CNBC The Rundown 27/6/18

27 June 2018


SUBJECTS: Liberals’ $80 billion corporate tax handout; Labor prioritising middle Australia over top end of town; Labor’s Australian Investment Guarantee; economic growth; Huawei.
MATT TAYLOR: Let's bring in Jim Chalmers, the Shadow Finance Minister, joining us now from Canberra this morning. Jim, business apparently pretty upset this morning at what the Opposition Leader announced yesterday, that you would be repealing that company tax cut for businesses with turnover of $10-50 million. Doesn't this make it more uncertain for business in Australia, ahead of the election, for them to be able to make investment decisions?
JIM CHALMERS, SHADOW MINISTER FOR FINANCE: No, it doesn't Matt, because we've made it clear for some time now that in the Labor Opposition, we put a higher priority on targeting tax cuts to those who need them most, but also investing in our hospitals and schools and infrastructure as well. So I think the position which has been talked about here in Australia over the last 24 hours or so is entirely consistent with that. If that new threshold was drawn at the $10 million turnover mark, we're still talking about tax relief for 98 per cent of Australian businesses, but also means doing the responsible thing when we've got record debt in this country - record net debt and record gross debt; doing the responsible thing, working out where we can target tax relief to the vast majority of small business. Because the country can't afford to give an $80 billion tax cut to the big multinationals and the four big banks.
TAYLOR: But what you've announced yesterday will affect some 20,000 businesses that employ 1.5 million workers. The Opposition Leader saying that the Labor Party is still considering with smaller businesses in terms of the tax cuts that have already been passed between two to 10 million. So it gets back to the whole question of certainty again. An election could happen at any time now, so business, I guess, is worried about what could happen and what the future regulatory pitch is going to look like.
CHALMERS: Again Matt, we've flagged for some months now - I think personally I would have said this a whole heap of times in the Australian and international media - that we don't support the tax cuts at the top. We do support tax cuts for genuinely small businesses, and we said that we'd tell the Australian people we'd come up with a formal position well before the next election and we intend to do that. But the point that we make is, when we've got more than half-a-trillion dollars in gross debt, when we've got net debt which is doubled under the life of this Government, we have to do what is the most responsible thing. We need to work out where we can target our tax relief. That's why we support tax cuts for genuinely small businesses. It's why we supported in the Parliament in the last two weeks an instant asset write-off for small businesses. And it's also why we have an alternative, which is called the Australian Investment Guarantee, which unlike the Government's tax proposal, actually ensures and compels businesses who want to access the Labor tax cut to invest onshore here in Australia in Australian jobs.
TAYLOR: On yesterday's announcement, the Treasurer Scott Morrison said that Labor's ladder of opportunity has become a snake of envy. How does your side of politics respond to criticisms like that from the Treasurer?
CHALMERS: Well, two things about that. Unfortunately, we've got a Treasurer in Australia right now who spends the vast majority of his time thinking about and talking about the Labor Party, rather than doing his job. That's one of the reasons why we have record debt. It's one of the reasons why debt has doubled on his watch. He's not doing his day job. He's focused more on us than on the Australian people. That's the first point. But on the point about the so-called politics of envy: it is not the politics of envy to care about what is the fairest outcome for the Australian people, what is the most affordable people for Australian people, and what's best for the Australian economy. Our tax policies, whether they be personal income tax or company taxes, are all about making sure we get maximum bang for our buck. There isn't a heap of money sloshing around the Australian Budget. We've got big fiscal challenges, and so what we have to do is say where can we do the most good? And where can we make room to invest in hospitals and schools and human capital and infrastructure and all of the things we need if we are to properly grow this economy in a sustainable way? 

TAYLOR: The Government's got a fairly decent record though when it does come to growth and jobs, something like a million jobs created over a 12-month (sic) period, and we've seen quarter-on-quarter growth stronger in the first-quarter growth on that year-on-year level at 3.1 per cent. How will your side of politics grow the economy and grow jobs?
CHALMERS: We do have some welcome headline figures in those most recent National Accounts; the numbers that you just quoted, Matt. But the point I would make is that we are growing as a country because of some really quite remarkable global conditions. The world economy's probably in the best nick it's been for the last decade or so, as you know. We are benefiting from that here in Australia. I think we're growing here in Australia despite the Government's policy settings, and not because of them. Our alternative says that you give tax relief to those who need it most, who are more likely to spend and invest in the economy - people on middle incomes, for example, and genuinely small businesses who need tax relief the most. We think you should be investing in human capital, that means investing in education, and we've made some big commitments in the education system right up and down the lifelong learning pathway. We think you need to make sure that you've got a stable energy policy which has a component of renewable energy in it. That's our alternative growth plan, because you don't grow the economy by hollowing out human capital as the Government is doing with their cuts to education. You can't grow the economy with this energy policy chaos that we're seeing on their side of the Parliament. And you can't grow the economy if you want to give personal income tax cuts where 60 per cent of the benefit goes to the wealthiest 20 per cent of Australians, who are the least likely to spend it in our small businesses. So we've got an alternative growth story. It's a superior growth story, and it will be a key part of the next election.
TAYLOR: Before we let you go, I just want to touch on another issue. There's a lot of concern in Canberra at the moment about the influence of Chinese phone company Huawei after revelations about sponsored travel to their headquarters. You're on that list. Was it appropriate for MPs to accept travel and should Huawei be part of the 5G build out in Australia that the Government's going to announce any day now?
CHALMERS: First of all, Matt, yes, I do think it's appropriate, so long as it is disclosed, and I disclosed that trip I took in 2015. Members of both sides of Parliament have done that, and that's appropriate too. On the broader issue of their participation or non-participation in the 5G network, that is a matter for the Government to decide based on the best possible advice. I don't unfortunately on the Opposition side of the Parliament have access to that advice. I would urge the Government to carefully consider it. We don't believe in making a decision on the run without access to the material that will be made available to the Government.

TAYLOR: Jim, we appreciate you stopping by to chat to us this morning. Thank you very much.
CHALMERS: Thank you.