James Bracey:
Now more on the Albanese government’s fourth federal Budget. Jim Chalmers catching the country off guard with a surprise tax cut for every Australian, a move the Coalition is calling an election bribe.
Sarah Abo:
And the Treasurer joins us live now from Parliament House in Canberra. Good morning to you, Treasurer, or should I call you the re‑election salesman with a Budget like that? $5 a week barely buys a cup of coffee. Can it buy an election?
Jim Chalmers:
It’s more than that, Sarah, that’s the first point. If you combine the 3 tax cuts that Labor is providing, it’s around $50 a week on average. It’s not the only cost‑of‑living help that we’re providing. We know that cost of living is front of mind for most Australians and it’s absolutely front and centre in the Budget. The tax cuts, strengthening Medicare, cheaper medicines, cutting student debt, providing energy bill rebates. This is all about providing the most cost‑of‑living help that we can in the most responsible way that we can.
Bracey:
Treasurer, why across the whole board, for everyone with this tax cut? We spoke to Kirsty earlier, cafe owner, mother of 7, who says the $5 bucks a week just won’t touch the sides.
Chalmers:
That’s only one of the 2 tax cuts that we’re providing, and 3 in total in our time in office, the average –
Abo:
But why is it for everyone Treasurer?
Chalmers:
The average is $50 a week. That’s the first point.
Abo:
Shouldn’t you prioritise the first 2?
Chalmers:
When you cut the bottom rate of tax, it flows right up and down the income scale, so it’s a tax cut for every taxpayer. These are modest tax cuts, they’re responsible tax cuts, but they’re meaningful when you take them in combination with the tax cuts which are flowing already, we’re topping up those tax cuts and we’re also providing cost‑of‑living relief in other ways.
Abo:
It’s barely going to help those top part of the brackets, as you know but it will, if it was doubled, be more of an impact for those underneath. I mean, there is still a big household onus now to find savings. The cost‑of‑living pressures are unlikely to change in the short term.
Chalmers:
That’s why we’re helping people with the cost of living. We’ve made a lot of progress together as Australians on inflation and in our economy more broadly. The Australian economy is turning a corner and that’s a very good thing. But we know that there’s more work to do. That’s why we’re providing more cost‑of‑living help and that’s why it beggars belief that the Coalition is opposing this cost‑of‑living relief.
What it means for the election is that it’s a simple choice between Labor cutting taxes to help with the cost of living versus Peter Dutton’s secret cuts which will make people worse off. Peter Dutton wants to cut everything except income taxes and that will be part of the choice that we’ll be asking people to make at the election.
Bracey:
There really is no Treasurer budget for an election and you set aside a further billion dollars for that election. What is up your sleeve?
Chalmers:
I don’t agree with that characterisation. It’s a budget about building Australia’s future and strengthening Medicare and helping with the cost of living. When it comes to that line in the Budget about decisions taken but not announced, that’s actually very small by historical standards. There are good reasons to have a small amount of money provisioned for in that way. If you compare that with earlier budgets, that line item is actually incredibly small.
Abo:
The surpluses are firmly in the review mirror, aren’t they, Treasurer? I mean, what a legacy; 10 years of deficit. Now you’re staring down extraordinary debt as far as the eye can see and without a real concrete plan to pay for it.
Chalmers:
I think it’s unusual, Sarah, that your question doesn’t acknowledge that when we came to office there were only deficits, and we turned 2 of them into surpluses and we shrunk the deficit for this year. We’ve made a lot of progress in the Budget. We’ve helped engineer the biggest ever nominal improvement in the Budget position in a single parliamentary term. More than $200 billion improvement, much less debt than what we inherited from our predecessors and that’s making a structural improvement to the budget as well. We have got the budget in better nick. We’re providing responsible cost‑of‑living help, we’re strengthening Medicare and we’re investing in the future of this country. And we’re doing that in the most responsible way that we can.
Bracey:
There’s a legitimate crisis in amongst all this though, Treasurer. The tobacco taxes collapsed to a 14‑year low. It’s blown a $17.6 billion hole in the tax base. Meanwhile, we see fire bombings almost daily, fuelling the black‑market wars that are going on as we speak. So, what will the government be doing about it all?
Chalmers:
There are 2 reasons why tobacco excise goes down. One of them is a good reason, one of them is a bad reason. The good reason is more and more people giving up the darts, which is what we want to see. But the bad reason is the case that people are finding more ways around tobacco excise. That’s why we’ve invested a substantial amount of money in new resources for compliance and enforcement. We do know there’s an issue. We acknowledge that. That’s why we’re trying to resource some more compliance and some more enforcement, because there has been some leakage in the Budget in that regard.
Abo:
Long night for you, Treasurer, and an early start. Thank you for joining us this morning and speaking to our audience. Appreciate it.
Chalmers:
Nice to talk to you both. Thank you.