NATIONAL PRESS CLUB
WEDNESDAY, 8 JUNE 2016
TONY BURKE, SHADOW FINANCE MINISTER AND MANAGER OF OPPOSITION BUSINESS: Thank you very much, Mark. I acknowledge the traditional owners of the land we are on today and their elders both past and present. I want to thank my parliamentary colleagues for being here, in particular Senate Leader Penny Wong and Ed Husic, who is also from the finance team. Thank you all for being here, and to the National Press Club for the first time getting two finance spokespeople to conduct a debate; proof you are not worried about the ratings. So it’s a pleasure to be here.
In this particular election, we do have two very clear visions about how you grow Australia. We have a government proposing one of the most transparent forms of trickle-down economics we've ever seen and we have a Labor Party talking about investing in the centre. We have the economic policy document released today by Bill Shorten and Chris Bowen which in turn goes through investing in people, investing in infrastructure. Driving investment in renewables and new technology, supporting innovation and start-ups, and helping small business. Budget repair that is fair.
Against that, we have a government policy which was meant to be based on their Budget, and today is in tatters. You go through the Budget measures meant to last all the way to the election and have not even made it to the halfway point of the campaign. The Budget measure on the backpacker tax is not being honoured by the government in this election campaign. They have flagged further education and health cuts to come after the election the public won't be told about before the election. They said they will “recalibrate” their tax plan including potentially their Budget centrepiece. They said they will review their superannuation policy, they may bring forward their childcare policy and there is more than a billion dollars’ worth of new spending that has come out in the course of the campaign.
Most importantly, their Budget bottom line still relies on the series of so-called zombie measures that have had no capacity to make it through the current Parliament, and look like they would have very little capacity to make it through a future Parliament. Those measures, up to $18 billion over four years, drive a hole right through the costings the government has put forward. Some of those measures are meant to start on 1 July, even though the election itself won't happen until 2 July. Yet they are meant to be already legislated to happen on 1 July. There are holes through their costings. Any claim the Prime Minister made today it's all paid for and it's all set out in the Budget cannot stack up when you look at the number of measures they have abandoned or changed already.
In this election campaign, it is clear we need structural reform to the Budget. The Government, in the Budget they've just delivered, said they will start paying down debt, they will be back in balance in year five. The year before they said in year five will be when they start paying down debt. The year before that, in their first would Budget, what year did they say they would be able to start paying down debt? Year five. As long as we don't engage in structural reform of the Budget, we will forever be in a situation where any paying down of debt and strengthening of the Budget will be entirely dependent on changes in parameter variations from Budget to Budget.
If I give a very simple example of the way Labor is pursuing structural perform and the Government is not. Compare the negative gearing and capital gains tax measure to the Government's corporate tax rate cut. In year one, the negative gearing measure improves the Budget by only $600 million. Compared to our promise of a small business tax cut, their tax cut hurts the Budget by only $200 million. By Year 10, the capital gains tax and negative gearing policy improves the Budget bottom line by $8 billion and the corporate tax cut hits the Budget by $13 billion. That's why we can't just look within the forwards. In the election campaign we are going into, neither side of politics will be promising a surplus inside the four years. What matters is whether or not we make the structural change the Budget needs and to do it in a way that serves the economy, rather than hurting it.
TONY BURKE: Thank you so much. I'm not sure we actually got beyond the talking points and moments the debate had been like an argument with Siri. But the challenge I think brings the whole debate together goes to that last question. In terms of the next generation, how do the competing plans unfold? You have a government promising to cut education, to have a second rate NBN, to have cuts to health, that will not address the structural problems in the Budget, that leaves people with little prospect of the next generation ever owning their own home and fails to invest in renewables to help Australia in the transition we are in.
Against that, you have a Labor party dealing with the structural problems in the Budget. A Labor party that hits a balanced Budget in the same year as the government and each year after that beats them significantly. By having the changes in structural nature of those Budget decisions, where our reforms make the Budget situation stronger through negative gearing and capital gains tax and the government makes it weaker through a corporate tax cut giveaway that increases year on year.
One of those plans, the Labor plan, delivers a future for the next generation which actually gives a stronger economy and better opportunity. What the Government’s doing now, is what the same old Liberals always do. Which is cut essential services, attack demand in the economy and to have very strong rhetorical positions that don't stand up to scrutiny; like the fact all their budget numbers in fact are already wrong. In this debate Mathias Cormann will not deal with the fact, by their own admission, the promised budget they themselves will not deliver.