school year is the best way for us to ensure that families have –
HOST:
No, but that's nonsense. That's absolute nonsense. You can give people money, it doesn't mean to say they're going to buy school bags or school uniforms. They might have the leftovers from the kids the year before, they might just recycle stuff they've got.
BRADBURY:
They may well choose to do any number of things with that money but in the end there has to be a balance here between making sure that we provide the targeted assistance to people who do need that assistance and giving them the opportunity to make the decisions that are necessary in order to – look, I'll just make this point. The amount of money that we've made available to people, anyone that's got a kid in school – and I've got four of them – will know that it does not take much. With the blink of an eye you can rack up expenses that are claimable under this particular refund. No one can tell me that those expenses are not being incurred because these are basic costs attached with getting kids into school. The fact that some families have not been claiming that, well you can take the view of ‘bad luck to them', we take the view that it's important to make the assistance –
HOST:
No, you're taking people, you're stopping people from having responsibility for their own lives.
HOST:
I don't think that's true at all.
HOST:
It is!
HOST:
It's helping.
HOST:
Because if you're giving someone money, the responsibility for any normal person is to collate your receipts as we all do.
HOST:
These people are actually paying taxes, these people are actually paying taxes regularly.
HOST:
Then keep the receipts!
HOST:
It makes life a lot more complex.
HOST:
You don't have to be a rocket scientist to keep – have a little cardboard box and put your receipts in it.
HOST:
I must say the other system was complex and this helps.
BRADBURY:
And look, I'd make this point –
HOST:
What does it help, Nick? We are going to be screwed again by the incompetent Government that blows our money up against the wall with gay abandon.
BRADBURY:
John-Michael, how many kids have you got?
HOST:
I've got none, thank god, in this climate I'm glad.
BRADBURY:
OK –
HOST:
If I did have I'd be responsible enough to keep the receipts [inaudible]
BRADBURY:
And you can make all of those assessments but let me make this point really clearly, from the Government's persepective, we want a tax system that takes up as little time and effort as possible. At the end of the day, people paying tax, we shouldn't have to be lumbering them with an administrative nightmare that's not warranted. And it's okay if you've got money to go off and get an accountant that's going to do that for you, but if you're trying to do it at home it's a much more complicated arrangement. We want to make sure that families get the benefit.
HOST:
So David, let's move on. The other story which has got a lot of prominence in the Melbourne papers today is that there are a lot of, there are senior Ministers who are allegedly pleading with the Prime Minister to change the carbon tax in some way, shape or form. Is that true? Have you been hearing that there is a movement within the Labor Party to try and get a change to the carbon tax?
BRADBURY:
I have not heard anything along those lines. I've got no knowledge of any suggestion that that's occurring.
HOST:
Okay, so even in Cabinet, Caucus, the floors of Parliament, you are not hearing anyone from within the Labor Party having any reservations given how unpopular you are at the moment?
BRADBURY:
As I understand it, the suggestion in the papers is that people are raising, Cabinet Ministers are raising these matters with the Prime Minister. I've not heard of any of that occurring. Apart from suggestions in the newspapers, which as I understand it are not attributed to individuals, but no, I'm not aware of any efforts from Cabinet Ministers on that part, no.
HOST:
Do you think it has now gone too far to change the carbon tax in any way, shape or form before it's introduced?
BRADBURY:
I think it's important to deliver the certainty that the scheme will put in place. We are of course putting into effect a whole range of other assistance measures that will help people come to terms with the introduction of the new arrangements. I think that when people do see this come into effect they will see very clearly that some of the doom and gloom that has been pedalled about how much damage this is going to do to the country will be shown to be very hollow. It's important that we implement the scheme well, that's what we're focussed on doing and the assistance that's being delivered, for most people the assistance they will be receiving, nine out of every 10 households will be receiving some assistance to help them come to terms with this. But if you want to put the right incentives in place to get the big polluting entities to start doing things differently, so they're not emitting as much as they are, then the only way you can do that is putting a price on carbon and that's what we've done.
HOST:
Have you told that to the Chinese and the Indians and the Americans?
BRADBURY:
Well, there are parts of China that have already put –
HOST:
Our very – yes, but what is it? One dollar a tonne?
BRADBURY:
In the end this scheme will come into effect, there are a lot of cynical and sceptical people about, I'll grant you that.
HOST:
Yeah, I'm one of them.
BRADBURY:
And I hear that. But when it comes into effect, Mr Abbott said it would wipe Whyalla off the map. Well, we'll wait and see if that comes into effect. He said it'd cost tens of thousands of jobs in places like Illawarra and Newcastle. We'll see whether that happens. He said that it would be driving individuals into all sorts of dire financial circumstances. Let's wait and see. Importantly, when this all comes into effect, let's see whether or not these people are fair dinkum or not about actually taking it away.
HOST:
And what about the jobs that'll go overseas?
BRADBURY:
Well that's why we're providing assistance to those industries that are in international competition and that is a huge part of where the money raised under this initiative is being redirected to those businesses to help make them more competitive and to recognise that they're competing internationally. People seem to acknowledge that the money is being paid and it will be paid by the big polluters but there seems to be a failure to acknowledge that we're handing significant assistance to those industries to come to terms with the changes. Can I just make this point, that the Treasurer has announced today that one of the measures that we'll be putting in place will be a new initiative called loss carry-back, which will allow companies that have been making profits but do it tough over a coming year to then go back and to take those losses back and offset them against tax that they've paid previously. One in six manufacturing firms, we estimate, will benefit from this measure.
So there are a range of things we're doing. We want to make sure we keep growing jobs in the economy, but at some point, someone in this country's got to take up the challenge of trying to price pollution and get us moving towards a cleaner energy future, and that's what we're doing.
HOST:
Alright, a busy week for you no doubt, we thank you for joining us this morning. David Bradbury, Assistant Treasurer. Thanks David, enjoy your Sunday.