TRANSCRIPT - DOORSTOP - PARLIAMENT HOUSE - FRIDAY, 3 JUNE 2016

E&OE TRANSCRIPT
DOORSTOP
PARLIAMENT HOUSE
FRIDAY, 3 JUNE 2016

TONY BURKE: Good morning. There's been a lot of talk this morning and yesterday over company tax cuts and, in particular, I want to start with this point: Labor is going to the next election with a commitment for a small business tax cut. Under the proposals Labor is taking to the election, no company gets an increase in company tax and small business gets a company tax cut. That's agreed.

What the difference between the parties is, Malcolm Turnbull wants to change the definition of what a small business is. Last year in the Budget, everybody agreed a small business would be defined as a business with a turnover of $2 million or less. What Malcolm Turnbull decided a few weeks ago was every year the definition of what a small business is would change until, in a few years’ time, businesses with a turnover of $1 billion a year get the small business tax rate. Now, that fails every test of common sense. You end up with Mr Turnbull putting forward a plan that costs $50 billion across the decade.

Now they want to say in this really extraordinary, extreme rhetoric from Scott Morrison and Malcolm Turnbull there is some sort of war going on. Let's deal with the facts. Labor is putting forward and supporting a tax cut for small business using the same definition everyone was using of small business up until a few weeks ago. Malcolm Turnbull wants to every year redefine small business until it includes companies with a turnover of more than $1 billion.

You don't get tax cuts for free. Tax cuts always have to be taken into account of what the cost to the Budget is. The cost to the Budget of what Mr Turnbull is putting forward is $50 billion, and as a result of that, he ends up in a situation where he is attacking Medicare and attacking school funding.

Labor's plan for growth is about investing in people and investing in infrastructure. Investing in people by making sure people are better trained and making sure we've got a healthier workforce. Investing in infrastructure by making sure we've got the roads, the rail and, most importantly, the high speed broadband that the economy needs. When you make that sort of investment, investment in the middle, not throwing all the wealth to the top and hoping some of it might trickle down, the outcome you get is jobs.

REPORTER: Isn't it true senior Labor ministers previously had supported a company tax - Bill Shorten spoke about it in Parliament in 2011, people like Chris Bowen have spoken about it in his book and Penny Wong has spoken about it. Isn't there some merit in cutting taxes for businesses beyond a turnover of $2 million?

BURKE: The first thing, in terms of 2011, there has been a bit of footage running around over the last 12 hours or thereabouts, can I start with this concept: in 2011, yes, Labor put forward a company tax cut and the Liberal Party voted with the Greens against it. So in terms of: Have parties changed their position between 2011 and now on a very specific issue of that particular company tax cut? The answer is yes, but it is a story of the Liberal Party as well. Let's tell the whole story on that.

The second thing, though, what has changed since then? Well, in the last two years alone, for the financial year we are about to enter, the deficit has more than tripled. In their first Budget, the Government said the deficit for the next financial year would be $10 billion. In the Budget they just delivered, that number has blown out to $37 billion.

You have to ask the question with any tax cut, is it affordable? Now there is no doubt small business tax cut – under the current definition of small business – is affordable. There is also no doubt you can't deliver the extraordinary gift to big business Malcolm Turnbull's putting forward unless you make cuts to health and education. Malcolm Turnbull is willing to go ahead with that by making the decision at the same time he will attack Medicare. Where you have got that sort of choice, that's not a choice Labor would make.

JOURNALIST: The thing is, though, that is the same argument Tony Abbott had back in the former Gillard Government when he opposed company tax cuts Bill Shorten was talking about. They could not be funded because it was linked to the mining tax, which delivered no money. That is the same argument isn't it?

BURKE: As I say, we are making the argument right now, what's the cost of $50 billion over the decade? If you look at the cuts Malcolm Turnbull is making over the decade, with the attack on bulk-billing, the attack on Medicare, the attack on making sure there is decent funding for schools and universities, making sure we have a better trained workforce, if you look at the choices Mr Turnbull has made, they match up perfectly.

He's decided to hit the Budget bottom line by $50 billion and the beneficiaries are the top end of town. The only economic argument is maybe some of that will trickle down to the rest of us. Labor has decided to invest in the middle. That's the choice that's been made. Are we proposing an increase to company tax rates at this election? No. We are promising a company tax rate for small business. We are not putting forward something the Budget can't afford.

JOURNALIST: But back in 2011 the company tax cut was funded by the mining tax. Do you concede that was unwise, there was no money to fund that proposal under the Gillard Government?

BURKE: I really think it's going to be a silly election campaign if fight the election based on things that happened just after two elections ago.

Let's get real here, as the Prime Minister said yesterday. What are the choices at this election? The choices at this election are if you are a small business, turnover under $2 million, Labor still says your tax should come down. Above that, we look at the budgetary situation and say the country can't afford that at the moment. What's the Government saying? They are saying the only way they can afford it is by attacking Medicare, attacking schools, something Labor won't do.

JOURNALIST: Would Labor consider changing the definition of a small business to include, let's say, the turnover to be as much as $5 million?

BURKE: Our policy is $2 million as the definition of small business. It’s what everybody agreed until a couple of weeks ago, about five weeks ago. Up until then everybody agreed that was an appropriate measure of small business.

Of course, wherever you draw the line in the tax system you will be able to find people immediately above and immediately below and say, ‘‘What's the difference between these two?’’. That’s simply a factor of when you draw lines, you have some people just above, some people just below.

For the businesses of $2 million turnover and under, no-one has argued they are anything other than small businesses. The concept of them being able to have an advantage in the tax system – because there is a whole lot of economies of scale bigger businesses start to develop that they don't get – is decent policy. We said in Budget Reply last year, we would be willing on a bipartisan basis to provide a further tax cut for them and we're keeping to that.

JOURNALIST: Focusing on superannuation, you talk more about how there has been division within the Federal Government about this. At the end of the day it's very, very similar to what you guys are proposing?

BURKE: What they are proposing, the retrospectivity of it, is certainly different. There is nothing we have put forward that had a start date of 2007 in a 2016 Budget. There are some significant differences. I think it's fair to say, in terms of working out exactly what the Government is doing in superannuation, it's been pretty unclear. That's not simply a Labor Shadow Minister saying it's been pretty unclear. We've had the Deputy Leader of the Liberal Party made clear that it's been unclear.

JOURNALIST: Let's be honest, once we do get a clear idea of what they're doing, it's very unlikely that you guys will block it?

BURKE: The first step is for Labor to do what the Government didn't do and continue to consult with the people affected, continue to consult and work through the detail, because the Government did none of that consultation when they announced it. They dropped it on Budget night, no-one had any idea it was coming. That consultation has to happen. That consultation has to happen in a frame where it's clear what the Government is in fact doing. Only today we've had wild variations in how many people will be affected by various measures they’ve got.

There are some measures they have put forward that are a photocopy of Labor policy. There is a measure for people on low incomes, which was a Labor policy they abolished in 2014. They've now said they want to rename and bring it back. It is Labor policy, of course we are supportive of that. There is another policy we have adopted put forward last year they have adopted completely on a rate shifting from $300,000 down to $250,000, concessional rate.

There is some of Labor's policy adopted, completely photocopied by the Government but a whole lot dropped on the Australian community without anyone really knowing what it means and what it involves. We are being responsible and methodical in conducting a consultation the Government quite seriously should have conducted themselves.

JOURNALIST: Is it sort of a Malcolm Turnbull-esque consultation. Are you going to just be banking this anyway when we do see your final costings?

BURKE: It would be a bit absurd for me to tell you when we are in the middle of a consultation, what our conclusion will be at the end of it.

JOURNALIST: Can I just confirm with the business tax cuts Labor is supporting for businesses with a turnover up to $2 million. From July their business tax rate would go down to 27.5 per cent?

BURKE: Yes. From the same date that the Government has proposed. The Government's proposal for the small business tax cut, Labor supports exactly that, but by keeping the threshold at $2 million.

JOURNALIST: Will you retain the changes to transitions to the retirement fund?

BURKE: That is one of the measures we are consulting on.

JOURNALIST: That's one of the measures you're not ruling out?

BURKE: This is one of the measures we are consulting on. Let's not forget this was a measure, until recently, you couldn't find a Government frontbencher who was capable of explaining it. It's not unreasonable on us to conduct consultation when the Government has been at sixes and sevens as to what it means.

JOURNALIST: No concerns at all, then? You're consulting but not saying whether it's a good or a bad thing?

BURKE: Surely the nature of consultation is you consult. It would be a bizarre consultation if Labor said this is what we are doing, we are going to pretend to consult.

JOURNALIST: What's the feedback been like, then? If you're consulting now then surely you've had some feedback?

BURKE: We put out policy a year ago and no-one has laid a finger on it. Don't forget, the Government railed against the proposals we put forward a year ago on superannuation. Said they would never do it. One of the measures they have adopted completely. Another of the measures, it appears they have tried to come at it from a slightly different angle. But it appears it may work in a similar fashion.

The Government has had our policy out there for a year, claimed they were opposed to it, directly photocopied one half of it and then tried to adopt part of it. There are about ten superannuation measures in this Budget. All of them operate quite differently and the only ones the public had notice of were the ones Labor put forward a year ago. The Government has provided no consultation, no information in advance of the Budget on this. If they won't be responsible and methodical, we will.

JOURNALIST: On Nick Xenophon, I've got Steve Ciobo saying he's protectionist, he could put at risk a number of trade deals if he does hold the balance of power. Do you agree with that?

BURKE: I've seen the reports in today's paper. I haven't seen Nick Xenophon's response to any of the reports in the paper today. Certainly, Labor supports trade. Always has supported trade. If Nick Xenophon has a different view to the views that Labor has then we would find ourselves arguing with Nick Xenophon in the next Parliament.

JOURNALIST: Is he a threat to the trade deals we're trying to secure with India, for instance?

BURKE: Well, if he has a different view that is something that would be argued throughout the Parliament. Labor supports trade. We have a process we've worked through on Free Trade Agreements. The Government talk about all the time, the negotiation of all of those advanced during our time in Government. We've always been supportive of trade deals so long as it's a trade deal in Australia's interests. But Nick Xenophon appears to have a broader opposition to trade generally, from today's reports, if they are accurate, which simply doesn't reflect Labor's view.

JOURNALIST: That's a very similar answer to what Cormann gave. It sounds like both parties are treating Nick Xenophon pretty carefully, given the balance of power he could hold in the next Parliament?

BURKE: You have put a policy question to me and I've given you an answer.

JOURNALIST: No, but from a political point of view, Labor and the Coalition both are having to be pretty careful about they deal with Nick Xenophon?

BURKE: I'm just making sure my answer to you is accurate. If you want to describe that as careful, go for it, but it's an accurate answer.

Thank you.