NEIL MITCHELL:
The Prime Minister, he’s on the line. Well, it’s been one of his most successful weeks I guess as Prime Minister with the tax cuts going through. There's some questions about them Prime Minister, good morning.
PRIME MINISTER:
Good morning Neil.
NEIL MITCHELL:
The dollars in the pocket aren't actually until next year, is it likely we'll go to an election before we see the dollars in the pocket?
PRIME MINISTER:
Well there'll be an election in the first half of next year, but this is all legislated. There will be, people on middle incomes will be getting $530 dollars back at the end of next financial year, which obviously begins on July 1.
NEIL MITCHELL:
And is this enough? Is this the reform for the next six years, or would you, if re-elected, would you do more?
PRIME MINISTER:
Well, this is a big personal income tax reform. It is really backing hard-working Australian families, it's ensuring they keep more of the money they earn. I mean isn't it a contrast -
NEIL MITCHELL:
No, no before we get into the politics, what I'm saying is, is this it? I mean, if you continue to be elected, do you continue to cut taxes?
PRIME MINISTER:
We will always do everything we can to ensure that Australians can keep more of the money they earn. Obviously we have to bring the Budget back into balance and we're doing that a year early. We've got to pay for all of our essential services and we’re putting more money, as you know, in Victoria into infrastructure, into hospitals and schools.
But our goal is to ensure that Australians keep more of the money they earn. To ensure that there are more jobs, stronger economic growth, guaranteed essential services and government lives within its means. That what we're trying to do.
NEIL MITCHELL:
But even on the figures I've seen, tax as a percentage of GDP increases over this period.
PRIME MINISTER:
It will, it will be constrained. It increases for –
NEIL MITCHELL:
Well it goes from 22.5 to 23.9 per cent.
PRIME MINISTER:
No, 23.9 per cent is the cap that we imposed. It will not exceed that.
NEIL MITCHELL:
But that’s still up on what it is now isn’t it? So despite the reform, tax increases.
PRIME MINISTER:
It’s a function of the strength of the economy Neil, but I can assure you we've got – look, the reality is Australians want us, the government to live within its means. They want to make sure that we're paying for all the essential services they need. And we are. We are not deferring the listing of life-saving drugs, like Labor had to do when they had the Budget out of control.
NEIL MITCHELL:
Are you cutting spending?
PRIME MINISTER:
Where there is waste, we cut it, but essential services, we are putting more funding into. I mean this is, you know, in government you've got to do a lot of things at the same time. You've got to ensure Australians keep more of the money they earn. At the same time, you've got to bring the budget back into balance. At the same time you've got to make sure that you're putting the resources you need into schools and hospitals, national security and infrastructure. And you've got to make sure that government lives within its means.
NEIL MITCHELL:
You’ve obviously made a decision here to give some tax money back to people, rather than reduce debt. I mean, in that sense, is the “budget emergency” over?
PRIME MINISTER:
That’s not a term I've used. I can say this to you though; that net debt is peaking this financial year at 18.6 per cent of GDP and then it will continue to decline year after year and ten years out, it will be about three and a half percent of GDP.
NEIL MITCHELL:
Obviously over the period of the six years we're looking ahead, inflation continues. Would it - it's a good thing obviously to raise the threshold for the various tax brackets - wouldn't it have been fairer to index them though?
PRIME MINISTER:
Well, I think no. I think it's better to actually abolish the tax bracket, as we’ve done.
NEIL MITCHELL:
Well that’s true, but on the way up, why not index them?
PRIME MINISTER:
Well, you've got a better solution here. You've got, when this reform is complete Neil, from $41,000 all the way up to $200,000 - and this means this covers 94 percent of Australians who earn less than $200,000 in 2024 - people will not pay more than 32.5c in additional tax. So it is flattening the personal income tax system, which has been a big goal for everyone -
NEIL MITCHELL:
I understand that, but $200,000 in six years time is going to be worth less than it is today. Or, so is $150,000 or $120,000 or $90,000.
PRIME MINISTER:
Yeah, currently the top, 45 cents, obviously plus two cents for the Medicare levy, comes in at $180,000. That's been there for a while. We're increasing that to $200,000 and by 2024, that that will obviously reflect –
NEIL MITCHELL:
But that’s my point. Did you consider indexing it to allow for inflation over that six years, to make it $200,000 plus inflation.
PRIME MINISTER:
We've always looked at that, but I think I think what we've got is a good solution. It’s a flatter, fairer, simpler tax.
Neil, I’ll give you one, this is a thing that a lot of people overlook and the Labor Party doesn't want to pay attention to. Do you know, in 2024/25 when our reform is complete, those people in the top tax bracket, earning over $200 000, will be paying a larger share of the total personal income tax take than they are today. So this proposition that this is, you know, a giveaway to millionaires and it's unfair is absolute nonsense.
NEIL MITCHELL:
How much higher?
PRIME MINISTER:
Well they'll be paying 36 percent of the total personal income tax take in 2024/25. Right now people in the 45 percent bracket, pay about 30 percent of the total income tax.
NEIL MITCHELL:
Okay. It's a long way off, are you likely, or do you want to be Prime Minister in six years time?
PRIME MINISTER:
As long as I’m doing a good job, I want to be Prime Minister, that’s for sure.
NEIL MITCHELL:
But –
PRIME MINISTER:
Neil, let me let me put this to you; everyone says politicians think too short term, they're only looking at the next opinion poll or the next election. This is a long term plan.
Like a lot of the things my Government is doing - whether it's Snowy Hydro 2.0 or the, you know, the rail line out to Tullamarine - people expect governments to plan for the long term and that's what I do.
NEIL MITCHELL:
Okay, Pauline Hanson, your new bestie, she's a bit unpredictable for a bestie, isn’t she?
PRIME MINISTER:
Pauline Hanson is a member of the Senate. We respect her and all the members of the Senate. We deal with them, engage with them constructively and I thank them all for their support.
NEIL MITCHELL:
So what can you offer her to get the next step through, the company tax cuts?
PRIME MINISTER:
We'll just continue having respectful and private discussions with the crossbench. That's our job, to get things through the Senate.
NEIL MITCHELL:
One of things that’s agitating her is the international companies, the corporations, not paying tax. Like Adani, zero on $724 million – this is going back a few years – ExxonMobil, Origin, are you going to fix that?
PRIME MINISTER:
We have actually done more on multinational tax avoidance than any previous government.
NEIL MITCHELL:
so you agree with her on that principle?
PRIME MINISTER:
Look I absolutely agree, I believe in lower taxes, but I do not believe in a self-help approach to tax reform. I believe in lower taxes, but everyone has to pay them.
NEIL MITCHELL:
Okay.
PRIME MINISTER:
I’ll just give you one stat; we have, with our reforms, brought $7 billion of additional multinational corporate revenue back into our tax base. That was through legislation that the Labor Party voted against. I don't know why, but they voted against it.
NEIL MITCHELL:
Our mate Derryn Hinch this week told me he won’t budge, no company tax cuts for companies over $500 million. Will you negotiate that with him?
PRIME MINISTER:
We will be having respectful and constructive discussions with all of the crossbench. But I don't, I don't do it publically and through the media.
NEIL MITCHELL:
No that’s fair enough, but I wonder is there room to move though. I mean would you look at a cap of a billion or something?
PRIME MINISTER:
Neil, I’m not going to speculate. We get a lot of things through the Senate by treating the Senators with respect and engaging with them confidentially and constructively.
NEIL MITCHELL:
No, that's a fair point. But would you comment on the banks? I mean he's going after the banks because they have been bastards.
PRIME MINISTER:
The only thing I'd say is that everyone has to pay their tax. We are relentless in ensuring that multinationals, big corporations, pay their fair share of tax in accordance with the law. Where they've been exploiting loopholes in the law, we close them up. Again as I said, we’ve brought seven billion dollars of additional corporate revenue into the tax net. That's one of the reasons why, by the way, the Budget is in better shape; because we've got more companies paying tax, companies have been more profitable, there are more people in work.
We've had record jobs growth.
We've got the lowest percentage of working age people on welfare, for twenty five years.
That's why we can afford to bring the budget back into balance, provide tax relief to hard-working Australian families and provide additional, increased funding for hospitals, schools and infrastructure.
NEIL MITCHELL:
The jobs growth is not full time growth though, is it?
PRIME MINISTER:
Oh no, it is. The growth last year, which was the record about 415,000 new jobs, about 80 per cent of it was full time.
NEIL MITCHELL:
We've also gone up to more than half the population is on casual employment, more than half of the workforce rather, on casual employment?
PRIME MINISTER:
That's not right.
NEIL MITCHELL:
Isn’t it?
PRIME MINISTER:
No, I haven’t got the number in front of me but the level of casual employment is about the same as it has been for a long time.
NEIL MITCHELL:
Do you think this could win you an election?
PRIME MINISTER:
Again, I’ll leave the others to speculate, but it's going to be a very clear choice. The Labor Party of today has abandoned all of the values of the Labor Party of the past. They are mystified, they say, by aspiration. They are not supporting hard-working families in getting ahead.
So Shorten is going to go to the election and he's going to say; ‘vote for Labor and pay more personal income tax, pay more investment tax, pay more business tax’ –
NEIL MITCHELL:
But again, so, he’s got a lot of money to throw around, if he -
PRIME MINISTER:
You know something?
NEIL MITCHELL:
If he goes, on your basis, I mean: “We’re not going to give you a tax cut, but we’ll give you a gold bar in every house,” or something.
PRIME MINISTER:
Yeah, Neil, Australians do not believe, like Bill Shorten does, that the Government knows best. We believe government’s job is to enable you to do your best. Shorten is patronising hard-working Australian families. He's saying that people on $90,000 $100,000 a year are “rich” and, you know, should pay more tax. I mean you had Richard Marles on the other day.
NEIL MITCHELL:
Yes, yes.
[Laughs]
PRIME MINISTER:
I mean, he acknowledged that somebody on $120 000 is not rich, I can tell you his boss doesn’t think that.
NEIL MITCHELL:
It’s the last time I’ll get him, thanks very much for that. You’ve brought that up in Parliament, it’s the last time he’ll talk to me.
[Laughter]
PRIME MINISTER:
He was looking a bit –
[Laughter]
NEIL MITCHELL:
No, no, he’s a good man.
PRIME MINISTER:
I don’t want to damage Richard’s career any more, but you and I are old enough to know Wran and Keating and Hawke. The Party they stood for was all about people on middle incomes getting ahead, you know, getting some more –
NEIL MITCHELL:
Okay well what about pensioners? When can you offer pensioners something?
PRIME MINISTER:
Well pensions are increased twice a year, as you know.
NEIL MITCHELL:
Yeah I know, but –
PRIME MINISTER:
I’ll tell you something - I’ve talked about the things that are in our Budget – I’ll tell you something that's not in there; which is this disgraceful raid that Shorten is planning on people’s retiree savings. I mean this is a big –
NEIL MITCHELL:
Yeah, but that’s not pensioners. Is there any relief on the way for pensioners?
PRIME MINISTER:
It will include a number of pensioners, but you know who it’s going to really hit? It’s going to hit self-funded retirees and these are people, very often on modest incomes. See look, here’s an example. Shorten is waging a class war. I mean you can hear all the abuse I get about this, this is absolute, old-fashioned class war, but here’s the thing; if you’re a wealthy person and you’ve got a big investment portfolio, you've got some listed shares and you've got franking credits, you’ll have some other investments which are taxable. You will offset the franking credits against the tax liability and Shorten’s plan doesn't affect you.
But if you are a retiree and you've got a portfolio of Australian shares and you're getting the franking credits back in cash because you don’t have other taxable income, he’s going to rip that off you. How is that fair?
NEIL MITCHELL:
Pauline Hanson is pretty upset about the robocall that Labor put into her area last night, urging people to call her direct, where you push a button and you got through to her office. Did you think that was unfair?
PRIME MINISTER:
Yes I do, I mean you can see what they were doing, they were seeking to bully her. This was a full court press to bully Pauline Hanson so that she wouldn't support our personal income tax reform. And obviously it didn’t work.
NEIL MITCHELL:
Just quickly, will you rule out an election this year?
PRIME MINISTER:
The election will be next year.
NEIL MITCHELL:
Okay, did Tony Abbott help with the negotiation on this?
PRIME MINISTER:
No, with the crossbench? No, the negotiations in the Senate are handled by Mathias Cormann and obviously we provide, Scott and I and other Ministers, provide support. But Mathias is the Leader of the Government in the Senate and he is a very skilful negotiator. And you know why? Because he treats people with respect, he is a great listener and he's very constructive.
NEIL MITCHELL:
Just finally, the ABC. I mean your own lot have sort of tried to shoot you in the foot over this. Are you willing to say that the ABC will never be privatised under any government you lead?
PRIME MINISTER:
It'll never be privatised under any government, ever. Well, I can certainly speak for myself, it’ll never be privatised under any government I lead but –
NEIL MITCHELL:
I’ve heard that before.
PRIME MINISTER:
In the business of political predictions, the business of political predictions, which is perilous, I think we would both agree that the ABC will always be in public ownership. I think that is one of the –
NEIL MITCHELL:
Well, is it captive of the left? Or not?
PRIME MINISTER:
Look, I think – Okay, I’ll tell you the criticism I’d make of the ABC. Yes, I think some presenters, some programs are biased more to the left, but what I’ve found disappointing in recent times is the quality of the journalism, it is the lack of accuracy. The ABC has got an obligation under its Act, for news and current affairs to be accurate and impartial. Now obviously impartiality, you know, is in the eye of the beholder and people have different views. But accuracy is different. I am concerned that there have been too many cases of just simply inaccurate reporting. I think that as the national broadcaster the ABC has an obligation, has an obligation to be fair and impartial, but really, they really have to ensure that when they're putting out the news, it is accurate and factual. And when they make a mistake, they promptly and prominently correct it.
NEIL MITCHELL:
Okay, thank you. You’re obviously losing your voice, is that, you’ve were cheering the Socceroos overnight? Or is it too many interviews?
PRIME MINISTER:
Yes well, congratulations to Mile and the team. They've got to beat Peru now, but, you know, they are definitely in the hunt! I think they did well, I thought they should have won but I would say that, wouldn’t I, because I’m Australian. But they had more than half of the possession in the game, so, there it is, you know, that’s football isn’t it? He’s a great guy Mile, I said to him, I said he and Bachar Houli have got the two best known beards in football and he gallantly said he thought Bachar put more effort into his beard. I think that’s probably right, but great players.
[Laughter]
NEIL MITCHELL:
Thank you for your time.
PRIME MINISTER:
Okay.
[ENDS]