E&OE - PROOF ONLY
PRESENTER: Well, look it’s obviously been Federal Budget Week in Canberra and the Treasurer Scott Morrison delivered his first Budget on Tuesday which outlined a 10 year plan to reduce the rate at which companies are taxed in Australia. The argument being that will stimulate the economy and encourage jobs growth. Well, last night, with the exception of the smallest of businesses, the alternative Prime Minister, Bill Shorten, delivered his formal reply to Tuesday’s Budget and in a nutshell the Budget is framed around taxing the rich, reintroducing the so called ‘deficit levy’ on people earning more than $180,000, maintaining the current rate of taxation on big business and using all of that money to inject new life into our schools and hospitals. Penny Wong is the Shadow Minister for Trade and Investment, and she joins us on the line now. Penny, good morning and thanks very much for your time.
SENATOR PENNY WONG, LEADER OF THE OPPOSITION IN THE SENATE: Good morning to you both.
PRESENTER: Now, can I just ask from the get go Penny, I’m having a few problems just wrapping my head around the logic of what happened in parliament yesterday because Labor – understandably given that the Prime Minister had a shocker in that interview on Sky News – you spent the whole day teasing Malcolm Turnbull about the fact that he didn’t know how much his company tax reductions were going to cost the budget. Then last night Bill Shorten stood up and said that we are going to save some $49 billion by blocking those tax cuts. If Malcolm Turnbull doesn’t know what the figure is, how do you guys know what the figure is?
WONG: Well, we’re not the Government, but what we’ve done is we’ve gone to Parliamentary Budget Office and got some indicative costings. But the point is the Government should be telling Australians how much this is going to cost. The centrepiece of the Budget though is what they call a 10 year enterprise tax plan. Now, if you’re putting forward to Australians that ‘here is the centrepiece of my plans for your future – for the country’s future’, you reckon should be able to say at least broadly, what it’s going to cost them. Because what we all have to remember is that tax cuts are to big business and this isn’t just for small business, this goes up to businesses with a turnover of $1 billion over the decade. That’s money, effectively, that taxpayers are foregoing, its less money for schools and hospitals. And you know ultimately, you’ve got to work out what your priorities are and one of the ways of doing that is making–
PRESENTER: -Did you provide costing over the forward estimates when you were in Government?
WONG: We handed down the Gonski and NDIS packages. We laid out indicative 10 year plans for those. And, look, you’re right Penbo, let’s be completely frank here, budgets do look at the forward estimates, that’s four years, but if you have got a 10 year plan you should be able to say broadly what sort of cost that will be to the Federal Budget. Particularly when we’ve got a pretty difficult position in the Federal Budget; we’ve had the deficit triple under the Government in the last couple of years. And the Government had no trouble, I’ll make this point, when they wanted to make a political point about the tobacco tax they had no trouble then putting out a 10 year cost. They just don’t want to do it when it doesn’t suit them.
PRESENTER: Hey Penny, you said you got your figures last night checked by the Parliamentary Budget Office. Are they the same people who knocked up of the back of a beer-coaster your costings for the tobacco tax? I mean they were-
WONG: -Come on, Penbo.
PRESENTER: But no, that’s a fair criticism-
WONG: You’re feeling a bit punchy today.
PRESENTER: No, no, no. I’m making the point because we had Albo on the show on Wednesday and his argument was essentially, well, don’t blame the Labor Party, these were the figures we got from the Parliamentary Budget Office.
WONG: Well I think-
PRESENTER: -Well, that’s your defence on having a $20 billion error.
WONG: Don’t you think it’s pretty unfair talking about beer coasters. I know we all like a drink but look-
PRESENTER: -Well, what other methodology are they using then?
WONG: Well, let’s be clear on what’s happened on tobacco. And again, let’s remember, that attack from the Government, they had to put out a 10 year costing on that and they were pretty happy to do that when it suited them on the company tax. But, look, it’s a reasonable question. And it is clear is that Treasury and Government have changed their assumptions around the tobacco tax. Now, we don’t know how they have done that. I’ll ask Treasury that today. What the Parliamentary Budget Office said, very clearly, is they used assumptions that Treasury had previously used. And, that’s how they got the costing and they have stood behind that. Now, we’ve said all along, once the Budget was handed down, and before the election, we’ll ensure all our costings were revised in light of the new bottom line, new parameters, so that is what the assumptions are around growth, unemployment, interest rates and all those sorts of things. But, the Government’s attempt to beat up a black hole was a political exercise and it stands in stark contrast to the fact that the Prime Minister won’t even tell you what his tax cuts will cost.
PRESENTER: Senator Wong, last night I was taken by the fact that the Opposition Leader referred a couple of times to the NBN and the fact that Malcolm Turnbull delivered a slower NBN and that the Federal Labor would deliver a first rate fibre network. What precisely is Federal Labor’s policy on the National Broadband Network. because I wasn’t aware that an announcement had been made?
WONG: We have said we want to ensure more fibre in the network. And, the NBN is – you know, I was in Estimates yesterday and it was pretty clear the the Coalition Government will hit its cap of how much taxpayer money it’s prepared to put into the NBN over the next couple of years. They’re then telling the NBN to go to the market and debt finance. But the reality is, they know that’s going to be a problem and they’re already putting in place contingencies around that. So, looking at whether they would have to give a guarantee or put more money in so Malcolm Turnbull has presided over a cost blow-out of the NBN.
PRESENTER: So, how much are you willing to spend to add more fibre to the network?
WONG: We will be saying more about that in the election campaign I am sure. I’m sure, Jason Clare will be adding to our announcement on that.
PRESENTER: Hey Penny, Bill Shorten insisted last night that there will still be relief for small businesses with the company tax rate is down to 27.5 per cent for businesses with a turnover of less than $2 million. I’m just wondering though, there would be a lot of small to medium businesses in South Australia that aren’t the Microsofts, you know, they’re not racking in and generating billions and billions of dollars who might be in the, say in the $2 to $5 million dollar bracket, who would love some form of tax relief because it might help them expand. There seems to be a bit of a view on the Labor side at the moment that business doesn’t deserve a tax cut because they will just keep the money. Isn’t there an economic stimulus argument for taking the brakes off business?
WONG: Well, I think this comes down to priorities, because a tax break for business means less money for schools that many people send their kids to, the TAFE system, less money for our health system, for our hospital system. And, that’s ultimately, that is what Bill laid out tonight. We’re up for a tax cut for small business, businesses that turn over up to $2 million. We’re not up for a tax cut that over time climbs to a very large tax cut for very large businesses, a $1 billion turnover a year. And ultimately what we’re saying is, we know where the budget is, we need to lay out a plan for budget reform that’s fair, we’ve set out $71 billion worth of savings last night, and what we want to do, is put more money into the schools, and universities, apprenticeships, infrastructure. These are the things that will drive more growth down the track.
PRESENTER: Penny just before we let you go, we were laughing earlier in the week about how it takes a special kind of political genius to unite Corey Bernardi and Penny Wong on anything, but that is exactly what Sam Dastyari did with is sledging of Adelaide.
WONG: I read your column. He is pretty good at it isn’t he. He is a controversial figure.
PRESENTER: When he come on our show though, he said that you called him into your office and gave him a 20 minute dressing down, told him to pull his head in. What exactly did you say?
WONG: Well, you know, conversations should stay private. Though you should always be aware that Sam is always inclined to a bit of exaggeration, but let’s put it this way. I did point out to him that he was a very sore loser.
PRESENTER: Yeah no, he certainly was, but at least he came on air and did a bit of top shelf grovelling.
WONG: He is not bad at grovelling when it gets him out of trouble I reckon.
PRESENTER: That’s right, he wouldn’t do a re-enactment again though. Got to leave it there, Penny Wong, Shadow Trade Minister, thanks very much for joining us this morning.
WONG: Good to be with you both.