SATURDAY, 28 JANUARY 2017
SUBJECT/S: Lunar New Year; Turnbull Government’s $50 billion big business tax cut; negative gearing and housing affordability; impact investing; One Nation; US refugee resettlement deal
JIM CHALMERS, SHADOW MINISTER FOR FINANCE: First of all, to everyone who's celebrating the Lunar New Year, Happy New Year of the Rooster. I hope the year to follow is a happy and healthy and prosperous one for you and your loved ones. I just wanted to touch on three issues today - company taxes, negative gearing and the Treasurer's discussion paper on impact investing.
Malcolm Turnbull is so out of touch that his top priority is to give $50 billion to multinational corporations at the same time as he cuts Medicare and schools and hospitals. It says it all about this Prime Minister when the Budget has deteriorated as badly as it has that his top priority is to shovel $50 billion in the direction of the biggest, most powerful and wealthiest companies in this country. Since this Government came to office, this year's deficit has tripled, debt has blown out by more than $100 billion and our AAA credit rating is at risk. Faced with those facts, the Turnbull Government thinks the most important thing for Australia to do is to give $50 billion away to multinational corporations. Australia can not afford a $50 billion tax cut for big business, especially when it comes at the expense of the things that we can't afford to lose, like decent schools, decent hospitals, decent Medicare and decent services for the people who rely on them in our country.
There have been comparisons made today between Australian tax rates and some of the tax rates in the G7 economies. The fact that we have dividend imputation means that those comparisons are largely meaningless. It means that we avoid the double taxation that other countries have, including some of those countries used in the comparisons. Besides that, businesses make their decisions based on a whole range of factors, not just tax; but the quality of our infrastructure, the quality of our people and our training systems, the stability of our policy-making institutions. It's for Australia to decide the tax rate that best suits us, that best suits the level of services that people have come to expect. It's not for us to blindly walk down the path laid out by President Trump and the administration in the US.
When it comes to negative gearing, the Treasurer has flown 17,000km searching for a policy on housing affordability when the answer is right here at home staring him in the face. If he is serious about housing affordability, he would adopt Labor's sensible proposals to change negative gearing, to level the playing field between property speculators and those who are trying to enter the market for the very first time.
The Liberal Party is hopelessly split on housing affordability and negative gearing. For as long as Scott Morrison ignores Labor's policy, ignores his own backbench, ignores the independent experts, then these unsustainable tax breaks will continue to flow to property speculators and will continue to work against the interests of people who are trying to get a toehold in the market for the first time. We call on Scott Morrison to adopt Labor's policy on negative gearing, as many in his backbench would like him to do. We call on him to do that to level the playing field. The solution to the housing affordability crisis is multi-faceted, but there is no successfully policy for housing affordability that doesn't deal with those unsustainable tax breaks that favour property speculators at the expense of first home buyers.
The Treasurer has released today a discussion paper on what is called impact investing. We welcome the release of that discussion paper. Labor has been doing its own work and its own thinking behind the scenes on impact investing. Impact investing has the capacity not just to improve budgets, but to improve lives. It does have the capacity to invest in some of our persistent social challenges in a way that is innovative and creative. We call on the Government to consider impact investing as a way to supplement investment in dealing with our social challenges, not as a way to substitute for Government investment. We want to ensure that impact investing is not used as other innovations have been used by this Government, as an excuse or a distraction from hacking into the social safety net or further cutting health and education and other services which people rely on. Over to you.
JOURNALIST: Business investors and leaders have warned that Australia's investment is at risk if it doesn't reduce its 30 per cent tax rate. Why are you refusing to support the Coalition's (inaudible).
CHALMERS: It's entirely unsurprising that the biggest supporters of a big business tax cut are big businesses themselves. The biggest supporters, perhaps the only supporters, of a big business tax cut worth $50 billion are the biggest beneficiaries of that tax cut. And it says it all about this Government that at the same time as they're hacking into schools and hospitals and Medicare, that they want to reward the wealthiest and most powerful people in this economy - big business in this economy - at the same time as they treat vulnerable people and people who rely on good schools and hospitals with such disdain.
JOURNALIST: Wesfarmers is saying that it's considering moving its investments to the UK because it's more competitive. Is that concerning?
CHALMERS: Again, businesses make their investment decisions based on a whole range of factors. They make their decisions based partly on things like infrastructure, the quality of our training, the stability of our policy-making institutions. The view that you just expressed or quoted just then is not a unanimous view in our community and Australia needs to determine what its priorities are. Australia's priority cannot be just to blindly go down the path laid out by President Trump. Businesses will make their decisions based on a whole range of factors. It's no surprise that the biggest companies are the biggest supporters of Malcolm Turnbull's proposal to give $50 billion to the wealthiest and most powerful at the expense of the most vulnerable.
JOURNALIST: In terms of housing in this country, obviously it is in a crisis. I mean, the median house price in Sydney and many of our capitals is just absolutely crazy. Do you really think negative gearing is the whole answer though? Surely it's not just that and is foreign investment still an issue as well?
CHALMERS: There's no doubt that when it comes to tackling housing affordability, you need to attack the problem on multiple fronts. The point that we make is that it's not possible to have a genuine, proper policy on housing affordability which doesn't tackle those unsustainable tax breaks which flow to people with seven or eight or nine homes at the expense of people trying to get into their first home. So any comprehensive policy on housing affordability has to include an approach to negative gearing and capital gains. We've also said that we've got an open mind on things like the bond aggregator model, which is about getting some new and decent investment in social housing in this country and there are other elements as well. We've always said that supply is one part of the solution, but certainly not the entire the solution as Scott Morrison and Gladys Berejiklian would like you to believe. Foreign investment rules have been tightened up in recent times. It's for us to observe those rules and monitor them and make sure they are always up to date and doing the job that they're designed to do. But there's no policy on housing affordability which doesn't include negative gearing. That's the point that so many of the Liberal Party backbenchers are making in a party which is hopelessly split; a party whose only approach to housing affordability to date is to get rich parents or, as Barnaby Joyce says, to get out of town.
JOURNALIST: In regards to the Government's discussion paper on social impact investment, it says that private investors might be able to play a role. Do you think that's feasible?
CHALMERS: I do. I think impact investment has the capacity to do real good in our community and in our society because it would offer investors the opportunity, not just to do well with their investments, but to do good as well - to do good in our community, to try to play their part in tackling some of these big, persistent social challenges that we have in this country. We think that impact investment should not be a substitute for Government investment, it should be supplementary to that. But the possibility is there if we get the settings right. We will engage with the Government and the Government's discussion paper process in a constructive way, because that's our responsibility to people who, for too long, have been the victims of our persistent social challenges; social challenges which require more investment, not less.
JOURNALIST: Is that for social housing as well?
CHALMERS: We've got an open mind, as Chris Bowen said yesterday, about some of the models that have been flagged by COAG, by the state premiers in particular for some months now and spoken about recently by Scott Morrison. As Chris Bowen made clear, and as others have made clear at other opportunities, we will examine what the Government puts out. We do have an open mind to alternative models to deliver social housing and we will engage constructively in the broader area of impact investing.
JOURNALIST: Just on the subject of Pauline Hanson, we saw another candidate crash out overnight. Is her party imploding are you guys still serious threatened by her, still worried about her?
CHALMERS: We take the electoral threat of One Nation very seriously. I think it's possible to separate out some of the candidates that you've mentioned. I'll leave you to make assessments on the quality or otherwise of those candidates. But it is certainly the case that around parts of our community, people are tempted by One Nation and we have to take that sentiment very seriously. I've given speeches about this before. What we need to do is try to address the economic underpinnings of people's disillusionment with the political system. We need to make sure that those people who have given up on the major parties for whatever reason know that we are listening to their concerns, particularly their concerns around the economy; things like wages growth at record lows, underemployment at record highs - all of those things which are feeding that disillusionment and encouraging people to consider alternatives.
JOURNALIST: Donald Trump signing his executive order regarding the intake of refugees from Muslim countries. Are you concerned this could affect the US refugee resettlement deal?
CHALMERS: It's for Prime Minister Turnbull to clarify the future of the refugee resettlement deal that he struck with the Americans. I do note he has said already that he's confident that the deal will stick but, of course, he also said he was confident that the Trans Pacific Partnership deal would stick and that didn't. So it's for the Government to urgently clarify the future of that refugee resettlement deal. It's for the Government to urgently clarify the future of that deal and whether it will go ahead under President Trump.
Thanks for your time.