SABRA LANE:
The old adage “a week’s a long time in politics”, should perhaps be rewritten to “twenty five minutes is a long time in politics”. While you’ve been on your feet, Rebekha Sharkie has held a press conference announcing that she is resigning in wake of the High Court ruling today. Also Justine Keay, Labor MP for Braddon has also announced that she is resigning and also Josh Wilson from the seat of Fremantle is resigning too in light of that High Court ruling. Two of those seats Mayo and Braddon are very marginal. How would you think the Liberal Party would go in winning back those seats given that they will go to a by-election?
TREASURER:
Well, that’s not really my topic for today. The topic that I’ve chosen for today I’ve already addressed. But it seems that that “rolled gold” process Bill Shorten was boasting about arrogantly some time ago isn’t so “rolled gold” after all.
LANE:
Alright, our first question from the floor. Colin Brinsden.
QUESTION:
Treasurer, Colin Brinsden, AAP. I’ll stick on topic. A lot of the people you have spoken about today will obviously be pleased to be getting a tax cut given the state of wage growth at the moment, which brings me to how can you be so confident that wage growth will be three and a half per cent in 2020-21 given where wages are now and given that you aren’t expecting a gradual decline in the unemployment rate over the next four years? If you’re wrong, isn’t this going to – if your forecast is wrong – isn’t this going to put your surplus projections in jeopardy?
TREASURER:
No, no, for a couple of reasons. First of all, the forecasts that we’ve got set out in the Budget really do sit in the middle of the pack if not the conservative end of the pack when it comes to all of these parameters. I mean, that’s been the commentary of leading business economists today. That shouldn’t come as any great surprise. Our forecasts are more conservative than the Reserve Bank and more conservative than the IMF, particularly on the issue of wages we’ve actually revised down to the final year what we were saying about wage growth over the Budget and forward estimates. So, look we always seek to take the cautious approach and I think what you’ve seen particularly over the last 12 months to 18 months is reflective of that. I mean, it wasn’t the Turnbull Government that went around forecasting iron ore prices at more than $150 USD a tonne and expecting that to go on forever. The Treasurer that did that was Wayne Swan and not surprisingly his revenue didn’t show up and neither did his surpluses. What we’ve done is the reverse of that. We’ve been cautious to stay I think on the right side of that line and the surprises that come intend to be on the upside, not on the downside.
LANE:
Annika Smethurst.
QUESTION:
Treasurer, Annika Smethurst from The Sunday Telegraph. You’ve given yourself a mid-year deadline to pass this tax relief. How confident are you that you will do that given that Labor have said they’ll back half of it and we’ve seen some crossbenchers – I think Storer has said that he won’t support it – and is it also fair to give the crossbench just eight weeks to pass $140 billion worth of tax relief?
TREASURER:
I think the Australian people for whom this tax relief is designed for would expect the Parliament to do its job and get this tax relief to them. I mean, that’s why we come here. Yes, we do a lot of talking but we’ve also got to do some voting. We’ve got to pass some laws. Mathias Cormann who is with me here today and has been such a rock in pulling not just this Budget together, but many, has been successful in seeing $41 billion in Budget savings passed through this Parliament since the last election. And I see Simon Birmingham there as well. Mitch may be around here somewhere else as part of that Senate team. They’re pretty good at this and they treat the Senate with respect and we work through issues. But, I think people sitting all around Australia need to ask their Senators a question, “Why are you standing in the way of tax relief for me and my family?” I mean, they deserve the certainty of what taxes they’re going to pay now. It’s a pretty fair ask, it’s their money after all.
LANE:
Phil Coorey.
QUESTION:
Hello Treasurer, Phil Coorey from the Financial Review. This time last year you were announcing a new tax on banks and you were using this lunch to tell the banks to accept the tax because people didn’t already like them and don’t give them another reason. There’s now a Royal Commission underway. There’s a federal election in the next eight or so months. Can you rule out between now and the election, imposing an extra levy or tax on the banks to, say, fund a compensation scheme or any other such recommendation which may arise in the Royal Commission or is your treatment of the banks in terms of taxation over?
TREASURER:
Well, if I could make a couple of points. The first one is the Royal Commission’s underway. We will let them do their work. We’re not going to prejudge their outcomes and they obviously have a very comprehensive terms of reference which will allow them to recommend as they will. I can assure you there will be no taxpayer funded redress scheme from the Turnbull Government. Taxpayers should not have to underwrite the misconduct of banks. That shouldn’t happen and it won’t happen under a Turnbull Government. What the Royal Commissioner recommends is a matter for him and what he recommends to the banks themselves is a matter for him. So we will wait to see what his recommendations are. There will be a report, we understand, in around September. But in terms of the bank levy, in terms of the reason for which it was introduced, those reasons remain today and they will remain into the future. I said I wasn’t changing it and I’m not changing it, but the Royal Commission will make its recommendations and we’ll consider what they say at that time.
LANE:
David Uren.
QUESTION:
David Uren from The Australian, Treasurer. In your Budget update last December, the return to surplus was powered by a forty billion dollar increase in personal income tax revenue which rose over four years to hit $229 billion. In your statement last night, personal income taxes rising $38 billion to basically the same amount. So aren’t you really relying upon bracket creep still to power the return to Budget surplus?
TREASURER:
This Budget is based on a very simple economic principle – getting people off welfare and into work. In rugby league it’s called the 12 point turnaround. That’s where you stop them from scoring and then you score yourself. Preventing six points being scored against you and then scoring yourself, you’ve got to make the conversions too, but I’m sure Chad Townsend will do that every time. It’s very important that you understand that what drives the economy is jobs and people getting in jobs, businesses creating jobs and that occurred because of a stronger economy. We now have the lowest level of welfare dependency of the working age population than at any other time in the last twenty five years. That’s what 1,000 jobs a day does. It gets people from receiving welfare to paying tax. Now, if you want to encourage more people to be in a position where they’re not receiving welfare and paying tax, then you have to create jobs and you have to create a stronger economy and so this is a virtuous pathway. A very virtuous pathway which is good for jobs, it’s good for the economy, it’s good for the Budget. We see that the services guaranteed, essential services for Australians being guaranteed by a stronger economy that is built on lower taxes and backing business. Not by running taxes through the roof. Our tax-to-GDP speed limit, our tax speed limit is very important. I mean, it’s not set at an unreasonable level. Paul Keating as I remarked in the lock-up yesterday, he achieved three surpluses with a tax-to-GDP level lower than the tax-to-GDP cap. So it’s not set at an inconvenient level, it’s set at a realistic level. The long run average is much below that. But if you allow taxes just to keep going up, as you say, that’s why we have taken the decisions we have on bracket creep, and if we can do it sooner we will. But Australians have to have reward for their effort, businesses have to have reward for their effort and that’s why our personal tax plan is not based on the politics of envy but on the economics of opportunity. We’re not saying we’re going to go and slug those who are currently accounting for 17 per cent of all personal income tax revenue with higher taxes to provide relief to those who are earning less than $90,000. We’re not going to do that. Our opponents are going to go and slug others with higher taxes. In fact, $220 worth of higher taxes and much of that they’ve already spent. They spent it at the last election. The reversal of the Enterprise Tax Plan, in full by the way including the legislated tax cuts for small and medium sized businesses. The imposition of an additional two per cent on the top marginal rate. Taking a sledgehammer or an axe to negative gearing and capital gains tax. They’ve spent it all and more because remember at the last election they had a deficit of $16.5 billion higher. So anyone who thinks they’re sitting out there with a big bag of money, well, they’ve already spent it. But one thing Labor never learns, it’s a pretty simple statement, you cannot spend money twice.
LANE:
Mark Kenny.
QUESTION:
Mark Kenny from The Sydney Morning Herald and The Age. Treasurer, thank you for your address. Can I go to that 12 point turnaround you just talked about? The idea of getting people off welfare and into work and therefore not draining resources but in fact contributing to them. Is it the case that Australia cannot afford to increase Newstart from its current $39 a day or is it the view of the Government that increasing it would act as a disincentive for those people to enter the workforce?
TREASURER:
I’m advised by Dan Tehan, and I know this from my previous portfolio, more than 95 per cent of people on Newstart are actually receiving some other form of assistance or payment, which is appropriate. We have a good strong social safety net in this country. Newstart is not intended to be a payment that you live your life on, it’s meant to be a payment that supports you while you actually get yourself back into work. And our priority in this Budget is to provide tax relief for working Australians and to ensure we create a stronger economy so we can provide those people who are currently not in work with the best form welfare that can be provided which is a job. And our record on creating jobs, I think, shows that plan is working well.
LANE:
Katharine Murphy.
QUESTION:
Hello, Treasurer, Katharine Murphy from The Guardian Australia. Can I just take you to the costings of the tax plan that you unveiled in the Budget last night? We’ve got a cost over the forward estimates of $13.4 billion then we’ve got a medium term cost of $140 odd billion. But it is unclear to me what the specific year by year costs of this measure is in the Budget out years. I've had a look at the legislation that you tabled this morning in the House and there's no detail there either. So in the interests of transparency, can you tell us what the year by year cost of this package is, given that you are asking the Parliament to lock in for at least seven years?
TREASURER:
Well, the medium term cost has been set out at $140 billion. It is not the practice of any Government to provide itemised year by year costs over the medium term, because they’re not reliable. You do it over four years and that’s what we’ve done: $13.4 billion. And that is covering, completely, step one of that process, because, as you know, the remaining steps actually come in over the medium term and the overall cost over the medium term is $140 billion. Now, that is the standing practice for budgeting in this country and we haven’t departed from those transparency rules.
LANE:
Chris Uhlmann.
QUESTION:
Chris Uhlmann, Nine News. You talk a lot about security in the Coalition, we live in a strategically contested environment, the space that Australia vacates is taken by others. Can you explain why it is in Australia’s national interest that the foreign aid budget continues to fall and why didn't you take this opportunity to put some more money back in?
TREASURER:
What we've done with the foreign aid budget, and I want to commend Julie who is here today, ‘J-Bish’, she’s making our aid budget work harder. I mean, it's not just about how much you spend, it's like on schools. We can have a big argument about how much money is spent but, you know what matters to the kids sitting in the classroom, or the child sitting in housing support in Sri Lanka is how well you spend the money. We don't go around beating our chest and say: “Well, it is this much and it’s that much.” It's the quality of the program that delivers on the ground and the transformation that I have seen, as someone who has been interested in this area for a long time, that Julie has been able to lead in getting us focused on the programs that change lives, make a difference, are focused on our region, and also protect our strategic interest — particularly in the Pacific — has been extraordinary. And she’s been able to do it by ensuring the aid budget lives within its means as well, and she should be commended for that. Because pound for pound, dollar for dollar, our aid budget today is far more powerful than it was in the past, not because of its quantum but because of its efficiency, and its effectiveness, and its focus. So yes, it's frozen at current levels, and I think Australians would understand that, but it maintains our commitment, but it continues to increase as its focus.
LANE:
Kieran Gilbert.
QUESTION:
Treasurer, Kieran Gilbert from Sky News. Last year you focused quite a bit on the NDIS and giving certainty and funding. When you changed that approach, it created anxiety within the sector, among parents, carers of the disabled. Why didn't you take more time to try and reassure those families, those vulnerable people of the certainty of this funding now given, as I say, it was a big focus last year and didn't get much of a mention last night?
TREASURER:
Well, it was in the speech. I made it clear in the speech last night, that every single cent, every single dollar of the National Disability Insurance Scheme is guaranteed. And I said at the time as we made the announcement not to have to proceed with the Medicare levy. And it's important that it is guaranteed, and I believe that is a bipartisan position. And I think that’s also a great assurance to families and people who are living with disabilities and, I think, we are now in an even stronger place on that than we were a year ago but I won't raise a tax if I don’t have to. And I don't think those living with disabilities would want others to pay higher taxes if they didn't have to. But as I have said throughout my presentation today, whether it’s hospitals, whether it’s schools, whether it’s aged care, whether it’s NDIS, whether it’s Spinraza. It all depends on a stronger economy and that is what our focus is.
LANE:
Shane Wright.
QUESTION:
G’day, Treasurer, Shane Wright from The West Australian. You've talked extensively about tax competition and your plan to really flatten the tax rate between $41,000 and $200,000. A person in Australia earning $50,000 to $60,000 would be paying 32.5 per cent under your plan, in Germany they’d pay 14 per cent, the UK – 20 per cent, the US – 25 per cent and Canada – 20 per cent. Is there an argument, do you think you can bring forward those tax cuts and is it fair that those people earning that low income to be paying such a high rate relative to the rest of the world?
TREASURER:
Well, I think people can take this based on my record and the record of the Turnbull Government and my colleagues, Kelly O'Dwyer, the Minister for Revenue and Michael Sukkar here, the Assistant Minister to the Treasurer. Any chance, any opportunity we have to relieve the tax burden on Australians, we will do it. I assure you the opposite with the Labor Party. Any excuse they can use to keep taxes higher, they will take.
LANE:
Just before we go to the next question, you did introduce a bill into Parliament this morning for the tax package, with the 1 July deadline. What happens if the Senate doesn't vote to pass it by this time? Will those first instalments, the part one of your plan, that won't apply?
TREASURER:
Well, I think that's fairly clear. This is why I think it's important for the Senate to do its job. I know Mathias will be taking this through once it comes out of the House of Representatives. That’s why we are quite keen to see it get to the Senate as soon as possible and we’ll work through those issues respectfully with the Senate, but I made the response to a comment earlier, and that is simply this: this is a secure plan for Australians to understand what tax they’ll be paying in the economy over the next 10 years. They deserve to have the certainty of what that is. There only has to be one vote for this to happen, there doesn't have to be a vote at the next election, or the one after that for that matter. There’s only one vote that has to take place to give Australians certainty about the lower taxes they can pay. And it’s going to happen in this place, in the House of Representatives, in the Senate. One vote, seven years of tax certainty and a plan that will ensure that 94 per cent of Australians will pay no more than the marginal rate of 32.5 cents, and if we don't touch it, that field will only be 63 per cent. So I think that’s a call to action. The plan hangs together, it's a plan for all Australians, not for some. It’s a plan to share the benefits of a growing economy in a patient way, with a clear set of clear steps which includes everybody, doesn't seek to say: “We’re going to hit you with more tax, you people are going out there and doing all these terrible things like starting businesses and doing well, you, you're the problem with this economy.” That's what Bill Shorten and Chris Bowen are saying, because they want more tax, because they can't stop themselves from spending. Every time you hear Chris Bowen say the words ‘budget repair’, it means one thing: higher taxes suffocating the economy. So it’s time, frankly, for the Labor Party to giddy up on this and get on board and support lower taxes, not higher taxes.
LANE:
Malcolm Farr.
QUESTION:
Malcolm Farr from News.com.au. Treasurer, thanks for your address. I ask my question to the background of America's decision today to abandon the nuclear arms treaty with Iran, something the Foreign Minister this morning expressed her disappointment about. And I ask with that background, because it highlights a fact over which you have essentially no control and that is global stability. And your Budget papers make it quite clear that there’s possibly going to be an increasing risk of global instability in the longer term –such factors as faster tightening of monetary policy, geopolitical tensions, and policy uncertainty in relation to trade protection. If I could use a rather brutal shorthand, is one of the greatest risks to this Budget Donald Trump?
TREASURER:
Well, the statement of risks set out in the Budget I think is very honest and very straightforward, and John Fraser and the team have been very clear about that. The world is not free of risk. Walking out of this building is not free of risk, but we all plan to leave the building at some point. You get on with life, [inaudible] a stronger economy and you don’t create a stronger economy by suffocating it with taxes. So the steps we are taking in this Budget to create a stronger economy is all about building up resilience. I just don’t understand this idea which says we allow the tax as a share of the economy to rise to levels that Gough Whitlam wouldn’t have dreamed of in wildest fantasies at 25.7 per cent. The highest level of taxes ever recorded if it were to come true in Australia’s history. But somehow that’s going to produce this incredible economy. It won’t. It’ll suffocate it. It’s like a snake eating itself from the tail. It’s an ugly and grotesque image. But Labor should put it on the front of their tax plan because that’s what it is.
LANE:
In getting back to the question, Donald Trump, is no risk?
TREASURER:
Sorry?
LANE:
In getting back to Trump…
TREASURER:
I think I’ve answered the question. We cater for risk by ensuring a stronger economy.
LANE:
Tim Shaw.
QUESTION:
Thanks, Sabra. Treasurer, thank you very much for your address. Tim Shaw, Radio 2CC Canberra. Spoke to two economists this morning, one rated your Budget at 7.5 out of 10, a former adviser to the Gillard Government and the second economist realised he taught you economics at UNSW and gave you 9.5 out of 10.
TREASURER:
Woah, I only got a credit on the last one from him, so there you go.
QUESTION:
Treasury’s has been very good at forecasts over the last three years. To what do you ascribe that? And do you…
TREASURER:
There was a bit of echo, sorry, mate.
QUESTION:
Treasury and those forecasts over the last three years have been very, very good. To what do you ascribe that?
TREASURER:
I think it’s a very pragmatic and professional approach which John and the team lead within Treasury and it’s about having fair dinkum looks at what’s happening in the economy. I mean one of the great things that John Fraser brings to the Treasury is a very practical real world understanding of what’s happening in the economy. I remember several years ago and when markets were falling over Christmas and I asked John to come and see me and the first thing I said was, “I don’t want Treasury advice, I want to know what you are doing with your money.” Because that was the honest view about how we saw it going forward and I think there has been a very professional, cautious approach which is strongly supported by the Government. I always look to surprises on the upside, not on the downside and by cautiously taking the approach we have on commodity prices and cautiously, you know working these forecasts through. You know you do have a Budget that I think agencies have been able to look on and say, “AAA, AAA, AAA.”
LANE:
Michelle Grattan.
QUESTION:
Michelle Grattan from The Conversation. The third stage of your tax package does contain reform, obviously, in terms of taking one of the tax brackets out. But you have in the past been very keen on a more ambitious program of tax reform. If the Coalition Government is re-elected, can we expect to see those ambitions again on the table?
TREASURER:
Well, I’m a keen fan of aspiration that’s why I believe in tax relief, to reward aspirational Australians and to give them that encouragement. The sort of things you're talking about are the things that can only be ultimately decided by the Australian people and that and the Prime Minister and I have made that very clear, that if there were ever to be any move in that direction, then that would require endorsement of the Australian people, which I think is only fair. But in this political environment, in this Parliament, you’ve got to play on the field you are on. I had a – sorry to bore you with football stories – but I had a rugby coach once and it was a really windy day and, on a windy day when you're playing footy, people get confused and they get, you know, the plays go wrong and all this sort of thing and he said, “You can’t change the wind but you can change how you focus on the field you’ve got to play on today.” You can’t control that. But you still have your game plan and you stick to it and that’s what we are doing as a Government and what we've been doing on tax I think has been just moving ever more forward. I mean, the package that Kelly is bound to bring together on the black economy, with Michael Andrew, is a great package. It really is and it’s about shining a light on the black economy in this country which will mean that honest, decent, hardworking Australians who pay their taxes aren’t getting ripped off by those who think that taxes are above them and that shouldn’t be the case. You know sometimes, someone will say to you down at the pub, “I was able to do this and I was able to get this, you know, this cheap bit of whatever.” It’s not clever. You're actually ripping off a mate, who’s actually doing the right thing in paying their taxes. We’ve got to change the conversation about this. We really do as a country. It’s not fair to people who do the right thing, taxes should be lower, simpler and fairer. Taxes should also be paid.
LANE:
James Campbell.
QUESTION:
James Campbell from The Herald Sun. If I could just go back to the question that Sabra asked you before, I enjoyed but I didn’t really understand your answer. Can you just clarify? Will you refuse to legislate the first stages of the tax cuts if you can’t legislate the ones seven years away?
TREASURER:
I don’t get into hypotheticals when it comes to the Senate. We have our plan. I didn’t put that in the Budget last night with a qualifier. I put it in as a plan and the Government is looking to legislate its plan just as we continue to do on the Enterprise Tax Plan which we haven’t moved and inch.
LANE:
Tim Lester.
QUESTION:
Treasurer, Tim Lester from the Seven Network. Economists seem to broadly regard your numbers as credible – those we speak to – except, they say, if something goes wrong with China. Related, I know, to the question that Malcolm asked. Do you share their view that events that aren’t particularly dramatic in China could radically and quickly alter the underlying assumptions of this Budget and going forward, what are the cushions for a Budget against being exposed so much to one country’s fortunes?
TREASURER:
Well, that hasn’t changed, Tim. That’s not a new issue. This has been an issue in terms of one of the external risks to the Australian economy for many years. Of course it is, I mean, they’re the biggest buyer of our products and services. It’s like forecasting the dawn. It’s a given risk. But I’ve been encouraged over the last two and a half years through my engagement with the Chinese Government and our strategic economic dialogue, as well as my engagements with them at the G20 and others and this isn’t just my view, by the way, but there has been an increasing confidence about the transparency and the economic management that has been taking place in China, particularly cognisant of the risks with those seen around credit growth in the shadow banking sector and an understanding of the challenges they have in that sector and they’ve been taking action on that and we need to remember in China, their economy works differently to us. They have different levers to pull and they’ll pull them. You know, China, there is a country that’s more dependent on growth in China than us. It’s China, and they are doing things to continue to support the growth of their economy and to lift the living standards of their people and you know, that I find is a very encouraging sign of the practical ways that we've seen much of their economic policy direct at the present. That’s the one big risk that is often raised in relation to the Australian economy. The other one was on the housing market, and indulge me just a second on this, because we’re raising the issues of risks. Domestically that’s the other risk and that’s why over the course of the last year you’ll be very well aware of the measures that have been put in place to boost housing affordability and we were here last year, Michael and I announcing the tax cut for first home savers. But also there has been work done on the macroprudential measures which has limited interest-only lending in the housing market. Now, we've seen a result of that very scalpel-like approach, the moderation of house price growth in Sydney and Melbourne. Now, one of the big things the rating agencies have always had was of a house price, a housing shock in the Australian economy which would have flow-on impacts into consumption and confidence in the Australian economy. That’s why we took the scalpel. If you take the sledgehammer or the chainsaw to taxation arrangements in the housing sector as our opponents are so keen to do – they're itching to do it – then I fear they will create a self-fulfilling prophecy about the housing risk in the Australian market.
LANE:
Quentin Dempster.
QUESTION:
Quentin Dempster, The New Daily. Treasurer, I think we all understand how difficult it is to get the Budget back into balance after the GFC. But I want to quote the economist Richard Holden and quote, “The sneakiest thing of all is taxing tobacco 12 weeks earlier upon entry into Australia rather than at present, when it leaves the warehouse. That will boost tax receipts once and once only in 2019-20 by $3.27 billion. Without that timing trick, the return to surplus would be pushed back a year to 2020-21.” He’s right, isn’t he? Do you take that as a compliment?
TREASURER:
No, no. He’s not. He’s mistaking a timing issue for a policy. I should say that the other way around. What I mean by that is by taxing it at the border, this is the key, you avoid the revenue leakage that comes, literally by the tobacco leakage that occurs at the border before it gets to the warehouse. So this is about ensuring you’re taxing it at the border, that’s how you actually you contain the revenue. This is what actually came out of the Black Economy Taskforce, and working on this issue. I mean, don’t underestimate the ingenuity of organised crime in this country. They move, they change, that’s why we’ve got a $10,000 cash ban on transactions in the Australian economy now. Bad news for gangs. Bad news for terrorists. And this change brought – that The [Daily] Tele[graph] has brought forward – will be bad news for those who want to do the illegal tobacco sales, because it tightens it up at the border. And so that’s the policy decision and, yes, it has the timing impact that you’d stated – of course it does – and the duration of that also. But it’s about a policy decision to tighten up and ensure that we’re having the tax paid that should be paid.
LANE:
Michael Keating.
QUESTION:
[inaudible] term from things like geopolitical uncertainty that Malcolm has mentioned, protectionism, failure in the non-mining sector investment, spare capacity in the labour market, and the labour shortage itself, what specific measures are being put in place by the Government to manage these risks?
TREASURER:
Well, I encourage you to read all of Budget Paper 1 because it sets out our plan for a stronger economy, which deals with everything from a new medical industry plan, what we’re continuing to do in the defense industries, what we’re continuing to do to invest in science and technology, and expand our export trade. All of these things are designed to create a stronger economy. Now, we can all sit here and become very bleak about the risks that sit outside this building. We need to acknowledge them as I’ve said. We need to understand them and our best bulwark against all of that is a stronger economy.
LANE:
David Crowe.
QUESTION:
Thanks for your speech and your Q&A, Treasurer. Obviously you’re reluctant or refusing to outline the year by year cost of your seven year tax plan. But others are analysing it, we’re going to get a big debate about whether it’s fair, and who collects the bulk of the proceeds. Now, we’re already seeing some early analysis from the Australia Institute that says about sixty…
TREASURER:
Australia Institute? They’re my favourite. That well-known, center-ground policy body, hardly a spokesperson for the left of Australian life…
QUESTION:
And there would be plenty of other analysis…
TREASURER:
I certainly hope so because I won’t be relaying on that.
QUESTION:
And given you won’t be breaking it down year by year, we will have to rely on some of this. But the point of my question is their analysis suggests that 60 per cent of the benefits dollar value go to those in the top two deciles, the top 20 per cent by wealth. This is a question that you’ll have to confront over a long time to come in the debate. What do you say to the fairness argument, that too many of the benefits are going to those on the wealthiest income rates?
TREASURER:
Well, let me set out for you what the percentage reduction in personal income tax paid is for people on the following salary levels cumulative over the course of this plan. For those on $200,000, 2.5 per cent reduction. For those on $160,000, 2.4 per cent reduction. For those on $120,000, 2.9 per cent reduction. Those on $80,000, 2.9 per cent reduction. Those on, sorry that was $90,000, those on $80,000, 2.8 per cent reduction. Those on $50,000, 6.3 per cent reduction. Those on $30,000, 8.3 per cent reduction. That’s my answer. You know, if less than 25 per cent of the people in this country who pay tax pay 65 per cent of the total tax on personal income in this country, I’d call that a progressive system. It is a progressive system. It remains a progressive system. The percentage of people on the top marginal tax rate at the end of the seven year plan will be higher than it is today. Now, I would prefer that not to be the case either but I’d like them to at least be the same. But our progressive system is not at risk of this. Our progressive system is maintained in this. And guess what? The more you earn, the more tax you pay. It’s how the system works. And if you’re in a position where you’re on the top marginal rate of tax, well, you’re paying the higher rate. But for most Australians, the highest tax rate they’ll face after this seven year plan is 32.5 cents and, as I said, that’s still high by global tests and certainly the top marginal tax rate and where it cuts in is also still high by global standards. So no, I don’t accept that. You have to look at this proportionality. People who earn more, pay much more tax. Over $80,000 a year median tax paid and more for those on the top tax bracket. For those on the 19 cent rate, they’re paying $1,900 a year. So, Australians don’t begrudge that and neither do I. You do better in life, you put more back in. We have a strong social safety net in this country which we can all be proud of. And I think we all felt good about our country when we talked about the PBS and Spinraza as we should. And those who do better do pay more in this country. But you know you’ve got to – you can’t take a loan out on that either and this is what really upsets me about the class envy which has been sought to be brought into this tax debate. It’s not us, it’s not our country. Leave those debates in other countries. Not in Australia. That’s not who we are.
LANE:
Everyone, please join me in thanking the Treasurer, Scott Morrison.