Sky News Business Ticky

22 March 2017



SUBJECT/S: Malcolm Turnbull’s family payments cuts; child care changes; Turnbull Government’s $50 billion big business tax cut; Budget savings; inclusive growth 


TICKY FULLERTON: Shadow Finance Minister Jim Chalmers was there in parliament today. He joins me live from Canberra now. Jim Chalmers, welcome.




FULLERTON: This Omnibus Bill seems to be like a Monty Python knight. We've now got the clean child care package with savings. Why can't Labor just pass it?


CHALMERS: Well it's a shambles. The main development that we saw today was really the resurrection of one of the cruellest parts of that 2014 Abbott-Hockey Budget. One of the savings that has come back on the table, as you said a moment ago, is a fairly severe cut to family payments. So that is something that we've said for years now that we're not prepared to support. 


FULLERTON: When you say it's a cut, it's a freeze on increases and the Treasurer said I think on Sky today that Labor in the past has frozen indexation but when we're doing it, he says, there's all this opposition.


CHALMERS: I wouldn't take Scott Morrison's word for it. I can explain it quite easily to your viewers, Ticky. The story is, is that when we were in Government, we froze the very top of the family payments system where it phased out, whereas what the Government is doing now is taking more than $1 billion right through the scale so that some of the most vulnerable kids in Australia will be impacted; something like two million Australian kids will be affected by the cuts that they are making. So it's not true to say that this is something that we did, when we did something incredibly different. He knows and anyone who's followed this debacle from the beginning, from the 2014 Budget, knows that it's a real cut for families, because when you freeze the rates all the way through the system, inflation continues but the family payments don't keep up and that's a cut to living standards.


FULLERTON: Savings have to come from somewhere and isn't this an initiative. It's for families earning around $60,000 a year, they'll pay $15 a day for child care, it's capped at the high end appropriately. Isn't it time to sit down and agree with the Government on savings that you could put next to this?


CHALMERS: We're always up for a conversation on savings, but what's happened here is we've got two Bills which are connected. One contains the harsh cuts that we couldn't possibly support and we've flagged our opposition to for some years. The second one, as you say, is the child care package. In the child care package, we've said for some time that we support increased investment in child care in this country. It's one of the key challenges frankly, that this country has - to fix up child care. But we've also said that the Government's changes disadvantage kids who are already disadvantaged. There's some important issues around things like minimum hours; there's some important issues around indigenous children. And for that reason, we've said that we want to see some improvements made to the Bill before we can commit to support it. It's about to go back into the Senate and when that process unfolds, we'll have a crack at some amendments, as will other parties and, hopefully, the Government can see sense. Because all of the experts, and all of the stakeholders think "yes, we need the extra investment, but we can do even better than the Bill that's on the table".


FULLERTON: Let me move to another initiative of the Government's, at least I'm assuming it's still there, which is the company tax cuts.


CHALMERS: (Laughs) Well, it's hard to know what to assume.


FULLERTON: Well it was a bit tricky looking at Question Time today, but again the Treasurer has pointed out that this is something the Shadow Treasurer Chris Bowen has, in principle, supported. He understands the research. You've got a finance mind. You must understand how company tax cuts can create jobs and isn't this just a bit like Labor's opposition to penalty rates which, again, will create jobs?


CHALMERS: I don't accept that the changes to penalty rates will create jobs, that's the first point. But on the company taxes, the country can't afford a $50 billion ram raid on the Budget. Nobody who looks objectively at a deficit which has tripled for this year; debt blowing out by more than $100 billion since the Government come to office - nobody looks at that and thinks what the Budget can really afford is a $50 billion tax cut, including $7 billion for the banks. So they can quote all they like statements from the past about hypothetical tax rates or they can say until they're blue in the face that people would prefer lower taxes than higher taxes. The reality is, the country can't afford the tax cut that's on the table and, as you rightly allude to Ticky, nobody knows whether it's still in the Budget or not.


FULLERTON: Well the reality is, presumably, it's going to be a bit like the energy crisis that it's going to actually wait until Britain's at 17 per cent; America maybe goes to 15 per cent, then we do get investment leaving this country for people to say "OK, right, now we do have a crisis on investment. Now we should be doing something". But won't it be too late by then?


CHALMERS: As David Gonski said, as the Australian Institute of Company Directors has said, businesses make their decisions about investment across a whole range of factors - not just the company tax cut.


FULLERTON: Point taken. Why don't we put everything back on the table, including GST and have some sensible conversations. You yourself have written a book, Glory Daze, where you talk about the combination of hyper-partisanship and self-serving incentives in politics. Why can't we put everything, including GST, back on the table?


CHALMERS: Because whether it's the GST, or the company tax cut for big multinationals, it runs counter to what should be our three objectives for economic policy - growth which is inclusive; hard work that's rewarded; and a decent social safety net for those left behind. What those two policies would do would be to smash inclusive growth in this country and we can never be up for that.


FULLERTON: But we've had reviews - the Henry tax review talks about putting negative gearing, your policy, back on the table. But putting GST, putting all these things back on the table - why can't we have a grown-up conversation about it all?


CHALMERS: Well we should have a grown-up conversation about it all. I think one of the things that we're proudest of is that when we took a big political risk and put negative gearing and capital gains on the table that we were rewarded for it. We led the debate and we're always looking for opportunities to lead the debate. That doesn't mean selling out Middle Australia by supporting things that we know will make our society less equal.


FULLERTON: It comes back though to savings. The ratings agencies have talked about if the savings aren't going to go through that the AAA could be under threat. All of this on the Labor side, surely now Labor has to answer where its savings are going to be real, because the sort of policies that we've had in the past like Gonski and indeed NDIS were not funded through to term.


CHALMERS: Not true about the NDIS. I contest that point that you made. But the general point that the AAA is important, I agree with. And the general point that the responsibility is on Labor to come up with alternative savings, I'm proud that we've done that - probably more than any other opposition in 20 years or so we've put savings on the table. The Government's picked up some of those and run with them. That doesn't get the attention like some of the other disagreements that we have. But we have been playing a constructive role. And whether it's Chris Bowen or myself or Bill - the whole team - we are determined to pitch up alternative savings where we can, which gives us the ability to oppose those things that we must oppose so that we can have Budget repair in this country which is fair - which is our objective.


FULLERTON: Jim Chalmers, look forward to talking to you pre- and post-Budget. Thank you very much indeed.


CHALMERS: Thank you very much.