E&OE TRANSCRIPT

PRESS CONFERENCE

CANBERRA

TUESDAY, 24 NOVEMBER 2015

SUBJECT/S: Labor’s plan to reduce tobacco consumption; Malcolm Turnbull’s 15 per cent GST on everything; polls, multinational tax avoidance.

BILL SHORTEN, LEADER OF THE OPPOSITION: Good morning everyone. 2.5 million Australians smoke every day. This numbers are simply too high - we need to do more. It's a drain on our health system and It's a drag on our economy. Over the next 10 years, smoking related health and economic costs are going to top $300 billion. So the choice couldn't be starker this morning. My colleagues are going to explain our initiative and our proposal. The choice couldn't be starker at the moment when we talk about tax reform in this country. On one hand, Malcolm Turnbull's Liberals want to talk about increasing the price of everything; fresh food, education, the cost of going to the doctor. On the other hand, we want to reduce the number of people smoking. On one hand, Malcolm Turnbull's Liberals want to increase the price of the things which people need most in life. On the other hand, we'll be proposing a measure which will see the cost of a box of cigarettes, a packet of cigarettes go up by $10 over the next five years. So, when we have this debate about the future of our health system, when we have a more important debate even about the future of the health of Australians, we are determined to be the generation of political leadership, which make it less likely that our children will take up smoking. Now, I would like to pass over to Chris and then to Catherine.

 

CHRIS BOWEN, SHADOW TREASURER: Thanks very much Bill. Labor believes in tax reform, with purpose and with principle. What we're announcing today is the next step in Labor's fiscal plan. Our plans for a better, more sustainable Budget. Now the Government tells us of course there's no alternative but to do things like taxing fresh food, to set a price signal on health and education and to jack up the GST. Well there are alternatives. We've previously announced our multinational tax plan, our high income super plan and today we're announcing the next stage of our plans. Of course when we were in office, Labor legislated for annual increases in the cigarette excise. Today we are announcing we would continue those annual increases for another four years. This will raise over the forward estimates $3.8 billion and over the medium term, 10 years, $47 billion. Now of course this is a decision which will also have positive impacts on the health of Australians. The evidence tells us that smoking has been declining in Australia,  has been declining in part because of measures taken, tough measures taken by the previous Labor Government to increase the excise and plain packaging. But the World Health Organization recommends that tax be 75 per cent of a packet of cigarettes. In Australia it is currently 57 per cent. This measure that we are announcing today will bring Australia into line with that 75 per cent recommendation and bring us in line with countries like the United Kingdom, Germany, France and New Zealand. Now, this is a decision which will in part be controversial. Of course we know that some people won't like this decision. We've always said that tough and controversial decisions will be necessary. Let me deal with one matter head-on. Poor people do smoke more - poor people die earlier. That is unacceptable to us in the Labor Party. Peoples' wealth is leading to lower life expectancy right across the country. There's a number of reasons why that's the case. Smoking is right up there as a cause for people who are on low incomes dying earlier than people on high incomes. That is offensive to us as the Labor Party. This is a measure which will make a contribution to doing something about that. Of course, we will welcome and continue to welcome the tax reform debate. This is the next stage in our announcements that we've been making through the year and we will continue to make in relation to fiscal plans. This is an important measure, and it goes to show the Labor Party's prepared to make tough decisions but we won't, as the Government does, just always say there is no alternative but to do things like making fresh food more expensive and making health and education more expensive.

 

CATHERINE KING, SHADOW MINISTER FOR HEALTH: Thanks very much and I'm really delighted to be here to join Chris and Bill in making this announcement a very important health announcement for the nation. 2.5 million people continue to smoke. 15,000 of those die from smoking-related diseases every single year. It costs our health system and our broader economy $31 billion every single year due to smoking-related diseases. This is unacceptable. Labor has a very proud history of tackling tobacco reform. In government, we did increase the excise. We introduced the world's first plain packaging legislation. We put nicotine replacement therapy on the pharmaceutical benefits schedule for the first time and we had programs in place to tackle those populations where we know smoking rates continue to be well above what they should be - Aboriginal and Torres Strait Islanders, people with mental health problems, unsung ethnically diverse communities as well. We've got to do more as a nation. Australia has led the way on this debate and I'm very pleased to be here today as part of Labor's team, as part of Labor's health team in announcing this reform.

 

JOURNALIST: Mr Shorten, to generate such an enormous amount of money, $48 billion, it actually presumes that while there might be some drop-off, a hell of a lot of people are just keep fagging on and as a reformed smoker doesn't this just mean this aggressive tax is going to target the poor impoverished, Indigenous communities?

 

SHORTEN: I'm going to get Chris to go to some of the detail. Let me put it really straight to you. 15,000 people a year die due to smoking-related disease. Let me put another number to you. The fact is that it's costing each year the taxpayers $31.5 billion. So I do think it's appropriate. This argument, and whilst I acknowledge your status as a reformed smoker, this argument which is often used by big tobacco, says that somehow making people pay more for cigarettes is anti-poor people. Both my parents smoked. Both my parents had tobacco-related diseases. Neither of my parents have lived to the age which I hoped they would have. I don't put that all at the feet of tobacco. But I don't buy the argument that somehow making people pay more for tobacco is anti-people. It's actually pro kids not learning to smoke when they're young. It is making it harder for people to smoke and it makes it easier if you've got an addiction to weigh up the considerations of actually giving up. So yes, it does have an impact. But also, if we want to talk about the relative merit of price impact, why on earth are the Liberals still having a debate about increasing the price of fresh food, increasing the cost of going to the doctor? You know, this debate beggars belief. We've got solid plans, real plans and are putting them on the table now. We aren't insulting the intelligence of Australians, we're not engaging in some sort of false debate where the Liberals would have worked out what they are doing. We're actually being up-front with people. I'll get Chris to go further into your issue because it's the key issue at the heart of this.

 

BOWEN: Thanks Bill. This policy has been costed by the Parliamentary Budget Office. They have assumed a natural reduction in smoking and they've assumed a greater reduction in smoking in the years in which the excise index supplies. Around doubling of the rate of reduction in smoking. That has been factored in and assumed by the independent Parliamentary Budget Office. So this is a measure which will increase the rate of reduction in smoking and will also be Budget positive. And as Bill said it's partly about people who currently smoke. It's also about young people, stopping them smoking altogether. When I talk to smokers in my electorate and travelling around the country, they say to me in part "it's too late for me, I've been smoking a long time. I started smoking before we knew the full health impacts but I will do everything, everything possible as a parent to stop my children smoking, taking it up and I'd like you as my elected representative of the Government to do the same". That's what we're doing very clearly is saying that we are deliberately making cigarettes more expensive to discourage them from taking it up in the first place.

 

JOURNALIST: If this about cutting smoking rate, will you put all the money raised into anti-smoking measures?

 

SHORTEN: We'll outline what we do with some of the excises that we would raise in the future at a future date. I'll get Catherine to talk a little bit more about our health plans we've announced so far.

 

KING: Certainty thanks for that Bill and thanks for the question, of course as Shadow Health spokesperson that's a question I think is a very important one. We've got a range of policies that we will be announcing later either this year or early next year in terms of primary care, public hospitals but, more importantly, prevention. This Government has done an absolutely appalling job when it comes to prevention. They have cut millions of dollars out of prevention programs, whether it be on obesity reduction, whether it be on drug and other alcohol or whether it be on tobacco. I want to have a focus on prevention. We know in smoking in particular what we need to do is look at those populations where those rates are really high. The great example, there was $100 million that we put into smoking cessation programs for Aboriginal and Torres Strait Islanders - overnight the Government cut that. For the first time we had seen teenage smoking rates actually start to reduce. We will be making announcements around prevention in relation to this announcement but today we really want to focus on the reduction that this measure, in and of itself, will have in smoking rates.

 

JOURNALIST: In order to implement the policy, you have to win the next election. Aren't you alienating the people who are going to vote for you?

 

SHORTEN: Actually, we are showing a degree of trust in the Australian people that Malcolm Turnbull is not. We are outlining our views. You are all experienced political writers, the game book, the rule book says "don't announce your policies until the election and be a small target". This year we've taken a different approach. We've outlined what we will do in terms of reining the excessive superannuation tax concessions which currently exist. We've proposed measures to make sure that multinationals pay their fair share. Today we announce further measures. We're not treating the Australian people inappropriately, we are not engaging in an insincere debate. You know, we have seen the debate in Parliament "oh let's have every idea on the table" but we never actually hear any of them. So what we're doing is we're treating the Australian people as intelligent. I get the lives that people live. I know plenty of people who are affected by the policies of the Government, and the cuts to family payments, and the cuts to the proposals on the GP Tax. I get that this decision about tobacco excises will have a real impact. I'll tell you something ele about people who smoke and working class backgrounds. There's not many of them who I've met who want their kids to take up smoking. I think this is where we go - we've got a plan for the future.

 

JOURNALIST: That's a strong moral argument. I think parents would relate with that. But what about alcohol? If you're talking about a legal drug that causes spiralling health costs, domestic violence, street violence, lack of productivity, loss of self. Why not hike up the tax on alcohol?

 

SHORTEN: Mark, let's not bank our change and assume that's done and dusted and move on to the next matter within five minutes. It is a legitimate issue you raise about the impact of alcohol in our society. There's no doubt the debates about tobacco are much further advanced and down the road. I'm pleased you mentioned family violence and domestic violence. We do have policies which would tackle the gender inequality which driving family violence. So no-one dismisses the point you're making but today Labor's outlining a policy which will see an increase in the price of cigarettes but we think the result and social good, the moral argument as you recognised, that will make it less likely people will take up smoking in the future, provided added incentive for people to give up smoking, provided much-needed revenue for the bottom line for our health and education systems. And all this is done without having a debate about putting the GST up to 15 per cent and a tax on everything.

 

JOURNALIST: Mr Shorten, Newspoll has you at 15 per cent as preferred prime minister. Why aren't the voters warming to you, and will you lead Labor to the next election?

SHORTEN: I accept what's going on with Malcolm Turnbull at the moment. Truth be told I share in the national relief that Tony Abbott's no longer Prime Minister of Australia, I understand that's what's happening. But what I also understand is Malcolm Turnbull hasn't actually been subject to any real economic tests yet. The real test will come when he has to bring down a Budget. The real test will come when he actually outlines what he wants to do about increasing the price of everything to 15 per cent. Until then, we are having fabulous conversations and it's a great time to be alive, but the real issue is; what is he going to do with the economy? What are the real plans, and I share some concerns that we haven't seen any detail this long in. In terms of myself and that final part of the question, just so people understand and people should expect, I never give up because I won't, because I don't -  that's who I am.

JOURNALIST: Mr Shorten, are you considering raising taxes on alcohol? Would you rule that out?

SHORTEN: In terms of that, we are focusing on this as our priority, so the tobacco proposition; we're not announcing any other taxes today or in the near future. What we are looking at doing, though, is making the tobacco excise a matter of public debate. I think, deep down, this passes the sort of common sense test. The Government said there's a great big budget crisis even though they won't even tell us what Treasury has told them to prepare for MYEFO, but I do think there is a challenge here about the unacceptably high rates of smoking. I also think there's a challenge in how we fund the health system and school system going forward. So this is all about choices, you tell the political parties by the choices they make. The Government wants to have a debate, which of course they keep returning to the GST as being the sort of, the hammer for every problem. A 15 per cent price rise on everything. We're saying there is a different path, Malcolm; we're saying that you don't need to put a tax on fresh food; you don't need to increase the prices of going to the doctor; you don't need to increase the price of rent; you don't need to increase the price of houses or apartments. Why not have a look and I say this in all sincerity, if we can have an outbreak of bipartisanship on tax reform, all the Liberals have to do is cross the road - it's not that hard - go after the taxation loopholes and overly generous concessions in superannuation, make multinationals pay their fair share and give a good serious look to increasing the excise on tobacco with all its resultant social goods.

JOURNALIST: You are heading to Paris, when are you going to announce what your targets will be?

SHORTEN: Soon.

JOURNALIST: And the ETS?

SHORTEN: We've already announced - see that's the difference between Malcolm Turnbull and myself. A year ago, he and I were both in favour of an ETS; the good news is I still am. We all know he did a deal with the devil to take the leadership of the Liberal Party. The Government has set knee high expectations for climate change, haven't they? 26 to 28 per cent. They've got this Direct Action Plan, which is sort of your classic Orwellian misnomer isn’t it, you know, it's indirect inaction really where they pay polluters to pollute. Well that's a great idea, isn't it.

JOURNALIST: But your plan? When are you going to announce it?

SHORTEN: Well we have, and you asked about an ETS; we are committed to an ETS. We're committed, we actually unlike the Liberals, we actually trust the market to work these issues out.

JOURNALIST: To achieve what targets?

SHORTEN: We've already - I've said that I'll announce our targets soon but not today. This is a good announcement on tobacco, we want to keep talking about it but in terms of our approach on climate change, an ETS, we think there's more that can be done with vehicle emissions. We've already announced that we support our energy mix in 2030, 50 per cent of it coming from renewable energy. We've announced that we want to be part of an internationally-linked Emissions Trading Scheme, and we support the Clean Energy Finance Corporation. I've been disappointed to see Malcolm Turnbull lukewarm in his support as the Liberals keep voting to abolish it. So we've outlined quite a platform of change. The Liberals really know their current measures aren't going to achieve anything.

JOURNALIST: On tobacco excise, back on tobacco excise but related to David's question, will the money raised from this go back into household compensation for an ETS, because remember, the compensation from your last ETS was retained by Abbott and co?

BOWEN: The money raised by the measures we're announcing today will go to budget consolidation and provide room for further announcements in the health area and education areas and other areas going forward as well as our general budget plans.

JOURNALIST: But not tax cuts, not pension rises, nothing like that?

BOWEN: No well, I've answered the question. It goes to our general budget plans.

JOURNALIST: You've described this as tax reform and there may be more to come, where does bracket creep fit in your priorities for tax reform? Is that something you are going to get to?

SHORTEN: Well in terms of tax reform, we're proposing today a way of finding revenue and resources to do the important things that communities expect, including help pay for schools, budget consolidation and the health system. But what we're also doing is we're not just coming up with a lazy GST which is going to increase everything by 15 per cent, this is lazy, you know it's lazy, we know it's lazy - more importantly, Australians know it's lazy. There is no great support for a GST in this community. Doesn't matter how you cut the questions in the polls, there is no great support for an increase in the GST.

JOURNALIST: But for bracket creep there is.

SHORTEN: But in terms of bracket creep, well of course this is an issue, but I think one of the challenges which we see now before we get to the debate about bracket creep is we've seen historically low income growth levels. Now this is not a strategy by the way to deal with bracket creep but it's a real problem at the moment. Income rises in this country are at a two decade plus low. What that means effectively is there is millions of people going to work every day and their income's just not growing. It's barely meeting pace with inflation. There is a confidence problem in this economy and no amount of declarations it’s a fabulous time to be alive and the weather's good - there's no amount of those sort of statements deal with the real economic tests. So to finish where I started earlier on about a real test, we know and Australians know that Malcolm Turnbull hasn't yet faced any real economic tests.

JOURNALIST: Just on tax transparency Mr Shorten, would you, would Labor support an exemption on the publication of tax details for grandfathered companies?

SHORTEN: Well, I think we've seen this phenomenon of the grandfathered companies - and I’ll get Chris to supplement the answer, we've seen the phenomenon of grandfathered companies leap into real magnification overnight, haven't we? The fact that there's well over 1000 companies from 1995 have been exempted for reporting their income. Now I think the whole challenge of tax transparency is an important debate. Australians should know what the largest corporations in Australia are paying in tax. If you want the rest of us to pay tax and accept the system's working, I think it's very important that the big end of town be transparent and clear in what they do. Now I'll get Chris to supplement.

BOWEN: Thanks Bill, our policy is outlined by the amendments we collaborated with the crossbench on to have adopted in the Senate last sitting week, and I don't blame you if you missed it because it's a busy building but the next day the Treasurer walked into the House of Representatives and had what's called a dummy spit and he threatened to kill the Government's entire multinational tax transparency bill because he was so outraged about Labor succeeding in the Senate to improve tax transparency. And the Treasurer was clearly not on top of his job and clearly not on top of what was happening with the crossbench and his response to that was to threaten to kill his own multinational tax bill. Such is the addiction of this Government to providing less tax transparency that they are prepared to kill their own legislation. We are prepared to support the legislation but we moved amendments in the Senate, in collaboration with some crossbenchers, and successfully did so. That happens from time to time when you are in government, and this Treasurer has shown his glass jaw by not accepting that result. Well we'll continue to insist on that being the case. The Government wants their multinational tax legislation through, they can cop a bit of increased tax transparency as the Senate has asked for. The Senate crossbench was outraged about the way that they were gamed by this astroturf organisation which pretended to be a grassroots organisation, and quite rightly so.

JOURNALIST: Mr Shorten, just on Newspoll, you say you won't give up but clearly the Opposition under your helm is not cutting through. So is there something else that the Opposition and specifically you can do to turn around the poll numbers?

SHORTEN: Well before you become too concerned, at the beginning of this year, Tony Abbott was Prime Minister, Labor was a strong Opposition. I remember when I became Opposition Leader, people said, and I've read in the newspaper editorials, Tony Abbott was going to be here for a very long time. In fact I think some of the bolder editorials said he moved Australia to the centre of Australian politics. Labor's been strong. I remember when we opposed the most iniquitous features in fact, let me just go to the whole of the 2014 Budget, people said oh Labor should give in and let them carry on with their changes. So I just remind you of the history, Labor's been doing the job as a strong Opposition. Today again we are fronting up. The political rule book says that Oppositions shouldn't announce all their policies until the very, you know in a big rush at the end which is greatly frustrating to Australians. We haven't. But remember when we proposed going after concessions at the top end in superannuation, there were a lot of screams from some in the Liberal Party and the current Treasurer and now I think they're looking at it. Remember when we said that multinationals paying their fair share was a big issue, there were some in the conservative elements who said that was the wrong thing to do. Now it's very much front and centre. I predict that today's measure talking about tobacco excise will be received on balance pretty well, and I think serious policy-minded people will be saying well why do we have to have a GST on absolutely everything at 15 per cent when we can do measures like this, and Labor offers this to the Government in the spirit of bipartisan. See you all in Parliament.

ENDS

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