14 March 2018
Transcript - #2018027, 2018

Doorstop interview, Parliament House

SUBJECTS: Labor's tax proposal

TREASURER:

What the Labor Party is proposing is fundamentally unfair when it comes to pensioners, those on lower incomes, retirees. How is it fair that someone on a high income is able, under what Labor propose, to continue to reduce their tax, as a result of the share dividends they receive, and get the full value of that, but it’s not ok, for a pensioner, someone on a lower income to also get the full value of the shares that they own.

[DISRUPTION]

It is fundamentally unfair to deny people on low incomes the same tax benefits that those on higher incomes receive.  Now this is a fundamental issue of fairness. The Labor Party used to understand that. At the 1998 election they actually went to the election, as did the Government at the time, supporting this fairness principal that those tax benefits should be equally accessed by people on low incomes and on high incomes. What the Labor Party have now done is said “No, we’re going to allow high income earners to keep getting those tax benefits, but if you’re on a low income, you’ll have your tax refund swiped by Bill Shorten. That’s fundamentally unfair. This is a pattern from Labor. You just never really know what they believe. They used to believe that company tax reductions would lead to higher investment and stronger wages and a stronger economy. They don’t believe that anymore. They used to think it was a fairness principal. That you have the same tax treatment to people on lower incomes that you did on higher incomes. They don’t believe that anymore. Sally McManus from the ACTU doesn’t even think pensioners own shares. That’s how out of touch they are in the left wing of the Labor Party. So we have a situation now where Labor continues to buck trade principals, whether it’s on economic policy, or on fundamental principles of fairness, And so the Government will obviously, has from the outset, completely rejected this fundamental principle of unfairness in what sits at the heart of what Labor is proposing and I say again what I said yesterday, the reason Labor are doing this is because they’re addicted to higher taxes. The reason they’re addicted to higher taxes is because they’re addicted to higher spending. Labor cannot tax you enough to keep up with their spending. If Labor is elected, that’s what you can expect. If they’ll rip the tax funds from 230,000 pensioners, image what they will do if they get the chance to tax you more.

QUESTION:

On Treasury calculations how many people will be worse off?

TREASURER:

You’ve got 97 per cent of the individuals who receive this tax refund have an income of $87,000 or less. Now that’s more than a million people. That’s just the individuals, on top of that you’ve got 200,000 self-manage super funds which will impact around about 500,000 people. On top of that, you’ve got several thousand more superannuation funds, their beneficiaries also get the benefit of this which will be in the millions. This isn’t the small number of people Bill Shorten would have you to think. What he’s hoping you’ll do, is that you won’t pay any attention to this. That you’ll think that this just happens to a small group of people. No, it’s happening to your mum, or your dad who bought shares in the Commonwealth Bank when it was privatised all those years ago. Or in Telstra, or they bought them back in New South Wales when the GIO was privatised, and they held on to those shares and their incomes may not be great now but they do get that cheque, the tax free funds that they get which is the benefit of those shares being held by your mum and dad. They may be pensioners now. Bill Shorten is reaching his hand into their pocket and just ripping out the cash because he cannot control his spending. There’s nothing fair about this, there’s nothing right about this. This is just a naked grab of pensioner’s and other low income, and retirees’ cash and the Coalition Government, the Liberal and National Parties, will not cop it and nor should you.

QUESTION:

What impact will this policy have on people investing in Australian companies? We see more investment offshore?

TREASURER:

Well, just taking self-managed super funds alone, they have over $200 billion invested in Australian equities. That is a pretty significant component of investors going into Australian equities. So you have to ask the question, it’s really for Labor to explain. Had they contemplated what this impact would be on how people will invest in Australian shares? They’ll buy overseas shares. They’ll go to other options. They’ll move away from where they otherwise might have invested. What does that mean for companies raising capital, what does it mean for the share prices of these companies upon all superannuation funds depend on, the Labor Party never understands when they’re playing with fire. They just stick their hands, and more importantly your hands, into the furnace and you’re the one who always gets burnt. Labor just never think these things through. All they can see is the big bag of cash that they want to get their hands on so they can just blow it all. We’re different to that. We put a ceiling, we will not allow taxes to rise above what is an affordable level in our economy. The Labor Party have blown that ceiling. They used to believe in that too. In fact, Chris Bowen said when we were first election that we had to make sure that we kept taxes below that cap, below that ceiling. Well he’s blasted that ceiling, it’s got no interest in that any more than he does with fairness when it comes to these policies on tax, or when it comes to economic policies that would grow our economy.

QUESTION:

Labor argues that those 97 per cent on taxable incomes of less than $87,000, a lot of them have high super balances. What do you say to that?

TREASURER:

These are individuals. Those specific figures I’m talking about are individuals. Sally McManus doesn’t even think that pensioners own shares. That’s how out of touch the Labor Party is. The Labor Party’s commentary on this only highlights that sense of how out of touch they are in understanding that normal people own shares Bill. Normal people. Ordinary people. People who have worked hard. Pensioners. People on low incomes. Share ownership goes right across the Australian community, and for people on low incomes, what this measure was designed to do was make sure that they got the full value of tax already paid by the company to the same level that people on higher incomes did. Bill Shorten has consistently not understood that what he is doing here, is he is preserving a tax benefit for people on higher incomes, and he is doing it while taking away a legitimate tax arrangement for people on low incomes. It is the reverse of what he says he is all about. The absolute reverse. Thanks very much.