SUBJECT/S: Budget 2015; The Government’s Unfair Cuts to PPL; Budget in Reply 2015.

KIERAN GILBERT: With me now is the Manager of Opposition Business and Shadow Finance Minister Tony Burke. Mr Burke thanks very much for your time. Quite a reaction, on the market at least, when it comes to the retailers.

TONY BURKE, MANAGER OF OPPOSITION BUSINESS AND SHADOW FINANCE MINISTER: That’s right and this is the reason why we came out in support of the broad measures that are there in the small business package right from Budget night on. This hopefully, and hopefully the Government manages it competently, hopefully this does provide a significant benefit. Not just to small business directly, but to the economy as a whole.

GILBERT: So no problem at all with this package, it’s funding and so on, you’re going to back it 100 per cent.

BURKE: Well with any package you’ve got to wait, you want to see the legislation and so you’re not going to give your final tick-off. But we’re well and truly inclined to support it from what’s been described. What’s been described are measures we would support so long as what comes through in the legislation ends up reflecting what the Government’s announced.

GILBERT: Very different from last year Budget isn’t it in terms of the optimism around elements of this Budget and specifically that $5.5 billion small business initiative.

BURKE: Yeah, that measure is quite different. A whole lot of the last Budget is still there. So, you know the higher education cuts, the cuts to schools and hospitals, the cuts to family payments, they’re all still there. What’s there with small business, effectively what the Government is doing, particularly when you see they’re blowing out the deficit at the same time, is they’re now running an argument to use debt to build growth in the economy. Now, let’s hope it works. It is worth noting it is the exact opposite of what they’ve argued for the last four or five years, but we want this to work and so we’ve been willing right from Budget night to say that we’re inclined to support those small business measures.

GILBERT: Now Labor’s set to block the Government’s efforts to end this parallel use of maternity leave schemes where someone in the corporate sector or public sector can access either their employers scheme and the Government scheme, not either or but both and run them back to back?

BURKE: Can I explain why they’re not strictly parallel and it’s a point of detail, I’ll do it as quickly as I can. The Government scheme is there to provide up to 18 weeks of paid parental leave, we introduced that when we were in office. A whole lot of employees and employers have said ‘we’d like to be able to offer this,’ would like more than 18 weeks to be able to stay with a new born child and have negotiated to be able to get additional time, paid, with a new born child; that’s not double dipping. That’s a negotiation to say we want to spend longer with a new born child and have forgone other things like pay rises to be able to get that agreement. What the Government is now doing is saying: ‘Well if you’re trying to get longer than 18 weeks, we’ll take the 18 weeks away’. That undermines the negotiation where the employees given away other things and for an employer who’s wanted to provide extra benefit it’s taken away. That’s why employers, including here on Sky News where I heard Kate Carnell, have said: ‘well if you go down this path employers will start with drawing a benefit because it’s not actually reaching –

GILBERT: So what would you say to tax payers then who would be concerned and that the Prime Minister and other making this point that they shouldn’t have to subside an enhanced paid parental leave package for some individuals, whereas others will only get the minimum wage?

BURKE: Well the first thing if you look at it purely from a tax payer point of view, this is likely to provide very little benefit to the tax payer. For the one simple reason: if employers respond as they’re saying they will and withdraw the benefit, then everyone falls back on the Government scheme anyway and the only outcome you get is new parents, usually mums in this instance, are in a situation where they end up getting less time than they would have wanted with a new born child. It doesn’t help the bottom line if employers withdraw, employers don’t get what they wanted in terms of offering an additional benefit and employees –

GILBERT: The Government says it’s going to save a $1 billion.

BURKE: Yeah and they’ve presumed that employers won’t behave this way. Employers have been out there saying: ‘Why would we spend money to provide a benefit that provides our employees with nothing because the Government does a matching withdrawal?’

GILBERT: So given you do support what some elements of the reforms the Government is putting up, like the child care changes, or at least you sound sympathetic to those changes, is Labor proactively and are you as the finance spokesperson proactively looking for commensurate saves you can put up and say ‘here’s an option, follow this line as opposed to cuts to family payments, changes to the PPL,’ and therefor you’re not accused of being fiscally reckless in saying ‘ok we support the good stuff but we won’t cop any restraint.’

BURKE: We’ve already put forward more than $20 billion worth of improvements to the Budget bottom line with both multinational tax avoidance and dealing with tax concessions for the highest income earners when it comes to superannuation. The Government on superannuation, yesterday and the day before, completely ruled out having anything to do with those savings with superannuation. On multinational tax they’ve said they’ve got their own idea, you look at the Budget papers and how much is that helping the Budget bottom line? There’s an asterisk, they haven’t even bothered to get the Treasury…

GILBERT: For self-funded retirees that would be quite a potent argument, message, from the Government wouldn’t it? To say ‘we’re not going to touch super, we won’t this term and we won’t into the future.’ That’ll be quite a potent and easy message for the Government to articulate?

BURKE: It’s easy and it’s economically irresponsible. Let’s not forget superannuation concessions are getting to the point where they will cost the Budget more than the Age Pension. That is the trajectory that they’re heading on. To have a situation where somebody is on an income of $250,000, surely they don’t need the same level of tax concession as someone on a much lower wage. They’re the sorts of measures Tony Abbott and Joe Hockey have irresponsibly ruled out, knowing full well it would do the exact job this Budget needs.

GILBERT: Finally, the Budget In Reply tonight. Bill Shorten in the minds of many remains undefined as a figure. He’s still got a lot of work to do in that sense. I guess, what should we expect from him tonight? A year of ideas, will he have some more ideas or is this just going to be having a crack?

BURKE: Every time I hear a member of the Government being interviewed, they always want to talk about the past. Tonight you’ll hear Bill Shorten talking about the future. If Australia as we know is going through a fundamental transition, then we need to make sure we’re in front of the game on what does Australia look like in 10 – 20 year time and how do we do the training and the preparation right now to position Australia for that next wave of strength.

GILBERT: Mr Burke, I appreciate your time.

BURKE: Good to be back.

Tony Burke