ABC AM (2)

19 December 2017




SUBJECT/S: MYEFO; Liberals jacking up taxes on seven million Australians; Banking Royal Commission


KIM LANDERS: Jim Chalmers is the Shadow Finance Minister and he joins me from Canberra. Jim Chalmers, good morning.


JIM CHALMERS, SHADOW MINISTER FOR FINANCE: Good morning Kim, how you doing?


LANDERS: Well, thank you. The Government is hinting at personal tax cuts for low- and middle-income earners next year. Does Labor back that idea?


CHALMERS: They've been talking about personal income tax cuts at the same time as they've got legislation in the Parliament which will actually jack up income taxes for seven million Australian workers. That's really the centrepiece of the Budget update that was released yesterday. What the Government expects is for the Australian people to stand and applaud a Budget update which smashes middle Australia with higher taxes; which showers the top end of town with tens of billions in tax breaks and, at the same time, we've got record and growing debt. So I think the Australian people take a pretty dim view of this talk about tax cuts at the same time as the Government is actually jacking them up.


LANDERS: You've heard the Treasurer say that's his job, he's going to try to deliver those tax cuts. Now, for a lot of Australians trying to make ends meet over Christmas time, surely that would be welcome news that the Labor Party should support?


CHALMERS: What would be welcome news is if the Government abandoned their tax hikes for people earning up to $87,000 a year. That would be welcome news. It would be welcome news for people who are entitled to penalty rates, if they had them restored. All of these sorts of things are what is putting pressure on family budgets - stagnant wages, high household debt; all of these sorts of things. When you look at the Government's policy suite, they're really part of the problem and not part of the solution when it comes to that financial pressure.


LANDERS: You talk about wages there. This Budget update makes it clear that wages growth is still going to be sluggish. What would Labor do to help Labor get a payrise?


CHALMERS: The Budget update actually only tinkers slightly with those very high forecasts for wages growth, which haven't been realised in this country.


LANDERS: Low forecasts.


CHALMERS: The forecasts for wages growth have been slightly lowered, but not sufficiently lowered. The reality for most people out there in the community is that their wages have been very stagnant and that's why we've got such low household consumption. The first step from a Labor Party point of view is we want to see penalty rates restored. The Government should not be attacking, as they are, the people who work on weekends and are entitled to that extra money. That would be the most important thing we could do to take the pressure off wages in the near term.


LANDERS: The Finance Minister Mathias Cormann says the only way workers are going to get higher wages is by business being more successful and more profitable, so why not help pass the Government's company tax cuts?


CHALMERS: It's just a laughable argument, Kim. This is the worst version of trickledown economics, which has never worked around the world and is not working here. This is the centrepiece of the Government's economic strategy. They think, wrongly, that if you give $65 billion to multinational corporations and the four big banks in this country, that miraculously they will employ more people and pay higher wages. It's a joke, and the Australian people reject that kind of trickle-down economics. The Budget update yesterday really had, at its core, those tax breaks for the top end of town, alongside those tax hikes for seven million people in middle Australia who work and struggle.


LANDERS: If we look at the higher education sector, will Labor vote for the legislation that's going to be needed to lower the repayment threshold for student loans to $45,000?


CHALMERS: That's a new cut obviously to higher education in this country and what we've said about all of these measures is that we will have a proper look at them, a proper discussion about them internally.


LANDERS: Have you formed a view on that yet though?


CHALMERS: Our view, as Tanya Plibersek and Terri Butler and others have made clear, is that we're not for anything that limits access to higher education in this country. I think one of the things that we could be proudest of in the Labor Party is that we want to turbocharge opportunity in this country and not curtail it.


LANDERS: Specifically on that measure to reduce the level for student loans having to be repaid, would you support that?


CHALMERS: We'll consider it and discuss it internally, Kim. But we'll look at it alongside those principles that I've just outlined.


LANDERS: Something else that was in the mid-year Budget update was making migrants wait longer before they're eligible to access welfare payments. It that something that would have Labor's support?


CHALMERS: Again, we try not to pre-empt our internal processes, Kim. But we've made it very clear in the last 24 hours that we take a very dim view of measures in the Budget update which pick on the most vulnerable people in our community, particularly when you set them alongside those tax cuts for the top end of town. So we'll go through our processes on that one as well. But we are not generally in the cart for asking the most vulnerable people in our community to carry the heaviest burden for the Government's fiscal failures.


LANDERS: If I could ask you about something else, the Royal Commission into Australia's banking, superannuation and financial services industries is now officially underway. The final report is due earlier 2019. That's an election year. If Labor is elected, would you guarantee to implement all of the recommendations?


CHALMERS: We'd have to see what all of the recommendations are, of course. But I think what the Government is doing is they're showing all of the signs of a Government who doesn't actually want to get to the bottom of these serious issues and allegations and scandals in our financial system. By sneaking out the appointment yesterday during the mid-year update; by only appointing Commissioner Hayne over a 12-month period when there's so much work to be done which could be assisted by multiple commissioners; the fact that they've engaged in this political and ideological frolic against industry super funds - all of these things point to a Government which is not serious about getting to the bottom of these issues. They've described a Royal Commission as "regrettable", their heart's not in it. Our heart's in it. We want to get to the bottom of these issues. We're serious about implementing what comes out of the Royal Commission, but we won't pre-empt what those recommendations might be.


LANDERS: Jim Chalmers, thank you very much for speaking with AM.


CHALMERS: Merry Christmas, Kim.


LANDERS: And to you, too.