ANDREW CLENNELL, HOST: Prime Minister, thank you so much for joining us on our first Sunday Agenda of the year.
ANTHONY ALBANESE, PRIME MINISTER: Good morning. Welcome back to Canberra.
CLENNELL: Well, in 2022, concerning the stage three tax cuts after the election, you said, “my word is my bond, I’ve always been a man of my word, and I believe that when you go to an election, you make commitments, you should stick to them.” Before the election, you were asked by a Sky journalist quote, “stage three is absolutely locked in?” You said quote, “yes.” Journalist asks, “there are no circumstances under which you would seek to roll back stage three?” You said, “no.” Then you told Sky again, Kieran Gilbert, “we’ve outlined very clearly what our plans are, people are entitled to have that certainty that the tax cuts that have been legislated.” Were you elected on a lie?
PRIME MINISTER: Sky News since then, has reported every day for the last year about cost of living pressures. And what we know is that they are most acutely felt by those on low and middle income. Now, over the last period, since we were elected, we’ve had a range of measures, the Energy Price Relief Plan, the cheaper medicines policy, cheaper child care, Fee Free TAFE. A range of measures, a lot of which, including the increase in welfare payments, have assisted low income earners. This package is aimed fairly and squarely at middle Australia. And when economic circumstances change, it would be irresponsible to not change economic policy. We’ve been upfront about that. I have said this is a change of our position. But it’s a change of our position, not driven by politics, it’s driven by looking after people.
CLENNELL: Are you embarrassed though, that you’ve had to do this? That you’ve gone out so publicly, so unequivocally, you’ve said, “my word is my bond.” And now you have to say, “oh, sorry, I didn’t really mean that.”
PRIME MINISTER: This is about putting people before politics. And we’ve made the right decision for the right reasons.
CLENNELL: Do you feel you need to apologise though for this broken promise?
PRIME MINISTER: We’ve made the right decision for the right reasons, and –
CLENNELL: So you won’t be apologising.
PRIME MINISTER: Average income earners will receive double the tax cut, which they did before. And what I’ve done is listen to people. I’ve listened to people, I’ve listened to programs such as yours. For the last year, I’ve looked at newspapers and seen comments people have made, but I’ve talked with people directly. As you know, Andrew, I don’t just speak in controlled environments. I get out there and talk with people on the ground, in the supermarkets, across our shopping centres, in our main streets, of our cities and our regional towns and our communities. And what I’ve heard is that low and middle income earners are under financial pressure. We know that that is the case. And in 2022, during the election campaign, I don’t think that you were saying, perhaps you were, that there were going to be a dozen interest rate increases, that inflation would continue, that the aftermath of the global pandemic would be so long in terms of its tail, and we know that COVID is still having an impact. We know that the supply chain issues, including from the shutdown of migration meant that there were labour market shortages, which fed into prices as well. We know that the ongoing Russian invasion of Ukraine fed in to prices as well. So we had to take advice –
CLENNELL: Okay, but do you regret being so unequivocal?
PRIME MINISTER: We had to take advice on the way in which, the way in which we could provide income support, provide a difference for people who are under pressure whilst continuing to tackle inflation. That’s what we have done. We’ve been upfront about it. We actually published, it’s very unusual as you know, Andrew, to publish an eight page document and then a range of tables from Treasury. We’ve done that so that there is a full and complete understanding of that.
CLENNELL: And those tables tell you this, that this is the end result, a lobster. That’s basically what you get. Even less. $16.40 for those low and middle income earners per week. Is that lobster enough in the supermarket to allow people to forgive you for breaking an election promises? Is that lobster enough for you to win the next election when you’re taking $4,500 a year off people who were expecting $9,000, who voted for you?
PRIME MINISTER: I’ll tell you what, Andrew, the fact is that politicians, and perhaps yourself, are not going to get as much as you were going to get. But I tell you what, for average income earners out there on $73,000 a year, they’re going to get double the tax cut. For families –
CLENNELL: They’re going to get $20, they’re going to get $16 a week.
PRIME MINISTER: For families –
CLENNELL: $32.
PRIME MINISTER: Andrew, people are doing a tough. This is aimed fairly and squarely at middle Australia. So that, for the average family earns $130,000, instead of getting, instead of getting just $1,000, they’ll be getting $2,600. That makes a substantial difference to them. This adds to the other measures we are doing. But it is targeted squarely at middle income Australians. And also Andrew, the Treasury analysis shows that this will be good for the economy, because it will address labour supply issues. So we have found a way to provide increased support, without putting pressure on inflation.
CLENNELL: Alright, I looked up the average median house rents at the moment in Australia yesterday. They’re up between 10 and 13 per cent for the year. In Sydney it’s 750 bucks a week. In Melbourne it’s 550. In Brisbane it’s 620. Most of these rents then have gone up $50 to $75. From July, you’re giving low to middle income earners, just $16.40 extra a week. So why do you think people are going to thank you for that if they’ve copped a $50 to $75 rent rise a week when they’re getting $16 off you?
PRIME MINISTER: You’ve just outlined Andrew, some of the financial pressures that people are under. Now the option is to do nothing about –
CLENNELL: But there have to be more options.
PRIME MINISTER: Well, I await you suggesting some, Andrew. Because we asked Treasury and Finance for them. We’re putting options on energy, options on health, including cheaper medicines. We put in the Urgent Care Clinics that are making a difference allowing people to see a doctor for free. We’ve tripled the Bulk Billing Incentive. We’ve got cheaper child care that has had a double digit reduction in the costs of child care for working families. But what we needed to do here was to target something on middle income working families. That is what we have done. And what our opponents are saying is that if they are elected, they will actually increase the taxation for 12 million Australians. And the hypocrisy, Andrew, on a mob who, Mr. Dutton was a member of course of the Abbott Cabinet. You might remember, in 2014, a new tax on higher income earners, the so called deficit levy that was imposed without any commitment prior to the election. Imposed at the same time as they were cutting health care, at the same time as they were cutting education. Same time as they were cutting all those things. And at the same time that Peter Dutton was seeking to impose a tax on going to the doctor.
CLENNELL: Okay, this is now. Jim Chalmers has said Treasury came back to him with this, stage three tax cut rearrangement as the only non-inflationary way to give cost of living relief. I mean, do you need a new head of Treasury than Steven Kennedy, if that’s the only non-inflationary way that he’s telling you, you can get that relief? Or is he just giving Jim Chalmers, what Jim Chalmers wants to hear? Was reinstating LMITO looked at? Which is about the sum of this. Was energy bill relief looked at? Were any other measures looked at as well as this?
PRIME MINISTER: Well, I’ve invited you, Andrew to come up with other ideas.
CLENNELL: What about a direct subsidy on energy bills above that 150,000 or greater than? Is that been considered in the Budget?
PRIME MINISTER: Well, we have an Energy Price Relief Plan, and we’ll consider a range of measures in the Budget. But the thing is, that there was $106 billion across the forwards allocated for tax relief. We have committed to $107 billion. There’s only a $1.3 billion difference between the two plans. So it’s revenue neutral in a way that provides assistance for people who really need it, particularly targeted at those middle income working families. That’s a good thing. And Dr. Kennedy has been, of course the head of Treasury, not just under this Government, but under the previous Government as well. And Dr. Kennedy’s advice of Treasury is very clear. And in addition to that –
CLENNELL: So this was it? Did he give you any other options in ERC at any time?
PRIME MINISTER: And in addition to that, in addition to that, Andrew, we consulted, both Dr. Kennedy and Dr. Chalmers consulted the head of the Reserve Bank. And the Reserve Bank Governor also said that her anticipation was that this would have no impact on their inflation predictions.
CLENNELL: When did you come to the decision that you might consider changing the stage three tax cuts package? When was the first time you seriously considered changing this package?
PRIME MINISTER: Well, we came to a decision on Tuesday in the Cabinet. And one of the things –
CLENNELL: What about in the lead up to the October Budget? Did you consider it then? Did you consider changing the stage three tax cuts in the lead up to the October Budget?
PRIME MINISTER: There wasn’t an October Budget. The Budget was in May.
CLENNELL: The May Budget should I say.
PRIME MINISTER: No.
CLENNELL: Not last year either?
PRIME MINISTER: No.
CLENNELL: So when was the first time that you thought about changing the stage three tax cuts?
PRIME MINISTER: We made the decision on Tuesday. And one of the things that we did, Andrew, and one of the things that I run, as you well know –
CLENNELL: I mean October 22 by the way.
PRIME MINISTER: I run a proper, orderly, considered Cabinet Government. Unlike the previous Government, where my predecessor was the Prime Minister and the Treasurer and the Health Minister and the Industry Minister, and all of that nonsense. Like it was a shambles, Andrew. And Peter Dutton and most of the senior members of the current Opposition sat there and copped all of that. They had a Cabinet committee of one. What we do is, we have proper processes considered. We received the Treasury advice only at the end of the week before the decision. So just days before we made the decision on Tuesday. We had a proper debate through our proper processes, through ERC, through Cabinet, through Ministry and through Caucus. And I can inform you that there was agreement across the board in a unanimous fashion for the direction in which we’re going. Because you can’t say, Andrew, think about the counterfactual. I’m interviewing with you here today, and you’d be asking me about, “what are you doing about cost of living pressures?” And I’d say, “well, you know, I’m the Prime Minister, but it’s hard to come up with something that will provide that assistance.” That’s untenable. I have a responsibility to show strength. And one of the things that I’ve said, is that this isn’t an easy decision, from it, and it wasn’t, but it’s the right decision. And when people think about it, and analyse what the options are, what I find interesting, we’re now many days after the announcement, and even more days than that, after the speculation, some of which was wrong. There is no criticism of any substance of what we have put forward. The Opposition have changed their position a range of topics. If you want to talk about changing policy positions, the Opposition have had different positions every day. And I suspect today they might have a new one again.
CLENNELL: Have you had any polling, or been briefed on any polling in relation to Dunkley in the last two or three months which indicate you can lose the seat?
PRIME MINISTER: No.
CLENNELL: So, Dunkley doesn’t factor into this decision?
PRIME MINISTER: No.
CLENNELL: But this will help you in Dunkley, presumably. This will help you in the by-election.
PRIME MINISTER: Well one of the great contradictions in the response of Mr. Dutton to this, is that he says it’s about politics, but doesn’t that contradict the argument that this wasn’t done before the 2022 election? If it isn’t about the changed economic circumstances? The fact is, this is about low and middle income earners who are under financial pressure. And over the summer, you might have noticed that one of the Sunday papers, associated with this network, did a polling, more like push polling, saying, “should the Government do more on cost of living?” And they splashed with that on the front page just weeks ago. Now, we are doing something about cost of living. You can’t just identify a problem. And what the Opposition do is they’re characterised by negativity, by what they’re against, by personal abuse. What my job is –
CLENNELL: Sure, let’s not worry about. You’re in charge.
PRIME MINISTER: Yes, that’s exactly right, Andrew. That’s the point. And we have therefore, because we are the Government, a responsibility to do the right thing. And that’s precisely what we have done here making a difference for people. So that, changing the tax rate from 19 cents down to 16 cents means that every Australian gets a tax break. Every tax payer.
CLENNELL: Well, did you consider going further? Did you consider going further? Because I talked about the $16 a week, and obviously for low and middle income earners, they’d probably prefer $25 or $30 a week, was that ever accounted? Were there a number of options or Treasury just gives you this and righto, that’s it?
PRIME MINISTER: Well, the challenge and the clear obligation that we had was to not put further pressure on inflation. So that was the context here. That was the problem with, you could hand out, the easy politics is to hand out cheques. That’s what Mr. Frydenberg was known for. That’s why we ended up having to clean up the trillion dollars of debt that we inherited. Now, my Government has been fiscally responsible. We produced the first Budget surplus in 15 years. We’ve banked revenue increases. We’re being very cautious about spending. Because the challenge for us is to assist people in the immediate without that being counterproductive. And if you just increase spending, then it can be counterproductive.
CLENNELL: Alright, well you keep talking about these tax cut changes helping middle Australia. What salary do you have to be on, to qualify being from middle Australia? Is someone on 155,000 in middle Australia?
PRIME MINISTER: Of course they are and they’ll get a tax cut.
CLENNELL: Is someone on 180,000 in middle Australia?
PRIME MINISTER: Of course they are and they’ll get a tax cut.
CLENNELL: Is someone on 220,000 in middle Australia?
PRIME MINISTER: You know what, they’ll all get a tax cut.
CLENNELL: So middle Australia is from where to where?
PRIME MINISTER: They’ll get a tax cut. They’ll get a tax cut. So the benefit here is, Andrew, what we haven’t done, unlike what happened in 2014, where there was a tax increase, a hit just on the high income earners. We’ve increased the tax cut, we’ve given a tax cut to who where going to get nothing for people under $45,000. So they go 19 to 16, and that flows right through the income range. Then what we’ve done, we’ve increased the next scale from 120, up to 135. That’s addressing bracket creep. What we’ve done with the next by increasing from 180 to 190, that is the first time, Andrew, that that rate has increased since 2008 when, by the way, we were in Government in 2008 under the Rudd Government.
CLENNELL: But the fact is, now many of your supporters would say tough bikkies. Some of the viewers will say tough bikkies. But the fact is there are a lot of high income earners who voted for you in certain seats in particular. Higgins, those sort of seats. Tangney, there are FIFO workers who earn 180, 200 for the household who voted for you. And they’re getting $4,500 less. So that’s a risk.
PRIME MINISTER: There’s a few in Grayndler as well.
CLENNELL: There are many in Grayndler.
PRIME MINISTER: And do you know what they’ve said to me? They’ve said to me, as we’ve gone around, they understand that so many people are under financial pressure and those people –
CLENNELL: So they’re prepared to give up $4,500 a year?
PRIME MINISTER: Well those people will get, I will get, Andrew, and you will get on your salary, $4,500. And you know what? There’s a whole lot of people out there who are doing it so tough at the moment that a $4,500 tax cut is significant. So our choice very clearly, is to give every taxpayer a tax cut. We have done that. We have aimed the biggest benefit, aimed squarely at middle Australia, that’s the right thing to do, as well. 90 per cent of women will get more as a result of this. And also Andrew, the benefit for the national economy is that Treasury have identified that when women and men who’ve had the fortune of having a little one come along, they’re talking about someone returning to work, one of the things they look at is that income scale, and they look at tax as well. This will be an incentive for labour supply and that is one of the things that has been a major issue. It’s a major issue for small business. And at the same time, the other benefit, of course, is that that balances out the fact that there is a greater marginal propensity to consume the less you earn. Because you don’t have the benefit of putting things away in your savings, you’re going to spend it on food, and on essentials of life. That will benefit, small businesses will benefit, local communities as well.
CLENNELL: When you were so unequivocal to all of us in the 2022 election campaign, wasn’t it the ghosts of 2019 stalking you? Weren’t you thinking, “if I even leave one piece of daylight on this, they’re gonna go me and we might lose the election.” Wasn’t that what you were thinking Prime Minister when you were so unequivocal about not changing the stage three tax cuts?
PRIME MINISTER: No. When the legislation happened, as you know Andrew, we moved amendments. Those amendments were unsuccessful by one vote. By one vote in the Senate. We then made a decision that we would support the legislation. And we did.
CLENNELL: Was that a mistake at the time? Given where you end up now with the broken promise accusations?
PRIME MINISTER: No one in 2022 in the election campaign could point towards saying that inflation would become the number one challenge. You will remember, Andrew, during the election campaign, when the first interest rate increase happened under the former Government, that was seen as a big change. Because as you know, Andrew, the Reserve Bank Governor had said very clearly and unequivocally that interest rates would remain at the same level.
CLENNELL: Alright, what about the fact people are copping it and continue to cop it from bracket creep. It won’t be long before today’s 130 and 140, is 150, is 160. Then they start going backwards in terms of your change. It’s been revealed the Government will bank 28 billion over 10 years.
PRIME MINISTER: It’s been revealed.
CLENNELL: By the advice, it’s in the advice.
PRIME MINISTER: The Treasury advice is very clear.
CLENNELL: I didn’t hear you shouting if from the rooftops.
PRIME MINISTER: Because what’s relevant, Andrew, what’s relevant is the forward estimates. The forward estimates are the same. The idea that bracket creep doesn’t get dealt with in 10 years’ time is, one of the things I said in 2019, I spoke about this at the Press Club, I said that it was a triumph of hope over experience to say you knew exactly what the economy would look like in five years’ time.
CLENNELL: Have you spoken to Greens Leader Adam Bandt about this tax cut change? And if so, what’s his response?
PRIME MINISTER: Well, I speak to people in the across the Parliament all of the time. I speak to people –
CLENNELL: So you have spoken to him?
PRIME MINISTER: I speak with people all the time Andrew.
CLENNELL: He wants more doesn’t he?
PRIME MINISTER: One of the things I do is have conversations, from time to time I might have conversations with you as well. I don’t go on another program and go through the detail.
CLENNELL: Well, thank goodness for that. Can you give a commitment then that in negotiations with the Greens in the Senate, you won’t take more off high earners? So could that potentially be on the table?
PRIME MINISTER: No, this is our plan.
CLENNELL: This is it? You are not changing this plan?
PRIME MINISTER: This is our plan. We will put it to the Parliament. We’ll put it first to the House of Representatives. We will put it to the Senate. And I’m very confident that people will look at the two plans which are there. One of which leaves a whole lot of people behind. All those people, the part time workers, the renters, the people earning under $45,000, leaves them behind and gives them nothing. For average working class people earning $73,000, that plan is inadequate. We’ll give them double the tax cut. We are determined to argue our case, we have our plan.
CLENNELL: So you’re not changing this tax cut plan. This tax cut plan will not change this year?
PRIME MINISTER: We have our plan, we’ll put it to the Parliament. And we will, not only that, Andrew, we haven’t even, Peter Dutton yesterday, was saying, I wouldn’t rule out him voting for it. So we’ll wait and see what happens.
CLENNELL: Okay, I’m gonna ask you to repeat this again, you are not going to change this plan?
PRIME MINISTER: We will put our plan to the Parliament. That’s what we’re doing.
CLENNELL: And you don’t intend to change it?
PRIME MINISTER: We are putting our plan to the Parliament. And we are hopeful of getting support. We will talk to people across the Parliament. And what we’ll also do, what we’ll also do, and we’re doing this through this interview, I this week already have been in Orange, and other places in regional communities. I’ll be in regional Australia and in cities in the coming week. We’ll argue our case. It’s a good case.
CLENNELL: You haven’t even got the superannuation and PRRT changes, those revenue changes, through the Senate yet though. So why are you so confident the Senate will pass this?
PRIME MINISTER: Because it’s good policy Andrew. It’s good policy. And the Senators will weigh up whether they want to have a policy that is better for 12 million taxpayers, one that gives every taxpayer a tax cut, one that appeals as well to aspirational Australia, one that makes sure it gives fair reward for hard work. And one of the other things that we’ve done, of course, together with this, something we have done that I don’t want to leave out here, we also want people to be paid more. So we want people to be paid more for, wages to lift. In the last two quarters –
CLENNELL: You’re pushing them into the higher tax brackets.
PRIME MINISTER: In the last two quarters, real wages have increased. The previous Government had reducing wages as a key feature of the economic architecture. What we’ve done is supported decisions to lift the minimum wage not once, but twice. We’ve given a 15 per cent pay increase for aged care workers. We’ve seen real wages increasing, and we expect real wages to increase over the coming year. So we want them to earn more and we want them to keep more of what they earn. That’s my Government’s policy. That’s a good thing. As well as that we will look at, as I said at the ³Ô¹ÏÍøÕ¾ Press Club, that this wasn’t the beginning of our cost of living relief and it won’t at the end either. We’ll continue to look at further measures that we can undertake.
CLENNELL: Why couldn’t you announce some more measures now? Because these don’t come into effect until July. I mean on the other hand you’re saying –
PRIME MINISTER: Because we had that support rolling out. There’s a range of measures providing support to people now that are continuing to go through the system.
CLENNELL: Now a year ago, I interviewed you at The Lodge and I asked you how deleterious it would be to your leadership if the Voice referendum was lost. Now your Cabinet colleagues after the referendum said to me that you were rocked by the loss. You were quite shaken by it, as any Prime Minister would when they support a referendum that goes down. Do you admit that? Do you admit it took a bit of confidence away from you?
PRIME MINISTER: I was disappointed with the outcome Andrew. I saw it as a lost opportunity to advance reconciliation. But I accepted the outcome from the Australian people. I fronted up. One of the differences between me and my opponent. I fronted up there, in Canberra, in Parliament House, in this office, in the Blue Room on that evening. I fronted up here. I’ve done two Press Conferences in Canberra this week, as well as the ³Ô¹ÏÍøÕ¾ Press Club, which I’ve addressed as Labor Leader on no less than nine occasions just through the ³Ô¹ÏÍøÕ¾ Press Club, not counting the Whitlam Oration and other events that I have done there. I make myself accountable and I was disappointed with the outcome, I’ve said that. But I accepted it, I accepted responsibility as Prime Minister for it. But I also know that one of the things we have done before, during and after is continue to look at ways in which we can close the gap in a practical way.
CLENNELL: Prime Minister, thanks so much for your time.
PRIME MINISTER: My pleasure. Thanks very much Andrew.
