SUBJECTS: 2017 Budget; surplus; bank tax; Medicare Levy; welfare changes

GARETH PARKER: My guest on the program is Labor’s Member for Perth Tim Hammond, he’s a regular on the program. Tim, Good Morning.

TIM HAMMOND MP, SHADOW MINISTER FOR CONSUMER AFFAIRS: Good morning from a sunny but cold Canberra, Gareth.

PARKER: Always is in Budget Week. It’s never been warm in Budget Week, it’s always freezing. A lot of people are suggesting that Scott Morrison’s Budget, handed down last night, could have been a Labor Party Budget. Are you happy with it?

HAMMOND: Absolutely not. You honestly can’t make this stuff up. The Liberal Party spent $200,000 commissioning focus groups to come up with a slogan for this proposed Budget to give it a notion of fairness. I can give you a slogan for free: Do Not Be Fooled

PARKER: Why not?

HAMMOND: A few reasons. First let’s look at the underlying assumptions in which the Treasurer predicates a proposed return to surplus. His projections for wage growth, which often underpin these notions of forward projections; he’s pitched it for the next few years to hit say 3¾ % by the end of the forward estimates period. That’s in the context of where we are now, which is where wages growth is actually down – from 2½ % down to 2%; it’s growing at its slowest rate in the nation’s history under this Coalition. What they want to happen is that wages growth to get to the point it was at during the construction phase of the mining boom, which isn’t coming back. So the assumption is flawed which people should not be fooled by.

The other thing is that the areas that needed reforms have been squibbed: housing affordability, banking reform, NDIS; infrastructure, health, education. You name it it’s just not there.

PARKER: On banking reform, bank execs are being placed under a tougher compliance regime, banks can be fined millions of dollars for treating their customers poorly. And the big thing is of course that they are going to be paying $6 billion in extra tax.

HAMMOND: Again, Gareth, the devil is in the detail – both in the levy and in the powers to make banks treat people fairly. We have seen no comfort that the banks will not just place the costs of this levy directly on their customers, mums and dads trying to pay their mortgages, or shareholders in the banks who often invest their money in superannuation funds. So there is no guarantee this is where the buck will stop. The other part is that this is in the context of a Government which is proposing a record-breaking tax cut for big business, which will see $50 billion coming off taxable incomes. $7 billion is from the banks. It is a merry go round approach people should not be fooled by.

PARKER: Will Labor oppose the cuts?

HAMMOND: I don’t think we’ll be in a position to do that, but the Government needs to assure mums and dads they will not be affected here.

PARKER: How about the increase to the Medicare Levy to pay for the NDIS, will Labor support that measure? 

HAMMOND: Medicare Levy raises need to be worked through, which is what we are doing over here. Make no mistake, when Labor was in government, the NDIS was fully funded. So the extra money being taken out of people’s pockets is not because the NDIS needs to be funded but because of all the other reforms this Government is sticking with. If the $50 billion tax cut wasn’t there we wouldn’t be talking about this. The other thing about the levy is that if the cuts this Government put forward had not been in place then there would be no need for a tax increase.

PARKER: In terms of welfare. What do you think of drug testing?

HAMMOND: It’s really early days, I am concerned about the targeting on vulnerable Australians. This is the ninth proposed welfare crackdown by this Government. It’s sad that the government is looking to target vulnerable Australians while the big end of town is getting a historic tax cut. Really early days, still needs to be worked through.

PARKER: Thanks Tim.