SUBJECTS: Budget result for rural and regional Australia, bracket creep, aged care funding, Citizenship.
NICOLE CHVASTEK: Joel Fitzgibbon is the Shadow Minister for Rural and Regional Australia and he is also the Shadow Minister for Agriculture, Fisheries and Forestry. Joel Fitzgibbon good afternoon.
JOEL FITZGIBBON, SHADOW MINISTER FOR AGRICULTURE, FISHERIES, FORESTRY AND RURAL AND REGIONAL AUSTRALIA: Nice to be with you Nicole.
CHVASTEK: That’s a great list that the Deputy Prime Minster rattled off yesterday. There looks like there is a lot of spending in there for regional Australia.
FITZGIBBON: We shall see. Lies, damn lies and statistics they say. Most of the infrastructure money they are talking about was funded by Labor five years ago and they are still starting to roll some of those projects out but nice to see we are finally getting somewhere. Take the Inland Rail Project for example. We spent $900 million I think it was on land acquisition and project planning before we left office and here we are five years on and not one meter of track has been laid, so they are revisiting some of the programs they delayed in their earlier periods in Government. But again it’s nice to see they are finally getting around to some of them.
CHVASTEK: Well Victoria is going is about to embark on a $1 billion road and rail blitz partially funded by the Federal Government.
FITZGIBBON: And some of the devil will be in the detail for example some of these projects like the Inland Rail Project I’m told will be done by way of equity injection or in other words off budget so it doesn’t impact on the budget deficit and there is very little detail about how those funds will be allocated. Of course the Department of Finance has very tight rules around doing things off budget. For example, you have to demonstrate it’s a good investment for the taxpayer and therefore demonstrate there is a good rate of return more for example than the Government would receive just putting it in the bank or doing some other project. So we shall wait and see how all that turns out.
CHVASTEK: What will Bill Shorten be announcing when he steps up for his budget in reply speech tonight. What can we expect from Labor?
FITZGIBBON: Well obviously I can’t reveal any of the detail but I think the theme will be around fairness because this Government is still committed to the $80 billion for corporate tax cuts. $17 billion of which will go to the four major banks. The subject of course to that amazing Royal Commission we have all been astounded with.
CHVASTEK: How much is going to the banks?
FITZGIBBON: $17 billion in tax cuts.
CHVASTEK: Scott Morrison says that the bulk of the Government’s proposed income tax cuts including its seven year plan will run a sword through bracket creep and lower income earners will enjoy the biggest percentage reductions in their tax bill. What’s wrong with low income earners being the ones to enjoy the biggest per cent reduction in their tax bill? That’s pretty fair.
FITZGIBBON: Well Nicole, again lies damn lies and statistics. It depends on what year you are talking about because these tax cuts come in over time and certainly we have said we will support the tax cuts for middle to low income earners and families but we will continue to resist the tax cuts to the big end of town and to high income earners. Remember what they are doing now Nicole is flattening out the tax base. We have a progressive tax system rightly in this country which dictates that the more you earn the more you pay in marginal tax rate terms and what they are doing is taking one whole level of that stepped approach out of the system which will make the system less progressive or other words more regressive and therefore will disadvantage over time middle to low income earners.
CHVASTEK: Well high income earners will pay the most by virtue of the fact they are earning so much.
FITZGIBBON: I’m sorry Nicole I was just (inaudible).
CHVASTEK: In dollar terms high income earners will pay more than low income earners. If you’re on a 32 per cent tax rate and you are earning $200,000 you will be paying more in dollar terms than someone on $30,000 a year.
FITZGIBBON: Yes but in relative terms the higher end is going to be more advantaged over time than the lower end and of course you mentioned bracket creep. Bracket creep of course, for the benefit of your listeners, is the way in which wage rises lead to more taxes and therefore more revenue for the Government. The Government should over time adjust the tax rates to return the dividend of bracket creep back to the taxpayer and this Government hasn’t been doing that over the last five years. So in that sense they are only doing what is expected of them. We are supportive of that but we are not supportive of the breaks for the big end of town and we are certainly not supportive of the breaks to the big corporates.
CHVASTEK: So what do you have planned? You don’t have to give me the specifics. You say that your budget will be about fairness. Scott Morrison says his budget is fair. How will yours be different?
FITZGIBBON: Well I said to a couple of regional radio interviews before the (inaudible) is that the real focus for us and for me is equality of opportunity to basic services like health, education including vocational education, aged care and child care and that’s where we believe the Government has it’s priorities all wrong. $80 billion going to corporate tax cuts which could be investing in health and education and of course vocational education and training.
CHVASTEK: Well the Government has announced more money for aged care packages.
FITZGIBBON: Well indeed it hasn’t. This is part of the pea and thimble trick. What they have done is they have announced more in place aged care packages so people can stay at home and we support that concept, in fact I think we may have initiated it back in the Hawke and Keating years but what the Government is doing is taking money out of aged care institutions to pay for these at home packages so people have more opportunity to stay at home but the cost will be worn by our aged care institutions in other words our retirement homes. This is not a good outcome. We need to be spending more, not shuffling money around.
CHVASTEK: The Government was criticised by regional Victorians for putting no money into Black Spot problems after the existing allocation. The existing funding runs out in the next financial year and then that is it.
FITZGIBBON: Are you talking about telecommunication blackspots?
FITZGIBBON: Sure because there are road blackspots too. I haven’t really gotten to the bottom of this. They have just decided there would be no fourth round in that Black Spots program. A curious decision in a budget designed to be a pre-Election sweetener. I am really surprised they have cut that program.
CHVASTEK: What will Labor do in relation to mobile phone Black Spot funding?
FITZGIBBON: Well again, you will have to wait until -
CHVASTEK: I don’t want the dollar figure Shadow Minister, I just want to know if you have any plans.
FITZGIBBON: Well, what I can say is, as we drive towards a more sophisticated agriculture sector we will rely more and more on connectivity because all these great new inventions in food production rely on connectivity. So I can say that that is a real focus for us.
CHVASTEK: So you will be putting more money after the current round of funding expires?
FITZGIBBON: Nicole as much as I would love to, I know your listeners get tired of politicians saying it, I won’t be making any announcements ahead of my Party making its announcements.
CHVASTEK: What about tax cuts in the future? Bracket creep obviously is a problem. It quietly steals the income of hard working Australians away from them. It is unheralded and they simply by virtue of the inflation rate move up into a higher tax bracket. The Treasurer has – I mean you complain it is regressive - but he has attempted to remove some of the impact of bracket creep by flattening that tax regime up until $200,000. What is Labor intending to do?
FITZGIBBON: Well he has belatedly in his own choice of doing so, addressed bracket creep as he should have been doing for the last five years. All things have to be paid for and the big difference between us and them is that we are going to pay for whatever we do with big reforms that address avoidance of the higher end of the income scale and at the corporate scale so what we announce we have announced changes to franking credits and the dividend imputation scheme, big changes in negative gearing and big changes to capital gains tax. So taken together this is going to deliver us billions of dollars which will be then available to give relief to the medium and lower end and of course to do those things I have been talking about in health and education, aged care and childcare.
CHVASTEK: Joel Fitzgibbon, are you embarrassed your leader regarded the advice you got about these citizenship status of Labor MPs as rolled gold. The Prime Minister has been making hay in relation to the resignation of the four Labor MPs who have subsequently been found to hold dual citizenship. This is what he said.
[GRAB] MALCOLM TURNBULL: He is a guaranteed deliverer of Olympic proportions. He gave a rolled gold guarantee that all of his Members, including the ones who have just resigned were eligible to sit in the House.
CHVASTEK: I mean the question is Bill Shorten said this was a rolled gold guarantee and they were eligible to sit in the House and it has transpired that they in fact are not eligible to sit in the Parliament. How can we trust anything Bill Shorten says?
FITZGIBBON: And you just saw a desperate Prime Minister jumping on what is a relatively small issue. I will make two points. We had legal advice –
CHVASTEK: Losing four MPS is not a relatively small issue I would argue Joel Fitzgibbon.
FITZGIBBON: No, the relatively small issue is making a big deal about Bill ultimately being wrong. He had legal advice that our system we had in place which was infinitely better than what the Liberals had in place and so much more better than the Nats, because the Nats didn’t have any system in place. We had legal advice that we had done that so well we were all inoculated from any problem. The other point is that the High Court effectively changed Section 44 this week by putting upon it the most narrow interpretation of Section 44. The most narrow interpretation of what the founding fathers were trying to achieve and do in Section 44 so when Bill said that he was applying his confidence to one law if you like and now we have effectively a new law. What the High Court did this week was change the way all the major Parties do pre-selections, particularly the timing of pre-selections.
CHVASTEK: So it’s not Bill Shortens fault it’s the High Court’s fault?
FITZGIBBON: I think we can see we didn’t get that right. I think Tanya Plibersek was actually apologising if anyone finds offence. We made a mistake off legal advice and the High Court affectively changed, moved the goal posts this week.
CHVASTEK: Thank you for your time.
FITZGIBBON: A great pleasure.