PATRICIA KARVELAS: The Shadow Finance Minister Jane Hume joins us now from our Parliament House studio. Senator, welcome back to the program.
JANE HUME: Good morning PK.
PATRICIA KARVELAS: You now have the details of the changes to tax. Will you support the changes?
JANE HUME: We do. We got the legislation yesterday and of course, as you would expect, it will need to go through our parliamentary processes. But what I can say is that the Coalition, as always, will always support lower and simpler taxes. This change to the stage three tax cuts has actually done away with any reform that could have gone through in the future. I mean, this is not genuine tax reform. This is simply a political response to what the Government have seen as their tanking popularity and with a by-election on the horizon, we know that this is really the driver of the changes to these stage three tax cuts. The Prime Minister only two weeks ago today looked Australians in the eye and said there were no changes to the stage three tax cuts. He has backflipped, he has lied to the Australian public and quite frankly sold his integrity for the largest tax cut will be $15 a week. I don't think you can buy integrity for $15 a week.
PATRICIA KARVELAS: But for anyone struggling with the cost of living, any extra dollars in their pocket would be welcome, wouldn't it?
JANE HUME: Absolutely and in fact, that's exactly what the Coalition have been saying now for nearly 18 months. That's why we established the Cost of Living Committee, which has gone right around the country talking to ordinary Australians about what it is that they're feeling, where the pinch points are and what some implementable, practical solutions might be that won't necessarily be inflationary. At really no stage did anybody other say that they wanted changes to tax cuts. What they said was they wanted help right now and they simply haven't got it from this Government. Even the Prime Minister admitted in his Press Club address that everything that they have done has been entirely ineffective. At the beginning of 2023, the Prime Minister was asked what his New Year's resolution was and it was to address the cost of living. Why is it that he didn't ask Treasury to do anything, any analysis until December 2023?
PATRICIA KARVELAS (INTERRUPTS) : Well, they've answered that question because.
JANE HUME: Well, it took him a year to do something about the cost of living crisis that was facing ordinary Australians watching interest rates rise over a dozen times, watching real disposable incomes go back by around 8.7%, the average Australian is about $8,000 poorer now than they were at the election and the Prime Minister thinks he can by them back with as little as $15 a week.
PATRICIA KARVELAS: So given this is the legislation in front of you, and if the Government doesn't get your support, it has to obviously negotiate with the other parties. Are you prepared to wave it through?
JANE HUME: Well, as I said, this will go through our normal party processes. That should be no surprise.
PATRICIA KARVELAS: And what's your view? I mean, do you think that you should be standing in its way?
JANE HUME: The Prime Minister said that the reason why he released the legislation yesterday was so that both the Coalition and the Greens could take it through their party room processes and that's exactly what will happen. So I don't want to pre-empt that process. As you can imagine, there's an awful lot of opinions within our party room on all sorts of issues, and this will be no different.
PATRICIA KARVELAS: Yes and this one is a contentious one. Many MPs have been saying that there's no way they want to stand in the way of people, you know, so many Australians getting more money than under your original changes. Do you understand that sentiment?
JANE HUME: Well, certainly. As I said, the Coalition will always be a party of lower taxes. But the problem is the reform has entirely disappeared from this agenda. Bracket creep will remain, and the Prime Minister is clearly comfortable.
PATRICIA KARVELAS (INTERRUPTS) : Let me put that to you, because today.
JANE HUME: He has decided that genuine tax reform is too hard and please understand this. I think this is really important, PK. Bracket creep essentially robs people's future prosperity. So yes, you might be on $135,000 now and you will appreciate that extra $15 a week. But can you name me a person that's on $135,000 now, that doesn't aspire to be on 140 or 145, potentially retire on over 150. Their future prosperity will be robbed by this decision. That this Government, that this Prime Minister is making today because he hasn't got the guts to do genuine reform on bracket creep, which sucks the aspiration out of our economy.
PATRICIA KARVELAS: Government has released new data showing that the average tax rate for the average worker will be lower in ten years than it would be under your legislation that is in law, that the Government wants to overturn. Grattan Institute analysis shows that workers will still be benefiting a decade down the track. So doesn't that prove that tackling bracket creep actually is in this for the majority, according to the analysis?
JANE HUME: Well, I think that what in fact that is saying is that they're not expecting people's wages to rise because you want a society where people want to earn more, to do better.
PATRICIA KARVELAS (INTERRUPTS): They've factored in the economic forecast.
JANE HUME: But in fact, the reason why your disposable income has dropped so dramatically in the last 18 months, two years alone, is for three reasons. Inflation which, let's face it, the Government has had no plan to tackle. Interest rates which have responded to inflation because the Government isn't using its fiscal policy. It's only relying on the RBA to use monetary policy and tax. Bracket creep has in fact eaten away at your disposable income and now the Government's expecting you to say thank you for no more than $15 a week. I think that the Government, and particularly this Prime Minister, has sold his integrity. He's sold out the Australian people. He's demonstrated he has no appetite for genuine reform and I think that that's going to reflect very poorly on him in the future. It also of course means that he can never make a single promise again, whether it be on negative gearing, whether it be on capital gains, whether it be on tax on the family home. There is no reason to believe Anthony Albanese ever again. He's proven himself a liar.
PATRICIA KARVELAS: Jane Hume, with all of those things that you raise, the fact that you want to raise other things, doesn't that demonstrate that you accept that this change is actually popular in the community?
JANE HUME: Well, if you're a drowning man, you'd reach for a life raft no matter what that life raft is. Of course people want a tax cut, who doesn’t want a tax cut.
PATRICIA KARVELAS: Does that mean if I can use the argument? Does that mean that under your taxation policy, men were drowning?
JANE HUME: No. In fact, what it means is that real disposable incomes have gone backwards under this Government. You are feeling poorer, your standard of living has gone down and your quality of life has gone down and all of that has happened under a Labor government. They've had no plan, no solutions and this which has always been on the agenda, as we know, they've hated the stage three tax cuts from the beginning. This is their only solution because they have said anything else we have done has been ineffective. That is the problem with this Government.
PATRICIA KARVELAS: What would you do if you were in power right now, what would you do? Keep stage three?
JANE HUME: I tell you what, the first thing we would do would be to get the economy moving again. In fact, if economic growth is stagnant and productivity is going backwards because of energy prices, because of industrial relations reforms and because of taxation, you have sucked the aspiration out of this society, and there is no real incentive or impetus to get moving again.
PATRICIA KARVELAS: What would get the economy moving right now?
JANE HUME: Well, I think that if you had a, you know, these industrial relations laws are a very good start by essentially wrapping up the private sector in red tape, you're discouraging organisations from taking on new employers, from producing more and of course, that's having a significant effect on economic growth. The only thing that is causing economic growth in Australia right now, and any economist will tell you, is migration. That's a Ponzi scheme. That's a Ponzi scheme for growth. The only way we're going to be able to inject productivity back into society is to create that sense of aspiration, and tax, and genuine tax reform is part of that. This government has not only said that it has no appetite for tax reform, it doesn't even think the appetite for tax reform that has been already legislated, that has been already costed and factored into its budget. This is a regressive government and that is a shame.
PATRICIA KARVELAS: Jane Hume, can I just ask you one question on fuel efficiency? The Government has announced they'll introduce fuel efficiency standards that will bring Australia in line with the United States. The Coalition has looked at the prospect of fuel efficiency standards before. Do you support this?
JANE HUME: Well, this is, you know, obviously a conversation that has only recently started in the last couple of days. I would imagine that the real question here is, is it going to push up the cost of cars for ordinary Australians and cost them and, is it going to make the economy more or less productive? Those will be the questions that we'll be looking for when we see the legislation.
PATRICIA KARVELAS: Jane Hume, thanks for joining us this morning.
JANE HUME: Good to be with you PK.
PATRICIA KARVELAS: Jane Hume is the Shadow Finance Minister and you're listening to breakfast.