FRIDAY, 10 JUNE 2016
SUBJECT/S: Labor’s plan for Budget repair that’s fair; Labor’s positive policies; CFA
BILL SHORTEN, LEADER OF THE OPPOSITION: Good afternoon everybody and thanks for coming. At the start of this election back on May 8 I said that this election would be about priorities and choices. In our first week we talked about our priority for properly funded schools and education. In the second week about our priority to save and defend Medicare. In the third and fourth week we have spoken about our priorities for infrastructure, for action on jobs, for action on climate change. At the start of this week we've spoken about our priority for properly funded and affordable quality child care and in the middle of the week we outlined our 10-year plan for Australia's economy. And throughout this campaign so far, I've talked about our priorities and further I've said that we will need to make savings and decisions about improving the budget bottom line and tackling the deficit.
Of course all of this has come on top of the previous 12 months, where Labor has outlined our improvements to the budget bottom line. Our reforms to negative gearing and capital gains tax deductions so that first home-buyers can compete on a level playing field and we can improve the bottom line of the budget. Our reforms to making sure multinationals pay their fair share. Our reforms to reigning in the unsustainably generous tax concessions at the top end of superannuation.
We’ve made these decisions both in this campaign and in the previous 12 months because for Australia to be able to afford the investments we need and the priorities of working and middle class Australians, we would need to take in the policies we have outlined. And because it is most important that over the next four and 10 years we start the action to fundamentally reduce the level of government debt in this country. We will need to make difficult decisions as this election unfolds. And so, today, I would like to invite Chris Bowen and Tony Burke to talk about our next measures in this campaign of priorities and choices.
CHRIS BOWEN, SHADOW TREASURER: Thanks very much, Bill, and ladies and gentlemen I've got a fair bit to announce so please bear with me. I will be talking for a little bit longer than I normally would at a press conference. But as Bill said, for the last two years as the Government has been all at sea on economic management, as they've replaced one Prime Minister for a lack of leadership, then moved to increasing the GST and state income taxes, Labor has led the debate, with courageous and important decisions on things like negative gearing. Of course, over that time, the Budget deficit has tripled. Labor's determined to positively invest in schools and infrastructure and hospitals and to make the room to do so and protect our triple A credit ratings. And build the Budget over the medium term just as the Budget requires. Today we're going to talk about four category of measures. I will talk about thre e of the categories and Tony will talk about the last category. Firstly, a brief update on the costings, the return to the Budget of things we've already announced. Secondly, new savings measures that Labor is announcing today, which will be included in Labor's bottom line but not the Government's bottom line, unless of course they choose to accept them like they have some of the other announcements we've made. Thirdly, our position on family payments and then, fourthly, the confirmation of final positions on measures that the Government has previously announced in the 2014 Budget.
Now firstly as you know we've announced a range of measures and after every Budget we resubmit those to the Parliamentary Budget Office for re-costing. And of course, since some of those were announced there's now an extra year in the forward estimates, an extra year in the 10-year projection. So I will just give you a brief update on those figures, the multinational tax, our package that we announced raises $1.6 billion over the forward estimates, $5.9 billion over the decade. Not proceeding with Emissions Reduction Fund, the Government's fund raises $453 million over the forward estimates. The Government has not funded that after 2020, despite their obligations under the Paris agreement. They have a black hole in their forward costings, their 10-year costings as a result of that. Negative gearing raises $1.9 billion over the forward estimates and now $37 billion over the decade. Removing the Government's deter mination to get rid of the deficit levy, making that rate permanent, raises $4.2 billion over the forward estimates and $19 billion over the decade. And not proceeding with the Government's big business company tax cuts, $4.4 billion over the forward estimates, $50 billion over the decade. And as Bill announced in Budget reply, cracking down on VET fee rorts, $380 million over the forward estimates and $7.9 billion over the decade. So the total impact of these decisions, the Labor Party has taken, and previously announced is now $12.9 billion over the forward estimates and $122 billion over the decade. Now, in addition today we are announcing 11 new savings measures, these are not government measures, these are the Labor Party's announcements. As I said, these will be included in Labor's Budget but not in the Government's Budget. I won't run you through all 11, they're in the details, but I will run you through a couple of the major ones. From 1 July 2017, the private health insurance rebate will not be available for health insurance which covers natural therapy. This saves $180 million over the forward estimates and $704 million over the decade. Now let's be very clear there is nothing wrong with getting natural therapies. I myself use them from time-to-time. My personal favourite is the Bowen treatment, I could recommend it to you, but in times of difficult budgetary situations, it is not appropriate for taxpayers to have to fund and subsidise private health insurance cover for these treatments. Of course people can continue to take out private health insurance if that is offered but it would not be funded, the rebate would not be funded by the taxpayer. Things like aroma therapy, herbalism, iridology, rolfing, pilates, etcetera, those natural treatments.
Secondly, we will continue the threshold freeze for PHI rebates for a further five years from 2021-26. This will raise $2.3 billion over the decade. The total of the new measures that we're announcing today is $6.1 billion over the decade. Now I will deal with family payments. Let's be very clear, families will be better off under a Shorten Labor Government. Our child-care package is superior. We will fund schools much better. We will get rid of the MBS freeze, which is a tax to go to the doctor by stealth and of course the Government is determined to proceed with cuts to family tax benefit regardless of income. They want to abolish the supplements for all. For single parents, they want to reduce family tax benefit when the child turns 13. We will continue to oppose those measures. But we do need to ensure that family tax benefits are appropriately targeted. So we're announcing two measures today. We will reduc e the family tax benefit A supplement by 50 per cent for families with an income of more than $100,000. This will raise $505 million over the forward estimates, $2.1 billion over the decade. In addition, we will pause the point at which families lose a portion of their family tax benefits so families whose income increases will receive less family payments if their income is more than $94,000 a year. This raises $275 million over the forward estimates and $800 million over the medium term. In a moment, Tony will outline the measures in relation to the confirmation of our final position. But this is a continuation of what we have been doing for two years. Tough decisions and being up-front. The Treasurer said in our debate at the National Press Club there would be more cuts after the election. But he will not tell you what they are. The approach Bill Shorten, I and Tony Burke have taken for two years is to be completely up-front about our decisions, to announce them well in advance of this election and we're continuing with that. We will have further announcements to make in relation to savings during the course of the coming period. Tony Burke and I will periodically update our Budget bottom line and we will do so much better than the Liberal Party did at the last election. They snuck their costings out, their final impact out on the Thursday before the election, effectively 24 hours before the election after the advertising ban had come into place. We will continue to make these tough decisions. We will invest in schools, in infrastructure, in hospitals. We will protect the triple A rating and we will build budget repair over the long term and we will reduce the deficit every year under our plans. We will make sure that we have a fiscally responsible policy in place for Australians but we don't think it's a choice between being fiscally responsible and investing in our schools. We think both are essential for th e future of our country.
TONY BURKE, SHADOW FINANCE MINISTER: Thanks very much Chris. The measures that I want to refer to are measures, the so-called zombie cuts, where we've gone through which of these measures in the context of a government that has now added $100 billion to net debt and has tripled the deficit for the financial year that we're about to enter into, in that context whether we can review our position on any of those measures and obviously we have applied very stringently the fairness test which we have applied throughout the course of the term. There are four measures which we had previously opposed in the Parliament which in the context now, of where this Government has taken the Budget to, with the tripling of the deficit, where we will now be in support of the following measures. This will be the sum total of the measures where there is a change of position. When Chris Bowen referred a moment ago of further announcements we wo uld have from here on, none of those will go to measures that have previously been put to the Parliament. The four measures are these - the R & D tax incentive, this reduces tax offsets for the first $100 million of eligible expenditure by 1.5 per cent. It raises $860 million over the forwards, $2.8 billion over 10. Secondly, the higher education indexation program, with funding being indexed to CPI, raises $119 million over the forwards, $3.7 billion over 10. The sustainable higher education loan program reduces the repayment or accumulated Help debt for certain courses. We had made our own announcement in this area with respect to the support we would provide with specific STEM courses. This raises $24 million over the forwards. So these measures put together leave the Parliament in the following circumstance. There is a remaining set of measures worth $5.5 billion over the forwards or $23 billion over 10, that the government includes in its Budget bottom line that wil l never pass the Parliament. The government, when they talk about their Budget figures, and when they present their Budget papers and wave it around as their plan, $5.5 billion over the forwards, $23 billion over 10, consists of money they can never deliver to the Budget. Some of these are measures that have been around for a very long time. Many of these hit family payments in a very direct way. Those measures, many of them the Government could have made them double dissolution triggers if they really wanted to get them through. They didn't. Instead, it it's a fiscal con, that the Government is continuing with that there are measures that will never hit the Budget bottom line that they're wanting to simply keep on the books as zombie measures to deceive the public about the true state of the Budget.
SHORTEN: Are there questions for us? Eliza, hi.
JOURNALIST: This seems to be about [inaudible], are you actually committed to ending the age of entitlement for want of a better phrase or will we see a Labor Government if it gets elected introduce more free money like the SchoolKids Bonus?
SHORTEN: We are committed to jobs, education and Medicare. We are committed to doing Budget repair that is fair. We're committed to improving the bottom line of the national Budget without smashing household budgets. What we are doing is what no opposition has done in a generation, we're outlining our measures, we're outlining methodically before and during the campaign what we stand for and why people should vote for us. We are outlining a series of policies that will help family, properly funding schools, saving Medicare, making sure there's real action on climate change, job creating nation building projects for road and rail, but what we are also doing is outlining how we pay for our promises. We've set forward the principles in our economic plan that we will make sure that we reach our balance in the same time as the government and our trajectory to improve and tackle government debt over 10 years wil l be a superior proposition to the government. But what we are not doing is pretending that zombie cuts in the Senate which have no prospect of passing can contribute to the bottom line of this nation. The changes we are recommending are ones that are difficult decisions but, quite frankly, if we want to pay for Medicare, for schools, for family-friendly measures, to make sure we can reduce the deficit over time, these are the decisions that have to be made and we will keep outlining in a methodical fashion. Remember before the election was called we explained negative gearing reform, capital gains tax reforms. We explained how we make multinationals pay their fair share. We explained a range of our measures in superannuation which means the unsustainable tax concessions going forward are reined in. During this election we have made it clear how we pay for education, how we tackle Medicare, action on jobs and infrastructure and climate change and child care, and we have our 10-year economic plan and today my finance team have been going through and explaining step by step how we pay for our promises.
SHORTEN: Let's not be a pessimist, we're aiming to win this election and I think you probably expect me to say that. This election still has 22 days to go. We're the underdogs. But, as I travel around Australia and you and the travelling media see it too, Australians are receiving well our statements. So we are focused on winning on July 2 full stop. But what we do recognise and I might get Tony to supplement it to remind people about these zombie measures, is there are measures that this right-wing government are proposing which will never pass the Senate in any imaginable set of circumstances, and we're calling on the government to explain how they're going to fund their unfunded promises because they're relying on measures which simply aren't ever going to see the light of day. Tony?
BURKE: Simplest example, one of those measures is a measure that when someone is unemployed they will have nothing to live on for four weeks. Nothing to live on four four weeks. There is no complexion of the Parliament where that will get through. Malcolm Turnbull, since becoming leader, hasn't wanted to talk about it at all. Didn't want to put it forward as a double dissolution trigger but they want to sneakily keep it on the books. What we are doing today is calling them out on that. What we are giving you is the Labor position on the measures where we are willing to support, following the election, and the measures where we will not move. That means you get two messages today - one about the fiscal responsibility of a Labor Government, and the fairness of a Labor Government, but, secondly, the consequences for the current government that they have presented Budget numbers that are undeliverable and called out on that.
JOURNALIST: You said when you announced the increase in tobacco tax under Labor that you would bring in roughly $48 billion over 10 years. The Budget says it's about $28 billion. You say you are being upfront about how you will pay for your promises. Be up-front on which set of numbers you are using for tobacco revenue [inaudible].
SHORTEN: I will get Chris to answer that.
BOWEN: Thank you, Tim. The Parliamentary Budget Office is a coster authorised under the Charter of Budget Honesty and equal status coster to the Treasury and Department of Finance. However, since we announced that, the Government has appropriated the measure after they called it a great big tax grab and railed against it, Scott Morrison got up on Budget night and adopted it. Quite shamelessly. Now the situation is when the government and the opposition have the same policy on something the Budget numbers - i.e. the numbers in the government's Budget - are the ones factored into our figures as well. So they are exactly the same.
JOURNALIST: Some of these [inaudible] relevance you previously did not back and are doing so now. Are - can you guarantee your party will stand by these decisions? And what sort of consultation went on with your party before making these announcements [inaudible]?
SHORTEN: These are difficult decisions and your question appreciates that point. These are decisions that have to be made. My Party is committed to the priorities we're outlining in this election. Properly funding our schools, our TAFE and our universities, making sure that child care is affordable and quality, making sure there are more places. Our Party is committed to making sure we stop the privatisation of any part of the Medicare system and that we defend Medicare and make sure that GPs don't have to introduce up-front fees. My Party is absolutely committed to making sure that the price of medicine doesn't go up, that is why we will scrap Mr Turnbull's price hike. My Party's committed to seeing Perth Metronet built, AdeLINK with its tram lines built, we are committed to building Cross River Rail in Brisbane, for example, and other nation building projects. In order to fund these priorities, in order to be able to protect families, in order to be able to do Budget repair that is fair and reduce the picture of government debt over the next 10 years, we do have to make these hard decisions. I really wish that the Government had just taken up our propositions about reforming VET loans. I really wish the Government wouldn't stick with the discredited Emissions Reduction Fund which no-one, except Tony Abbott and now Malcolm Turnbull, believe in. I really wish the Government would look seriously at reforming the unsustainable nature of negative gearing and capital gains tax deduction reforms over the prospect of 10-year period. But they haven't done that. By the way their 2014 Budget, when they should have boosted confidence in an economy transitioning from relying on mining, shattered confidence. The Government has given us no choice with tripling the deficit and the decisions they have mismanaged over the last 1,000 days so we have to make hard decisions. But we are deter mined, we are committed, we are resolute about funding our priorities.
JOURNALIST: Is this how you're going to pay for your child care package, in particular? Will you commit to the cap of below 23.9 per cent?
BOWEN: We've taken a position consistently we announced savings and we announced spending. We don't hypothecate one particular measure to another. We've announced a lot of savings, negative gearing reform, capital gains and as I've said, the total improvements that we've announced previously comes up to now $122 billion. But we haven't said this pays for that, we've then announced spending as well, and over the 10 years, we have more savings than spending. It's the Government which has in a political manoeuvre hypothecated for the purposes of the Senate. The words of Arthur Sinodinos, not me, he hypothecated family tax benefits to child care. Previously they wanted those cuts to Budget repair in the 2014 Budget and in the 2015 Budget they said, "Now we need those cuts for child care" - the same cuts - it's a ridiculous non-existent hypothecation. We don't do that. We announced savi ngs, revenue measures, and we announced spending and we reconcile our figures. In relation to tax to GDP, the Government has a technical assumption for forecasting purposes, they don't have a cap, they have a technical assumption for forecasting purposes in the Budget.
JOURNALIST: Mr Turnbull has come out as a feminist recently. Women's issues will always be on the agenda. They're still on the agenda. Will your Government continue to tax items on sanitary items and punish women for an essential bodily function?
SHORTEN: I've always been a feminist, it's not a recent development. In terms of the GST on tampons, in an ideal world we would scrap that. But in order to do that you have to get the concurrence of state premiers. The Liberal Governments in New South Wales and Western Australia have made it clear that idea is dead, so I'm not going to stand here and make a promise we can't keep, and the challenge would be for Mr Turnbull to persuade Mr Baird and Premier Barnett to change their positions.
JOURNALIST: Just ... on the Tax and Transfer Policy Institute benefit changes. How many families will be worse off?
SHORTEN: In terms of our changes, our priority - and it's been a difficult decision - has been to look at families underneath $100,000. We are saying that if you receive as a family an income of over $100,000, that we'll reduce the benefits you receive by half. I might get Chris to supplement that answer.
BOWEN: The vast majority of families are under that $100,000.
JOURNALIST: Is there a number of families that will be worse off?
BOWEN: I've outlined the total save to you. The Family Tax Benefit supplement is around $700 per child, so it depends on how many children each family has as to the reductions impact. The vast majority of families are under the $100,000 cap. We could certainly provide further details to you.
JOURNALIST: Earlier this week you said the... (inaudible).. would that be by a small extent or a large extent?
SHORTEN: I'll get Chris to supplement this answer, but the principles that we outlined when we spoke about our 10 year plan for Australia's national economy are one, was that we would have greater savings over the decade than spending. Two, that because the Liberals have put our triple-A credit rating at risk, and they're the only political party that's been called out on it by the credit ratings agencies, what we would do is reduce the deficit each and every year. We've also said the structural reform we make will be prospective in nature and we're not going to rely upon "zombie cuts" and nonsense measures which will never see the light of day. I think the difference between us in the first four years will be relatively modest. What I can also guarantee Australians is that we will achieve balance in the same year and because we're taking the tough decisions. Not to give a $50 billion giv e away to large corporations including the banks, who Mr Turnbull wants to give a $7.4 billion tax give away to. Because we're making tough decisions which are not well received by the big end of town and the Business Council and their ads spending millions of dollars to gain billions of dollars in advantage from Liberal friends after the election. We can promise we will make real structural reform which will lower Government debt and put Australia in a better position for whatever economic circumstances approach our country in the future.
JOURNALIST: What's the total better off figure today that the Budget is thanks to these decisions?
SHORTEN: I'll get Chris to take you through again.
BOWEN: Of the new announcements?
JOURNALIST: The money that you're announcing today.
BOWEN: I'll run through it for you. It's just in a couple of categories and a total that we've got to so far. The new Labor savings announcements, the ones that the Government hasn't announced, $6.1 billion over the decade, $92 million over the forward estimates. A $10 billion improvement in the Budget bottom line over the decade of the updated costings that I've announced today. So the total Budget improvements of what we've done, net what we continue to oppose is $8.9 billion over the forward estimates, $105 billion over the decade.
JOURNALIST: Mr Bowen, can I get you the detail of the private health insurance, we are in the dark a bit here, we still don't have a release. When you say you're not going to cover people on these types of extras, does that mean if they have a core hospital policies and they've got extras they don't get any rebate at all?
BOWEN: No. The rebate would not apply for the element which is natural therapies. There'll be implementation issues with the private health sector. I'm sure they will not welcome this announcement. They will oppose this announcement. We understand and respect that. We have to act in the national interest. Private health insurance is, I think, most people would understand originally for core health care. As I said before, nothing wrong with natural therapies. You can continue to use them. It is open to private health insurance providers to continue to offer coverage, but the rebate will not apply to the proportion which covers natural therapies.
JOURNALIST: Why don't we have the release in front of us?
SHORTEN: Tommy, we'll get you the release mate. Are there other questions?
JOURNALIST: The Council of Small Business organisations today says that Labor has regressed on small business policy under your leadership to the point where they're saying you're worse than the Greens. What's your response?
SHORTEN: Complete rubbish. First of all, we are supporting tax cuts for businesses under $2 million down to 27.5 per cent. We're supporting the instant asset write-off. But what I won't do is pretend a company which has $100 million or a $1 billion turnover is a small business. I won't jeopardise the education of our children or the health of sick people or pensioners facing increased prescriptions and I won't be intimidated by vested interests who simply say the only economic plan in this country is to reward the big end of town. We've got other good measures which help small business. Access to justice when they're facing unfair competition from large operators. Access to microfinance for start-up businesses. The other thing we'll do for small business in this country is restore confidence in the high street amongst customers. We've got flatlining wages growth. We've got a Government who every time they have a Budget calls it wrong. They called it wrong in 2014 with their harsh cuts and by 2016 we've seen three economic plans no less from Mr Turnbull. I can promise small business that a Labor Government I lead will never have a 15 per cent GST. If you want to kill off small business in this country, go and speak to any greengrocer and say we want a 15 per cent GST on fresh food. I don't buy the arguments. I accept why they're being made. This is an election and every vested interest in town is queueing up to get what they can. We see the Business Council of Australia spending millions on an advertising campaign so they can reap back billions in the form of unwarranted tax cuts which will deliver dubious economic growth at the expense of Medicare, education, child care, and the expense of families. I have a great vision for small business in this country, but what I'm not going to do is wreck a community, further diminish confidence, go after the pensioners and the sick just so we have to give a tax cut that the nation can't afford at this time to moderate to large businesses.
JOURNALIST: Jenny Macklin in February said that the Government's cuts to the Family Tax Benefit supplement completely fail the fairness test. Why are your cuts fair now?
SHORTEN: This is my economic team and Jenny Macklin does a great job and she's been a great champion defending fairness and opposing the pension cuts, for example. What's unfair is if your kids don't get properly resourced at school, if you've got to pay a price to see a doctor you can't afford and, therefore, delay going to the doctor. What I know is unfair if you lose penalty rates at work. What I know is unfair is that the price of medicine goes up for people on fixed incomes. What I know is unfair is we don't have properly funded public transport in this country. Let us also be really clear. We are digging in and we are going to fight the hardest we can against cuts to family payments for people whose income is less than $100,000. I think in a difficult environment, Labor defending families on incomes of less than $100,000 is the right ground to fight on. I wish that we didn't have to make thes e hard decisions. But I can promise Australians that a Government I lead will be upfront with people before an election. We won't do something after an election. I can promise Australians we understand how working-class and middle-class families organise their lives. We'll make sure that families, all families have their children properly resourced when mum and dad need to take kids to the doctor they won't have to pay an upfront GP tax. We'll make sure they never have to face a 15 per cent GST. That's unfair.
JOURNALIST: A member of Labor's national executive and a Victorian minister has quit this morning over the CFA EBA dispute. Are you disappointed it's come to this? Do you think this is an appropriate outcome?
SHORTEN: I think it is disappointing to see any Minister resign as part of complex and difficult negotiations. I also want to record again my complete support for our firefighters. They're all professional, both the career firefighters and the volunteers. Every dispute no matter how difficult or complicated has a start, a middle and an end. And I would expect the Victorian Government to be able to outline how they intend to resolve these negotiations, because they do need to be resolved.
JOURNALIST: If you're fighting for families, working class and middle class families as you say, families over $100,000 are rich, are they?
SHORTEN: I absolutely did not say that. What I said is when you've got to make decisions to defend family payments I'll defend utmost payments for people under $100,000. We're not proposing scrapping payments for families over $100,000. But we think in a difficult Budget environment brought about by this current incompetent Government who talk a lot of talk, but do little action, they've tripled the deficit. We've come across the best compromise, which is still providing families over the $100,000 50 per cent of the benefits they were getting. But what I also say is that families, regardless of their background, deserve to have their kids educated at well-resourced schools. Every family in Australia regardless of background, should be able to see a doctor and not face an upfront fee which will deter people from going to the doctor. What I believe is we should be defending the price of medicine and that' ;s why we'll scrap Mr Turnbull's price hikes. Labor and families work together. Liberal and families well, the Liberals smashed the family budget. Because they want to give an unwarranted tax cut to the big end of town that this nation simply can't afford. Perhaps one more question.
JOURNALIST: What is your view on Victorian Premier (inaudible) Daniel Andrew's decision to back (inaudible)?
SHORTEN: I might refer you to the earlier answer I gave. I think it's disappointing that this conflict is going on. I absolutely do, because I do think that the volunteers deserve to be treated with respect and I also respect the work of career firefighters. How could any reasonable person think otherwise than that? I do expect Premier Andrews, because this is a State issue at its core and they're the people closest to this dispute, to resolve the matters. I've got no doubt they will. I wonder if my opponent Mr Turnbull, bored with trying to run Australia, might try to get involved in Victorian politics. All I just say is that you don't need people looking to make political trouble in an already complex conflict. My money is on the Victorian Government, the volunteer firefighters and the career firefighters working these issues out. Because that's what they've helped do for Victorians, the State I love , for many years. Thank you everybody, see you a bit later.