2GB/4BC Nights

09 May 2016


MONDAY, 9 MAY 2016

SUBJECT/S: Superannuation Budget Measures; Schools Funding; Revenue and Savings Measures

STEVE PRICE: Fifteen minutes past eight o'clock. It is going to be a long campaign. We will talk in detail about it. I teed off on the superannuation changes last Thursday. I think we were ahead of the pack on that story. There are some real problems for the Government with those changes with their base. Jim Chalmers is the Shadow Minister for Financial Services and Superannuation. He's been good enough to join us. Thanks for your time.


PRICE: Good thanks. You were a former chief of staff to a Treasurer. Has Scott Morrison made a stretch too far in these super changes and will the Labor Party rule out the retrospective aspects of those changes?

CHALMERS: Well it looks like he has made a bit of a mess of it and I think you're right to claim that you guys were on to it pretty early.

ANDREW BOLT: Flattery will get you everywhere Jim.

CHALMERS: Well you were right. You were out there on Budget night saying that people would be pretty dark about the retrospective nature of some of those changes and you've been proven right. That's certainly the feedback that I get out in the community and certainly from all the stakeholders, that while a lot of people support cracking down and targeting some of those tax concessions at the top end, they do worry about the retrospective nature of some of the changes. We've said that we're looking very closely at what's been proposed. It was a pretty significant set of measures announced on Budget night, so we're in no rush to come to a final view. But we have said that the thing that troubles us most is that retrospectivity. So we're talking to people and consulting with people and then we'll come to a final view.

BOLT: But Jim, they had former New South Wales Labor Treasurer, Michael Costa, on a TV show tonight and he said he'll endorse everything you just said, obviously, but he went on and said 'on the other hand there's an element of retrospectivity in your policy too' in that people would have made their arrangements and their judgement of what to spend, to defer and to put into super, and now they too will be taxed above, what's your figure, $75,000, when they might have expected it to be tax-free? So there's an element of retrospectivity there too. What's the difference?

CHALMERS: I've heard that argument, Andrew, and Michael is entitled to his view of course. But what our policy does is it taxes future earnings -- earnings from next year over $75,000 a year -- which means you've got to have a pretty big balance. But it's about future earnings. What the Turnbull-Morrison policy does is it forces people to take money out of their super that they've already put in there and it also backdates one of the other measures to 2007. So it's the very definition of retrospectivity when you're backdating measures back nine years and forcing people to take money out that they've put in. So I think there's a world of difference. I've heard that argument before, I don't dismiss any of those arguments lightly but I don't agree with it.

PRICE: We've had people, Jim, that have made financial decisions in the past month that are going to be caught by the changes Scott Morrison has announced. I mean you've got transition-to-retirement pensions which currently, if people draw down the minimum four per cent they need to draw down a year then any earnings of that fund are tax-free. Suddenly, Scott Morrison comes out and says that we're going to completely change that, you'll pay fifteen cents in the dollar on every dollar earned. I've even seen that Jim, mis-reported by papers like The Australian and The Fin Review of all people -- they don't understand it. Does Scott Morrison, do you think, actually understand superannuation?

BOLT: What a leading question, Steve!

PRICE: It's a very genuine question, Andrew, because--

BOLT: Jim, is Malcolm Turnbull a terrific Prime Minister, really?

PRICE: Hang on, I firmly don't believe Scott Morrison understands super.

CHALMERS: I think what's happened here is he's been given a menu of options that he hasn't really taken the time to get across and he's said yes to all of them. The best evidence of that is the two days after the Budget was handed down he was asked over and over again, including by us, about the retrospectivity and denied that it was there at all. I mean, you and I and everybody knows that there are retrospective elements to this policy. It's a bit embarrassing that the Treasurer didn't understand that when he announced it.

BOLT: Alright now, free kick over. You know, I have to be honest, what alerted me to this being a real problem, apart from Steve, was that the Liberals were proposing a raid on super, on rich fat cats, on rich people, all the sort of things Labor is campaigning against and you said 'no'. And I thought, gosh, if Labor won't accept this part of loot that they could have, there must have been something dodgy about it. That gets me to the question. Don't you need to enhance credibility with sceptics like -- well, maybe I'm beyond reach, I don't know -- but you've got to put some savings, real savings cuts, not tax hikes, savings cuts on the table to prove that the old days of tax-and-spend that was Rudd and Gillard, this is a new Labor Party?

CHALMERS: I certainly agree with you, Andrew, that we need to come up with not just revenue measures but savings measures. And you would have seen, as others would have seen, in Bill Shorten's very good Budget Reply that we had a spending cut there --

BOLT: That was of --

CHALMERS: Some of the rorting at the top of the vocational education system.

BOLT: That was one and in part, it was an easy go because it fits in with you not liking private schools or private colleges, wanting state things. That's fine. I'll accept that one. But I'm talking about middle class welfare.

CHALMERS: I won't let you verbal my view on private provision. I think everywhere there will be a mix of those things. I'm certainly someone who believes in a mix. But anyone who's looked at those knows that there's an issue with some of the private providers and if we can trim what happens there in terms of Government funding, that's a good thing. But there's a whole range of other savings, Andrew, that don't get well-publicised. Things like, we're not into the new baby bonus that the National Party imposed on Malcolm Turnbull. We said we'd cut that. We're not into Direct Action on climate change. There's a whole range of savings.

BOLT: Then you're going to give us a carbon tax. I'll buy you on the baby bonus. I'll see you on the baby bonus and raise you family benefits.

CHALMERS: Well I think some of the things that the Government is doing on family benefits is pretty unfair given there's a $49 billion tax cut for big businesses at the same time as an average family loses $4,500 a year. I don't think that's fair.

BOLT: I know that but the money's running out Jim and all that I'm hearing from Labor-- I'd like to give you a go, but all I'm hearing is tax, tax, tax apart from the couple of spending cuts you're mentioning. I'm just wondering, for credibility, wouldn't it be great if you had spending cuts as well? Are you going to announce more than you revealed to date before you get to vote?

CHALMERS: We do have a bunch of spending cuts on the table, but I think it is--

BOLT: Not revenue-raisers.

CHALMERS: Let me finish, Andrew. I think it's fair to say that the job of repairing the bottom line in a fair way is never done. We're always on the lookout for ways not just to improve the revenue side of the Budget, but as you rightly say, to look for where spending can be better targeted. We've been on the case there for the best part of three years -- people like Chris Bowen and Tony Burke and Bill himself deserve some credit for that effort. It's been a long time since an Opposition has put as many savings on the table as we have, and I think that people are recognising that we have made a genuine attempt to fix the Budget, but to fix the Budget in a way that's fair.

BOLT: And more to come.

PRICE: I want to ask you a funding question. Bill Shorten at a school in Cairns today, kept talking about education funding. Simon Birmingham's office, the Education Minister, says the Government is not cutting education funding. Where's the truth in this?

CHALMERS: Well the truth is the Abbott-Turnbull Government has pulled thirty billion dollars out of schools funding and then put a billion dollars back in and want to be applauded for it. So they've got their candidates running around saying 'look we've jacked up education funding by a billion dollars, pat us on the back'.

PRICE: But as the architect of part of that education money, you know that it wasn't really there. It's money that never really existed.

CHALMERS: Well it was money that was budgeted for Steve. I don't accept that characterisation. It was budgeted for. It's probably, in my view, the most important thing that we can invest in federally. It wasn't that long ago that Malcolm Turnbull flagged the federal government getting out of funding State schools entirely. So I think you take from that policy proposal, which thankfully didn't last very long, that they're not serious about funding schools. And Birmingham and his office and his colleagues can say all they like --

PRICE: Well they say that they're going to grow funding from $16 billion in 2016 to $20.1 billion in 2020. That's a growth in spending not a retraction, isn't it?

CHALMERS: That always happens, Steve. The funding as the population grows and there's inflation and all of those sorts of things. The reality is that we had a fully-funded Gonski plan in place when they came into office, they wound that back--

BOLT: It wasn't fully-funded, Jim. Come on, it wasn't funded.

CHALMERS: It was funded. And it's fully-funded again. And if we're elected, and when we're elected, we will implement Gonski in full, we will reverse those cuts because we think that's more important than $49 billion in tax cuts straight on to the bottom line of the biggest companies in Australia.

PRICE: The thing about this election, I mean, I think the audience listening to us on the fifity odd stations we're talking on now, they hear you say it was fully-funded and the money was there, they hear the Government say it wasn't fully-funded, the money wasn't there. Stuck in the middle are little kids who want to go to school and have decent teachers. Aren't people sick and tired of this sort of stretching the truth and shifting stuff around? Don't people deserve in an election campaign the facts?

CHALMERS: Of course. And the feedback that I get Steve, and you probably get with your talkback callers, is people are sick of politics as usual and they want to see their kids get the opportunities and the chances and the teachers that they deserve and that's what we're on about.

BOLT: Sorry I'm still stuck on more and more taxes, and I'm not seeing the spending cuts to match.

CHALMERS: I wondered why you'd gone quiet Andrew!

BOLT: I was hoping, because you know what, people always criticise me of interrupting all the time, and I was trying to give you a red hot go so I could jump in and say Jim, Jim, the spending cuts, you said there'd be more. What are they going to be? Are they going to be big cuts, are they going to be small cuts? Are they going to be cuts substantial enough to say, listen you guys are serious in a way that you haven't been in so many years.

CHALMERS: There are two points I made Andrew. One is more savings on the table than any Opposition I can think of--

BOLT: No, no. I'm talking-- you said that one, I'm talking from now on.

CHALMERS: The second point I made which I was getting to is that the job of repairing the Budget in a fair way is never done.

BOLT: I could say that too.

CHALMERS: Well you should, because it's true.

BOLT: I want to know if you'll have spending cuts of any size, a substantial size, between now and election day so that we can say 'my goodness, these guys do get it, and maybe the Budget bottom line will even be better than what the Liberals are promising'.

CHALMERS: I think you should already be saying that these guys get it.

BOLT: I'm not. We need to know-- but anyway...

PRICE: We appreciate your time. When will you announce your formal reaction to the super changes, Jim?

CHALMERS: Well Chris Bowen is giving a speech tomorrow at the Press Club. I'm not saying we'll announce our formal and final view on the super changes, but I'm sure we'll have more to say about it--

PRICE: I can tell you it's a vote-changer.

BOLT: I can tell you too, Jim. I was button-holed by someone just on the way to this studio about that just this morning. I think people are red-hot.

PRICE: A vote-changer, Jim. I appreciate your time, thanks a lot.

CHALMERS: Thanks very much fellas.

PRICE: Jim Chalmers there who is the Shadow Minister for Financial Services.