KIERAN GILBERT:
Treasurer, thanks for your time. I know you've had a busy morning, lots of Australia Day events in your electorate of Rankin there in Brisbane. But on the tax cuts, do you have a sense of relief that you've landed on this spot? Because I know, and many would have known for many months, that you have not been a fan of the original stage 3 design from the get go.
JIM CHALMERS:
Oh look, Kieran, I'm pleased that we've come to the right decision for the right reasons and that is to give more people a bigger tax cut to deal with cost-of-living pressures. We found a way to give a tax cut right up and down the income scale but with an emphasis on middle Australia in a way that is good for the economy, good for cost-of-living pressures, good for middle Australia, good for women and the workforce, good for nurses and truckies and teachers. I think it's an important proposal and policy that we put forward yesterday from the Prime Minister at the National Press Club. It recognises that people are under pressure and I think the really important thing that we've done here is we've put people before politics. We've come to the right decision for the right reasons. We've put people front and centre and that's because the outcome here, the substance of what we're proposing is much more important than the politics and the punditry.
GILBERT:
Well, on a bit of the punditry, it's an old saying. I think it's attributed to Keynes. I'm not sure he said it, but "when events change, I change my mind". Is that essentially what we're seeing from the Prime Minister? As I say, you haven't changed your mind, you've been supportive of amending these things from the outset. But is that what we're seeing from the PM here?
CHALMERS:
Well, first of all, when it comes to my position, I've spent most of the year and a half that we've been in office finding other ways to provide cost-of-living relief to people - rent relief, energy bill assistance, cheaper medicines, Medicare, bulk billing, all of these kinds of ways that we've been providing assistance. But it became increasingly clear, I think, to the PM and to myself in recent times, that this was the absolute best way to provide some additional cost-of-living help without adding to inflation, by making sure that we can give a tax cut to everyone but a bigger tax cut for more people to deal with the pressure that they are under. And the pressure when it comes to cost-of-living, we know is sustained and it is persistent.
As the Prime Minister said yesterday, I think, echoing Keynes in one way or another, when the economic circumstances demand a change in economic policy, that's what we've done here. We know it's controversial, we know it's a big call, we know it's not an easy call, but it is definitely the right call because it's right for middle Australia, it's right for Australians, broadly, because they get to keep more of what they earn. I can't understand for the life of me why the Liberals and Nationals want to see higher taxes on middle Australia to pay for an even bigger tax cut for people on the highest incomes.
GILBERT:
You said this morning that 80 per cent of Queenslanders, 90 per cent in your seat, will get a bigger tax cut. Does this make it a bit easier for you to make the political ground you need in your home state?
CHALMERS:
Well, first of all, I don't see this in political terms, I see it in terms of the economy and I see it in terms of the cost-of-living pressures that people are under. The point that we have made is that every taxpayer gets a tax cut. About 84 per cent of Australians get a bigger tax cut than they would have under the proposal Scott Morrison legislated 5 years ago, 87 per cent of Queenslanders get a bigger tax cut and 90 per cent here in my own community, here to the south of Brisbane. But this is fundamentally about helping people with the cost of living. It's about middle Australia, it's about a better outcome for them. The politics will be the subject, obviously, of much discussion, but really, our focus here is easing cost-of-living pressures in middle Australia and that's why we've taken the difficult decision that we have.
GILBERT:
Keeping this to the 37 cents in the $1 bracket, doesn't that just entrench bracket creep?
CHALMERS:
No. What the Treasury advice that we released yesterday makes clear is that there are many ways to return bracket creep. I have said for a long time - you and I would have talked about it on your various programs over the years, Kieran, that I think it is good to return bracket creep when governments can afford to do that. I think tax relief is a good way to provide some help with the cost of living, but there's more than one way to do that. And what we've shown here is we can return something like $359 billion worth of tax cuts over the 10 years in a way that recognises that bracket creep hurts most in middle Australia and so by structuring the tax cuts as we have, we're returning bracket creep to everyone. The top threshold goes up, the second threshold goes up, but we do have an emphasis on middle Australia because that's where I think bracket creep hurts the most.
GILBERT:
Did you tell caucus that Labor now owns the tax cuts because of these changes? And if so, one of your backbench colleagues put it to me in a similar way. They said they never put stage 3 on their material that they mailed out to their constituents, but they will now because they feel like they own it.
CHALMERS:
Well, everyone will make their own decisions about local campaigning. My terrific colleagues are capable of making those decisions. But it is my view that having taken this difficult decision and putting it through the Cabinet on Tuesday, that this tax relief that the Liberals and Nationals, via Sussan Ley, have said that they want to unwind, we do own this tax relief. More than that, what this shows is that Labor is the party of aspirational middle Australia - that is overwhelmingly clear now. Again, I find it disappointing but not especially surprising that Sussan Ley has said she will unwind these changes and so every Australian needs to understand that the position of the Coalition is higher taxes for middle Australia in order to fund a bigger tax cut for people on the highest incomes. We've taken a different view here. We know that that will be contentious and controversial, but it's the right outcome and our job is not to take the easy path if it's wrong, our job is to take the right path and it's right because it's better for Australians, it's better for middle Australia - in particular, it helps people with the cost of living.
GILBERT:
And you've said it's controversial and you know it's contentious because of that integrity question about what was said by you and the PM before and after the election and now what's happening. That's obviously the integrity question at play here. So, let me ask, because this is what is going to be put to you many times over the months ahead before the next election. Can you rule out changes to negative gearing?
CHALMERS:
We haven't changed our view on that, Kieran. We have changed our view on the income tax cuts and I understand that people will ask us from time to time about a whole range of policy areas, and that's fine. We haven't changed our view on those other proposals. We have changed our view on the stage three tax cuts and more than that, when we've come to a different view, we've fronted up, we have explained our position. We've said why we've come to a different view and the main reason is we found a better way to give more cost-of-living relief to more people. And so I understand that people will have a view, and I'm not pretending that this isn't a change in position, it definitely is and we own that, we take responsibility for that but we found a much better outcome for people - much more helpful - bigger tax cuts for more Australians to deal with the cost of living. That's a better outcome than what people would have otherwise got on the 1st of July and that's what warrants this change in position.
GILBERT:
And on franking credits, do you rule out a move on that?
CHALMERS:
I'd give the same answer about that, Kieran. We haven't changed our view on that or the other example that you mentioned. We have changed our view on stage 3 and that's because we found a better way.
GILBERT:
You've had some rugged interviews the last few days. I know that some of those that have interviewed you have copped flack because there are viewers that support the changes. There have been a lot of critics of stage 3. Nonetheless, are people firing up because of the fact of that integrity question? They feel that politics needs people telling the truth and being upfront with voters before elections.
CHALMERS:
A couple of things about that. First of all, I think the Australian community understands that our job is to try and come to the right decision, whatever the political controversy might be. I think there is a broad understanding in the community about that and I think when people are reacting to some of these interviews, some of them, and I appreciate it - leaping to my defence, I think that's just recognition that their focus is on the outcome and not the politics or the punditry. But I say this about difficult questions we get about it - and you know this, Kieran - you and I have known each other for a really long time. You know I respect journalists and I respect your craft and I respect your line of work and I do get a bit uncomfortable whether it's Lisa Millar on the ABC or Waleed Ali on Channel Ten and others, I do get a bit uncomfortable when people hop into them in personal terms. Journalists are just doing their job and I'm just doing my job. And if the price of getting a much better outcome for middle Australia to help with the cost of living is a few interviews where the questions are a bit punchy, then that's a price that I'm willing to pay. I did a heap of interviews yesterday - 2GB, Sky, ABC, Nine and Sunrise and all of the other channels, as many as I could fit in - The Project and other opportunities. I understand people will ask us questions about that, that's a good thing. We should be subject to that scrutiny. I'm fronting up and explaining why we've come to a different position. Journalists are just doing their job, and I'm just doing my job and I understand that part of my job is dealing from time to time with punchy questions. But again, if that's the price we pay for a much better outcome for the people in real communities like this one around Australia, then so be it.
GILBERT:
And one final one before you go. I know you've got a busy Australia Day - but the year-long inquiry by the ACCC on price gouging in the supermarkets, how does that work alongside the Craig Emerson probe that's looking into supermarkets as well?
CHALMERS:
It's entirely complementary - so, the work that Craig is doing, the work that the chair of the ACCC will now do, we've given her the powers to conduct that work, but also our broader competition review. This is all of a piece, and it's about getting a fair go for farmers and families. It's about making sure our economy is competitive as it can be and part of that is making sure that the supermarkets are doing the right thing by people. So, the work that Craig's doing, the work that the ACCC is doing, the work that I'm doing with Andrew Leigh on the competition review, all of this really is of a piece. It all has the same objective. We think that people will get a fairer go at the checkout if our economy is as competitive as it can be.
GILBERT:
Treasurer Jim Chalmers, thanks. Talk to you soon.
CHALMERS:
Appreciate it, Kieran. All the best.