Subjects: Coalition and Labor costings; John Howard on the election result; company tax cuts.
EO&E…
KIERAN GILBERT:
This is AM Agenda. With me now we’ve got the ALP campaign spokesperson, Katy Gallagher, and Liberal frontbencher, Scott Ryan. We’ll go first to you, Senator Ryan. In relation to the costings to be finalised today by the Government, another day talking about the economy, and so you’d be happy about that, and the Treasurer going to say that you’ve funded, in fact, more than funded the promises made during this campaign.
SCOTT RYAN:
Well, what we’ll see later today when we release our costings, is a clear contrast with what Labor’s done. Our Budget situation shows improvements. Labor have admitted that the Budget deficit will be bigger over the next four years under them. The taxes will go up, the debt will go up, and they promise that somehow, magically, it will get better in two or three elections, which surely brings back all the memories of the chaos of the Budget under Wayne Swan and Kevin Rudd, so the contrast today will be clear.
KIERAN GILBERT:
Katy Gallagher, is that damaging to Labor? I guess this goes back to that week in the campaign where there was that initial concession by Mr. Shorten, Mr. Bowen, and Tony Burke as well, that this was going to see high deficits across the forward estimates.
KATY GALLAGHER:
Well, Labor’s plan is very clear. We will be reducing the deficits year by year, just as the Coalition have forecast, and we will be reaching surplus in the same year that the Coalition intend to do so, and we have, certainly over the medium term, structural improvements to the Budget that the Coalition haven’t supported, so I think from our view, our economic plan is very strong, and there is a difference between the Government and the Labor Party. The Government wants to give a tax cut, %50 billion tax cut, to the big end of town, and we want to see investments in Medicare and health. We’ve outlined that in our fiscal plan, and it’s there for everybody to see.
KIERAN GILBERT:
I’m going to ask the Labor Senator in just a moment, Senator Ryan, about the things we don’t know about, like the superannuation plans for Labor, but I want to ask you about the Government’s plans that we don’t know about, and that’s a different thing altogether when you’re talking about the higher education policy. We don’t know how much you’re going to spend on that in terms of climate change, dealing with the emissions reduction fund into the future again. This is an amount of money that we’re not sure just how much you’re going to commit to that, so there are uncertainties within the government’s costings, and that’s even before we get to the so-called Zombie Cuts, which Labor says, and points out, that you’re likely never to be able to pass through the Senate.
SCOTT RYAN:
Labor can’t actually claim that our budget is not getting better, when they’re the ones actually tying the Government’s, the country’s hands, and the Parliament’s hands in actually improving the Budget balance. Labor’s always trying to divert attention from the fact that, for years in government, they always said it was going to be better in four or five years, and it always, every Budget, every Budget update got worse. Now, I heard the Treasurer on radio this morning, and he outlined that the money for the emissions reduction fund is actually fully accounted for, because Budgets are detailed over four years. Labor is trying this ten-year trick. No one believes that if you make it worse over four years, it will somehow magically get better in five or six. It is simply not believable. Now, the Government has actually accounted for programs going forward but they’re not specifically costed and detailed in the same way Budget estimates are, but they are reflected in the underlying cash balances the Treasurer outlined on radio this morning.
KIERAN GILBERT:
Katy Gallagher, your response to that and the criticism that Labor, while you’ve criticized the Government over its superannuation changes and being retrospective, yours will create even more uncertainty because, basically, when it comes to about $2 billion worth of the savings that you’re banking, we don’t know how you’re going to go about doing that.
KATY GALLAGHER:
What I’d say in relation to what Scott just said there is, there seems to be a bit of smoke and mirrors. There’s been about $7 billion in commitments from the Liberal Party, or the Coalition, during the election campaign. There’s the zombie measures that are contained in the Budget forward estimates, and we’re all meant to believe, apparently, today, if you read the papers, that the bottom line’s improved over time. I think that will be deserved, certainly, some intense scrutiny in terms of the outline of our costings where we have put in place, or booked the savings in relation to superannuation and some of the savings through the public service. We’ve been very clear that we would like to see those savings delivered, but we are going to take time certainly in superannuation to talk with the industry. That’s what they’ve said to us since the Budget was released, that we need to fully understand the impact of what the Government is proposing, and in relation to the public service about how you actually deliver savings through areas like contractors, which the budget has ballooned over the last two years while they’ve been sacking public servants. They’ve been hiring contractors at much more expensive rates. We’ve been clear with that, that’s in our fiscal plan, it’s there for everybody to see, and I don’t think you can certainly say that we aren’t being upfront or transparent with those plans.
KIERAN GILBERT:
How much, Senator Ryan, is the Government relying on the expectation, the forecast on your company tax cuts, that they will work and generate the growth to get the bottom line, essentially, where you are saying it will be, not just in the forward estimates, but for the medium term as well. As the Prime Minster said last night on that excellent report by Sara Ferguson on the ABC, he says that it’s all about trying to generate growth. Well, if your big policy item doesn’t do that, you’re lost.
SCOTT RYAN:
We’re not just talking about theory here, Kieran, we’re talking about practice. Governments over the last thirty years in Australia have made a point of reducing the corporate tax burden, knowing that flows to higher investment, which means higher wages, more jobs, and greater productivity through that greater investment. We know that countries in our region have lowered their tax rate to attract greater investment. We know that countries that have similar economies in other parts of the world have also lowered their corporate tax rate. We know it drives growth. It is not just a theory, although it is a theory that was supported by Paul Keating. It was one that Ken Henry promoted in the tax review commissioned by the previous Labor government, so it’s a well-understood, practical measure that encourages investment, which we know leads to increased economic growth. Now, Australia has always been a country that needs foreign investment and capital flows from overseas, and making Australia more attractive, particularly as our competitor nations have been lowering their corporate tax rate, will ensure that we continue to attract the investment that drives more jobs and particularly higher wages.
KIERAN GILBERT:
Katy Gallagher, in relation to the broader argument, you can respond to some of what Scott Ryan said there, but in relation to the broader politics of this campaign, are you worried now as we are in these final stages that Labor hasn’t done enough to neutralize the economic issue, the economic debate, given, again we saw it on Sunday, that the costings reinforcing this message that Labor’s numbers just won’t be anywhere near as good as the government’s, at least for the short term?
KATY GALLAGHER:
Well, I think the approach Labor has taken is to lead the policy agenda, to lead the agenda in terms of how to make structural reform to the budget to improve it over the medium term, which is essential for budget repair. We’ve been very clear about what our priorities are. They are about investing in Medicare, saving Medicare, investing in schools, making sure we have our kids brought up in an education system that’s going to prepare them for the jobs of the future, and we have been clear that in the short term that will involve higher deficits, but in the medium term, and we do return to surplus in the same year the government does, in the medium term, the budget is in a much better position with the policies that the Labor Party has outlined during this contest, and we will have to keep talking about that right up until the second of July. We’ve been doing it for the last eight weeks, we will continue to do it, because our plan is better for the future, not only of the budget, but of the Australian community.
KIERAN GILBERT:
Senator Ryan, I want to ask you about the comments made by John Howard yesterday to David Speers in that interview here on Sky. He expressed a confidence in Malcolm Turnbull will not only win, but win with sufficient a margin to get through the various pieces of legislation through that joint seating, which basically means that he will lose no more than nine seats to maintain a majority. Do you share that confidence from the former Prime Minister?
SCOTT RYAN:
Well, Kieran, some people regard me as a bit of a pessimist, but I’m not going to question someone with the experience and standing of our former Prime Minister, John Howard. Look, I have to admit in the week that I’ve been traveling around Australia, and the Central Coast yesterday, heading out to polling booths around Victoria over the weekend, the message I’m hearing from voters is that the scare campaign from Labor hasn’t worked, and they are very interested in the agenda that the Government and the Prime Minister are putting forward, so I certainly hope that the former Prime Minister is correct in his prediction.
KIERAN GILBERT:
He also put it out that he doesn’t believe that the voter angst is anywhere near it was in the UK, for example, with the Brexit, or the hollowing out of the middle class, like we’ve seen in the US, Scott Ryan, do you think, and obviously the flow and support for Donald Trump as a result. Do you agree with him on that, that we don’t have that much angst towards the political class in this country?
SCOTT RYAN:
All due credit to John Howard himself, one of the things that John Howard’s government would pay to Costello as treasurer ensured, particularly in the 2000s was that we didn’t have the growth in household income and equality that has happened in the United States. I mean, after the ’80s we did have a difficult period under Labor where there was no real wage growth for a decade, but then we got 20 per cent real wage growth of the decade, effectively, that John Howard was Prime Minister. And I think that reinforces the fact that, while this is probably something for a bigger discussion, that the economic policies that the previous Coalition government put in place, actually ensured real household income growth. People felt they were getting better off, we had strong controls on our borders, and that led to, essentially, a national consensus that the country was moving in the right direction. If there’s angst in Australia today, I haven’t picked it up anywhere near to the extent that I think exists in the UK or the United States. It really is a result of the fact that that hasn’t continued, particularly under the previous Labor government, and some difficult choices have had to be made by this coalition government to try and put those measures back in place.
KIERAN GILBERT:
Katy Gallagher, what do you make of that assessment from the former Prime Minster, and also the suggestion by Senator Ryan this morning, that the levels of anger that have driven much of what we’ve seen internationally recently don’t exist here, therefore, maybe not the preconditions for a Labor win this time around.
KATY GALLAGHER:
Well, I would say I’ve been doing a bit of traveling too. I’ve seen the Central Coast yesterday, like Scott, and I would say, certainly people in that area, around Bateau Bay, were talking with me around their concerns around Medicare, around housing affordability, around education funding, and jobs for their kids. I wouldn’t say there’s a sort of anger. I would certainly say there is a level of concern, and I think people understand the level of inequality that’s existing in our community. You know, I think that is a genuine issue for people, certainly people who are finding it hard to get a job, or hard to buy a house, or don’t believe their kid’s getting the right education, are certainly sitting there wondering and making decisions around their vote on Saturday based on what the parties offer for them. You know, I would say if it’s around education and health, and investing, and looking after low and middle income earners, then Labor’s policies are the ones to go with.
KIERAN GILBERT:
ALP campaign spokesperson, Katy Gallagher, and Liberal frontbencher, Senator Scott Ryan, appreciate your time this morning. We’ll talk to you soon.
SCOTT RYAN:
Thanks, Kieran.
(ENDS)