TUESDAY, 12 MAY 2015

SUBJECT/S: Budget 2015

FRAN KELLY:  Tony Burke welcome to Breakfast.


KELLY: Jobs and families will be centre stage tonight. We know that when Joe Hockey stands and delivers. Does it look to you like the Government is handing down pretty close to what might ordinarily be called a Labor Budget?

BURKE: Not for a minute. The first thing I think is worth noting is exactly the way Josh Frydenberg finished that last interview. When you asked him about the measures they’d apparently ditched, he described it as being ‘unfortunate’. I think that really tells the truth measures they have temporarily parked, they still believe in. They still believe in bringing back a GP Tax, they still believe in cutting the pension indexation rate…

KELLY: Well he just said they’re gone. He said those two measures are gone.

BURKE: He said it was unfortunate…

KELLY: No, he said they were gone. He said the higher education changes are still there.

BURKE: That’s right, the higher education changes. In terms of tonight’s Budget, they won’t appear. But be in no doubt, the first chance this Government gets, they’d bring them back because they are things they still believe in. Now on tonight’s Budget, when you talk about the measures that are there, they have continued to link measures that will be announced tonight that are spending measures to measures that were in the last Budget; the $6,000 cut to family payments, that remains even though it won’t be in the Budget papers tonight. It remains a critical part of the story of tonight’s Budget. 

KELLY: Well we know they’re relying on that to fund their child care changes.

BURKE: That’s right. They’re double counting the money because they also claim they’re relying on it to be able to bring down deficit, and you can’t spend the same money twice. When they announced a child care package tonight, the $6,000 cut to family payments is 100% part of that. The other thing with tonight is the process they’ve gone down has been absolutely bizarre. The way they’ve now argued paid parental leave is something where we’ve been asked to do a complete backflip from being told by this Prime Minister that current paid parental leave is woefully inadequate, to now being told its either double dipping or, as described by one person yesterday, close to fraud.

KELLY: So is that going to be your narrative tonight? That the Government’s got mixed messages here, rather you moved off unfair because clearly it is fair to be giving more people more money for childcare and more small businesses tax breaks isn’t it?

BURKE: Well it’s hardly fair to be cutting families $6,000 that’s part of what…

KELLY: Just on that, the Opposition won’t support cutting off the Family Tax Benefits, particularly the element when the youngest child turns six. If that element is gone, and there are clear signs the Government might be prepared to negotiate that element, would Labor support it?

BURKE: On anything we have a look at package in its entirety. The thing that was interesting yesterday when the Prime Minister put these issues up for negotiation, is effectively he’s willing to ditch parts of the Budget as the Budget goes to the printer. In terms of any level of certainty or confidence from the Budget to be delivered tonight, I’ve never seen a situation where the Government starts to open the liquid paper before they’ve even released the document.

KELLY: Yes, but as I said to Josh Frydenberg, let’s get real here for a minute. This Government has to deal with the crossbench in the Senate to get many of its changes through. It was criticised last time for not doing the talking and just coming out with extreme measures that then had to be explained. Is it any wonder it’s starting to negotiate with people?

BURKE: Well they’re offering Plan B before they’ve even revealed exactly what Plan A is. I presume we’ll go through, the way the narrative from this Government is changing by the hour, we’ll be at Plan Z by the end of the week. But wherever the plan goes it won’t be a plan for Australia. All we’re seeing is a political plan to save the jobs of Tony Abbott and Joe Hockey.

KELLY: It’s eleven minutes to eight on Breakfast. Tony Burke is the Shadow Minister for Finance and the Opposition’s Manager of Business, joining me in the Parliament House studios. There’s nothing political in terms of the small business tax cut is it? It’s almost exactly what – the package as we’re lead to believe it will be and we haven’t seen it and Josh Frydenberg wouldn’t help us out. But one of the newspapers suggests that the 1.5 per cent cut to tax for small business is going to be extended to another 1.7 million unincorporated tradies, partnerships, that kind of thing, presumably in the form of tax deductions, which is exactly what small business have been wanting.

BURKE: Today’s papers imply its exactly what the Government abolished twelve months ago. We had in place instant asset write off and the loss carry back provisions. Those provisions made sure you have a way of helping small businesses that are not incorporated. One of the concerns the small business lobby has made in the lead up to this Budget is if you deal with the company tax rate only, then you deal with a large number of small business, but a minority of them because most are not incorporated. What they’ve flagged in the papers today, which we’ll wait and see the detail tonight, means that we may well see Labor policies that were abolished in the last Budget being reintroduced. If that’s what happens then obviously we’d support that. But they’re not going to get a thunderous round of applause if all they’ve achieved is to cause small business harm for the 12 months in the middle.

KELLY: Will they get a thunderous round of applause if they do go after multinationals that avoid paying their fair share of tax in this country? You have a different plan on the table, but the same goal.

BURKE: I don’t know what Joe Hockey announced yesterday. It was extraordinary to have the day before the Budget a taxation policy announced and he says he’s going to keep the number secret. How anyone’s meant to weigh up exactly what he’s putting on the table when he won’t give any indication of how much revenue it’s going to raise is beyond me.

KELLY: Well Josh Frydenberg made the point that Labor had a mining tax out there and it budgeted several billion dollars income from it, it made only a couple of hundred million dollars in the end. He said isn’t it better not to stipulate what you’re unsure of, rather than put in the Budget something you can’t deliver.

BURKE: All projections vary according to a whole lot of factors, but if that was the argument we wouldn’t bother delivering a Budget tonight. The only reason we have a Budget is you take the best advice from Treasury and you let the Australian people know what the intensions are. To have a multinational taxation measure, which, by all means, is probably a good thing, but to not let us know how much revenue is going to be there and to use the argument that ‘oh the numbers might change’, if that’s the argument there would be no Budget tonight. Nothing would be printed.

KELLY: But is it a good idea and do you think that you can count on, we can all count on, the ATO to go after these multinationals, identify the amount of tax they haven’t paid and make them pay it back 100 per cent?

BURKE: The concept is one we’ve been advocating for months. We have a fully costed policy out there on dealing with multinational tax avoidance. Over the decade it raises in the order of just over $7 billion. Now that’s out there from us. If the Government’s doing something similar, good. But no one would have a clue what the Government’s doing if they’d listened to Joe Hockey’s media conference yesterday.

KELLY: Well if we read one of the newspapers today we also get a clue that he deficit tonight will be less than had been projected. Economists telling us it should come in around $45 billion, looks like it could come in under $40 billion. The Government’s getting some luck going its way – or good management?

BURKE: Well there’s a number of parameter variations that will have a big impact on this number. We always talk about the iron ore price, but there’s a number of commodity prices that play into this. You’ve also got the unemployment figures and you’ve got the growth figures. Now exactly how they play out will be a significant swing factor in what the deficit is tonight. Whatever it is, it will still be true that the net debt figure that is released tonight will be the highest debt figure in the history of the nation.

KELLY: Just finally Tony Burke, would $10 billion worth of spending directed primarily at families and small businesses. How much harder will this Budget make life the Labor and for Bill Shorten? You can’t just cruise along on the back of a bad Budget like you did last time.

BURKE: What we’ve been doing is making sure that our principle of fairness is understood. Last year we conveyed that principle fairness by what we were willing to stand up and oppose…

KELLY: Tony Abbott’s embraced the term this Budget.

BURKE: You know that’s right, but it’s not something you buy on eBay. You don’t just pick up the term, do a few clicks, say it a few times and people believe it. As long as the policies that you advocate and you believe in and, you know when you ditch them you describe it as ‘unfortunate’, as long as you believe in policies that can hurt the people that can afford it least, that’s not fairness.

KELLY: Tony Burke thank you very much for joining us.

BURKE: Good to be back.

Tony Burke