Sky News AM Agenda (36)

22 January 2018



SUBJECT/S: Turnbull’s tax cut for top end of town; Inequality on the rise under Turnbull Government; electric cars; citizenship

KIERAN GILBERT: Let's turn now to federal politics and, as I mentioned at the start of the program, with me now is the Acting Shadow Treasurer, Jim Chalmers. Mr Chalmers, thanks very much for your time on our first program of the year. You can see the direction continues in in terms of the company tax cuts and, with support of a number of CEOs today, questioning your criticism basically of the company tax cuts and essentially guaranteeing that it would lead to wages growth and to more jobs.


JIM CHALMERS, SHADOW MINISTER FOR FINANCE: Good morning, Kieran. It's great to be back, raring to go for another year. I don't think it's a big surprise; it's not necessarily front page news that big business in this country would prefer to pay less tax and good on them for making the case for that. But I think if we're serious about growing the economy in an inclusive way, this is entirely the wrong way to go about it. We've got a very tight budget and in those circumstances it makes very little sense to shower $65 billion on the biggest multinationals and big banks in this country at the same time as people who are working in middle Australia are being asked to cop a tax increase. And that's the recipe that Malcolm Turnbull and Scott Morrison have for this country - tax breaks for multinationals and millionaires and making everyone else pay more income tax. That won't grow the economy because people won't have the money to spend in shops; they won't have the wages keeping up with the costs of providing for their families; we've got these education cuts, which harm productivity. For all of these reasons, I think that Malcolm Turnbull's one-point plan for tax cuts for the top end of town won't grow the economy in the way that these big businesses have claimed.


GILBERT: The impact in the US - Walmart increasing wages there in the wake of the Trump tax cuts. Locally, the Wesfarmers CEO Rob Scott says lowering company tax rates would improve the prospects for wage growth. So, why doesn't that fit in with your argument, your view of the need for economic growth with equality across the board? That would take pressure off companies to boost wages.


CHALMERS: Those arguments have been made before. I'm not sure that we want to hold up Walmart as the example of the paying of good wages to their workers necessarily, but those arguments have been made before. The reality in this country is that wages growth is stagnant and one of the reasons for that is that people's bargaining position in the workplace is getting weaker and weaker. It's being undermined by labour hire and other practices. We've got a Government that's not on the side of working people. So, for all of these reasons, I think it's wrong to assume or to suggest that, all of a sudden, if you shower $65 billion on the biggest companies in this country, all of a sudden people will see increasing wages and increasing jobs. This is the sort of trickledown economics that's been tried around the world. It's been tried here. It doesn't work. If you want to grow the economy properly, if you want wages growth, if you want jobs growth, growth needs to be inclusive. That means investing in people, in their education and training. It means making sure that they have disposable income so that they can spend in the shops and invest in the future and provide for their families. 


GILBERT: You say it doesn't work, but it's already had a pretty good response in terms of the economy in the United States, which continues to grow. Jobs growth is on the rise as well. Wall Street's reacted well. 


CHALMERS: Don't forget, Kieran, the global economy is in probably the best nick it's been in for something like 10 years, so it would be wrong to say that the Trump tax cuts, which were only recently legislated are responsible for some of the uptick in growth around the world. We're seeing some really positive signs around the world in the economy. As I said, the best probably since about 2007 or 2006. So I think it would be a mistake to try to pretend that just because Donald Trump and the US Congress cut taxes, that that's the entire reason we're seeing some better outcomes around the world, particularly in the US.


GILBERT: You make the point, and your colleagues regularly, about the billions of dollars in tax cuts for the top end of town. But the fact is that Labor doesn't support tax cuts for businesses with turnovers of three, four or five million dollars a year. So that's hardly the big end of town. 


CHALMERS: We've made it clear, as you say repeatedly, that we don't support the full suite of tax cuts. We don't think the biggest businesses deserve a tax cut. We do think that small businesses, genuinely small businesses with a turnover of up to $2 million deserve some tax relief and we've said we'll make our views clear on the rest of the legislated tax cuts in due course. But I think the Australian people are very supportive of our position, which is we have a Budget that is in very bad nick; it's not the time and it doesn't make any economic sense to give tens of billions of dollars of tax breaks to the top end of town. Genuinely small businesses deserve some tax relief, but we've got other priorities when it comes to the Budget. We think we should be investing in productivity in the economy; we think that we should be restoring penalty rates so that people get reward for effort; all of these sorts of things. They're our priorities. The Government's got a very different set of priorities and that's why the Australian people have concluded that they're so desperately out of touch.


GILBERT: Should you also reconsider where you set that benchmark for what is a small business? Because, as I say, it doesn't take a very big company to knock up a turnover of three or four million dollars a year.


CHALMERS: As I said, Kieran, and as Chris Bowen and Bill Shorten have said, we'll work our way through that. We've said we'll support the relief up to $2 million. We don't support the full $65 billion, particularly because it goes to the biggest companies; people who need tax breaks the least. We'll make our view known on the rest of it in due course.


GILBERT: Let's look at a couple of other matters. Billionaires in Australia - eight more billionaires in 2017. Do you see that as a sign of a strong economy and healthy businesses, or is that a sign of greater inequality in the country?


CHALMERS: There were a couple of really important reports out today, Kieran, that you're referencing. What they show is that our economy is becoming less equal. I think the Oxfam report makes some very good points - the observations they made about the link between work and reward being severed; the idea that people think the rules of the economy are being written to benefit somebody else; and then that growing inequality between what they call the super-rich and ordinary working people. These are very concerning developments; very big challenges for an economy like ours and, indeed, most of the developed world. The problem that we have, which relates to what we were just talking about, is most of the Turnbull-Morrison agenda is designed to really turbocharge those very worrying trends. When you make it harder for people to bargain for wage increases, when you take away their penalty rates, when you increase their income taxes for middle Australia, all at the same time as you give bigger tax breaks for the top end of town. All of these things are a recipe to make that problem worse rather than better. It's a very concerning and worrying development, and it's a very dangerous policy suite from the Turnbull Government, which will make that problem worse.


GILBERT: 33 billionaires, eight more billionaires last year. Is that a symptom of that point you're making in terms of the Government, or is that just simply some people who have done well? How do you see that specifically? That issue and those cases of eight more billionaires across the country?


CHALMERS: Obviously, there's a handful of people doing extraordinarily well. There's a handful of people in this country who have amassed enormous personal wealth. My issue is really with the gap between a small minority of Australians and the majority of Australian working people. It's not for me to get into the billionaires in this country, but it is to point out that if we have a country where people feel like no matter how hard they work they can't get ahead. That's a problem. Turnbull and Morrison are part of the problem, not part of the solution when it comes to that challenge.


GILBERT: It looks like there is another solution looking in terms of industry in South Australia. Let's turn to that now. Electric vehicles might soon be produced where Holden cars were made. This is according to The Advertiser today, reporting on billionaire Sanjeev Gupta, who saved Whyalla and now looking to open manufacturing for electric cars in Adelaide. That would be a good development. You'd welcome that?


CHALMERS: That would be extraordinarily positive news, not just for the people of Adelaide, but also for the broader national economy. I look forward to hearing more about those plans, but if they go ahead as described, that would be a really positive development. We would welcome it wholeheartedly. We do want to see more electric cars circulating in Australia. We've got a very low take-up of electric cars and one of the reasons for that is because we are the only advanced economy not to have a proper emissions standards for our vehicles. The Turnbull Government's been sitting on a recommendation for something like three years to introduce those emissions standards, which would encourage bigger take up of electric cars. The reason they haven't implemented that recommendation is because the knuckle-draggers in the Liberal Party run the show. We want to see those robust standards. That will encourage more electric car take-up, and if those are built in South Australia, in Adelaide, the suburbs of Adelaide, that would be a terrific outcome too.


GILBERT: And the last question relates to David Feeney, the Labor MP set to go before the High Court in March. The Government says he should just resign, have a by-election as did a couple of their own MPs, given he says he has evidence he renounced his British citizenship but hasn't been able to offer that evidence to the High Court. Given it hasn't been provided, shouldn't he stand down, as did John Alexander, as did Barnaby Joyce?


CHALMERS: I think the Government's got a less-than-stellar record predicting the outcome of a High Court process. Malcolm Turnbull famously said that Barnaby Joyce would be fine and he wasn't. The broader point, Kieran, as I think we've talked about before, we've got very robust processes in the Labor Party. The only person who has said the he's not sure whether he's complied with that is David Feeney and he's referred himself off to the High Court. We actually attempted before Parliament rose at the end of last year to refer en bloc a whole bunch of MPs from all sides that had doubts about their eligibility. Malcolm Turnbull and the Liberal Party actually voted against that and, in doing so, they voted to prolong this crisis rather than end it. I think that speaks volumes about the political approach they're taking to this.


GILBERT: Acting Shadow Treasurer Jim Chalmers, thanks for that this morning. We'll talk to you many times throughout 2018. Appreciate it.