RN Drive 18/6/18

18 June 2018


MONDAY, 18 JUNE 2018
SUBJECT/S: income tax cuts; Morrison’s latest gaffe; National Energy Guarantee; Wayne Swan; Clive Palmer
PATRICIA KARVELAS: Jim Chalmers is the Shadow Finance Minister. Welcome to RN Drive.
JIM CHALMERS, SHADOW MINISTER FOR FINANCE: Hi Patricia, thanks for having me on.
KARVELAS: Has Labor worked out its position on the Government's income tax cuts? Will you support them?
CHALMERS: We're working our way through it, as you know. We've said that the most important thing that the Government can do is to separate-out the tax cuts for low- and middle-income earners, and if they do that, we're prepared to vote for them immediately. It just makes no sense whatsoever for Scott Morrison to say to the Australian people and to their Parliament that low- and middle-income earners can only get a tax cut if we vote for a bigger tax cut for higher income earners seven years down the track.
KARVELAS: The Government has made clear it will not split its Bill, which means that Labor has to make a decision. Are you prepared to vote for the whole package and then promise to repeal the higher end tax cuts later?
CHALMERS: We'll have more to say about that, Patricia. But I think that threat that Scott Morrison and Malcolm Turnbull are making is a really unfortunate one, because it's holding a lot of low- and middle-income earners hostage to their tax cuts for the top end of town.
KARVELAS: Couldn't you make that argument the other way around though, that you're also holding these same people hostage by refusing to support the package? Vote for the package, repeal the bits you don't like later if you win Government and do the deal so people get the tax relief that they're clearly seeking?
CHALMERS: There's an easier way to deliver that, Patricia. And that's for the tax cuts that come into being on July 1 this year to be voted on in the Senate. There'll be a lot of support for them there. We will enthusiastically support them there because they're directed at low- and middle-income earners. We don't want to see people held hostage to a political game over tax cuts. The other tax cuts come in in 2022 and 2024, so many years down the line after more elections. It makes no sense to rush to judgement on those ones in particular. The Government should split the Bill.
KARVELAS: The Government says it won't split the Bill, so are you prepared to go into Super Saturday having essentially blocked attempts to deliver tax cuts?
CHALMERS: Our most important priority is to get the policy right.
KARVELAS: So you are prepared to go into that Super Saturday season with the Government saying you voted against its tax package?
CHALMERS: We haven't come to a decision on that yet, Patricia. But wherever we land, I am confident because we've been doing it now for all of these years of Opposition, going to the people and saying, "look, our overwhelming priority is the people who work and struggle in this country". Sometimes that means difficult decisions about tax cuts elsewhere in the system. It means difficult decisions about tax concessions and loopholes that we want to close down. Because the Budget's not in especially good nick and you need to be upfront with people about your priorities, and I think everyone in those by-elections - all five of them - know that Labor is the party of the worker and we'll always prioritise people on low- and middle-incomes over people who don't need a tax cut right now.
KARVELAS: Treasury modelling says your $10 billion out in your estimates...
CHALMERS: (Laughs) 
KARVELAS: ...of what the plan to end to cash refunds paid under the dividend imputation scheme would raise, because wealthier investors will simply rearrange their finances. That what Treasury modelling says.
CHALMERS: There's been a lot said on this today.  Where to begin? Scott Morrison's been humiliated today. He tried to pretend that it was some kind of independent Treasury modelling, then the Treasury themselves came out and said it was based on specifications provided by the Treasurer's office. Then Scott Morrison was whispering to journalists that there'd been some kind of external review of the costing, and then the Treasury secretary wrote to Chris Bowen and said no such external review took place. So the Treasurer's been humiliated again. The thing I would say to Scott Morrison about this is, do what you will on an almost daily basis to trash your own reputation, but don't trash the Treasury's reputation. There's a lot of good people working in that department. I've worked with them personally. He should stop politicising and trashing the Treasury in the pursuit of some kind of political end. It really is not the behaviour of a Treasurer who's up to his job. He can make up stuff...
KARVELAS: Jim Chalmers, Treasury has accepted that modelling is based on some assumptions. Labor could clear this up by releasing its own policy costings. Why don't you do that?
CHALMERS: We released the number we got from the Parliamentary Budget Office. The Parliamentary Budget Office themselves have put out a press release today saying that they stand by their costings. The way that our system works, the PBO is on an equal footing with the Treasury when it comes to the credibility of costings. What we have instead is the Treasurer who has done this again and again and again. He puts stuff on the front of the paper, pretending it's some kind of high-end independent Treasury modelling when after a day of questioning it's shown to be anything but. All I'm saying is the Treasurer should make his political points, that's fine. We're all big people. We're can all have a political argument and a policy argument, but don't trash the Treasury in the process.
KARVELAS: Either way, what measures are going to be in place to counter the fact that wealthier investors could simply rearrange their finances?
CHALMERS: We've announced our policy and everyone knows what it is, and the Parliamentary Budget Office has taken into account the fact that some people will change their behaviour. They've done that to the best of their ability. They're very professional people. They're not silly. They know that when you announce and implement a policy, some people do things differently. They've factored that in.
KARVELAS: The draft design paper for the Government's National Energy Guarantee has been released. Is this policy borrowed from Julia Gillard, as Tony Abbott says? Is it a carbon tax?
CHALMERS: It's certainly not the same policy from Labor's period in office and I think Tony Abbott's commentary today, or Craig Kelly from the backbench or whoever, just shows that they haven't got their act together on energy. They're still having this massive brawl in the Coalition party room over what to do. A lot of people say to Labor, why don't you try to get to some kind of resolution when it comes to energy policy in this country? We would love to, frankly, and we'd like to engage in good faith, but the problem is we don't know who we're engaging with because energy policy is run by the kind of right-wing extreme of the Liberal Party. The minister has very little say in the energy policy. You've got Tony Abbott rolling around...
KARVELAS: Well I don't know if he doesn't have much say because he keep pushing on with this National Energy Guarantee despite his backbench critics, so I'm not sure if that's really an accurate representation of what Josh Frydenberg's doing.
CHALMERS: They haven't finalised their policy, Patricia. That's the point I'm making.
KARVELAS: He says he's going to push on with the National Energy Guarantee. In fact, if  you want to deal with this, and given that the target can increase as the report suggests, are you prepared to support the scheme for the sake of policy certainty?
CHALMERS: We don't know what scheme will emerge from their party room. Think about it this way - Josh Frydenberg, yes, he may say that they'll have a National Energy Guarantee, but he has said things before and subsequently been reined in by the Craig Kellys and the Tony Abbotts. So I guess the point I'm making is, yes, we understand that the people of Australia would like some resolution on energy policy, but we need to engage with something that has the support of the Government party room. Then we can apply our own judgement and values to that. Things like, can we ensure that we get the renewable energy investment in this country to put downward pressure on bills; all of those things that matter to us in the Labor Party. In order for that conversation to properly happen, we need to be engaging with that which is settled on the other side.
KARVELAS: If you're just tuning in, my guest is Jim Chalmers, he's the shadow Finance spokesman for the Labor Party. 0418 226 576 is the text line. Former Labor Treasurer Wayne Swan has won the federal presidency of the ALP. His competitor was Mark Butler, who was going around a second time. Of course, you worked with Wayne Swan when he was Treasurer, and you are a member of his Labor Right faction. Why was Wayne the right man for the job?
CHALMERS: It was an outstanding outcome, a very decisive result, Patricia, which is a credit to Wayne. I'm very pleased with the outcome, but also very proud of Wayne. The reason he won the ballot was because he went around and around the country campaigning on issues, getting people fired up on inequality.
KARVELAS: Just finally, were you surprised by the re-entry of Clive Palmer into Australian politics?
CHALMERS: No, I think anyone who's driven on the freeways of Australia and seen the big yellow signs with Clive on them has probably thought that this day has been coming. I've spent a bit of time in Townsville where Clive Palmer has done a lot of damage to that community. We can't let Clive do the same sorts of things to Australia that he did to Townsville. So I think it's not a surprising development in this sort of crazy politics that we're engaged in at the moment, particularly in the Senate.
KARVELAS: But do you think he's a competitive threat to the major parties? He was last time around.
CHALMERS: We take everyone seriously. Anyone with the sort of bank balance that Clive has, and the capacity to fund all those billboards and ads and all that sort of thing; we don't take someone like that lightly. But I think in terms of his record, I think we should engage him on the issues and on the record, and I think if we do that properly, people will understand that he's not necessarily the right person to send back to Canberra.
KARVELAS: Jim Chalmers, many thanks for your time.
CHALMERS: Thank you, Patricia.