Labor’s tax policy hoax – Interview with Alan Jones, Radio 2GB

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September 9, 2004

Labor’s tax policy hoax – Interview with Alan Jones, Radio 2GB




Interview with Alan Jones


Wednesday, 8 September 2004

8.10 am


SUBJECTS: Labor’s tax policy hoax


Treasurer good morning.


Good morning Alan.


Treasurer was it a mistake in your last Budget to leave out those 6.5 million

people who are earning under $52,000?


Well of course we didn’t. What we introduced for people who are earning

$58,000 and below was the most generous superannuation scheme the country

has ever seen Alan. By which if you put a dollar into superannuation the

Government gives you $1.50. It is the only case where you are actually given

benefits, matching benefits, from the Government. And I have got to say

it is just a tragedy that Mark Latham wants to rip that saving away from



So that is going to be removed?


Oh, removed.


And that’s one way, that’s $1 billion that will cost so that will help

him fund the package he announced yesterday?


Well let me make this point, this superannuation co-contribution, you know,

if you were on say $40,000 you would have got $900, you were eligible for

$900 from the Government. And he rips it away. And he is just going to say

to those people bad luck, you won’t have any superannuation, the scheme

that the Government put in place, that’s just been abolished. It is, not

only is it really vicious on people who are saving for their retirement

but it is really bad policy. We have got an ageing population, the Government

has put in place a way of helping people save for the future, and Mark Latham

rips his hand in and he says that’s all over, I am taking that.


Does he understand that policy because I saw him today or heard him somewhere

say that ‘well who’s got $1,000 to save on that income?’ Doesn’t this co-contribution

apply even if you save $20?


Absolutely. You put in $20 and the Government gives you…




…gives you $30.


I will do your maths here.


Thank you very much.


That’s okay.


If you put in $100 the Government would give you $150. He doesn’t understand

it you see. This is the problem with Mark Latham, he comes out with this

idea of ripping money out of people. He says oh, nobody is going to miss

that money. But they will. It is the most generous superannuation scheme

we have ever had. Let me give you…


Let me ask you another question. Has he then made a mistake in offering

only eight bucks to the under $52,000’s because that is equal to what $1.14

a day. Someone said this morning it is 46 cents short of the price of the

cheapest bus ride in Sydney.


Well, yeah, what is it, you know, one and a half sandwiches and a milkshake?

But Alan, again, you see, this is where Mark Latham doesn’t understand his

own policy, because he says oh well, you will get eight bucks a week, that’s

not true either. Let me give you the facts. If you are on $20,000 you will

get $3.48. If you are on $25,000 you will get $6.10. You’re not even going

to get eight bucks.


Who gets the eight bucks?


That is a complete con. There is a narrow range of people above $27,000

until it starts phasing out who will get eight bucks. But anybody below

$27,000 is not going to get eight bucks. Oh, no way. That is just the con

I am afraid. Now here is another point that all of the journalists seemed

to miss, he didn’t even announce what his family payment was going to be

in yesterday’s policy.


He just said he would pool the two family payments together. Does he get

credit though in all of that for raising the ceiling? I mean the Family

Tax Payment A under your programme cuts out at about $32,000 and then of

course the Family Payment Benefit is reduced progressively up to, depending

on what your income is, does he get marks for saying ‘well there will be

no reduction until you get to $50,000’?


Well, actually, there are two levels of Family Tax Payment…


Yeah, A and B.


…at the moment. Even at A there is the maximum rate and the minimum

rate and the minimum rate under the current situation doesn’t start phasing

out until about $70,000 or more. You see, but this is where Mark Latham

has, gee he has been dishonest. I have got to say he has really been dishonest

on this one. He is abolishing the benefit for single income families. That

is what he didn’t tell you yesterday.


That is the $4.50?


He is abolishing the benefit for single income families. So let me give

you a few figures. Mum and Dad with three kids, Dad in the workforce, $35,000,

Mark Latham is going to rip out more than $10 a week. He is just going to

take it away from you. I am not talking about a situation where you don’t

get an improvement. He is going to deduct your payments. You’re going to

have less money than you have today. Single income families have got to

know this, that Mark Latham’s policy is designed to attack single income



So you’re saying single income families households are going to be worse



Yes. Single income families where Dad is in the workforce and they have

got kids are going to be worse off.


The Government in the Budget made an increase of $600 one-off payment in

Family Payments. He said yesterday that wasn’t real money…




…and didn’t include that in the benefits that families are now receiving.


Well Alan, ask 2.2 million Australians who received the cheque of $600

per child, if you had two children $1,200 if you had three, $1,800 before

the 30th of June last year, whether it was real money. Just ask

them. This guy has got to be in cloud cuckoo land.


Just in terms of costs he says that this package will put another 72,000

people in work and as a result of that there will be fewer payments on unemployment

benefit, greater tax revenue, so over three years there will be a saving

of $1.9 billion. Is that a legitimate way to be able to fund the package?


No Alan and this is just another area where he has just been too clever

by half. He says oh how am I going to pay for these benefits? He said, oh

well I will just assume that more people get into work. Now let me tell

you, when we do Budgets we never say, let’s take last year’s Budget, when

we did last year’s Budget we cut taxes. We didn’t say, oh well, by cutting

taxes we will actually get more money because more people will get into

work. We didn’t say that. That is not the way that these things are costed

and that is why I make the point now, Mark Latham, put your policy in for



Well can I ask you that question? There is a Charter of Budget Honesty

Act from 1998 which puts in place a legislative framework for the reporting

of these matters, one of the commitments from the Charter was it not, was

to cost election campaign promises.


That is right.


Has Mark Latham submitted all of this for costing in the formal way that

the Charter intends?


No, Mark Latham has not submitted this policy for costing. Now this policy

can be costed by the same group that costs Government policies. So every

Australian could be assured that both the Government policy and the Opposition

policy add up. Mark Latham has refused to submit this for costing. Now one

of the reasons he refuses to submit it for costing is that he knows all

of this dodgy stuff about, oh, I can cut taxes but it will actually pay

for itself, you know, you cut taxes and it actually pays for itself because

more people get jobs, he knows that is not allowed and that is the reason

why he won’t put this dodgy policy in for costing.


He is going to say today that what he has done was a meaningful incentive

for people to get stuck in, work harder and a boost productivity. Is $8

a week for those on $30,000 to $50,000 sufficient incentive to be able to

engage that argument?


Well of course it is not. And what I would say to your listeners is this.

Mark Latham says, for a very narrow range, for a very narrow range, look

I will try and give you $8 a week – let me ask people who are listening,

if interest rates went up under a Latham Government by a ¼ or a ½

or more, how much would they actually lose?


The Reserve Bank actually puts up interest rates though doesn’t it, it

is an independent entity. You are saying if the circumstances of economic

management was such that led the Reserve bank to put up interest rates.


Well if interest rates went up under a Latham Government by a ¼

or a ½ or more, how much is their $8 going to cover of their increased

mortgage repayments? I would ask people that question today. How much of

Mr Latham’s tax policy would cover your mortgage repayments if interest

rates went up under a Latham Government?


And what, but I mean in what circumstances would interest rates go up?


Well interest rates go up if inflation increases because interest rates

are directed at keeping inflation low. How could inflation go up? Well they

would go up if you had bad economic management, if you couldn’t balance

your Budgets, it would go up if you had an industrial relations system,

which allowed wage increases which are not backed by productivity. It would

go up if you didn’t have a ridgy didge competition keeping prices low. I

mean if you muck up economic management in this country, if you let inflation

get out again, if you had somebody like, who doesn’t have the experience

to run the economy and if inflation goes up, interest rates will follow.


Just in relation to the union movement because there is going to be widespread

debate between now and the election day about the industrial relations program

and the extent to which the union movement may have him by the throat to

some extent, was there any evidence of that yesterday, he seemed to be promising

a delay in the phasing out of the protection for tariffs, textiles, motor

vehicles and footwear and so on, is that a doffing of the hat to the union

movement and could that mean that Australians may be paying more for these

products under a Latham Government than otherwise would be the case?


Well that will be a consequence, but the way he doffs his hat to the union

movement is he wants to re-introduce the provision which will allow compulsory

unionism, he wants to allow secondary boycotts, he wants to abolish Australian

Workplace Agreements and he has a new national payroll tax, he calls it

a levy, but it is a payroll tax. Now these are all policies which have been

demanded by the trade union movement and Mark Latham has made it quite clear

that if he gets to the industrial relations system the union movement will

have its powers increased. Now, in the past where you have had strong union

power and where you have had wage demands, this has always led to an outbreak

of inflation as it did previously back in the 80s, and if you have an outbreak

of inflation again, what you will have, is you will have higher interest



Just coming back to your point about co-contribution, the co-contribution

he is abolishing, a part from the co-contribution for people under $50,000,

or ‘the people that were left out’ of your Budget, will you be, in the ensuing

weeks, once the financial position of the Budget becomes clearer, on the

economy becomes clearer and there is likely to be more revenue to play with,

will you be making any tax adjustments to the taxation arrangements that

affect those very people?


We think that when you take into account the arrangements we have in place

for family payments and for superannuation, people are better off under

the current system than under Mr Latham. You have got to remember this,

Mr Latham is proposing to take benefits off hundreds of thousands, we will

do the sums, millions of Australians will be worse off under Mr Latham’s

policy. And all people have got to do is understand it, people have got

to understand it. Now, I call on him today to submit it for costing because

once it is submitted for costing all of this will become apparent.


All right.


But people have got to understand this, that it is not just that you won’t

go forwards, single income families in particular, where Dad is in the workforce

and Mum is looking after the kids at home, they are going to be worse off.


Ok, we will leave it there, there will be plenty of analysis in the remaining

four weeks, but thank you for your time.


Great to be with you Alan.