HOST:
Joining me now is Assistant Treasurer, David Bradbury. David, welcome.
DAVID BRADBURY:
Good evening, Ticky.
HOST:
Now, [inaudible] is saying this is a little bit of creative accounting in this MYEFO, but let's go to the Mining Tax first, the MRRT, big slippage in receipts obviously with commodity prices coming off, down from $3 billion to $2 billion. Joe Hockey is right, isn't he, though when he says I guarantee it's going to be more of a slippage than is actually in the MYEFO and that's why you've brought it out early.
BRADBURY:
Look, I don't accept that that's why we've handed it down today. But can I say, that if you look at commodity prices, some prices have not only dropped, but they've now rebounded and they're heading back up in the other direction, so if people are suggesting that this is a question of trying to pick the timing that suits the figures the best, then that's a bit of a guessing game in a sense. We've chosen this time because it is the appropriate time. If you look at the Charter of Budget Honesty Act, it indicates that the review should be handed down around about this time. In fact, two weeks ago Joe Hockey stood up in the Parliament, I know this because I was on the other side of the dispatch box, and he called upon the Government to urgently update its figures. So we've done that now and now he's suggesting we've done that too early.
HOST:
It's just that normally MYEFO would come out a little bit later than this and it is actually the day that the mining tax is paid and just obviously too late to get into these figures. So are people entitled to be a little bit cynical?
BRADBURY:
But as the Treasurer pointed out today, just because those receipts are due today and are received today doesn't mean that that information is going to flow through immediately anyway. The other point that I'd make is that when we handed down MYEFO last year, Mr Hockey said that we handed it down too late and the reason he cited was that there was no opportunity for parliamentary scrutiny. Well, we've got a sitting week next week, which is the second last sitting week of the year. If we didn't hand it down now, I bet my bottom dollar that we'd be accused of having handed it down at a point where it was not going to be subject to parliamentary scrutiny.
HOST:
It's been called a nip and tuck budget today, but it's certainly not for business a nip and tuck budget. They have done, as it's been said, a lot of the heavy lifting. $8.3 billion. Now, no consultation whatsoever as I understand it. Are you expecting business just to lap this up?
BRADBURY:
Can I say on the consultation question that we are very open to consulting through the detail of this announcement.
HOST:
But you've actually announced it as a fait accompli, it's just how it is implemented.
BRADBURY:
Can I make this point, that that has been raised by others in the context of asking the question, was this a part of the Business Tax Working Group. Now, I have to also tell you that over the last six months just about every figure that's had an interest in the Business Tax Working Group has come to me and has said look, we only want those measures considered as part of a cut in the company tax rate and if the Government were to undertake any of those other measures without delivering a cut in the company tax rate, we would consider that a sign of bad faith. So the reality here is that there are a whole series of tax measures that are the subject of ongoing discussion through the Business Tax Working Group. But let's be fair dinkum about this, that doesn't mean that the Government should sit here with its hands tied behind its back in relation to all other tax reforms.
HOST:
It's just that you're talking about being fair dinkum. You've got this Business Tax Working Group, which was set up precisely to ensure better consultation with government. You've got the Executive Director of the Treasury's Revenue Group sitting on the committee and not a word about $8.3 billion.
BRADBURY:
But let's be clear about this. Not one additional dollar of tax is going to be paid by business. That seems to be missing in the discussion.
HOST:
That's not correct though is it, because effectively it is a tax hike for business.
BRADBURY:
Well, no additional tax will be payable.
HOST:
But the timing of it means that you get more…
BRADBURY:
In terms of the timing, absolutely, and that is reflected in the MYEFO papers.
HOST:
It's also reflected in the banking costs for a lot of businesses and the level of competition that they're going to have to face.
BRADBURY:
Sure, sure, and these were all of the same arguments that were put many years ago when businesses only paid their tax after the end of the tax year. In fact…
HOST:
Are you saying this is not an effective tax hike? Because surely it is.
BRADBURY:
This is about making sure the corporate tax system operates more efficiently. We're not the first government to do that. If you go back from the late 1980s through to the early 2000s when the Howard and Costello Government made certain changes, what you see is progressively there has been a series of efforts to try and make sure that business is paying its tax more contemporaneously with the economic activity that's …[inaudible]
HOST:
But the effect is that $8.3 billion come Government's way when it was being held on to by business, which is struggling, and it's not just, we're now talking about a retail sector that's struggling, manufacturing sector that's struggling and we are actually shifting costs now, as a result of this MYEFO, on to business.
BRADBURY:
Clearly we are not the only jurisdiction in the world that operates in this way, that's relevant and that is an important point.
HOST:
Yea, but you have to dig quite hard. Canada, [inaudible], the Netherlands.
BRADBURY:
Well, Canada is a pretty good example. But having said that, if we have a look at what we're asking business to do, and we're not asking anyone to do anything overnight. We've indicated that this will only come into effect after a 14 month period and when it does first come into effect it will be impacting on 350 businesses, 350 businesses, wait for it, who have a turnover of more than $1 billion a year. And then progressively that will move down. The other point that I'd make is that this will bring into alignment PAYG instalments with the GST instalment process that applies to those companies already over … [inaudible]
HOST:
This comes on top of a promise that originally the Mining Tax was going to spread the benefit of the boom and pay for super, it was going to come, this comes on top of the idea that we were going to have cuts to corporate tax rates. These things have not happened and instead we've had this consultation and the consultation has brought nought quite frankly.
BRADBURY:
Well, that is a process that is still ongoing. I understand that the business community is quite divided over the prospect of a company tax cut. We've gone through a period, and let's be clear about the Government's bonafides, we were attempting to deliver a cut in the corporate tax rate and that was something that was frustrated in the Parliament. I would make the point that we remain committed to delivering that tax cut but equally, the next time a tax cut like that comes up before the Parliament, I would hope that we can count upon our friends in the business community to stand up and be a little bit more vociferous in their advocacy on such an important issue, because I have to say fewer people there at the time and we've heard a lot more from them since.
HOST:
David Bradbury, thanks very much for joining us.