Natalie Barr:
And Treasurer Jim Chalmers joins us live in Canberra on a busy morning. Good morning to you.
So, barely enough for a coffee or about a McDonald’s Happy Meal, how much impact do you think $5 a week will have?
Jim Chalmers:
It’s more than that. There are 2 rounds of additional tax cuts, and together with the tax cuts which are flowing now, the average is about $50 a week, $10 additional in last night’s Budget. That’s because we need to be responsible, and we’re providing this cost‑of‑living relief in a modest but meaningful way, the most responsible way that we can. It’s not the only cost‑of‑living relief in the Budget. We’re also strengthening Medicare, making medicines cheaper, giving energy rebates, cutting student debt. There are a whole range of ways that we’re helping people. Tax cuts are an important part of that.
Barr:
And a lot of people like this this morning, Treasurer. But if you earn $1 million a year, you still get this, don’t you? Why didn’t you means test it?
Chalmers:
Because when you cut the bottom rate of the taxes it flows through up and down the system, but proportionately, it applies to people who need it the most. The biggest proportionate impact is people on relatively modest incomes, young people, people entering the workforce for the first time. And that’s deliberate.
Barr:
Yeah, but why didn’t you cut it off? You could have cut it off at people who earn like half a million bucks, and then could you have put that money to something else?
Chalmers:
Because the only simple and effective way to do that would be to provide it in people’s tax returns. That’s the only way you can limit it up the tax scale. We wanted to make sure that this was a permanent, ongoing benefit. What we’re doing here is topping up the tax cuts which are already flowing to every Australian taxpayer to provide that cost‑of‑living relief.
Barr:
Okay, so it was more of a sort of technical easy thing to do.
Chalmers:
It’s how we top up a tax cut for every taxpayer. Nat, you and I have spoken on a number of occasions that last year we implemented tax cuts which apply right up and down the income scale deliberately. What we’ve done last night is top up these tax cuts in a modest but meaningful way, recognising that there are a number of ways that we can help people with the cost of living. That’s what we’re doing.
Barr:
Okay, moving on. Australian energy prices remain some of the highest outside of Europe. People talk about in the last few years, them that their energy bills going up about $1,300. The rebate is well received too, but it’s just not keeping up, is it? What are you doing to try and bring those power prices down?
Chalmers:
What we showed last year is by providing these energy rebates, we can take some of the sting out of these energy bills, which you’re right to point out are impacting people right around the world. We do what we responsibly can. We’ve got to make sure that the cost‑of‑living relief is affordable, and it is, that’s why we’re providing another 6 months of these energy rebates rather than 12.
It’s why we’ve sequenced the tax cuts that we have, because the Budget is a responsible budget. It’s all about helping people with the cost of living and strengthening Medicare and building Australia’s future. It’s delivered in the context of a pretty remarkable improvement in the Budget in the economy over the last 3 years.
Barr:
I noticed that taxes on cigarettes have collapsed. There’s a big $17 billion hole. I think there’s been reported this morning, not because people aren’t smoking, but because they’re buying illegal cigarettes. But vapes, e‑cigarettes don’t have the excise. Have you considered taxing them?
Chalmers:
What we’ve done with vapes is to make it harder for kids to get their hands on them. We’re really worried about kids using vaping as a gateway to taking up cigarettes. You’re right to point out that there has been a hit to tobacco excise and that there are 2 reasons for that. More people giving up is a good thing. More people avoiding the excise is obviously a bad thing. There are some new resources in the Budget for compliance and enforcement. We do have an issue here when it comes to enforcement of this tax and we’re taking steps that we can to try and fix that.
Barr:
Do you reckon it’s working? Trying to, you know, make it harder for kids to get vapes.
Chalmers:
On the vaping side? Yes, I’m confident about that. When it comes to the excise side of tobacco, we know that there’s more work to do. That’s why there’s more resources to try and crack down on the people who are avoiding it.
Barr:
Ok, so look, Budget out the way. Election called, what, Friday, Saturday or Sunday?
Chalmers:
That’s for the Prime Minister to determine and to announce. My job is to hand down the Budget and to talk with you about it this morning. The PM will determine the election timing. Obviously, he has already said there’ll be an election in May, and that election will now be a pretty clear choice. After Angus Taylor’s brain explosion last night on tax cuts, the election will be a choice between Labor cutting taxes and helping with the cost of living versus Peter Dutton’s secret cuts, which will make people worse off. Peter Dutton wants to cut everything except people’s taxes. That means people will be worse off if he wins. That will be a key issue in the election campaign itself.
Barr:
Okay, Treasurer, we’ll leave you to the big sell. Thank you very much for joining us this morning.
Chalmers:
Appreciate it, Nat.