CARLTON:
The Prime Minister though joins us now on the line from Canberra. Good morning.
PRIME MINISTER:
Good morning Mike.
CARLTON:
The criticism seems to be here, it's in the papers, that the tax cuts do go to the wealthy and nothing for anyone on under $1,000 a week. Why is that?
PRIME MINISTER:
Well Mike, they don't go to wealthy people. They go to middle and upper income earners. If you're earning $52,000 a year, that is not wealthy. Thirty-seven per cent of full-time male earners in this country now earn $52,000 a year or more. This idea that if you're earning $50,000 or more a year, you're wealthy, is just out of touch with reality. I mean your listeners would include all of these people. I mean you're talking about a police sergeant who works a bit of overtime, you're talking about a situation where the average male full-time wage in Australia now is a little over $51,000 and if you're a full-time female worker the average wage is about $49,000. So by stopping those people over the next two or three years bumping into a tax bracket where they're paying 42 cents in the dollar on some of their income, is a very desirable reform. It's tailored to encourage people to work harder and to contribute more. We cannot clobber the aspirational in this country. We cannot clobber people who are prepared to work a bit of extra overtime. And to call them wealthy, as the Labor Party appears to be doing, is just... demonstrates they're out of touch, they don't understand contemporary Australia.
CARLTON:
Alright. You're saying that 80 per cent of the workforce will be on 30 cents in the dollar.
PRIME MINISTER:
Yes, I am saying that. I'm saying that you can pass from 21... under the new scales, when they come fully in, you can pass from $21,600 a year in income to $63,000 a year in income without paying more than 30 cents in the dollar on any of your income. Now to middle Australia, to hard-working Australia, that is a great piece of reassurance. Now we deliberately set out to stop the clobbering of the hard-working middle income earner in this Budget.
CARLTON:
Especially those in marginal seats.
PRIME MINISTER:
Well... I mean they live everywhere. They live everywhere Mike. And they pay increasing amounts of tax under the present scales, and we're trying to do something to stop that happening. And of course the family benefits apply to families at all levels of income, and family benefits are more generous if a family earns less than $31,000 a year. That has been built into the present system. And of course on top of that the superannuation co-contribution cuts out in the middle $50,000s and therefore it can be seen to be particularly skewed towards encouraging lower income earners to save for their retirement, because we've jacked up the contribution from one... a dollar for dollar, to a dollar and a half for every dollar contributed by the taxpayer.
CARLTON:
Alright. Prime Minister, the other criticism I read this morning is this, and it is in the papers. I think you've seen it. The Budget is an election bribe we'll pay for down the track big time in years to come as more and more baby boomers start to retire.
PRIME MINISTER:
Well Mike that would be a valid criticism if we'd gone into deficit. It would be valid criticism if there was something shonky about the figures. That would be a valid criticism. But we wouldn't have done that. I mean we are still budgeting for a surplus. We've cut $70 billion off debt. We've got a debt to GDP ratio now of three per cent, which is about the lowest in the world. It's 50 per cent in America. So there's no... on all the advice we have about the growth of the economy, there is no way that we will not be able to afford this package. It's quite conservatively crafted. We haven't gone close to the wire. Nobody...
CARLTON:
Well I don't know about conservative. I would have thought it was overflowing with generosity, it was splashing money around.
PRIME MINISTER:
Well...conservative... in a fiscal sense.
CARLTON:
Oh yeah.
PRIME MINISTER:
I mean we haven't gone into the red. I mean nobody in this country is saying that this country has a debt problem. In fact some people are saying that our... and I don't agree with them, that our fiscal position is so strong that we could afford to borrow a bit more and go into a bit of debt. I don't accept that, but some people do argue that, including some people even in the business community.
CARLTON:
Right. There's not a lot in it for small business, is there?
PRIME MINISTER:
Well there's the change in relation to the annual filing of the BAS statement that will mean about 740,000 small businesses will only have to put in one return a year instead of one every quarter and every month. But Mike, the thing that small business wants more than anything is low interest rates and a strong economy and after all, a lot of the things we've already done have created a very good small business climate. The corporate sector in Australia is enjoying its highest profits ever. One of the reasons, can I say, that we have been able to afford to do some extra things in this Budget is that the collections of company tax have been higher, and they've been higher despite the fact that we have a lower company tax rate because the economy is performing very strongly. And isn't that a good story - companies doing well, employing people, paying taxes, taxes being returned to families in benefits? I mean it's a virtuous cycle.
CARLTON:
I've got 30 seconds left Prime Minister before our news. When is the election?
PRIME MINISTER:
I don't know. It will be sometime, probably sometime in the second half of this year. I could theoretically have it early next year, but the more normal time would be to have it in the second half of this year.
CARLTON:
August?
PRIME MINISTER:
Well Mike, I honestly have not made up my mind and I'm not likely to make up my mind for some time yet. I just don't know. Obviously it will have to be some time in that time cycle because that's what the law says.
CARLTON:
Okay. Prime Minister, thanks very much for your time.
PRIME MINISTER:
Thank you.
[ends]