A little bit of gratuitous analysis on the way out. Goodnight.
That’s about it for the reaction and photos.
I thought it was a reasonable speech from Bill Shorten though the delivery was rather clunky but it contrasted Labor with the Coalition.
Let me close my thoughts for this budget week.
In my view the Coalition’s budget was not a Labor-lite budget but a budget to respond to the same forces that led to Brexit and Trump.
It had the populist measures like the bank taxes and whacks for foreign workers, mashed up with a welfare crackdown (NOT trad-Labor), which also goes down well in the regions and outer suburban areas where the those Trumpie swings are on. So a bit of cultural red meat to add to the populist stuff.
Shorten, on the other hand, was old style pre-Keating Labor, favouring Labor base income brackets re the Medicare levy, sticking with a bank royal commission, adding more schools funding, and extra money for TAFE. It was more Shorten, as we know him, where as the Coalition budget was charting very new Tory territory, the big pitch to the outer suburbs and regions.
Ok that is your lot for the evening. I’m going to put my eyeballs in a glass by the side of my bed. I will see you in the next sitting week so sweet dreams.
Good night.
I love this image for some weird reason.
Updated
Brother Albo. Brother Shorten.
Budget reply.
Mathias Cormann declines to say whether the government will “meet in the middle” on the increase in the Medicare levy only for workers over $87,000.
He says its his job to negotiate with the crossbenchers. He’s not disappointed. He’s not surprised. Same same.
Finance minister Mathias Cormann was on hand to reply to Shorten.
He calls on Shorten to submit his speech to the parliamentary budget office for a full costing.
There was not a single policy to strengthen growth, create more jobs or give Australians higher wages. His numbers didn’t add up. He failed to commit to a surplus in 2021. He seems to be spending some of his revenue measures twice. He has clearly the intention of imposing a 5% tax increase on 3.2m small to medium size businesses across Australia and 6.5m Australians who they employ.
He has still failed to provide numbers over a 4-year estimates period, which is just another demonstration that he is not able to add up the numbers over the current forward estimates period.
What Bill Shorten should do is submit his speech to the Parliamentary Budget Office for costing over the forward estimates period so that all Australians can see the true cost of the spending promises that Bill Shorten made tonight.
Leigh Sales finally invites him to say whether a Labor government deficit would be larger or smaller than the current Coalition number. He declines.
That’s it for Bill.
In his speech, Bill Shorten said if the banks pass any of the bank levy onto ordinary consumers, Scott Morrison should go. Leigh Sales asks, under his own measure, Shorten should go if that cost is passed on.
Fair is fair. They are guaranteeing Australians. Don’t worry about me. Worry about Australians and they are saying that the banks won’t pass this on. I think Mr Turnbull needs to work with Labor to make sure that the banks don’t pass it on. I am a bit worried how strong Mr Turnbull is because he’s fought so hard against a banking royal commission.
Sales: Do you really want to have an economy where the government strong arms the banks and intervenes in how the banks operate their businesses?
I don’t want to have an economy where the excessive economic power of banks remains unchecked.
On 7.30, Bill Shorten defends not supporting the Medicare levy for those below $87,000. He says it can be funded via other methods like not going ahead with the corporate tax cuts.
I just don’t buy the argument that the only way that NDIS or other schemes the government can get funded is by increasing the taxes of people on $50,000 or $70,000 a year. There are smarter ways to do it and fairer.
Meanwhile:
The worst Opposition Leader's response to the Budget since Latham. Bill's greatest offence - he got bored with his own material.
— Christopher Pyne (@cpyne) May 11, 2017
Updated
Bill Shorten: the new news from the budget reply
Let’s just recap what the new bits were in Bill Shorten’s budget reply speech.
Shorten announced he would compromise on the government’s increase of the Medicare levy, saying he would only support the increase for those over $87,000.
Labor sticks by its election promise to fund schools policy – $22bn more than the Coalition.
He wants to lift the Medicare freeze for everyone immediately.
He doesn’t support the government’s superannuation for housing plan.
Labor supports the bank levy and raise $5.4bn from multinationals (method unclear).
Labor will put more funding in Tafe and double Indigenous rangers.
Onto 7.30.
Updated
Bill Shorten finishes with the claim that only a Labor government can deliver fairness.
But repetition is no substitute for conviction. Fairness is not some slogan you can borrow, it’s not a domain name you can register.
It’s not a shell company where you strip out the assets and keep the brand. This isn’t a Labor budget – and it’s not a fair budget.
Because we are not you – and you will never be us. Fairness isn’t measured by what you say – it’s revealed by what you do.
Updated
Shorten: This prime minister of many words has learned a new one – fairness
Bill Shorten leads up to his finish.
The government says this is a Budget for ‘better days ahead’.
What they mean is
- Better days for millionaires and multinationals
- Better days for property investors and tax-minimisers
- Better days for the big end of town but bad news for battlers.
The Prime Minister says this budget is about: ‘helping Australians realise their dreams’.
- Unless you’re a working class kid, who dreams of going to university
- Or a small business owner, dreaming of a decent NBN
- Or a young couple who dream of owning your first home.
This Prime Minister of many words has learned a new one – fairness – and he’s saying it as often as he can.
But repetition is no substitute for conviction.
Shorten promises to double the number of Indigenous rangers
The gallery is packed to the rafters with Labor supporters.
I’ve seen the pride that comes from wearing the ranger uniform, people working for this country on their country and their waters.
Combining the latest environmental science with traditional knowledge, these Rangers benefit the environment, tourism and develop new enterprises.
Shorten repeats his promise that one in every 10 workers on projects funded by the commonwealth will be apprentices to skill the workforce.
He names the:
- Cross-River Rail in Brisbane
- Western Sydney Rail Link
- Melbourne Metro
- ADELINK
- Perth METRONET
As well as:
- The National Broadband Network
- Defence Procurement
- And the Australian Rail Track Corporation
When we back good local projects like a new bridge over the Shoalhaven in Nowra or better water security for Townsville…
When we make sure Victoria gets the fair share of funding it deserves…
When we modernise and build our energy network - with new pipelines and updated interconnectors...
And when we develop the North - through tourism infrastructure…
Labor promises 1 in 10 to be apprentices.
Shorten pledges 2/3 dollars raised via vocational ed to TAFE
This what Shorten said:
And we will reverse the trend toward privatisation – because it’s time to put public TAFE back at the centre of our national training system.
Tonight, I pledge that a new Labor Government will allocate 2 out of every 3 dollars raised of public vocational education funding to public TAFE.
(Not entirely sure how this works. Will enquire.)
Now to 457s and skills. Shorten:
This begins with a new focus on training Australians, instead of importing skills.
So far, all the government has done about exploitation and rorts in the work visa system is re-name 457s, and yell at us.
Their much-hyped changes only affect 8 per cent of visa holders.
I congratulate the Prime Minister for getting tough on foreign antique dealers and goat farmers…but we need a lot more than that.
That’s why Labor will train more nurses, cooks, carpenters, carers and electricians here at home - and help them fill the jobs we know our country needs.
Blessed are the goat farmers.
Labor promises their 2016 full funding package over a decade
Bill Shorten reaffirms Labor’s full funding package from the last election. That is an extra $22bn on the Turnbull government’s schools policy.
(There has been some equivocation on this in the recent week).
Shorten underlines education at the centre of his speech.
If Australia doesn’t think big, we will end up small.
Building a rail line to move freight from Brisbane to Melbourne is a valuable idea but educating a generation is how we prevail in our changing world.
Bill Shorten delivers his budget reply https://t.co/r9w6MGk41j @GuardianAus @gabriellechan join us #politicslive pic.twitter.com/6I1FfAUCDn
— Mikearoo (@mpbowers) May 11, 2017
Shorten contrasts his revenue raising measures with the Coalition.
They’re ignoring negative gearing and capital gains – that’s $37bn.
They’re letting multinationals and tax minimisers off the hook – that’s $6.7bn.
They’re giving the top 2% of Australians a tax cut – that’s $19.4bn and they’re clinging on to their handout for big business– that’s $65.4bn.
This is $128.5bn the Liberals could use to pay down the debt.
$128.5bn without holding the NDIS hostage without cutting schools or jacking up uni fees.
And without increasing taxes for middle class and working class Australians.
Updated
Bill Shorten reasserts Labor paid for the NDIS in full.
Labor didn’t just create the NDIS - we fully funded it, we budgeted for it - and Treasury confirmed it.
He promises to raise more revenue from $5.4bn from multinationals companies and caps millionaires tax management costs.
That’s why a Labor government will cap the amount individuals can deduct for the management of their tax affairs at $3,000.
This affects fewer than 1 in 100 taxpayers and will save the budget $1.3bn over the medium term.
Shorten looks closely at Malcolm Turnbull. The PM is on his phone.
Labor will introduce a new set of laws to target those who aggressively minimise their tax – and leave the heavy lifting to middle class and working class people, who can’t pick and choose their tax jurisdiction.
There’s only one reason people hide their money in tax havens – to avoid paying their fair share.
So instead of beating our chests about ‘welfare crackdown 9.0’ and setting robo-debt collectors loose. Labor will get tough on people who earn – and owe – big dollars.
Updated
Shorten says the Medicare levy rise will hit lower wage workers.
The Liberals’ new income tax increase will affect every Australian right down to an income of $21,000.
A worker on $55,000 will pay $275 a year.
For someone on $80,000 it’s an extra $400.
Bill Shorten criticises the corporate tax cuts but does not commit to drop existing legislated tax cuts.
Last year, the Prime Minister’s 10-year handout for the top end of town was estimated to cost $50bn.
On 1 July the cost will rise to $65.4bn.
This is a recipe for fiscal recklessness on a grand scale.
It is a threat to Australia’s triple-A credit rating – and therefore a threat to every Australian mortgage holder.
And the only defence the Liberals have mounted, is that it will lead to an increase in workers’ wages.
On the government’s own numbers, we’re talking about an extra $2 a day … in 20 years’ time.
Those are the crumbs from the prime minister’s table. $65bn for big business – and 10 bucks a week for workers in 2027.
Updated
Bill Shorten pledges to $1 bn in savings.
The opposition leader’s measures:
Since budget night, Labor has already identified $1bn of government measures we will not support.
The United States has killed-off the Trans Pacific Partnership – so there’s no point wasting $162m trying to revive the deal.
Unlike the Liberals we won’t spend $40m on government advertising congratulating ourselves on our own tax policy.
We won’t waste $300m paying the states for regulatory reform they should be doing already.
And - we will not support setting aside $170m for a divisive plebiscite nobody wants … when this parliament should do its job and get on with making marriage equality, a reality.
Updated
Shorten says the government’s housing initiatives in the budget were an insult. All the benefits will be eaten up.
Let’s look at the one new idea for housing in this budget.
A poison pill for superannuation – just to make houses more expensive.
The sad lesson of first-home owner grants is that any extra cash in the pocket of people looking to buy is eaten-up by price rises.
And, when you study the detail, this program offers microscopic assistance for young people.
If you divide the cost of this program in the budget by the number of first homes sold each year …
The government is allocating $565 for each first home.
What a joke. What an insult.
Updated
Shorten repledges to a bank royal commission.
But we are deeply sceptical of a banking culture that takes every opportunity to hit customers with higher fees and charges.
And we are worried the weakness of this government will turn a $6 billion tax on the banks into a $6 billion charge on every Australian with a bank account or a mortgage.
The big banks know they can run right over the top of this weak Prime Minister.
He’s giving them a levy with one hand, a tax cut with the other and a free pass for bad behaviour.
I’ll give them a Royal Commission.
Shorten suggests the Liberals are terrified of losing.
In the past four years, the Liberals have: cut Medicare, taxed Medicare and tried to privatise Medicare.
And now they want to pretend it was all a misunderstanding.
Not because they’ve changed their minds …or got the message.
But because they’re trying to save their own skins.
That’s the thing about this Prime Minister – he only discovers his heart when he feels fear in it.
He doesn’t believe in what he’s doing –the people behind him don’t believe it either.
And Australians don’t trust a word he says.
It’s the most basic question in politics: who do you trust?
Updated
Shorten contrasts the Coalition budget with Labor. Lest you think Tuesday’s budget was Labor lite.
Make no mistake, this is not a Labor budget .
A Labor budget would protect penalty rates – not cut them.
A Labor budget would fund schools properly – not rip money away.
A Labor budget would invest in universities – not jack-up fees to discourage working-class kids.
A Labor budget would respect pensioners – not tell brickies and nurses to work til they’re 70.
A Labor budget would level the playing field for affordable housing – not protect tax-breaks for property investors.
A Labor budget would protect workers in labour-hire firms from exploitation – not give their companies a tax cut.
A Labor budget would Close the Gap - not cut $500 million from Indigenous services.
A Labor budget would rescue TAFE – not of cutting courses and closing campuses.
A Labor budget would invest in renewables, delivering an emissions intensity scheme and take real action on climate change – not pass the problem on to the next generation.
A Labor budget would stand up for middle class and working class families – instead of taking their money and giving it to millionaires and multinationals.
Updated
Bill Shorten opens:
This is the Budget of a government that wants to bury its past and re-write its history.
The Liberals want Australians to forget four wasted years in which wages growth has hit record lows, unemployment is up, Under-employment and casualisation has hit record highs and living standards have stagnated.
This budget is an admission of guilt. A signed confession.
It’s proof the Liberals have frozen this nation and hurt our economy.
And now they have the nerve to come in here and talk about ‘fairness’ and ‘opportunity’.
Updated
Ok people. MPs gathering and applause from the true believers in the gallery. Penny Wong got a rock star reception prior to vision on the TV.
Bill Shorten enters to applause.
From colleague Melissa Davey, this is awks. The Victorian government’s ice taskforce expert says testing more likely to show up in professionals working in “the finer leafy suburbs of Melbourne and Sydney”.
Company tax wrap.
I am going to slow down the pace for a while because I would like to live blog Bill Shorten’s budget reply speech at 7.30pm. And, if I keep going like this, I could expire. But be assured we will have the full Shorten show. Here is a picture to stand by ...
(He is quite speedy. I know. I gave up on the Shorten media jog in the last election.)
Updated
Native title update.
As of 4.30pm on a Thursday, the Senate cannot vote on anything unless there is a motion to amend that rule.
That means the native title bill now being debated in the Senate will not be voted on until June at the earliest.
The resources minister, Matt Canavan, has called on the Labor party to get on with the Native Title Act for the sake of north Queensland, including mine workers and Indigenous people, as well as the Adani mine.
He says Adani have to put off its final investment decision.
They have showed the patience of Job, even Job’s patience runs out.
.@mattjcan says the Labor party is torn on this issue of native title changes. #auspol #pmagenda MORE https://t.co/0oZ8LcHQ9z pic.twitter.com/iqAE6x6hJ5
— Sky News Australia (@SkyNewsAust) May 11, 2017
But then Paul Osborne of AAP reports that Adani won’t be delaying an investment decision because of a holdup to native title laws in the Senate.
Paul reports the company was advised by the Labor leader, Bill Shorten, on Thursday afternoon that the opposition would support the laws when they came to a vote in mid-June.
Though the failure of the Senate to pass the amendments today will mean some delays in some early works, the company remains on track to make the crucial financial decision this month,” the Adani spokesman told AAP on Thursday.
This is a very confusing story.
Updated
Company tax cut primer
Back to corporate tax cuts.
I want to recap what the company tax plan does, from the explanatory memo.
The government passed the cuts for small and medium businesses in the last sitting session. That section is costing the budget $29.8bn over a decade, according to the treasurer.
The bill introduced this morning was a recommitment by the government that it plans to still try to legislate the cut for the big end of town.
It says it would:
progressively extend the lower 27.5% corporate tax rate to all corporate tax entities by the 2023-24 income year.
The corporate tax rate will then be cut, for all corporate tax entities, to:
• 27% for the 2024-25 income year
• 26% for the 2025-26 income year
• 25% for the 2026-27 income year and later income years.
The original cost of the company tax plan for 2017-27 was $48.2bn, as revealed by Treasury officials after the budget last year.
The cost, as revealed by Scott Morrison in question time, for 2018-28 is $65.4bn.
Morrison told David Speers the reason for the large discrepancy for one more year is that the tax cut progressively ramps up. So the 2018-28 period contains more companies on the tax cut.
So to extend the bill to the big end of town, as the government proposes, will cost the budget $35.6bn over the next decade.
Updated
The native title debate has just begun in the Senate.
Updated
Updated
Look into my eyes, look into my eyes, not around my eyes ...
Updated
What would SA Steel do?
Bowers says Shorten had just handed the PM a note at this very point.
Labor was not the only one having a good day today.
The incredible shrinking man.
The LNP MP has had weight-loss surgery and is slimming down.
Updated
The former head of the PM’s Indigenous Advisory Council, Warren Mundine, tells Sky’s David Speers there are no further consultations required for the native title legislation. They have been negotiating on Indigenous land use agreements since 2008. There are 126 Iluas now in question and it also puts in danger agreements signed for the past 25 years.
Too many people are focusing on Adani and not the other 125 agreements, Mundine says.
(The federal court decision puts Adani’s agreement with traditional owners in question.)
The legislation change, he says, means that not every Indigenous land owner would have to sign off on land use agreements.
He said needing all members’ agreement on land use agreements was like every local council decision requiring every council member to agree. It would be unworkable.
Updated
Labor were delighted to extract the $65bn company tax figure.
Put on your interested face.
Updated
Barnaby encourages the speaker to turf Tony Burke, he received a warning for his efforts @gabriellechan @GuardianAus pic.twitter.com/Ti2KoCdZ8J
— Mikearoo (@mpbowers) May 11, 2017
Bill Shorten:
For two decades he had a calm and measured, mellifluous voice which is with us in the cars as we drive home, keeping us company on an evening shift, perhaps in the kitchen as we would get dinner ready. He had a certain manner. There was a disarming mix of gentleness and authority. He could cajole the most skilled, recalcitrant, non-answerers into finishing a sentence, which passes through the mind of the interviewee, “Did I just say that?”
Both leaders will end question time paying tribute to Mark Colvin, the ABC broadcaster who has died aged 65. Malcolm Turnbull:
He was as elegant as he was erudite. A prodigious reader, as well-informed as all of us would like to be but more so.
Updated
Labor’s Jim Chalmers to Malcolm Turnbull: If the deficit levy on high-income earners was necessary when the deficit for the coming year was $2.8bn in Joe Hockey’s first budget, why isn’t it necessary when the deficit for the same year is $29.4bn, or 10 times bigger in this budget?
Turnbull says Labor opposed the temporary deficit levy for high-income earners. Then Labor voted for it on the basis that it would expire in three years. Now it wants to extend it, says Turnbull.
It raises $1bn a year. It is no substitute to raising the Medicare levy which raises around $4bn a year on current estimates.
The leader of the opposition tonight will no doubt say that Labor will not proceed with the rest of the enterprise tax plan and claim that that will somehow or other enable them not to increase the Medicare levy.
Let us be clear about this. Labor has already spent the proceeds of the enterprise tax plan. They have already spent every cent and they were still $16.5bn further into deficit.
Updated
A government question to Peter Dutton on the changes to the 457 program in the budget.
Labor to Scott Morrison: Can the treasurer advise the house what gross debt is projected to rise to in dollar terms by 2027-28?
Morrison says on page 79 of the budget statement, it says: “The total value of commonwealth sovereign securities on this issue is projected to rise to $725bn by 27-28.”
The face value of CGS on issue is projected to rise to a peak around $649bn in 2021.
It is important to understand on these figures, from 2018-19, the commonwealth will no longer be raising new debt ... to pay for things that are everyday expenditure.
From 2018-19, the net debt peaks and comes down and I confirmed the net debt at the end of that period is projected to fall 8.5% of GDP or $255.8bn.
Updated
There is a government question on Indigenous land use agreements. This also relates to the native title legislation waiting in the Senate queue.
The justice minister, Michael Keenan, says Labor has committed to support the bill but the Senate didn’t support sitting tomorrow.
(Non-government members offered to debate the bill this afternoon but were refused, apparently. The government wanted to sit on Friday. It lost that vote.)
Updated
Shorten to Turnbull: In the answer to the same question, the government has given five different answers to the full updated cost of its big business handout. My question is why didn’t any of these numbers appear in the budget papers or the treasurer’s speech on Tuesday night?
Turnbull says he accurately described the costs.
The treasurer and I have accurately described the 10-year cost of the enterprise tax plan from 2016 which is when it began and then the treasurer updated that for a decade from 1 July 2017.
Updated
A government question to Barnaby Joyce on how the budget creates jobs in regional Australia.
It gives Joyce a chance to berate Labor because it voted against sitting in the Senate tomorrow to pass the native title legislation, referenced earlier in the blog. He is getting very shouty.
Tony Burke takes a point of order.
I don’t really have a point of order. He just needed to take a breath.
Speaker Smith boots him out.
Updated
Shorten to Turnbull: Just about this $65.4bn, 10-year big business handout. How much will flow to overseas shareholders?
Turnbull flicks the question to Scott Morrison.
Morrison does not answer the question.
He reverts to asking questions of Bill Shorten.
He says the Coalition is committed to ensuring that tax to GDP remains below 23.9%.
The question that the opposition leader has to answer tonight is will he commit to the same thing? Or will he allow taxes as a share of the economy to grow and grow and grow and grow?
Updated
Shorten to Turnbull: Today, just in question time, the prime minister and the treasurer have said the cost of its 10-year corporate tax cut is $26bn, $36.5, then it was $35.6bn, then $65.4bn. In their latest answer it was back at $35bn. Prime minister, how much will the 10-year figure cost taxpayers at the next election?
Turnbull says:
What the question reveals is the leader of the opposition’s persistent desperate manner of misrepresenting everything he has been told. He asked me what the cost of the 10-year enterprise tax plan was from its beginning, from 2016. It began in 2016. Then he asked what it cost 10 years from 2017. In each case he was given the accurate answer.
Updated
That's some blowout #qt
— Katharine Murphy (@murpharoo) May 11, 2017
Shorten asks how the govt intends to pay for the $65.4bn tax cut. The PM has been handed a note #qt
— Katharine Murphy (@murpharoo) May 11, 2017
"Stick a fork in him, he's done." @NickChampionMP says about the PM. He's booted. #QT #auspol
— Luke Henriques-Gomes (@lukehgomes) May 11, 2017
Shorten to Turnbull: The government has just announced a $65.4bn handout to business, including big business. How are you going to pay for it?
Turnbull says he needs to clear up some confusion on the Labor benches.
The government’s 10-year enterprise tax plan began last year.
It began on 1 July 2016 and the cost over 10 years is as I described, $50bn of which a little less than half, $24bn is the cost of the legislated saves, that is legislated reductions, that is companies with a turnover of less than $50m and the balance of around $26bn is for the larger companies that are unlegislated.
In terms of 10 years from 1 July 2017, the cost is $65bn, of which around$29.5bn are for the legislated saves already ... and $35bn for the balance. That should be very clear.
Updated
Cost of full package of company tax cuts now $65bn over decade, PM confirms
Shorten to Turnbull: I have twice asked the cost of the 10-year company tax cut. Initially the prime minister said an extra $26bn and the treasurer said $36.5bn. Given that $10.5bn was added from one answer to the next, how much is this government actually planning to give away to big business? What is the total cost of corporate tax cuts from 1 July 2017, both legislated and proposed to be legislated by this government?
Morrison:
$65.4bn.
He sits down. Uproar.
(That $50bn company tax package is growing rapidly.)
ScoMo thinks better of it and returns to the dispatch box.
Speaker Smith says yeah, nah. Ie you can’t return once your backside hits the benches.
The PM tries to speak.
Nah, answer is over says the Speaker.
*My translation*
Chris Bowen and Graham Perrett get thrown out in the melee.
Updated
Morrison puts the backbench to sleep #auspol #qt
— Wayne Swan (@SwannyQLD) May 11, 2017
A government question on the budget and Right Choices. The Musical.
A lot of urgent Christmas cards that need signing on the Government back benches #qt
— Tim Watts MP (@TimWattsMP) May 11, 2017
Updated
The Indi indie MP, Cathy McGowan, to the PM: She thanks him for the $100m upgrade to the north-east Victorian line in the budget.
My community, led by the Hume corridor rail group and the Border Rail Action Group, have lobbied long and hard for this but they are eager to know will this funding mean the end of the blame game? The success of this project is dependent on strong collaboration between all levels of government. My request, will you please lead this collaboration, call together all the stakeholders so that the communities of north-east Victoria will actually receive faster, more reliable rail services sooner rather than later?
Turnbull says the $100m will improve the track and reliability of services to ensure people in McGowan’s seat can use the train to get to Melbourne on time. Turnbull:
We know people want to use rail more but don’t because it is unreliable. We know the trains go slower than they should because the track is ageing and needs repair and communities want more frequent services. Our $100m will fix the track.
Updated
Shorten to Turnbull: Given the additional budget year, what is the updated cost to the prime minister’s full 10-year company tax cut? Is the prime minister asserting it is still $26bn?
Scott Morrison:
I confirm the answer the prime minister gave previously in relation to the original plan and the full cost is $36.5bn from 1 July 2017.
Updated
Govt spending % GDP
— Stephen Koukoulas (@TheKouk) May 10, 2017
2011-12 24.9%
2012-13 24.0%
.
.
2014-15 25.5%
2015-16 25.6%
2016-17 25.1%
Every yr to 2020-21 is 25.0% or more #qt
Under the sacred budget tree ...
Updated
A government question to the treasurer on the budget. Right choices. The Musical.
Shorten to Turnbull: Just this morning, the treasurer reintroduced a bill to give big business a handout. Can the prime minister please tell Australians what is the updated cost of the government’s full 10-year company tax cut?
Turnbull makes the point that the company tax cuts for small and medium businesses – already passed – cost $24bn over the next 10 years.
Is the leader of the opposition, having spent that $24bn, is he going tonight to say he will repeal it?
They promise to do one thing and they do the reverse. Just like they promised to fight for the school kids bonus every day to the election. They abandoned it just before the election.
Updated
First government question is on the budget, which gives the PM the opportunity to ask Labor whether they are backing the increase in the Medicare levy.
Updated
Tanya Plibersek to Malcolm Turnbull: Is the prime minister aware that the secretary of the New South Wales Department of Education has written to the principal of every public school in NSW stating the commonwealth budget leaves “a shortfall from our existing agreement of $1.8bn”. Is the prime minister aware that the email also refers to information sent out by the commonwealth education minister saying: “You should not rely on these figures for future planning or budgeting purposes.”
Turnbull says Labor has no education policy, given that Plibersek failed to commit to the $22bn in the next decade that Labor promised at the last election.
The question for the Labor party is this. If they say more money needs to be spent, are they saying the federal government should pay a larger share of government schools costs, or of non-government schools costs? Are they saying the schooling resource standard is not high enough or the loadings are not high enough? It has to be one of those.
Updated
Question time, people!
Updated
Anna Bligh says the banks have begun getting questions from international markets.
(sovereign risk warning bell)
Banks are already getting questions from international markets about why they are being singled out for treatment like this by the Australian government. We can expect those questions to escalate as the legislation is so unclear.
Q: Could the Senate extend any inquiry into this, even if it goes beyond the 1 July, to make sure there is an exposure draft?
Bligh gives a clear warning.
I think it is important to make sure that all members of the parliament, and particularly those in the Senate, give very careful scrutiny to the process by which this bill is being drawn up.
Give very careful scrutiny before they consider how to vote on it. Give the opportunity for the banks to put their case forward.
This is not an opportunity the government has given the banks, but they will certainly expect that the Senate and the crossbenchers will give the banks the opportunity to tell them how this legislation might in fact impact on customers and shareholders.
Updated
Banks pull the armour on over tax
Anna Bligh of the Australian Bankers’ Association is standing under the sacred budget tree in the Senate courtyard to talk about the banks levy.
She says:
- a meeting between banks and treasury officials today “left more questions than answers”,
- it is clear the tax was rushed in at the last minute as a “smash and grab”,
- banks left Treasury meeting unable to make any determination of what it would mean for them,
- banks need more time to understand the implications,
- banks have until Monday to make a submission which is impossible when their questions were not answered,
- on Wednesday there will be legislation,
- such haste will make for policy mistakes,
- no draft legislation will be given for banks and consumers
- the government is playing “fast and loose” with one of the most important sectors for the economy.
Will the banks respond with a mining tax style ad campaign?
The banks will reserve the right to continue to prosecute this issue in a number of ways. Obviously they will be talking to the government. Obviously they will continue to make public statements they feel very concerned about. Where the campaign goes after that is something the banks will consider when they have a better idea, frankly, what this means for them and their customers.
Banks are obviously preparing for war.
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Higher education Senate update from the Karponator
After Labor announced this morning that it would oppose university changes (7.5% fee increase to 2021, a 5% efficiency dividend and the lower $42,000 Help debt threshold)
I’ve been checking in with the crossbench about both higher education and the schools funding reforms.
So far I’ve heard back from:
Derryn Hinch: supports Gonski 2.0, still considering uni changes. But he described the $42,000 Help debt repayment threshold as “too harsh” and wants to do more to recover $50bn of unpaid Help debt that is written off.
David Leyonhjelm: does not support Gonski 2.0 because there “is no evidence this will improve educational outcomes”, a spokesman said. He supports all of the uni changes, and wants the Help repayment threshold even lower than $42,000.
Nick Xenophon Team: still considering its position on both, but wants inquiries into both.
Jacqui Lambie: won’t support the higher education changes because students shouldn’t bear the brunt of budget cuts, a spokeswoman said. Lambie hasn’t come to a position on schools but wants to see Catholic schools in rural and regional areas supported.
Still too early to say how these bills will fare save for two observations:
- The Greens have indicated they could help pass the Gonski 2.0 schools funding changes. With the Greens’ nine Senate votes and Hinch’s support, the government would not need any of the other crossbenchers to pass it.
- The government has a narrow path to success on university changes, if Labor (29), the Greens, Lambie and Hinch oppose them then the government must get all of Cory Bernardi, Lucy Gichuhi, One Nation and the Nick Xenophon Team to pass them.
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In the lower house, the vulnerable workers bill passed and will move to the Senate.
Now they are on to the corrupting benefits bill that outlaws making or receiving payments that encourage unions to improperly trade off workers’ rights.
That bill was announced by Malcolm Turnbull in March. If it passes, payments made with a “corrupting motive or intent” of inducing unionists to act improperly will be punishable by up to 10 years in prison, up to a $900,000 fine for an individual or $4.5m for a company.
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Since Jacqui Lambie suggested that politicians should be tested for drugs if welfare recipients are, the favourite question around parliament to our nation’s leaders has been: would you be comfortable taking a drug test?
The treasurer, Scott Morrison, the finance minister, Mathias Cormann, and the social services minister, Christian Porter, have said yes, yes, yes.
It’s worth remembering that Malcolm Turnbull told Q&A in 2009 when he became opposition leader, “Yes, I’ve smoked pot.”
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Lunchtime politics
A quick summary for those just joining us here at Bloggo Road.
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Scott Morrison revealed that the profiling for the drug welfare test trial would involve poo profiling to determine which areas have high drug use.
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Unemployed people who refused to accept “suitable” work offers will have their payments cancelled immediately according to the government, under welfare changes from the budget.
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Scott Morrison believes Bill Shorten is indulging in class war in regard to people with disabilities, because the opposition leader will not decide on the Medicare levy and is instead calling for a permanent high-income earners levy.
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Labor revealed it would oppose elements of the government’s higher education package which lifts student fees and forces people to pay back uni loans at a lower income level. The changes save the government $2.8bn.
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Various analysis from Natsem and Shane Wright of the West Oz show that budget changes will hit low- to middle-income workers.
No bean curd today!
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The lower house is now debating the fair work amendment (protecting vulnerable workers) bill. This is essentially the 7-Eleven bill, designed to protect workers from being exploited.
(In that case, Fairfax and the ABC uncovered an underpayment scandal that forced a number of franchisors to pay back wages. Pay attention, Peter Dutton.)
The bill imposes increased fines and a new offence for franchisors who fail to stop underpayments.
The Greens MP Adam Bandt is trying to amend the bill to account for circumstances where employers don’t have adequate records. He proposes that in the cases where records are inadequate, the onus of proof is reversed. He alleges in the 7-Eleven case, some franchisors deliberately kept opaque records so underpayment was difficult to prove.
The social services minister, Christian Porter, says reversing the onus of proof is a serious thing and should not be done lightly. He believes the Greens amendment would also attract opportunistic claims against franchisors.
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Banking analysts are starting to wrap their heads around the implications of the Turnbull government’s bank levy, and they don’t like what they see.
Jonathan Mott from UBS, one of Australia’s most respected analysts, has told clients he foresees “significant risk” from the proposal.
“While we expect banks to pass much of this on to customers, Pandora’s Box has been opened,” Mott has written in a note to clients.
“Bank repricing could easily earn the wrath of the government who may react by increasing the Bank Levy rate (the UK Bank Levy was hiked 9 times).
“Future governments could also raise the Bank Levy as an easy source of revenue to fund spending, tax cuts or the deficit, especially as none of the political parties oppose this policy.
“If the banks reprice their mortgage books this would put further pressure on household cash flows which are already suffering from near-record low income growth, higher mortgage payments (as they revert to Principal & Interest from Interest Only loans and absorb recent repricing) and higher power bills.
Mott has warned his clients he sees little upside in owning bank stocks at the moment.
“While the implication on the ‘animal spirits’ in the housing market is difficult to predict, we see substantial risk to the Australian housing bubble,” he said.
“Despite the recent pull-back we struggle to see the upside case in owning the banks in the current environment.”
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The full sewage storm, via Paul Karp.
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The immigration minister, Peter Dutton, has had a crack at Fairfax journalists who walked out last week after the company’s decision to sack one in four journalists as a cost-saving measure.
I thought the productivity of Fairfax went up last week with the strike. I don’t think lives were affected one way or another. I think people realise you can live without reading Fairfax newspapers. I think it’s a better way to lead your life – that would be my advice.
Fairfax CEO Greg Hywood's response to Peter Dutton: "Once again Peter Dutton shows why no one rates him" #auspol
— Adam Gartrell (@adamgartrell) May 11, 2017
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The veteran ABC broadcaster Mark Colvin has died. He was an inspiration as a journalist, always level-headed and a joy to listen to. His voice is so familiar to me, he felt like a friend even though I never met him in person.
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Unemployment payments cancelled for not accepting 'suitable job'
Paul Karp, of eagle eye, actually attended the welfare press conference and points out something that escaped us on budget night.
Here’s Paul:
At a press conference, the human services minister, Alan Tudge, has drawn attention to one aspect of the demerit welfare crackdown that was not clear on budget night: that failure to accept “suitable work” will result in immediate cancellation of payments.
No demerit points or three-strike system as applies to other infringements, like failing to look for a job or attend an interview – instant cancellation of welfare payments for four weeks.
Asked what a “suitable job” is – whether it depends on skill level or location – and if aeronautical engineers are expected to work in cafes, the social services minister, Christian Porter, replied:
This issue gets raised very often: what is a suitable job? All jobs are the outcome that we’re trying to seek. This notion that there’s a perfect or better or worse job is not one that we accept …
Now whether you’re training at first instance is with that job in mind shouldn’t be the determinant of whether that is a good job for you to have or not – all jobs are better than being on unemployment benefits.
Asked if that includes casual jobs, that might pay less than welfare such the dole, Porter replied that was a “misrepresentation” of how welfare works.
Someone in a casual job can earn up to the income-free area … so the system caters for the fact that individuals can take casual or part-time work and receive some, or in some cases quite a large amount of the relevant income payment.
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Mathias Cormann is prepared to be drug tested before coming to work, just so you know.
Mathias Cormann was asked to explain why the government chose the big five banks and not other domestics or overseas banks. He says it improves competition among Australian banks and levels the playing field.
We had to look for revenue measures and we made a judgement that, in all of the circumstances, the major banks in Australia, the biggest banks in Australia, who between them make more than $30bn a year in after-tax profits, had the capacity to contribute to budget repair.
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The finance minister, Mathias Cormann, is speaking about the need for Labor to support the increase in the Medicare levy.
Someone asks given the government is so keen on reaching across the aisle, why not agree to Labor demands to keep the temporary deficit levy?
Cormann says Bill Shorten is flip flopping on this.
I was here when we announced the temporary budget repair levy and what did Bill Shorten say at the time? He opposed it. He said he would oppose it and vote against it in the parliament. When it came to the parliament he voted for it and now he wants to make it permanent.
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The employment minister, Michaelia Cash, has outlined the changes in “mutual obligations” for welfare recipients including the unemployed, noting that the majority of recipients do the right thing by the Australian taxpayers.
In the first instance, if you actually fail to comply with one of your mutual obligation requirements and this might be because you have caring responsibilities, your payment will merely be suspended until you reconnect.
You will have three opportunities to do that.
On the third time that you miss an [job] appointment or you fail to discharge your mutual obligation requirement, we will ensure that your job provider sits down with you and identifies any barriers that you may have.
If you again fail to comply, you will then be placed into an intensive compliance phase.
You will sit down with the Department of Social Services and you will have a full assessment ...
It is only after four demerit points that you will move into the intensive compliance phase.
At this point in time, you will start to incur financial penalties if you fail to meet your mutual obligation requirements, starting with the loss of one week’s payment, then two weeks’ payment and a four-week suspension.
What we are putting in place with our new compliance framework is all about changing behaviour.
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I will bring you some more welfare changes in a minute as it is quite a detailed press conference.
John Howard has used a post-budget breakfast to underline his unease at the bank tax, acknowledge the difficulty of governing with the gridlocked Senate yet call for more economic reform.
He says the GST negotiations, which he undertook in the late 1990s, would have been impossible under the current circumstances.
It is absolutely impossible for that kind of negotiation on any fundamental economic reform of that kind to be negotiated between the Coalition and the Australian Greens and extremely difficult between the Coalition and the other collection of independents and other parties that occupy positions in the Senate.
That is a political reality that the government has to live with.
He notes the zombie savings from the 2014 Budget of Doom would have gone down in the Senate and therefore the Coalition had to find another “albeit less satisfactory way” of cutting the deficit.
But he does not like the bank tax and told the Oz:
I’m uneasy about [the bank levy] … and I understand banks do pay company tax … but the arguments against the mining tax applied by [former Labor treasurer] Wayne Swan can be applied here with equal force. It’s not a levy on banks, it’s a tax on banks.
Howard was not walking away from those comments today but wrapping them up with the shiny bow of context.
I don’t walk away from that. I did express it in the context in which I have asked you to look at the decisions that have been taken by the government.
Howard said Australia had extraordinary record economic growth.
But one does have the feeling that we are getting down to the brake linings, that we have started to fall behind when it comes to economic reform, and one of the things that I hope comes out of any consideration of this budget is a revitalisation of the debate I believe we need to have about ways of getting around the political gridlock, which is holding up further economic reform. Of course, we need taxation reform.
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The social services minister, Christian Porter, says it was the case that unemployed people had to engage in a certain number of hours’ activity a fortnight and a certain number of job searches a month.
Every fortnight that was:
- 50 hours if you are in your 20s
- 30 hours if you’re in your 30s
Now it will be:
- 50 hours’ worth of activities per fortnight in your 30s
Activities could be work-for-the-dole or other things for getting a job.
Porter says 55-year-olds had no mutual obligation if they did things like volunteering.
- Now a 55- to 59-year-old will have to undertake job searches every month.
There will also be a “modest activity requirement” placed on those over 60, which is 10 hours’ worth of volunteering a fortnight.
We spoke with the Council of the Ageing, who I understand are supportive of us on this issue. That is a ridiculously low expectation. That will be tidied up and changed.
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The social services minister, Christian Porter, the human services minister, Alan Tudge, and the employment minister, Michaelia Cash, are holding a press conference to outline welfare changes.
Firstly, seven payments are mashed into one.
Porter:
People will transition either onto a new jobseeker payment or on to the aged pension.
What we are removing from the system is the Newstart allowance, the sickness allowance, wife pension, partner allowance, widow B pension, widow allowance and bereavement allowance.
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There is some funny biz going on in the Senate.
There is a general government panic on regarding the native title legislation, which the government says is necessary after a controversial ruling in the federal court.
Today is the last Senate sitting day until June owing to Senate estimates committees (though this has been on the calendar for quite some time so not sure why the last-minute flurry).
The native title bill was already delayed once because the long and arduous Senate debate over the first half of the company tax cuts.
So the government moved a suspension of standing orders to sit tomorrow. The government lost 33-35.
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I should say sewage testing for drug use is not new, as my colleague Josh Robertson reported last month.
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Sewage to be tested to find areas of high drug use for welfare trial
The treasurer, Scott Morrison, has confirmed sewage will be tested to find areas of high drug use to trial drug testing of welfare recipients.
In a Periscope Live video with BuzzFeed on Thursday, Morrison said areas of high drug use were “the best place to start” the trials and promised the controversial measure would only be retained if it “helps people”.
Asked if the program would use national waste water test results to find areas of high drug use, Morrison said the government was “innovative, agile and flexible [and] looks at all sorts of new ways to better target [programs]”.
When the BuzzFeed political reporter Alice Workman quipped the government was looking at “new ways and new waste” to target welfare, the treasurer agreed and said, “You’ve got to be smart about [it].” He compared the system to Victoria using water use to determine which apartments are left empty to apply a tax on vacant properties.
If [drug testing] doesn’t work, we’ll stop it. And if it does work, and it’s helping people, we’ll keep doing it.
I presume the treasurer was not joking.
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Opposition leader Bill Shorten on his morning run #BudgetReply @GuardianAus @gabriellechan #politicslive pic.twitter.com/JQ7w4HI6l5
— Mikearoo (@mpbowers) May 10, 2017
The Medicare levy rise and how it will be treated by Labor will be a big feature today. It is one of the keenly awaited subjects to come out of Bill Shorten’s speech tonight.
Our video duo, Josh Wall and Dave Fanner, have done a video explainer that might aid your understanding today.
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Parliament is sitting at 9.30am, in both chambers.
Here is your list for the day. Uni fee changes will be the big flashing light.
Introduction of bills:
o Treasury Laws Amendment (Enterprise Tax Plan No 2)
o Comcare and Seacare Legislation Amendment (Pension Age and Catastrophic Injury)
o Australian Education Amendment
o Higher Education Support Legislation Amendment (A More Sustainable, Responsive and Transparent Higher Education System)
Resumption of debate:
o Fair Work Amendment (Protecting Vulnerable Workers)
o Fair Work Amendment (Corrupting Benefits)
o Social Security Legislation Amendment (Youth Jobs Path: Prepare, Trial, Hire) – consideration of Senate amendments
o Treasury Laws Amendment (2017 Enterprise Incentives No 1)
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Low-paid workers to be hit by higher ed changes and Medicare levy rise
You have seen the Natsem figures on the hit to middle-income earners but Natsem did not include the Medicare levy rise and the lower threshold ($42,000) at which students have to pay back higher education loans.
Shane Wright, economics dude of the West Australian, has crunched those numbers and found:
Thousands of low-paid Australians face an increase in their tax bill as the federal government’s changes to university fees and the Medicare levy combine to eat into their disposable income.
Some people, especially those receiving rent assistance, face the prospect of losing almost every dollar they might get from a pay rise because of the government’s changes.
Shane’s calculations found a large whack for lower income levels.
Combined, a single university graduate earning $44,000 will pay $660 a year in extra tax from 2019-20. Their annual tax bill will rise to $7,387 from $6,727. Treasurer Scott Morrison dismissed concerns, focusing on the benefits that flowed to graduates. “[It’s] a good investment by the taxpayer in higher education but the debt, which is extended to them on concessional terms, has to be repaid,” he said.
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Peter Whish-Wilson is rather busy this morning.
Bill Shorten is a hypocrite on the deficit levy. When @ChristineMilne moved an amendment to make it permanent in 2014, Labor voted it down. pic.twitter.com/cJxfIDyW56
— Peter Whish-Wilson (@SenatorSurfer) May 10, 2017
.@ChristineMilne When the rubber hit the road, Labor voted to make sure the deficit levy lapsed.
— Peter Whish-Wilson (@SenatorSurfer) May 10, 2017
.@ChristineMilne And late last year Labor voted to hand a $315 tax cut only to the top 20% of income earners.
— Peter Whish-Wilson (@SenatorSurfer) May 10, 2017
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Those with us last night would have seen Derryn Hinch’s statement referring to the trading on banks to the Australian federal police that happened before the release of the budget. He alleges insider trading of some sort, without pointing fingers at anyone.
Today the Greens senator Peter Whish-Wilson – a former banker – has made these statements on Twitter.
I will be writing to ASIC today to ask them to investigate equities and derivatives market trading of the banks in the lead up to the budget
— Peter Whish-Wilson (@SenatorSurfer) May 10, 2017
This is about leaks from government to people who may have profited from inside information. This issue is NOT about leaks to journalists.
— Peter Whish-Wilson (@SenatorSurfer) May 10, 2017
We need to look for any abnormal trading & if anyone is found to have profited from inside info they should have the book thrown at them.
— Peter Whish-Wilson (@SenatorSurfer) May 10, 2017
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Labor to oppose elements of higher education cuts
Labor’s shadow cabinet has decided to oppose the key elements of the government’s higher education package, which includes:
- Fee increases of 7.5% by 2021, or between $2,000 and $3,600 for a four-year course
- A 5% efficiency dividend on the university spread over two years; and
- Lowering the Help student loan repayment threshold to $42,000, which will force people with student loans earning $50,000 a year to pay more than $1,000 more a year to pay back their loan
The cuts amount to $2.7bn in underlying cash terms or $3.8bn in fiscal balance terms over five years.
Labor’s shadow education spokeswoman, Tanya Plibersek, said the government was “jacking up student fees and cutting unis by $3.8bn to pay for a big business tax cut” and Labor “will never support” the measures.
Clearly, Malcolm Turnbull thinks it’s fair to saddle young Australians with a big uni debt at the same time as they are trying to buy a house, or start a family.
If Australia is to have a strong, high-productivity economy, we should be investing in education, not cutting it like the Liberals are doing.
Plibersek said that in government Labor had lifted overall investment in universities from $8bn a year in 2007 to $14bn in 2013.
Over the last four years, the Liberals have spent around $4.5m on 27 reviews, inquiries and talkfests on higher education. All they’ve come up with is a plan for higher student fees and cuts to unis. It’s pathetic.
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Scott Morrison's war
Happy budget reply day, blogans.
Again, a clear crisp autumnal morning in Canberra on the outside but blustery within.
Katharine Murphy has previewed the Labor leader’s speech tonight, the formal chance for Bill Shorten to reply to the Coalition’s budget and outline the Labor story.
Murph confirms that Labor is opposed to removing the temporary deficit repair levy on 1 July, arguing the government should not be cutting tax for high-income earners because the budget has not been repaired.
Labor is yet to make a decision about whether or not to support the government’s proposed increase to the Medicare levy to fund the National Disability Insurance Scheme.
Scott Morrison has spoken to Fran Kelly this morning. He doubled down on his war with banks, suggesting their hissy fit (my words) would mean that, when company tax rates drop, they should drop their mortgage rates because costs would be lower. *LOLs*
ScoMo characterised Shorten’s support for the high earners deficit levy with his equivocation on the Medicare levy as playing class warfare.
Bill Shorten is playing class-war politics with the disabled.
The treasurer earlier asked Labor to meet him in the middle on the Medicare levy and yesterday spoke emotionally about his brother-in-law Garry Warren, who suffers from multiple sclerosis.
Today it seems ScoMo has decided to go in hard and a tad loose.
The other news you need to know is from Gareth Hutchens’s report from the National Centre for Social and Economic Modelling, which has crunched the budget numbers for families.
It found families earning between $80,000 and $140,000 will lose the largest proportion of their pretax income, worth between 0.66% and 0.82% of their household income, because they will be impacted by the family tax benefits freeze and have to pay the full Medicare levy increase.
Families earning less than $20,000 will see their income increase by 0.09%, while those earning more than $240,000 will lose just 0.60% of their income.
Stick with us for the (very long) budget reply day. Mike Bowers will be around, as per usual. Talk to us in the thread or on the Twits @gabrielle and @mpbowers. Facebook is another portal where you are likely to get me here for longer comments.
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