04 July 2019




SUBJECTS: Income tax cuts; Floundering economy under the Liberals; Newstart; Pension deeming rates.

LAURA JAYES, PRESENTER: Shadow Minister Tanya Plibersek joins me now here. Good to see you.


JAYES: This is a deal that's now done. Why has Labor effectively dealt itself out of relevance here in the Senate?

PLIBERSEK: We believe that hard working Australians do deserve a tax cut, and we went to the last election with the same or bigger tax cut for 10 million hard working Australians. We know that the economy is in trouble. We agree that, not only that the first stage of tax cuts should go through, but we think that part of the second stage should be brought forward as well, so people have more money in their hands. But this third stage that the Government is proposing - that takes place in five years' time, that's worth $95 billion dollars - we think is highly irresponsible to sign up to today. We don't know what the economy is going to be like in 5 years' time, but we do know that this Government has already doubled our national debt, and if they commit five years ahead of time to adding $95 billion dollars to that debt, that's a real problem.

JAYES: Jacqui Lambie seems to have done a deal, even though apparently there's no deals being done with Senate crossbenchers. It's $157 million dollars, it's not big in terms of a Commonwealth Budget. Do you have a problem with the Commonwealth forgiving that debt for Tasmania?

PLIBERSEK: Obviously we need to look at the details of what's been proposed, but $157 million dollars is not a lot in the Commonwealth Budget but it's a lot in the Tasmanian Budget, and I know that this has been putting pressure on the Tasmanian housing budget for some time. They have really, very serious problems with homelessness and housing affordability in Tasmania. So, I certainly hope that this Government does commit to doing something to support better investment in social housing and emergency accommodation in Tasmania.

JAYES: In terms of where the economy is at, globally yes, there are headwinds. But it looks like our trade surplus and iron ore price is actually making the Budget look pretty healthy. Is now the time to increase Newstart do you think?

PLIBERSEK: Well, it's really something that we need to have a look at, but you say that the -

JAYES: What do you think the stimulatory effect is?

PLIBERSEK: I think we have to take a step back because you're saying that the economy is looking good, it's actually not looking very good. The interest rate right down, the second one in a row by the Reserve Bank, shows that the Reserve Bank's very concerned about rates of economic growth in Australia, and certainly wages have been flat-lining. We know growth is low, wages are flat-lining, people feel like they're struggling to catch up. So, the idea that the economy is working I think is really not right. People don't feel like they are getting ahead.

When it comes to Newstart, even some of the most senior business leaders in the country, conservative commentators, even former Prime Minister John Howard, are saying that it is very difficult to live on Newstart, and that that's having a real effect on people's ability to get a job. If you can't afford to buy a clean shirt and catch the bus to the job interview, it's pretty hard to get out of unemployment. So it is something we believe that there should have been an inquiry. If we were in government we would have done an inquiry into the adequacy of Newstart. I certainly hope this Government has look at the adequacy of Newstart, as so many people are urging them to do.

JAYES: We hear from the RBA, Phillip Lowe is almost begging the Government to do more, which goes to your argument on stage two of the tax cuts, but it also goes to what he calls structural reform that is needed in the Budget, and more spending on infrastructure. Do you think that we should look at the deeming rate for pensioners? I mean, pensioners are hurting, part-pensioners are hurting, and it's around 3.5 % at the moment. Would that be acceptable to you and to Labor if it was moved down to two?

PLIBERSEK:I think all of those things have to happen. Structural reform in the economy has to happen. I mean it's crazy, for example, that we still have high youth unemployment in some areas and skills shortages, often in the same communities. That's nuts. We need to make sure that we're getting rid of inefficiencies like that in the economy. Yes, we also need to bring forward infrastructure investment. Infrastructure investment's a great way of putting some life, some spark back into our economy, because of course you're creating employment, right now. A lot of that infrastructure is also adding to productivity over time. If you're improving roads, or public transport, or ports, or airports, you're also improving the efficiency of the economy, our ability to export, for example, from our regional airports.

JAYES:What about the deeming rates though?

PLIBERSEK:Yes, absolutely. I think the deeming rates issue is a really serious one. Interest rates keep going down, pensioners who are relying on their savings are seeing a real cut in the interest rates they're being paid on those savings. And this Government just hasn't kept up on that. It's very important that we recognise that because the Reserve Bank is taking this emergency action on the economy, pensioners' incomes are suffering. Deeming rates need to change.

JAYES:Scott Morrison, just finally, has declared this the 'year of the surplus', but given where the economy is at and what we've just discussed, would you be adverse to the Government spending more money in order to get that stimulatory effect into the economy?

PLIBERSEK:We've proposed two direct things that they should do straight away, which is bring forward some of this infrastructure investment and bring forward part of stage two of the tax cuts. We think people need a bigger tax cut sooner. That's good for their hip pocket, it's good for the family budget, but it's also good for activity in our economy.

JAYES:Tanya Plibersek, appreciate your time.

PLIBERSEK:Thank you.