TRANSCRIPT - ABC NEWS BUDGET COVERAGE - TUESDAY, 12 MAY 2015
ABC NEWS BUDGET COVERAGE
TUESDAY, 12 MAY 2015
SUBJECT/S: Budget 2015
CHRIS UHLMANN: I'm joined now by the Opposition's financial spokesman Tony Burke, and I'm assuming you're one of those less than happy with this Budget?
TONY BURKE, SHADOW FINANCE MINISTER AND MANAGER OF OPPOSITION BUSINESS: We've been presented tonight Chris with a Budget that fails the tests Joe Hockey put forward for the Budget and fails the tests we put forward for a Budget. Joe Hockey said the test is that they're getting debt and deficit down. Tonight, Australia's debt is now higher than it's been at any other point in Australia's history and the deficit, on Joe Hockey's own numbers, has doubled from a year ago. Added to that, the rule they said they'd put in place that each year there would be more Budget repair than there would be Budget spending, they've broken that in this Budget in their own documentation as well.
UHLMANN: Let's accept that all of that is true and, in fact, it's difficult to argue with that analysis of this Budget. But if you were in government you would increase spending, you’d give more spending to health and education for example, another $80 billion, so where would the credible path back to surplus be for you?
BURKE: When I say they've failed both tests, I think it's important we deal with both. On the tests that Joe Hockey and Tony Abbott have put forward, this Budget fails those. On the tests we've put forward, you have to include a key test of fairness, and when you deal with Budget repair, at the last Budget when you were dealing with retirement income, their approach was to have an effective cut in the aged pension by reducing the indexation rate. Our way of dealing with fairness in terms of retirement incomes is to have a look at high income superannuation tax concessions. So you're still dealing with the retirement income space, but you're dealing with it in a way that targets the revenue from people who can most afford it.
UHLMANN Let’s pick up there. Again, both of those things do need to be looked at, don’t they? You need to look at those upper end concessions to high-income earners, but don't you also need to look at where the pension actually starts to cut out for people? Surely once you get to owning your own home and having assets in excess of $1.1 million the pension should be gone for you?
BURKE: We haven't ruled out looking at that when the Government presents the detail. Tonight they present the Budget numbers with everything except multinational tax, where they present asterisks instead. But tonight they present the broad policy. On a lot of these issues we need to work through the detail to make sure that it matches up with what they’ve in fact said.
UHLMANN But that something you're prepared to have a conversation about, pensions?
BURKE: We'll work through the detail on that, absolutely. We flatly ruled out and ruled out right at the beginning a year ago the concept that you would cut the indexation rate meaning in ten years' time it was effectively an $80 a week cut to the age pension.
UHLMANN I think there’s a full retreat on that one. What about the child care and the child care package that you’ve seen from this Government, is there anything in that that appeals to you?
BURKE: We've been broadly positive about the child care package itself. Once again we want to see the detail, but we don't accept for a minute the savings measure that they've chosen to attach to it. They've chosen, rhetorically at least, possibly more when the legislation comes in, to say the only way the child care package will go forward is if we go ahead with their cuts to families from the last Budget. It's hardly saying let's improve the situation for families by taking in the order of $6,000 a year off a typical family. So the benefits of the child care package evaporate very quickly if you insist, as their rhetoric sort of does at the moment, that it would have to be linked to the cuts to family payments in last year's Budget.
UHLMANN: You're Shadow Finance Minister, it's possible that you could become Finance Minister by late next year and these problems could become your problems. The Budget at the moment has 35% of its spending aimed at welfare. That's going to grow by 16% over the next three years. Those are big numbers, is that sustainable spending and where would you make cuts in that?
BURKE: We've been taking a responsible look at what that Government puts forward on these issues. Last year for example, while there were a large number of measures we opposed, there was also more than $20 billion worth of measures we supported the passage of through the Parliament. One of those is in the exact area you referred to, which reduced on Family Tax Benefit the cut off rate from $150,000 down to $100,000. When there's a sensible way of dealing with these issues then we're there for that conversation. Mind you, it's been the exact opposite from the Government. When we've put forward a revenue measure that would improve the Budget bottom line, be it on high income superannuation or on multinational tax avoidance, the Government has said they'll have nothing to do with it. We had Joe Hockey today in his Budget speech thumping the lectern saying there'll be no changes to superannuation under them. You can't have a situation where these concessions are getting closer and closer to the total value of the age pension itself.
UHLMANN: Can we have a look at the business side of the equation, the jobs and business package was the other part of this $5.5 billion being spent. They are reintroducing some of the asset write-offs they got rid of. What do you think about tax cuts to small businesses and the way that's being run out and this idea you can write off up to $20,000 not just on one purchase, but on unlimited purchases between now and 2017?
BURKE: Both of the measures they've had on small business are eerily similar to issues that we've previously put forward. We'll look at the detail, but we're generally supportive of what they've put forward there. As we work through the detail that's the lens through which we're viewing it. The principle of allowing a small business to be able to have rapid depreciation rather than having to do it over a long period of time helps significantly with cash flow. From the business's perspective it's a deduction that over time they were going to get anyway and makes sense. The Government abolished it last year, if they're reintroducing something similar this year where they've budgeted for a higher amount but over a briefer period of time, so the cost to the Budget is roughly similar, then that's something we're broadly supportive of. In terms of the tax cut itself, we put forward a cut to the company tax rate in the order of about 2% when we were in government. The now Government then Opposition voted with the Greens to stop that going ahead. If they're now willing to let that through in part, only applying to small business, but still in part, that's something we'd be broadly supportive of.
UHLMANN: Is it clear how it's going to work? You'll have businesses up to $2 million who will get that tax cut, but it doesn't appear to be tapered, then above that number, then you'll have businesses paying 30% company tax rate, you would think perhaps people might start structuring their businesses around that kind of figure?
BURKE: And the legislation will have to have a keen eye to that. I presume the Government is across this. They've been talking it up for a while that they wanted to head in this direction. You want to make sure on any measure like this that the people you’re assisting, if it's a small business measure, are in fact small businesses. You don't want people structuring their companies for the purposes of turning themselves into small businesses.
UHLMANN: You've been around politics for a long time, does this Budget have an election whiff about it to you?
BURKE: Certainly the rhetoric around it does, but the key to this Budget is the main criticisms of the last one are actually still there. They're not there in print, but they're behind the numbers. So behind the numbers that they're putting forward you still have the $100,000 university degrees. Behind the numbers they haven't walked away at all from the cuts to family payments. In fact, they're wanting to reinforce them. You referred earlier to the cuts to schools and hospitals that are now appearing in the forward estimates for the first time, even though we've had a year of the Prime Minister denying that those cuts ever existed. So a whole lot of the challenges of that last Budget are still there. So in terms of our test, the Labor test of fairness, does it cut that way? Absolutely not. But on the entire story that the Government has intermittently told about debt and deficit, it fails dismally.
UHLMANN: Tony Burke, Shadow Finance Minister, thank you.
BURKE: Good to be back.