SUBJECT/S: Income tax cuts; Nick Minchin; manufacturing industries
HOST: Anthony Albanese good morning to you.
ANTHONY ALBANESE, LEADER OF THE AUSTRALIAN LABOR PARTY: Good morning.
HOST: Can we start by talking about the Labor position on the three tranches of the Federal Government’s tax policy? In Two Tribes we talked about this a lot in the lead-up to the Federal election and for some context I went back and read Bill Shorten’s Budget Reply speech in which he says: “We will not be signing up to the Liberals radical, right-wing flat-tax experiment way off in the future; a scheme that would see a nurse on $50,000 paying the same tax rate as a surgeon on $200,000. We won’t back a plan that gives a retail worker on $35,000 less than $5 a week while an investment banker pockets more than $11,000 a year. This is not a tax plan. It’s a ticking debt bomb.’’ Isn’t this what you’ve signed up to?
ALBANESE: No, not at all. We were opposed to stage three of the tax cuts. But let’s be clear. The flattening of the tax rate happened – the removal of that 37 per cent rate, happened in 2018. It didn’t happen in this year’s Budget. It wasn’t part of the legislation. What part three was about was that tier that disappeared, turning that from 32.5 to 30 per cent, and it didn’t change the flattening. That was done in 2018 and many people in terms of the debate didn’t recognise that was what was before the Parliament. What we said …
HOST: Clearly Bill Shorten didn’t because on the 4th of April this year that was his speech on the matter.
ALBANESE: Well, it is just a fact that the flattening of the tax scales happened in 2018. Labor voted against it in the House of Reps and the Senate. But it went through with the support of the crossbenchers and what this change did was simply reduce that rate that had already been legislated from 32.5 to 30. We argued strongly and tried to defer that out – stage three – because we don’t think that you can determine in 2019 what the Budget will look like in 2024-25.
It was overwhelmingly the most expensive part of the package and we didn’t support it. And that is why we tried, and only failed by one vote by the way, to defer that legislation – to separate it out. We were then faced with stages one and two, which we did support. Stage one is the only part of the legislation that will come into effect this term. And that is benefiting people to the tune of up to $1080 for low and middle-income earners through a tax offset. And the people need that basically – low income workers need that assistance, people who work in hospitality, people who work as cleaners, people who work in child care, people who work in retail. They need that and what’s more, the economy needs them to get it as well, because the economy has very low growth at the moment and low consumer demand.
HOST: So Albo, just for clarity’s sake for our listeners, what is Labor’s position now in relation to the Government’s tax proposals? Is Labor now going to let the Government completely have its way on all three stages of the tax cuts?
ALBANESE: Well the legislation has passed. It would have passed with or without our support. We think it is very unwise of the Government to have that stage three as part of the package. We argued our case in the House of Reps and in the Senate.
HOST: If it would have passed with or without your support, why support it then? Why not fight this because millions of people voted for you guys on the basis that part of this was unconscionable.
ALBANESE: Well part of it, we supported. We supported stage one and we not only supported stage two, we argued that it be brought forward. So we had a decision to make. If we had gone the other way, people would have said why is it that you said you supported stage one tax cuts for low-income workers, but you voted against it? So you’ve always got to look at the counterfactual and that is the choice that we had to make because we supported two thirds of the package, but not one third, would we be defined by what we were in favour of – stage one and two – or what we were against, which was stage three? And we chose to be defined by what we supported, rather than by what we opposed.
HOST: Changing tack Albo, I don’t know if you caught up with this excellent piece in The Australian this morning written by me; but I had a chat to the former Industry Minister in the Howard Government, South Australian Senator Nick Minchin and he made some fairly pointed remarks about the conduct of the Abbott Government – Tony Abbott as Prime Minister and Joe Hockey as Treasurer – both of them Sydneysiders, where he said that his fear as someone who represented South Australia for 18 years is that if we end up with this, Sydney centric governments –particularly where you’ve got both the Prime Minister and the Treasurer from the harbour city you are going to get bad decisions and the one he really homed in on was the death of the car industry. He accused the Abbott Government of effectively killing it off by withdrawing subsidies. What is your assessment of his warning?
ALBANESE: Let me say this David, you had me at “I wrote this’’.
HOST: Thank you.
ALBANESE: But then when you’ve gone on to explain it was about Nick Minchin spearing Tony Abbott and Joe Hockey, you really had me. And Nick Minchin is right. We pointed that out at the time. At the time we said it was extraordinary – Joe Hockey made a public statement basically daring the car industry to leave and that has had a devastating impact on jobs. But it also isn’t in our national economic interests. It is in our national economic interests to have a broad economy and to have a viable manufacturing sector and the car industry, it’s not just the people working at the factories at GMH or Ford or Toyota, that have all gone, and Mitsubishi indeed of course as well, it’s this spinoff of the jobs that are there.
HOST: I asked Nick Minchin if he thought there was any way the car industry could somehow be resurrected and if there was any way you could re-introduce some sort of government assistance to kick things off again. He said: “No, once it is dead it is dead for ever’’. Do you agree with that or do you think there would be a way to rev it up?
ALBANESE: Well, I wouldn’t like to write it off in terms of the future. You never know with new technology. Certainly there is some manufacturing going on of electric vehicles in Australia right now with people looking to invest in that industry. But certainly it was a huge loss and it is much easier to keep something than to start something and you lose that skills base, you lose all the capital equipment that has been invested over many, many decades and that to me is an absolute tragedy. I mean we do make buses in this country. This country is the second largest country in the world when it comes to Boeing and its investment in aviation manufacturing. We make trucks. We do a whole range of manufacturing in transport and of course the ship-building industry is very important for South Australia but also for WA and other states indeed with the spinoff as well. So there is no reason why the Government should have taken the view that they have. I think it was very short sighted and I do think there is something to what Nick Minchin has had to say about location of senior people and just not getting it.
One of the reasons why I try to get around this country including to Adelaide and I was in Perth yesterday, I was in Melbourne the day before; and in WA one of the issues there that I was talking about is how do we actually use the fact that we have these mineral deposits, not just export them and then import them back after value has been added? How do we value-add here in Australia? With the growth of the lithium industry in particular we have everything that is required for a battery. Now that will be a huge part of the future global economy, that storage of energy and we are not producing it here at all
HOST: Federal Labor Leader Anthony Albanese, thanks for joining us.
ALBANESE: That’s for having me on the program.
Leader of the Australian Labor Party, MP for Grayndler, Rabbitohs Life Member. Authorised by Anthony Albanese, ALP, Canberra.