Press Conference - Brisbane

03 May 2018




SUBJECT/S: 2018 Budget; Liberals’ wasteful spending on market research; income tax cuts; Liberals unable to commit to own fiscal rules; BCA campaign; Turnbull’s $80 billion big business handout; CBA data breach; Labor’s fairer tax plan


JIM CHALMERS, SHADOW MINISTER FOR FINANCE: Thanks everyone for coming here today. There are a whole heap of issues around at the moment, so bear with me as I try to touch on as many as I can.


With the Budget five days away, I wanted to begin with something that I agree with Scott Morrison on - something that Scott Morrison said in the last couple of weeks. He said that this Budget in five days' time will be like all of the other Liberal budgets and I think he's right. This Budget will be chock full of out-of-touch and out-of-whack priorities. It'll be defined by an $80 billion tax handout to big business in this country. And that will come at the expense of health and education and it will come hand in hand with a tax on the cost of living in middle Australia. This is a make-or-break Budget for Malcolm Turnbull, but it's also a test. It's a test of whether or not Malcolm Turnbull has been listening to the Australian people who want him to reverse his cuts to Medicare; his $700 million in cuts to hospitals; his $17 billion in cuts to schools; his zombie attacks on pensioners and families which are artificially propping up the bottom line; and that $80 billion tax handout to multinationals and millionaires in this country. 


There have been new revelations this morning that the Government has spent half-a-million dollars of taxpayer money on market research, on focus groups, in the lead up to this Budget. At the same time as they are lecturing middle Australia about the need to tighten their belts, they're spending half-a-million dollars of taxpayer money on what is effectively researching an election strategy. They shouldn't need focus groups to tell them what is fair and what isn't. They shouldn't need focus groups to tell them what should be in the Budget. They should listen to the Australian people. You do not need expensive market research to work out what is fair; you just need a functioning heart and an affinity with people who work and struggle. 


It is my belief that working Australians will see through any income tax relief provided in the Budget in five days' time. Because they will remember that this Turnbull Government was the government which tried to jack up income tax on seven million working Australians. They will not forget that. The Australian people will not forget that. They know that Malcolm Turnbull's highest priority is multinationals and millionaires and not middle Australia. They know that this is a Government which will always put the interests of big business before the interests of Australian workers. We will look at what is in the Budget, we will carefully evaluate what is put forward in five days' time and we will respond in due course. But we make this point: the workers of Australia will always be better off under Bill Shorten and Labor than they will be under Malcolm Turnbull and the Liberal Party. Only Labor can deliver tax relief for middle Australia responsibly and sustainably because we have done the work over a number of years now to put the Budget on a more sustainable footing by dealing with those big tax concessions at the top end of the tax system; by putting it out there with plenty of time before the election what we would do to repair the tax base in country. That is what will make it possible for Labor to responsibly and sustainably provide genuine relief to middle Australia. What the government is doing is the opposite of that. 

We have seen them all at sea today - Mathias Cormann today, Scott Morrison in recent days - unable to commit to their own fiscal rules; the fiscal rules that are there in the black-and-white in the Budget. Neither Cormann nor Morrison are able to commit to meeting the basic tests they have set for themselves. They're now pretending that they never said there was a budget emergency. They're now pretending they never said they would run up big surpluses equivalent to one per cent of GDP. All of that is all out the window under these characters. They have billions of dollars flowing through the door in new revenue courtesy of a really strong global economy and, still, the budget is a mess. They have run out of excuses for the fact that the deficit for this year is eight times bigger than was in Joe Hockey's first budget. Net debt has doubled since they came to Government on their watch and gross debt has crashed through half-a-trillion dollars for the first time in Australian history. It's growing with no peak in sight over the next 10 years. With an election around the corner, that budget emergency is out the window, their own fiscal rules are out the window and in their place we just have this record and growing debt; debt which is growing faster on their watch per month than it did under Labor which had the Global Financial Crisis to deal with. 


One of the reasons we have record and growing debt in this country is because the Turnbull Government continues to give the biggest tax concessions to those who need them least, and they are also insisting on this $80 billion handout to multinational corporations in this country. We have seen the Business Council out there today arguing for that $80 billion tax handout. That is not especially surprising and it is not especially troubling. We expect them to make the case for them to pay less tax. We expect them, frankly, to raise millions of dollars to make Malcolm Turnbull's and the Liberal Party's argument for them. The Liberals have asked the BCA to sing for their supper and they are responding. They're doing exactly that. Our focus isn't the BCA. Our focus is the Turnbull Government. Our focus is that $80 billion handout for multinationals which is unfair and unwise and unaffordable. It is unfair because it comes at the expense of schools and hospitals and middle Australia. It is unwise because even the Treasury modelling says the growth dividend will be negligible and far down the track. And it is unaffordable because we have record levels of debt under the Liberal Party. 

There's new research out today which shows that only one in every $33 of a tax cut actually flows to higher wages. When companies get a tax cut, three per cent of it - three per cent of it - goes to higher wages. And that torpedoes Scott Morrison and Malcolm Turnbull's lies about this company tax handout. Almost none of it goes to higher wages in this country. The key argument they put forward is that is how they would address stagnant wage growth and that has been shown today to be a lie. And it would be worse among big business, because much of Malcolm Turnbull's $80 billion company tax handout will spray around overseas in the form of executive bonuses, share buybacks and pumped up dividends as well. This is a tax cut which will boost the profits of the top end of town at the expense of hospitals and schools and middle Australia. It says it all that the biggest single beneficiary of Malcolm Turnbull's company tax handout will be the Commonwealth Bank. With all the damning revelations out of the Royal Commission, everything we now know about the Commonwealth Bank, Malcolm Turnbull does not want to punish them for that behaviour. He wants to reward the big banks with $17 billion of taxpayer money and the Commonwealth Bank will get the lion's share of that. 


We have seen overnight a very concerning data breach out of the Commonwealth Bank and what we need to see now - because there are a lot of customers who are justifiably worried about where they're sensitive and important information has gone - we need to see the Commonwealth Bank explain to each of the affected customers just what has happened here and what the consequences of it are. People are justifiably worried about where their information might have ended up. The Turnbull Government needs to give a full statement too about what has gone on here. When did they know about this extraordinary data breach, and what did they do about it back in 2016? It is worth noting - and this is my final point - it is worth noting that had the Government not stalled the implementation of Labor's data breach notification laws, which are now thankfully in place, the bank would have been required already by law to have notified their customers. So that delay has been very costly in this case as well. But the main point is, when we see these rip-offs and rorts and data breaches and bad behaviour in the financial system, middle Australia will remember that Malcolm Turnbull is the Prime Minister who wants to give $17 billion of middle Australia's money to the big banks at the centre of these scandals. Over to you.


JOURNALIST: You mentioned that Labor has done work to fix the Budget. What have you done?


CHALMERS: We have made a series of announcements about how we would make the tax system fairer at the same time as we would put the Budget on a far more sustainable footing. We have taken some political risks in doing so, but we have always prioritised what's good for the Budget, what's good for the economy, what's good for middle Australia, over our political prospects. We have announced some difficult policies like changes to negative gearing, changes to dividend imputation and family trusts, and other important tax reforms. The effect of that would be to put the Budget on a far more sustainable footing, so that if we were to provide tax relief for people who work and struggle in this country, we can do it in a far more responsible way than what the Government is proposing. What the Government is proposing to do - on the eve of an election, having treated middle Australia so shabbily for the last five years and relying on some kind of collective amnesia about that - the Turnbull Government wants to use this spike in revenue - these billions of dollars which are coming through to the door - and they say they want to give tax relief to the same people that up until a couple of weeks ago they wanted to hike taxes on. What we're saying is, you can do that in a more responsible way if you deal with those big tax concessions at the top end of the tax system which go overwhelmingly to those who needed them least, and if you deal with that at the top end, you can more responsibly look after the people who work and struggle in this country. Thanks very much.