Forthcoming Budget, Tax Cuts, Surplus, Federal Liberal Leadership, Tax Thresholds, Interest Rates Simon Crean - Shadow Treasurer, Deputy Manager of Business in the House

TV Interview with Paul Bongiorno

Trasncript - Meet the Press, Channel Ten - 9 May 2004

FEDERAL TREASURER PETER COSTELLO: We won't be introducing new taxes and we won't be increasing existing taxes. This is the difference between our government and the Labor Party. The Labor Party refuses to rule out new taxes and in fact we know already they do have some planned new taxes.

PAUL BONGIORNO: Mr Crean, can you match the Government's promise of no new taxes?

SIMON CREAN: Well, just before we go that, let's go to this. This is the same promise they've made before every election. But since they've been elected, they've introduced 144 new taxes, and 32 since the last election. And there they are Paul, all there, all documented. But it doesn't stop there. They've said and the Treasurer said last week, "No new taxes." But they've already agreed with State ministers to introduce a new industry levy, a new industry tax from July 1, to establish a National Energy Authority funded by an industry levy. And here's the document, signed off by Ian Macfarlane, attested to by the Prime Minister on 25th of February. There's the Treasurer a week before the Budget saying, "No new levies." And yet they've got this one which they have not publicly announced coming in on July 1. I mean, you just can't believe them when they say that. Their track record is appalling and they've only ever known one way when they're in trouble and that's to put up a new tax - the sugar tax, the dairy tax, the Ansett ticket tax. Whenever they're in trouble they stick on a tax, they make the consumer pay.

PAUL BONGIORNO: Are you saying there is a new electricity tax coming?

SIMON CREAN: An industry levy to set up this new energy market authority, means higher charges to consumers. Because if the industry has to pay it, it'll pass it on to you and me.

PAUL BONGIORNO: Let's talk Labor. The Treasurer says that Labor says that it's the highest taxing government, but is promising to do nothing to cut taxes.

SIMON CREAN: That Labor is promising this? It's just not right. First of all we've said that families have to get relief. Second, we've already announced a tax cut. A tax cut on superannuation from 15% to 13% on the contributions tax.

PAUL BONGIORNO: You've announced a payroll tax increase as well.

SIMON CREAN: Now, again, Peter Costello will say anything to get away from the real...

PAUL BONGIORNO: He's right there, isn't he?

SIMON CREAN: No, he's not right. Because what this is, is a proposal to ensure that workers entitlements are protected 100%. It's worker's money, Paul. It's money that they don't get because businesses go insolvent. There was only one company that got 100% of workers' entitlements back, John Howard's brother's company. We want to make sure that every worker gets 100% of their entitlements. That's why we have proposed it. We announced it two years ago...

PAUL BONGIORNO: Is that the only exception Labor has apart from that, no new taxes, no tax rises?

SIMON CREAN: We've said that we're going to lower the tax burden on Australian families, not just through tax cuts, but by restoring bulk-billing and by not charging university students the 25% hike. We've said we'll do that with no increase in company tax, no increase in capital gains tax. It is only Labor that is committed to a fairness in the tax system. This Government only ever gets serious when there's an election in the wind.

PAUL BONGIORNO: Just before we go and briefly in this segment - I'd like to pick up that report that Treasurer Costello is considering quitting politics. Labor is saying a vote for Howard is a vote for Costello. It could well be that there'll be no Costello?

SIMON CREAN: Well, I think some people might cheer that. But let's... what Peter Costello has done is essentially put the leadership issue front and centre in Budget week. I mean, I can't believe the guy. This is a guy that gives every impression he doesn't want to bring this budget down. And yet this is a budget that is great opportunity for Australia if we do it properly. It's a budget that Chris Richardson, who you've got later in the program, says might be the last big chance. And what does Peter Costello do? He effectively says, "I don't want to deliver it." I want to be leader and I'm going to take my bat and ball and go home. But understand this, these stories mean a vote for Howard is a vote for Costello, and what I want to know is the denial of this secret plot to transfer Costello over. When Chris Pine came out with this story a couple of months ago he was jumped on. Now you have Senators Brandis, Mason and Campbell all saying there's an arrangement, and silence from the Government. A vote for Howard is a vote for Costello, and leadership has been put front and centre in Budget week when it should be talking about relief for Australian families.

PAUL BONGIORNO: Time for a break. When we return with the panel we ask, are Mark Latham and Simon Crean the biggest threat facing the economy?

PAUL BONGIORNO: You're on Meet the Press with Labor's Simon Crean. And welcome to the panel Jennifer Hewett, the 'Australian Financial Review' and Steve Lewis, the 'Australian'. The economy is seen as the Coalition's strong point, and last week the Treasurer ran this scare about Labor.

PETER COSTELLO (EARLIER MEDIA APPEARANCE): If people think that the economy just runs itself, they might say, "Oh, well, Latham and Crean couldn't do that much damage." And my point is Latham and Crean can do a lot of damage. Of course they can do a lot of damage. And the kind of damage that you saw when interest rates were at 17% can happen again.

JENNIFER HEWETT, THE ‘AUSTRALIAN FINANCIAL REVIEW': Mr Crean, on your own estimates you've got about $10 billion of spending already announced and obviously more to come. You've had Mark Latham say that there's about $6 billion already in savings, you had McMullen say about $7 billion and then you last week said $8 billion. Doesn't this put pressure on interest rates to have kind of unfunded spending plans already in place? No, the figure is 8, it was 10, but the Government took 2 billion of it because it recognised what we identified could be saved. So we embarrassed them into doing it. But the 8 billion that we've identified has all been used to offset our spending measures. In other words, we've not proposed to spend anything we couldn't save on. The reason we do that is two-fold, Jennifer. One, to not put upward pressure on interest rates, and two, to leave us maximum opportunity to deal with whatever the remaining surplus is on Tuesday night. But I ask you this question, and I ask the Treasurer this question - when did you ever hear him announce a proposal to spend money in which he announced savings? Every one of our spending measures has been covered off by savings and it will continue to be. When I became the Shadow Treasurer again, I insisted on this discipline. It's what we've exercised in the past 12 months, it's what we'll continue to exercise right up to the election - and why? Because nothing we spend will put pressure upwards on interest rates.

JENNIFER HEWETT: And do you think that because Labor has a problem with credibility on economic management, obviously the Government thinks it does, that you actually face higher hurdles in trying to demonstrate this type of thing all the time?

SIMON CREAN: Well, I think we always face higher hurdles, but I'll tell who's facing higher hurdles at the moment, and that's Australian families. I mean, the real damage that's being done to Australian families has been done on Peter Costello's watch. Record high household debt, record credit card debt, record foreign debt - and this is a Treasurer that talks about inter-generational issues. The only reform he's made to superannuation in his time is to put on a tax, and the circumstances in which he's ripped money out of education, out of health, has just put even more pressure on families, because their services are gone. That's the damage that's being done.

STEVE LEWIS, THE ‘AUSTRALIAN': Mr Crean, just on this issue of credibility. At the last election you pledged to deliver a bigger surplus than the Coalition's if Labor was elected. Will you repeat that pledge?

SIMON CREAN: We'll be having something to say about this following the Budget. I mean, obviously, what we want to see, Steve, is the size of the surplus and the fiscal parameters. But sure, we will be going to the election with the pledges that mark clearly our commitment to fiscal rigour.

STEVE LEWIS: Is that a pledge to a bigger surplus?

SIMON CREAN: I hope that we can do that.

STEVE LEWIS: You hope that you can do that?

SIMON CREAN: I hope we can do that. But let's see the figures. But what I can guarantee you is that we will have surpluses in each of the years over the next term of Government. On all of the information that we know now we can guarantee surpluses in each of those years. But let's wait and see what's happening on Tuesday night.

JENNIFER HEWETT: Mr Crean, just on our taxes. Obviously, in the past there's been this whole debate about higher income earners. Labor now seems to be saying that yes they agree that the tax threshold for the highest income tax rate cuts in too early. Do you think that's true, and also, is the rate too high?

SIMON CREAN: I think it is true with families. I made the point that families over $62,500, that threshhold level, who have got kids, and who face the increasing cost of taking them to see a doctor, who face the increasing cost if they're going to universities, these families are doing it hard. And why? Because the Government has put them under additional pressure. So, I'm saying that we do have to look to that group of families as well.

JENNIFER HEWETT: To $75,000, $80,000, $90,000?

SIMON CREAN: Well, our priority will be low and middle income families. But I'm saying here that families in the $62,500 area have got the kids and the cost, they're doing it hard too. Now what we'll be doing, following Tuesday night, is seeing how we can allocate relief to them. But I make this point, Jennifer, because it's very important. This debate about taxes versus services, we've already made our commitment on the services front. We've said we're going to restore bulk-billing. We've also said we won't be allowing the universities to charge the extra 25% hike, which most universities have now done. The Government said, oh, it is only if... some universities will do it. They're all doing it. We've also funded a mechanism by which, not only won't we be charging the fees extra, we will be adding 20,000 universities places and 20,000 TAFE places. This takes enormous pressure off families on the services side. That's stopping money coming out of their pocket. What we can do in terms of tax and family benefits will depend on what's there on Tuesday night.

PAUL BONGIORNO: Mr Crean, we're just about out of time in this segment. Mark Latham, obviously, if you believe all the published opinion polls, is doing quite well. But won't his inexperience tell against him, especially when he's up against John Howard, long-term Prime Minister now long-time senior Parliamentarian?

SIMON CREAN: I think the real issue is the freshness versus the staleness. That's really what's at issue in this election. John Howard hasn't got an agenda, except to win the next election. He only ever spends money and gets interested in families when there's an election around the corner. This stuff about childcare places today, Paul, we know from leaked Cabinet documents they've been sitting on this information for three years.

PAUL BONGIORNO: But isn't that...

SIMON CREAN: Hang on. They've done nothing. It just seems to me that the big challenge in this election is returning a Government that only does anything to buy its way into the next election - or a forward-looking agenda. That's what Mark Latham offers - and he's got an experienced team around him.

PAUL BONGIORNO: OK, we're right out of time. Thanks for joining us today, Simon Crean.

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