E&OE TRANSCRIPT-TELEVISION INTERVIEW-SKY NEWS AM AGENDA
08 May 2018
KIERAN GILBERT: Brendan O’Connor, it was certainly an unusual intervention from the longest serving Treasurer in the nation’s history, in terms of the timing at least.
BRENDAN O’CONNOR, SHADOW MINISTER FOR EMPLOYMENT AND WORKPLACE RELATIONS: A remarkable intervention by the former Treasurer, effectively belling the cat and saying that the Government for five years - almost five years Kieran - has been talking about debt and deficit emergency, and then of course doing a backflip and almost forgetting that we’ve got a real issue with respect to debt. And I guess we’ll see the detail of that.
GILBERT: But Mr Morrison has alluded to the fact that there will be more to be said on that tonight, and said Mr Costello, his mentor, should be watching this evening to see the size of surpluses in the medium term clearly, and if it’s a debt reduction.
O’CONNOR: I think Peter Costello understands the process well enough to know - and the leaks that have already been provided to the media well enough to know - that this Government has said for the last four years, the last four Budgets that we have an emergency to deal with. Now it’s turned its back on that, and is trying to provide some very pathetic sweeteners to save their own bacon. That’s what’s happening.
That’s why you’ve seen Costello in a very dramatic way, Kieran, I’ve never seen a former Minister of the same political party come out and on the eve of the Budget and actually attack so centrally.
GILBERT: No doubt it was very surprising to see that. Particularly from someone respected in Coalition ranks like that. But privately this morning I’ve been told that his analysis in the view of many in the Government was wrong - not just politically, but as well in the sense that non-receipts aren’t factored in either. So 1.5 per cent of things like GDP, non-receipts like cost recovery, dividends, interest - that sort of thing. You’ve got to factor that in as well when you are looking at spending vis-a-vis revenue coming in. Mr Costello didn’t do that.
O’CONNOR: I just think his dramatic intervention underlined the fact that we’ve had for four years a message by Government which has now been discarded for political purposes, and he was-
GILBERT: Has it really been discarded? They are still talking about being responsible in terms of their spending and-
O’CONNOR: Well, let’s see. But we have had this slash and burn everything. Now let’s be clear, there are still cuts to pensions, there are still cuts to aged care, there are still cuts to education, there are still cuts directly to schools, which I am sure will still be there.
There is still the requirement to work until you are 70 before you receive the pension – that is still there, unless something changes tonight. Wage growth is at its lowest. We have a very small tax cut – that does not make up anywhere near the amount that has been lost because we have the lowest wage growth in a generation-
GILBERT: You are obviously pretty confident that you can out do that tax cut, by the sounds of it. Tanya Plibersek is saying it is a hamburger or a milkshake. You are saying that it’s pathetic-
O’CONNOR: I am saying that in the context of penalty rate cuts for those 700,000 workers it’s not going to make up for those cuts. And it won’t make up-
GILBERT: You are going to have to outdo them by a bit though, if you are already deriding them.
O’CONNOR: Well, firstly we are not supporting the penalty rate cuts. That’s going to happen to low-paid workers, hundreds of thousands of them in every electorate in this country we have low-paid workers suffering penalty rate cuts. That $10 won’t make up for the cuts for most of those workers. In terms of wage growth, we have low wage growth. The relief that is being provided here is not going to make up for generational low wage growth.
GILBERT: As I say, Labor is going to have to put its money where its mouth is, isn’t it, in terms of your response on tax? If you are already having a crack at the Government before the budget is out, deriding their numbers-
O’CONNOR: I think our first responsibility it to remind voters and your viewers that they have been saying one thing for the last four years, and they are saying something different now, as if they are out of the woods. They are not out of the woods – they have doubled the debt, and they want to forget that and pretend somehow that they have inherited this.
No, they have been in now, this is their 5th Budget. They have to take some responsibility for what's happened structurally to the Budget and they won't do that.
GILBERT: Labor's supercharged that in terms of the last year or so of government, with the NDIS, with Gonski-
O'CONNOR: Well nobody is opposing the NDIS. They are supporting the NDIS, correct? They say they support the NDIS, so if they do support the NDIS they can't complain about that.
When we actually had to go into debt, we did it to respond to the greatest economic crisis globally for 70 years. We saved our economy and we made sure we protected 200,000 jobs, and our economy grew faster than any other developed nation after the GFC as a result.
What is their excuse for the ongoing increase to debt? That is why you see Peter Costello come out, because they have been saying something so starkly different from what they are now trying to suggest.
GILBERT: What about Labor's position in terms of consistency, when you said that you would be going to keep the deficit levy or the debt levy for high income earners on over $180,000 a year, because of the Medicare levy increase to fund the NDIS? Now that's not needed, but you are still keeping that in place. Do you feel for individuals who have worked their way to a point where they are earning $180,000 a year, but they're paying nearly 50 cents in the dollar compared to the corporate rate even now which is 30 cents in the dollar.
O'CONNOR: Look, I support progressive taxation and I am one of those people who would be paying that increased tax, as I should, because I can afford to do that. One of the points we made very strongly last time, was how can we possibly consider any form of relief at a time when the debt wasn't improving? It was getting worse, and indeed we had a problem with respect to low paid workers having taxes increased.
Now, as Chris Bowen has said, we will examine the position. We will examine a lot of matters after we have seen the Budget. It is impossible for us to make a detailed response to the current situation-
GILBERT: But in a philosophical sense, does Labor see any benefit of lowering the top rate, in terms of boosting aspiration in our economy?
O’CONNOR: Let’s make this point clear- the thing that made it impossible for us to consider was because at the same time that it was being suggested that we provide some relief, they were imposing taxes on all workers between $21,000 and $87,000 per year. Now the Government has finally surrendered that position-
GILBERT: But you kept the other-
O’CONNOR: Well they’ve done that, and we’ll examine all the things that we can do. I mean obviously, if we can provide tax relief, we’d like to do so. Our focus is on working class and middle class people, as it should be particularly at a time of the lowest wage growth in 25 years.
GILBERT: Mr O’Connor. Great to see you. We’ll talk to you soon.
O’CONNOR: Thanks Kieran.