Interview on ABC AM with Sabra Lane
Subjects: Federal Election
Sabra Lane: A sign of just just how hard this election will be fought, the Coalition has chosen the first full day of campaigning to release fresh Treasury Department costings of Labor’s policies, saying the ALP he will slug voters $387 billion more over the next decade. The Coalition says that’s $5400 for every household. Most of the costings, $230 billion is due to Labor’s decision to reject stages two and three of the Coalition’s plan to cut personal income tax. Simon Birmingham is the Federal Trade Minister, and during the campaign. He is the Liberal Party’s official campaign spokesman. He joined me earlier.
Simon Birmingham, this morning the government’s arguing that Labor’s tax plans will raise a lot more money than its previously said. What are you suggesting and have you come to that conclusion?
Simon Birmingham: Well based on Treasury analysis, Labor’s tax policy, will see Australians pay $387 billion more in tax and what does that mean to the annual average household? It means the yearly household tax bill would be $5400 more per household on average. Now that is an enormous amount of extra tax that people will be paying on their income tax, in relation to retirees, in relation to housing across business and superannuation. It’s a huge hit on households and of course on the economy.
Sabra Lane: How happy is the Treasury Department that it is being used by the Coalition in this political fight?
Simon Birmingham: Well this type of analysis has been done many times before. Wayne Swan has done so as well in previous campaigns to look at costings and implications of all sides and ultimately this election is a choice and it’s a choice between the Liberal and National parties have delivered a strong economy a budget that we’ve brought back to surplus that’s allowing us to provide for tax cuts or Bill Shorten who is making so many reckless spending promises that he’s having to jack up taxes by some $387 billion.
Sabra Lane: Let’s dig into some of that. Chris Bowen has already said that this is dodgy. He’s also, Labor’s also pointed out that the head of Treasury is now Phil Gaetjens a former adviser to Peter Costello. What are voters to make of that?
Simon Birmingham: Well if the Labor party dispute the $387 billion figure, let them tell Australians exactly how much extra their tax hikes will be. We know that they’re going to collect more in personal income tax.
Sabra Lane: That is the single biggest item here due to Labor’s rejection of the Government’s tax cuts.
Simon Birmingham: Working Australians should be very scared about that.
Sabra Lane: Instead Labor is offering instead to deliver bigger benefits to workers on lower incomes. Voters might actually prefer that.
Simon Birmingham: This is actually looking at the sum total of Labor’s policy. And Australian workers should be very scared that income taxes for the average worker will be higher under the Labor Party. NATSEM modelling not Treasury shows that average workers will be around $1000 worse off under the Labor Party. That compares with the fact that we are delivering tax cuts that start significantly this year that would see a household that’s a nurse and a tradie around $2000 better off because of the Liberal and National parties tax cuts. And the reason we’re able to afford those tax cuts is because we’ve got a strong economy, because we’ve brought the budget back to surplus. All things the Labor Party was incapable of doing when they plunged the nation’s debt and deficit last time.
Sabra Lane: Just a couple of points, the budget is not in surplus yet. We will not know that until September next year. And the independent Parliamentary Office Budget Office has costed Labor’s policies. It’s a credible office that Labor’s based its figures on that and I’m not aware that the Parliamentary Budget Office has actually recanted on its costings.
Simon Birmingham: Well as I say Sabra, if Labor don’t think it’s $387 billion in new taxes, that their retiree tax, their housing tax, their higher income taxes will collect. Let the Labor Party tell us exactly how much it is. Bill Shorten and Chris Bowen could come out today and say how much more tax they’ll collect. But this is Treasury analysis, it’s fair dinkum and what we’ve seen in terms of the surplus is that as a government we have met and exceeded each of our budget projections. You know when Wayne Swan forecast a $47, surplus he ended up delivering a $47 billion deficit, we have forecast carefully each budget gradually bringing the deficit down from $33 billion to $10 billion to $7 billion to $4 billion. And now we are projecting a $7 billion surplus. We have met and exceeded each of our projections. Australians can have full confidence that we will deliver that surplus.
Sabra Lane: This is the first full day of the election campaign and the Coalition’s gone 100 per cent negative, wanting to talk about Labor’s policies. What are voters to make of that tactic?
Simon Birmingham: This is about framing the choice. Now we are incredibly positive that our policies will continue to deliver more jobs for Australians. We’ve delivered 1.27 million jobs since we were elected and we project 1.25 million jobs over the next five years. That’s about more opportunities for Australians to get ahead and to be able to do more in their household. We’re also very positive about the fact that the policies we released in the Budget just last week will seek more support for mental health, we see more investment in infrastructure in busting congestion across the nation. So we’ve been releasing many very positive policies. But this is also about framing the choice for Australians. And it is a stark choice, the Labor Party is going to this election with very radical tax policies that will vastly increase the rate of taxation collected in Australia. And the consequences for that is that Australian households will be facing a bill of around $5400 per annum as well as the prospect of a weaker economy. And that’s just something that means a surplus won’t be there. If a surplus isn’t there because Labor’s weakened the economy then you won’t have the money to invest in hospitals and schools that are at record levels already.
Sabra Lane: Thanks for talking to AM this morning.
Simon Birmingham: Thank you Sabra.