SKY WEEKEND BUSINESS
SUNDAY, 11TH OCTOBER 2020
SUBJECTS: Scott Morrison’s trillion dollar debt; tax cuts; rewiring the nation; Victorian lockdown
ADAM CREIGHTON, HOST: Right now we're joined by Labor’s Shadow Assistant Treasurer Stephen Jones from his electorate in Shellharbour.
STEPHEN JONES: Hey guys, good to be with you.
CREIGHTON: Stephen, thank you so much for joining us. Look can I start with the tax cuts, of course Labor has been very critical of bringing for stage 3. That never happened. But of course, we're hearing now the child care package of Labor, which is essentially giving money to the high-end. Whereas you didn’t want to give tax cuts to the high end.
JONES: I think there's an interesting contrast here. the government said as early as this morning, Josh Frydenberg said on another program, that this $130 billion unfunded stage 3 tax cuts was all about ensuring Australians keep more of what they earn and it was all about rewarding effort. Now nowhere could that be more true than ensuring that we can get women back into the workforce. If you look at the effective marginal tax rates for a woman returning to work after childbirth, three days a week when you go from three days a week to four and five days a week, the effective marginal tax rates can be as high as 75 percent for every dollar earned when you factor in the childcare costs. We think this is a huge impediment. It's a huge rake on economic growth. That's a huge brake on women's participation and increasing the participation rate in the workforce as a whole. As you said in the intro to this package, we've got a big demographic challenge facing us with the decline in the birth rate, decline in Immigration. We need to be ensuring that every able bodied person who's wanting to get back into the workforce can and childcare is the tool to doing this. We don't see this as welfare measure, we see this is an economic measure.
TICKY FULLERTON, HOST: Beyond that I mean, obviously it's a six billion dollar spend on top of the huge stimulus that the budget has already got to it. Broadly speaking, there's not much to argue about in terms of the big picture initiatives. There was a Jim Chalmers actually contacting the ATO, you know to try and push the stimulus through.
JONES: We've said right from the very beginning Ticky that we are going to back sensible initiative, we’ll offer criticism, critique we’ll offer constructive suggestions where we think they're needed. But it would be pretty ridiculous, I've got to say, for us to call for something for 12 months and then vote against it. We've been calling for the bring forward of stage two tax cuts for 12 months. We've been calling for the government to implement some version of our investment allowance for well over 12 months. When they do it, we should congratulate them for adopting a Labor policy, not vote against it and that's exactly what we're doing. We're going to be giving the government as we have all the support to get those measures through the Parliament. And we'll look at all the other provisions within the budget with a critical eye, but we won't be standing against sensible policy provisions.
CREIGHTON: Just on the policy issue of superannuation. I know that's very close to your heart. There. Were there were two somewhat modest measures in the budget. There was a comparison tool that's going to be generated but also some sort of mechanism to stop the proliferation of unwanted funds. Presumably you be supportive of both of those things?
JONES: We're on the side of performance. We want to ensure that the money that is being put away for retirement savings builds a great nest egg so that every Australian can retire with dignity, that they can look to a better life in retirement. So we'll look very, very closely with the Government’s put forward. I'll have more to say about this in the next 24-48 hours. There are some concerns that I have with the measures that have been published in the budget papers. I am concerned with some of the metrics. I'm also concerned that the government get the sequencing right. It would be absolutely disastrous if the government staples members for example to an underperforming fund. The Productivity Commission has already pointed out that the difference between a low performing and a median and high-performing fund can be hundreds of thousands of dollars in lost retirement savings. We want to fix that up. We don't want to make it worse by stapling somebody to an underperforming fund.
CREIGHTON: Just on the overall level of public debt, I understand Labor has been very critical of gross debt going through a trillion dollars. But you haven't spelled out how you would have spent less here or there to ensure it didn't increase as much.
JONES: That thanks for raising it. The issue of debt is not so much what you're spending, although we've got to ensure that every dollar that we are borrowing and every dollar that we are borrowing is going to good purpose, but the issue is not so much the level of debt, astronomical as it is, but ensuring that we get some productive benefit from the money that the government is spending. As Anthony spelled out in his budget speech in reply wearing a fall short on women. We think of fall short on women's participation. We think it falls short in ensuring that we can get more bang for the buck in terms of government procurement, more apprentices employed more work made, more manufacturing done in Australia. So there's a whole heap of areas where we think the government is spending money, but not wisely.
FULLTERTON: For example, this 20 billion that Labor is looking to spend on rewiring the nation. I mean, I don't think there's any attempt there of a commercial return is there? That's a lot of money given the white elephant that the NBN became?
JONES: Absolutely couldn't disagree with you more Ticky. This is about a sensible market intervention to ensure that we are pushing power prices down by dealing with the dysfunction in the distribution network by ensuring that we can put in place that we put in place a market-based mechanism to facilitate finance for the building of infrastructure. Ensuring that it doesn't cost taxpayers one cent, but ensures that taxpayers save money through the saving through distribution networks and ensuring we are bringing prices down. Like, the market regulator and the industry as a whole have already agreed that we need to fix the distribution network. It's not fit for purpose for the next century. We need to ensure that we have got a distribution network which is connecting the places where the energy is generated to the places where it's being used. It doesn't at the moment. We want to ensure that we're not over-building or gold plating that network. And the intervention that Labor is suggesting will fix both of those problems by ensuring the finance that is available leverages off the cheaper costs of borrowing that government is able to achieve, has that flowing through to the private sector to ensure that we can get the infrastructure built but not in a cent more than it needs to pay for it just so that they can pass those savings to taxpayers.
CREIGHTON: I wanted to get your observations on the Victorian situation. It seems now that the Stage Four lockdown there and Melbourne won't be lifted on the 19th, which is obviously very devastating social and economic views. Surely we're past the point now in that state where the cure is worse than the disease?
JONES: Look I think the Victorian Government is signalling that there’ll be some relief of the measures in a week's time. Nobody wants to see that lockdown occurring and those measures any more strenuous than they absolutely need to be for a day longer than they need to be. But we only need to look around the world, when this gets out of control, they thought they had it in control in Spain, they thought they had it in control in the UK. Numbers jumped up again. Devastating for health, but also devastating for the economy.
FULLERTON: So you support the extension of the disaster situation over there?
JONES: Look, I'll use my words. I don't think those measures should be in place a day longer than they need to. But we all know now that the economic solution is a health Solution, and we need to ensure that we get the virus transmission down. I think we've done a pretty good job of that in Australia. I think a lot of places, a lot of people are looking overseas, and they would be saying would rather be here than a lot of places else around the world.