Senator the Hon. Mathias Cormann
Minister for Finance
Leader of the Government in the Senate
Senator for Western Australia
MATHIAS CORMANN: Today is a reminder to every Australian that should Bill Shorten become Prime Minister no Australian will be safe from his high taxing agenda. Whether you are an Australian worker, saver, home owner, professional, small business, whoever you are, whatever you do Bill Shorten will come after you with a higher tax agenda to fund his reckless and irresponsible spending sprees. This is not what Australia needs. So far Labor has already announced tax increases, should they be successful at the next election, of more than $200 billion over the medium term. More than $200 billion in higher taxes, increasing the overall tax burden in the economy would lead to less investment, lower growth, fewer jobs and lower wages. Our agenda, the Coalition’s agenda is all about making sure that Australians have the best possible opportunity to get ahead. It is all about making sure that businesses can be as successful, as profitable into the future as possible, so they can hire more Australians and pay them better wages. Our agenda is about stronger growth, more jobs and higher wages. Labor’s agenda, clearly, is about damaging the economy, leading to fewer jobs and lower wages.
Happy to take questions.
QUESTION: Isn’t this just a generous handout for wealthy shareholders that Labor is cracking down on?
MATHIAS CORMANN: No. This is a policy that was introduced with bipartisan support by the Howard Government in the late 1990s to ensure that we avoid double taxation. Every shareholder in Australia is a part owner in the business that they are invested in. That business pays thirty per cent corporate tax on their profits. Depending on what your own personal marginal tax rate is, you either get a franking credit or you get this refund if you have a personal income tax rate that is lower than thirty per cent. That has been introduced for very good reasons. Whatever way Bill Shorten wants to dress this up, whatever class warfare rhetoric, whatever politics of envy, whatever shifty, misleading technicalities he wants to put around it describing it inaccurately as savings, this is a tax increase, pure and simple. This is $59 billion in higher taxes targeting among others more than one million retirees, many of them pensioners or part-pensioners. If you are a part-pensioner directly owning some shares you will pay more tax as a result of what Bill Shorten is announcing today. If you are a self-funded retiree, having worked hard all your life, having saved hard all your life, you will pay more tax under the policy that Bill Shorten is announcing today. This is the latest in a long series of tax grabs with a very nasty, vindictive, politics of envy edge to them, which Bill Shorten clearly believes is going to work for him politically. What Australia needs is a continuation of the politics of opportunity, a continuation of our plan to ensure every Australian has the best possible opportunity to get ahead, rather than this approach by Bill Shorten of trying to turn Australian against Australian.
QUESTION: How many pensioners will be affected?
MATHIAS CORMANN: Again, as I have said to you, more than a million retirees will be affected, many of them pensioners.
QUESTION: How many pensioners?
MATHIAS CORMANN: Bill Shorten has not even made his speech yet. These are all things that will be worked through in the next few days. But let me tell you, more than a million retirees will be directly hit by this, will end up paying more tax. $59 billion worth of higher tax revenue, does not come out of nowhere. It comes out of the pockets of everyday Australians. Predominantly, people who have worked hard, saved hard all their life and quite frankly who for good reasons are today in a position where they can avoid double taxation. Bill Shorten wants to expose them to double taxation again. When this policy was legislated in the late 1990s, the Labor party at the time, bragged about the fact that this was actually part of their pre-election policy in 1998, introducing this method of dividend imputation including the method of tax refunds. They bragged that this was a logical extension of the Paul Keating reforms introducing dividend imputation in the first place. Bill Shorten is the most left-wing Labor leader ever. If he became Prime Minister he would damage the economy, he would lower the opportunity for people across Australia to get ahead. His tax grabbing ways are out of control.
QUESTION: Isn’t this more of a Budget saving than a tax grab?
MATHIAS CORMANN: Be very careful not to be misled by Bill Shorten’s shifty language. A saving is a spending reduction. This is not a spending reduction. This is an increase in tax revenue. Whatever way Bill Shorten wants to dress this up, this is an increase in tax revenue. It comes at the expense of people across Australia who have worked hard, saved hard, invested in Australian companies and who at the moment, under our policy settings, under policy settings that have enjoyed bipartisan support until today are able to avoid double taxation. Bill Shorten wants to subject them to double taxation again.
QUESTION: Reports today that an internal review into Roman Quaedvlieg has found that he should sacked and that the Executive Council will need to tick that off before that happens. Has that been dealt with by the Executive Council yet?
MATHIAS CORMANN: That is not a matter that falls within my purview. But I am sure that the responsible Minister will make relevant announcements at the right time.
QUESTION: Minister, if you don’t know many pensioners are affected yet, how can you attack Bill Shorten for targeting pensioners?
MATHIAS CORMANN: Because we know how this works as a matter of course. We know a pensioner, a self-funded retiree on a low income, anyone who pays less than thirty per cent tax who has invested in shares, who has directly invested in shares for self-funded retirees through their self-managed super fund are invested in shares, anyone with an income tax rate of less than thirty cents in the dollar will end up paying more tax. Because they will no longer be able to get the refund in recognition of the fact that the company they are part owner in has paid a higher tax rate than they themselves given their personal circumstances should pay. By definition what Bill Shorten has announced today, by definition, targets those at the lower income level on the basis that the way this franking credit and dividend imputation method works, in terms of the refund part of it, it is a refund to those and Bill Shorten says that himself, don’t otherwise pay tax or pay lower taxes.
QUESTION: He said some individuals have received refunds of up to $2.5 million, why should someone [inaudible]?
MATHIAS CORMANN: That is what Bill Shorten always does. He comes up with the example at the high end in order to justify targeting low and middle income earners. With Bill Shorten do not ever listen to what he says look at what he does. $59 billion worth of additional tax revenue will come from everyday Australians who have worked hard and saved hard. Whatever way Bill Shorten wants to dress this up in his usually shifty ways, this is nothing else other than a classic Bill Shorten tax grab, which will hurt everyday Australians.
QUESTION: Has the PM just moved his leadership question away from Newspolls by saying the leadership is at the pleasure of the party, the old Howard edict?
MATHIAS CORMANN: That is self-evidently the case. Any leader of a political party is the leader of the political party with the support of their colleagues. That is just a statement of fact.
QUESTION: So he is quite confident of the numbers obviously?
MATHIAS CORMANN: I am very confident that Malcolm Turnbull enjoys the very broad and overwhelming support of his party room. Absolutely.