PAUL CULLIVER, PRESENTER: Pat Conroy is the Minister for Defence Industry and the Federal Labor Member for Shortland. Good afternoon to you.
PAT CONROY, MEMBER FOR SHORTLAND: Good afternoon, how are you?
CULLIVER: I am well. Is the Prime Minister’s leadership terminal?
CONROY: That’s just a ridiculous comment from Mr Dutton who leads a political party that has two completely different positions on our tax plan today alone, let alone any time else. What Prime Minister Albanese has been very clear with is that our plan is about providing relief to those doing it toughest which is middle- and working-class families. We’re in a cost of living crisis at the moment due to the war in Ukraine, the Middle East crisis, and the global pandemic, and we are taking a responsible course of action to provide relief in a way where 84 per cent of all Australian taxpayers receive much greater tax cuts than they would have under the Morrison tax plan.
CULLIVER: It was an election promise from the Labor Party going into government that they would keep the Stage 3 tax cuts as legislated. Why break that promise?
CONROY: Well we’ve been very clear that we’ve changed our policy because the circumstances have changed. The cost of living crisis is here with us now. We need to take action to provide relief to middle Australia, and that’s why we’ve announced this plan. Good governments, when circumstances change, change their economic policies, and that’s what we’ve done with this. We’ve changed our plan so that middle-class families are better off, and we’ve done it in a way where we’re increasing workforce participation, we’re supporting more women to enter the workforce.
This is – I am yet to hear anyone criticise the actual policy we’ve announced. It’s good policy that provides targeted cost of living relief, and we standby it. And I’d like to suggest that your listeners think about the counterfactual. What would a responsible government be doing if they are confronted with new circumstances, and not taken a change of course of action? This is what responsible governments do, and we don’t apologise for focusing relief where every single Australian taxpayer gets a tax cut, and 84 per cent of Australians get more relief compared to the Morrison tax plan.
CULLIVER: My understanding from what the Prime Minister said today is that this is broadly revenue neutral, the idea that anything you save from giving less of a tax cut at the top end is redistributed to lower- and middle-income earners. What’s the information you have on whether this will be inflationary or not?
CONROY: Well it definitely won’t be, and the Government has released the Treasury policy advice that was the underpinnings of this policy announcement, and the Treasury has said that this will not be inflationary because again the quantum of the tax cuts is broadly the same as the Morrison tax plan, and it will actually encourage more people to work because we are providing tax cuts lower down the income scale. So this is being targeted and responsible where we give a tax cut to every Australian, and someone on the average income of about $73,000 will get a tax cut of $1,500, but in a way that won’t contribute to inflation.
CULLIVER: Since we are talking about cost of living, we might bring in the other announcement that we’ve heard today which is the Australian Competition Consumer Commission are going to examine prices and competition in the supermarket sector over the next 12 months, which goes to my question which is, if that’s going to take 12 months, we’re at least five months away from the tax cuts happening, we are in the cost of living crisis now and we have been for some time, is this too little, too late?
CONROY: We’ve already provided around $23 billion worth of cost of living relief through things such as our energy bill relief plan, cheaper childcare, reducing the cost of medicine for example, and making it – encouraging doctors to bulk bill. All of those things are making a contribution. I’m at a street stall right now at Charlestown Square in my electorate, and I’m talking to people who have received the $500 energy bill relief, and they’ve been telling me it’s making a real difference. So this Government is focused on the cost of living. It is the number one pressure for families out there, and this announcement today is just another installment to what we’ve already done.
CULLIVER: So progressive tax brackets are a feature of the Australian income tax system. We have the concept of bracket creep which is that we don’t increase these brackets based on inflation. So as Australians gain larger, higher wages, naturally they get bumped up into higher tax brackets, and the Government – if they don’t change those brackets – can reap more and more money, more and more revenue to fund whatever they’re doing. Is there a missed opportunity here to better address the issue of bracket creep in Australia?
CONROY: Well as Prime Minister Albanese said at the Press Club, we are increasing the income rate at which the top marginal rate kicks in. That’s the first increase in the tax threshold for that one since I think the early 2000s – around 2008. So that is a significant reform that we are proposing, and that’s important. But we are really focusing this tax relief in a way where every Australian gets a tax cut, those earning over $200,000 get a tax cut of $4,500 for example, but we are giving – the main focus of the relief is on middle and working class families, and that is where it’s needed most. And I think if you asked people in the street they would agree. That is the fairest way of doing it. I’ve also seen commentators out there saying that we’ve hit the double dividend of both increasing equity but also increasing efficiency by providing greater incentives for people to work more hours in the economy and re-enter the workforce.
CULLIVER: Come the next election, anyone earning more than $200,000 a year could look at the ballot and say, ‘well Labor basically robbed me of $4,500 a year, why would I vote for them again?’. Why should they?
CONROY: Well I’d make the case that compared to today, someone entering the ballot box who earns over $200,000 will receive a $4,500 tax cut from the Albanese Labor Government. That is a very significant amount of money, and they will also be able to look their neighbour in the eye or their partner in the eye and see that they’ve received a tax cut. Our plan is the only plan that has been proposed that gives every single Australian a tax cut, and we make no apologies for focusing on middle- and working-class families. We acknowledge that everyone is doing it tough with the cost of living crisis, but as I said, we are very focused on supporting aspiration, but we are doing it in a measured, responsible way that helps more people back into the workforce, targets the assistance where it can provide the most impact, and supports aspiration.
CULLIVER: Obviously any tax cuts need to be legislated. Will they pass through Parliament?
CONROY: Well we’ve obviously indicated we will need legislation and we will start that process very soon. I know that the Manager of Senate Business, Katy Gallagher was asked about this on ABC television and we will go through the normal processes there, but it would be a brave Opposition or brave other members of Parliament to be opposed to a plan that gives a tax cut to every Australian and gives 84 per cent of taxpayers a tax cut in excess of the one they would have received under the Morrison plan.
CULLIVER: Pat Conroy, thanks for your time today.
CONROY: Take care, have a great afternoon.