ABC RN Drive (6)

23 January 2018




SUBJECT/S: Party reform; Turnbull’s $65 billion tax gift to multinationals; Liberals jacking up taxes on middle Australia; immigration; citizenship


PATRICIA KARVELAS: Jim Chalmers, welcome to RN Drive.




KARVELAS: Good. If your National President is describing the inner machinations of the party as "backroom buffoonery", what does that say about the state of the ALP in 2018?


CHALMERS: I don't think I necessarily share that assessment of the Labor Party, Patricia. I think we can always be more inclusive and we always want to be a bigger, more effective party and we've all got a part to play in that. But we've grown by something like 15,000 extra members since Bill Shorten became the leader. I don't think we've ever had more opportunities to participate at the rank and file level. We elect a leader now. We elect a National President. In a lot of states, they elect the Senate candidates, so there are a lot of avenues for people to participate. We can always do better. We can always be more transparent and inclusive, but we've done some pretty good things over the last little while. I think most of all, certainly the branch members in my part of the world, what they care most about is that we're putting forward a good policy offering and we're definitely doing that.


KARVELAS: I think there's no doubt that people want to make sure that the policies are right, but I suppose the candidate selection is so crucial to all of that in terms of the people that are allowed to make those policies and discuss that. So what has your experience been? Is buffoonery an accurate description of how Labor can sometimes choose its candidates through these pre-selection processes. There's a seat Mark Butler mentions in Melbourne that apparently has a candidate, but we don't have a seat yet.


CHALMERS: I wouldn't share that assessment that Mark's made. I've got a lot of respect for Mark and it's up to him to make those kinds of comments. I wouldn't necessarily share them. My experience...


KARVELAS: But do you share - I'm going to have to interrupt here - do you share the view that it's a little odd to know your candidate before you've even got your seat?


CHALMERS: I'm not aware that's the case down there. I've got enough on my plate in the Finance portfolio, and minding the shop for Chris Bowen at the moment as well while he's in India, all these sorts of things. I've got heavy participation in my part of the world. I'm not aware of that Melbourne pre-selection. My experience,  including own case - my pre-selection was very willing, very democratic, and we got through the other side of that. A lot of people have had that experience. We're about to go through some pre-selections here in Queensland too. So I think overwhelmingly ours is a very democratic party. We can always do better, always be more inclusive, but I think we've taken some pretty good steps in the last little while. This is my 21st year in the Labor Party and I think at this point we're more democratic than we have been at any other point in that 21 years.


KARVELAS: Do you think more change is needed?


CHALMERS: I'm open to more change, definitely. From time to time, at national conferences and state conferences and other opportunities that people have the opportunity to put forward their view, there are proposals made and we evaluate them on their merits. That's how we came to elect the National President, which is the job that Mark has, as well as the proposal from Kevin Rudd there’s

Now a membership component of electing the leader, Senate candidates and all those sorts of changes. That's a good way to do it. We evaluate those proposals as they come before us, but I think overwhelmingly we've done some good things. We shouldn't be too down on ourselves. We're certainly far more democratic than all of the other parties and that's been rewarded with a big increase in membership under Bill Shorten.


KARVELAS: UK Labour increased their primary vote by 10 per cent at the last election, mostly by tapping into the youth vote. Is that a template for what the ALP should be doing here?


CHALMERS: I don't generally accept that you can transplant one country's conditions and strategies onto another country, but certainly we need to find ways to excite, empower and engage younger voters. I think there's a bit of that going on at the moment, partly because they know what Malcolm Turnbull wants to do to universities and schools and all of those sorts of things - issues that are very important to young people. So I think we need to energise and engage them. We don't necessarily need to try to photocopy a strategy of another country and another party.


KARVELAS: I want to move to the other issue that you're talking about quite a lot at the moment and that's these tax cuts. The Treasurer and the PM say that cutting the company tax rate from 30 to 25 per cent at a cost of $65 billion of corporate tax cuts will equal more jobs and wages growth. You're contesting that, but the Treasurer's said Labor's made this argument for a long time. You've just switched now, haven't you?


CHALMERS: I'm glad you asked me that, Patricia. What Scott Morrison is referring to is eight years ago there was a proposal on the table to pay for a reduction in the company tax rate by increasing taxes on business elsewhere in the system. What Scott Morrison and Malcolm Turnbull, in their usual way, are proposing now is to give a $65 billion tax cut to multinationals and the big four banks at the expense of middle Australia by jacking up income taxes on people who work and struggle. That's the main difference between what was proposed eight years ago and what is being proposed now. Morrison and Turnbull want this tax cut to be at the expense of middle Australia. We were proposing to change the business tax mix eight years ago. We've also got much higher debt - record and growing debt now than we had eight years ago. And we've got other priorities, particularly at a time when the Turnbull Government is cutting education and training funding. If you want to grow the economy, you need to invest in people. That means investing in education and training, because that's where we get the productivity that will grow the economy and create jobs.


KARVELAS: The Government is also looking at tax cuts for middle-income earners for individuals. Is that something Labor would stand in the way of?


CHALMERS: That's absolutely laughable, Patricia, that Scott Morrison goes around talking about how he wants to cut taxes for middle Australia. Right now in the Parliament, and it might be that not all of your listeners appreciate this, but right now at this minute before the Parliament, the Government has legislation to increase income taxes by $44 billion on low- and middle-income earners in this country - an income tax hike of $44 billion at the same time...


KARVELAS: You're referring to the NDIS Levy?


CHALMERS: I am - the Medicare Levy - which is levied on income. It's an income tax.


KARVELAS: Sure, but why does that exist? I mean, that's something you'd support. We have to fund the NDIS, don't we?


CHALMERS: We're talking about a $44 billion tax hike, Patricia, and a $65 billion tax cut for multinationals. What that tells your listeners, it's very simple maths. If they were fair dinkum about providing that money, whether it be in the health system or the NDIS or anywhere else, they could find it by not giving that $65 billion tax gift to multinational corporations and the big four banks. I think that just shines a light on the priorities they have - their warped priorities. We don't think we can afford to give a tax cut of that magnitude to the biggest businesses who need them least.


KARVELAS: Do you think that middle-income earners - that was my question - deserve a tax cut?


CHALMERS: Middle-income earners are doing it very tough. A lot of them are having their wages and working conditions undermined. Those who work weekends, a lot of them are having their penalty rates cut. So obviously if you're going to give tax relief, you wouldn't do what Malcolm Turnbull's doing and go first to the big foreign multinationals, you'd go to middle Australia. What we've tried to do is propose alternatives to what Turnbull and Morrison have proposed. That's why we said we wouldn't do, for example, the increase int he Medicare Levy for people earning up to $87,000 a year. That's one way that we can decrease the burden on people who work and struggle in this economy, while Malcolm Turnbull and Scott Morrison just want to make things harder.


KARVELAS: So if we end up seeing a genuine policy, not just a discussion around income tax for middle-income earners in the Budget, is that something Labor is prepared to support?


CHALMERS: We're not going to support anything we haven't seen, Patricia.


KARVELAS: But I mean, conceptually, you're discussing who you think deserves a tax cut. Do these people deserve a tax cut and is a policy you would consider supporting?


CHALMERS: We will always do whatever we can responsibly afford to give people relief; when there's relief to be given in the tax system, or in the industrial relations system, we will always work to prioritise people who are on low- and middle-incomes and the Government will always work to prioritise those at the top end of town.


KARVELAS: A corporate tax rate of 30 per cent is well above the OECD average of 22 per cent. How can Australia compete internationally if businesses pay more tax than their overseas competitors?


CHALMERS: There's a number of points to be made there, Patricia. The international comparisons are not easy to make. For example, a lot of people want to compare the Trump tax cuts to our corporate rate here in Australia. They don't have dividend imputation in the US, we don't have state corporate taxes - all of these sorts of things mean that the comparisons are very difficult to make. But when you talk to a lot of businesses, as I do in my job, what they'll say to you is the headline rate is one thing, and obviously they'll argue to pay less tax on the headline rate if they can and that's what we'll expect from them. But most businesses know and understand and relay to us privately that that's just one of the considerations they take into account. They care about the quality of the workforce, which goes to education and training. They care about the capacity of people to adapt to new technology. They care about the infrastructure, they care about the regulations, they care about the stability of the Government. All of these sorts of things factor into decisions that companies make, not just the headline tax rate.


KARVELAS: Just finally on another issue, Jim Chalmers, New Zealand has a standing offer to resettle some of the refugees on Manus Island and Nauru. Labor openly supports this. Sources within the new Home Affairs Department have told The Australian newspaper in a story this morning that this has led to increased people smuggler activity. Are you worried about that?


CHALMERS: If that were true, Patricia, that would also apply to the deal that the Government has done with the Americans. So I think there's a bit of politics being played there.


KARVELAS: The Government argued that's different, because that's a one-off deal and people smugglers aren't trading on it because they know it's a one-off deal. Look at the Trump administration's reaction, for instance. 


CHALMERS: I don't think you can separate the two things. It's a convenient argument for the Government to make and for people to put in The Australian newspaper, but I think at the end of the day, if that were true it would apply to the Americans as well. We don't accept the case that's been made by the people who spoke to The Australian.


KARVELAS: Just finally, I know you're a Queenslander, but you are a frontbencher. Are you going to put your support behind David Feeney in the seat of Batman if he has to face a by-election? It looks like it might be the next by-election on the cards. 


CHALMERS: Well there are multiple hypotheticals in that question, Patricia.


KARVELAS: Some of them very live issues - you and I know it.


CHALMERS: Normally you just bowl up one hypothetical at a time, but you've gotten away with a couple there! I think people who try to predict what would happen in the High Court have come a cropper in the last six months, most famously the Prime Minister, so I'm not going to predict or get into what might happen, except to say that David Feeney is an outstanding colleague and I hope he's there for a very long time.


KARVELAS: He's an outstanding colleague who keeps forgetting his paperwork. Is that really outstanding behaviour?


CHALMERS: I think he's a terrific Member of Parliament, and he makes a contribution across a range of areas - defence policy, he's a good local member, he’s good company, so I would like to see David in the Parliament for as long as possible. I'm not going to try to guess what the High Court might say or do.


KARVELAS: Jim Chalmers, thank you so much for your time.


CHALMERS: Thank you, Patricia.