Subjects; Perth-London Qantas Inaugural Flight, Dividend Imputation, Company Tax Cuts
OLIVER PETERSON: Joining me in the studio is senior Labor MP Anthony Albanese. Welcome back to Perth.
ANTHONY ALBANESE: Good to be here Ollie. This is my fourth visit this year.
PETERSON: I know.
ALBANESE: It’s only March.
PETERSON: You are almost becoming a West Australian.
ALBANESE: Well, I wouldn’t mind becoming a West Australian I’ve got to say. It’s a great city and a beautiful day here. It has been pretty miserable in Sydney the last few days. It was wet and cold and before that it was too hot, so it has been a great day here.
PETERSON: It is and you are on the inaugural flight tomorrow with Steve Ciobo – obviously your counterpart across the chamber. You are both heading to London on board the Dreamliner.
ALBANESE: We are and we will be there promoting Australia and promoting Western Australia in particular. This is an amazing thing. The Kangaroo Route began in 1947 and it took four days and it was called the Kangaroo Route in part, the Qantas logo of course, but it was called that because they literally had to hop all the way to London. This one is going to be non-stop – 17 hours – and it opens up the West by having that direct flight here to Perth non-stop and what certainly the Western Australian tourism sector want is for people to not just spend time here in Perth but there are deals going to then have people go to Broome, Ningaloo, Margaret River. There is so much that the West has to offer and it is an important market that will be opened up here for jobs and for the tourism sector.
PETERSON: Well we did have word on the street this week from Karen who indicated that the WA Premier, Mark McGowan, is going to be handing out posters for quokka selfies. Now that has become a revolution Albo. Have you been over to Rottnest and had a quokka selfie like Margot Robbie did this week and obviously Roger Federer earlier this year.
ALBANESE: Well, Margot Robbie and Roger Federer both have different aspects than I do, either attractiveness …
PETERSON: Or they are decent at tennis.
ALBANESE: … or talent. I play for Marrickville Lawn Tennis Club. That is the closest that I will get to being as great tennis player. But I did spend Christmas Day in 1983 on Rottnest Island.
PETERSON: Did you really?
ALBANESE: When it was a lot smaller place. I came over, drove over. I was a student at the time, myself and my then girlfriend, and we didn’t have any money for a holiday. Someone was from Perth, a friend was coming back over to spend time with their family, so I spent six weeks here including Christmas and for Rottnest Island Christmas time was fantastic. I don’t know what it is like now. It is a lot busier obviously.
PETERSON: It’s still brilliant.
ALBANESE: The accommodation was pretty basic and you had to make sure the doors were shut because the quokkas would get in and it was an absolutely fantastic time and I think my love of Western Australia and the south west in particular started there, because we went down to Albany and we did Margaret River and the Big Trees and we did all of that. We went to places like Mandurah – it was a little sleepy place back in 1984 before it really boomed.
PETERSON: Well there you go. You’ve got the perfect mix there with tourism, transport, infrastructure etc. But let me ask you this afternoon, now the changes your party is proposing to dividend imputations, let’s start there. Could this be, on the sale of trying to get this across to the Australian people, could this be at the moment though, Bill Shorten’s John Hewson moment, trying to explain how a GST would be applied to a birthday cake?
ALBANESE: No I think the thing about the GST with the birthday cake was that it applied to everyone because everyone has a birthday. Of course this doesn’t apply to everyone. It applies just to those people currently, instead of being able to reduce their tax liabilities – how much money they owe the tax office for their investment – they are able to get a cash refund. Now that wasn’t anticipated to be the case. I think people know that there are fiscal issues with the Budget. We have put this forward. We have been upfront about it. People have got lots of time in terms of organising their financial affairs. People will know what the impact of it is. We’ve been out there explaining the case. The Government used to talk about reducing the deficit. We are actually coming up with measures from Opposition and it is a tough thing
PETERSON: Is it scary though, to target some self-funded retirees who are very influential? They will say I’ve worked my backside off to try and fund my golden years, and now you want to come and raid the money that I have and then they will probably tell their children and their grandchildren. Has it been thought through properly?
ALBANESE: Look it has been thought through. This is a system that when introduced by John Howard was anticipated to cost $500 million a year. We know it will cost up to $8 billion a year to the budget just in the next couple of years. Now, that is more money than the national government spends on public schools. So government is about making budget choices. When you say that to people I think they realise that this is a loophole, which is there, which I understand people have legitimately used. But what we’re saying in advance, well in advance, is that the budget simply can’t afford an $8 billion annual hit such as this.
The big difference is between when it was introduced by Paul Keating in 1987 and then John Howard made these changes. What’s happened since then is that superannuation has become income tax free, once you’re of a certain age. What that means is that the difference between people’s taxable income and their actual income can be quite substantial. So this by and large applies to self-managed super funds and the amount of money that will be impacted, where most of the revenue of this will come from, is from a very small number of people at the top end. Yes there is some broader impact and we’ve acknowledged that and we’re talking those issues through.
PETERSON: Ok. Will older Australians be better off under a Labor Government than a Coalition Government?
ALBANESE: They’ll always be better off under a Labor Government. We won’t do things like increase the working age to 70. We wouldn’t have done things like what happened in the Senate just this week, where you’ve had a removal of the bereavement allowance. A small amount of money for widows has been removed.
We, of course, look at the changes that were made to the pension assets test by the current Government, where 90,000 people lost their pensions. So there has been significant changes and when we were last in Government we, of course, gave the largest ever increase in pensions in Australia’s history.
PETERSON: Company tax cuts on the agenda. It looks as though the Government may have the numbers, or shortly will have the numbers to pass this through the Senate. It looks like a deal is being done with One Nation. Is Labor on the wrong side of company tax cuts?
ALBANESE: No I don’t think we are. I think people out there, for similar reasons about the state of the budget: can we afford a $65 billion company tax cut that relies upon essentially the trickle down theory? The theory is that if you give this tax cut to companies, somehow it will be passed on in the form of increased wages. Well, there are a couple of problems with that. One is that a whole lot of the companies that have been mentioned haven’t actually paid any company tax for some time…
PETERSON: Well let’s take FMG for example. They’ve said the five per cent cut to the $2 billion or so it pays in tax; $40 million Andrew Forrest would reinvest in the economy. Create jobs, higher wages: isn’t that a good thing?
ALBANESE: Sure. Look investment is always a good thing in the national economy. But the question is what happens to the overwhelming amount of the $65 billion and whether that’s directly invested. For example I’m the shadow infrastructure minister – I know what I could do with $65 billion of infrastructure investment in public transport around the country. For example, you could revolutionise public transport in this nation with that sort of figure.
PETERSON: You could build METRONET out to Ellenbrook.
ALBANESE: Well, we’re going to build the rail line out to Ellenbrook anyway. We’ve put that in there as part of our $1.6 billion that we’ve committed here in Western Australia. But it is a matter of choices and the problem is that people, when they have a look at what is actually happening, they can judge the theory. Because if the theory was right, then what would be happening right now would be that real wages would be increasing because company profits are up, because executives’ pay is up. The only thing that is down is workers’ wages, which isn’t even keeping up with inflation. So I think for people out there who are struggling to pay their mortgage, put food on the table for their families, pay their education fees for their kids, they’ll all be looking at this and going, well hang on, the boss doesn’t automatically just pass this on, otherwise that would have happened before now.
PETERSON: Anthony Albanese, we are out of time but go and enjoy your inaugural flight on the Qantas Dreamliner to London.
ALBANESE: I think it will be very interesting. It will be a very good thing for Western Australia because in a few years time there will be direct flights no doubt, as technology gets better, from Sydney and Melbourne, but what’s happening here is that Perth is getting the jump on the rest of Australia and that’s a great thing.
PETERSON: It certainly is, thanks for popping by.