Transcript: Interview with Kieran Gilbert on Sky News with Kieran Gilbert on Sky News

**TRANSCRIPT: Interview with Kieran Gilbert on Sky News with Kieran Gilbert on Sky News** **5 October 2022** **Subjects:** Stage 3 tax cuts, RBA cash rate increase **‍** **E &OE…** **Kieran Gilbert** ‍ Let's go live now to Sydney. I'm joined by Liberal Senator Andrew Bragg. Thanks so much for your time. You've argued, first of all, if we look at the case for or against stage three, fundamentally, your look at this is that it's wrong to suggest it's just a tax cut for the wealthy. Senator? **‍** **Senator Bragg** ‍ Well, the last thing the country needs is a big tax slug. Middle income earners on big mortgages in places like Sydney are already facing very difficult conditions and so an increase in their taxation, which is why any remaking of the stage three tax cuts would be, would be a disaster. **‍** **Kieran Gilbert** ‍ So, it is applicable to everyone earning upwards of $45,000 a year? That's right, isn't it? **‍** **Senator Bragg** ‍ Yeah. So, someone on $80,000 a year would be looking at a tax cut under the current legislation of about $1,000 a year. Last time I looked, someone on 70 or $80,000 wasn't a super-rich cigar-chomping person. So, it does hit the middle income cohort, but it also, of course, hits the perhaps less fashionable higher income brackets which, the reality is, if we want to try and attract skilled labour into the country, we need to be running a competitive tax system. **‍** **Kieran Gilbert** ‍ Are you encouraged by some of the message that we've heard from Labor MPs today? Mike Freelander, speaking to Ashley Gillen, my colleague in the last couple of hours, said that someone on $120,000 a year in Sydney is not rich, shouldn't be seen as such, and that the government should honour its pre- election commitment to deliver these legislated cuts. **‍** **Senator Bragg** ‍ Well, I welcome the outbreak of free speech in the Labor Party. I must say it's very rare to see Labor colleagues come out and break ranks. But I think it does indicate that there is a strong connection from people like Mike Freelander, who's a very good person with his community. People in places like Camden and Campbelltown, I expect, would be very negative towards Mr. Freelander and his party if the government were to drop their promised tax cuts. Because, of course, people who are earning 80 or $100,000 a year would be hit. **‍** **Kieran Gilbert** ‍ Do you think there's a comparison, though, if you look to the events in the UK, where there was that huge volatility off the back of the Truss Government's mini budget, is there a tale, a cautionary tale, in that for the upcoming budget here? **‍** **Senator Bragg** ‍ Well, I think we have to send the right message to the market that the country is open for business, that long legislated promised tax cuts, tax relief is going to flow through not just the middle-income earners who are going to see the end of bracket creep, which has been a great scourge for many decades. But also, as I say, that I know it's not fashionable, Kieran, but we are competing for labour on global markets. We just had a huge skills summit in Canberra where people have bemoaned the difficulty of getting skilled labour and we need to have a competitive tax system. So, the top tax bracket cuts into 180 grand, which is much lower than comparable jurisdictions like Singapore and Japan. So, we need to be a competitive country because we need to attract foreign capital and foreign labour. **‍** **Kieran Gilbert** ‍ Indeed. But again, that comparison that's been made with the volatility off the back of the UK and the fundamental question about government policy being out of whack with Central Bank policy. Is that a risk, do you think? Because I guess I ask you that in the context of what Daniel Mulino said to me last hour. He made the point that the stage three tax cuts don't come into force until the 1st of July 2024. **‍** **Senator Bragg** ‍ Well, I don't understand the equivalence between Australia and the UK in relation to these matters. I mean, the country has a settled tax policy. We've had a general election; the Labor Party have won the election promising to stick with the former government's tax policy. So, I don't see the equivalent to the UK. On the second issue of the Reserve Bank. The tax relief is already factored into the RBA's conclusions. So, all the government needs to do is to leave the legislated tax cuts as they are and then try and work in collaboration with the RBA as it tries to fight inflation. **‍** **Kieran Gilbert** ‍ Is there any justification, given the level of debt and the volatility internationally, for the cuts to be amended at all, not to be scrapped, but amended, in your view, to save some of the cost here over what is an expensive proposition? **‍** **Senator Bragg** ‍ Well, it depends on how you look at the philosophy of government. I mean, the government has no money of its own. The government needs to levy the citizens and businesses to raise revenue. The revenue it raises and then spends. Now, I would say to you that the most important thing here is that the country is able to maintain a balanced policy. The final budget outcome was a $30 billion deficit which is heading in the right direction. So, I think that frankly, the most important thing the government can do is to work in sync with the RBA and not produce a super high spending budget. That's the best thing you can do to work in conjunction with the RBA, which is trying to fight inflation here. I mean, the debt levels are historically high, there's no question about that. As I say, with the last budget coming in at a $30 billion deficit, the government needs to try and maintain that trajectory. **‍** **Kieran Gilbert** ‍ When you say that the tax cuts have also been factored into macroeconomic expectations of businesses and workers, can you elaborate on that? Is that simply about the certainty of planning for those companies and individuals? **‍** **Senator Bragg** ‍ Well, of course, and the Central Bank has factored it into their conclusions that they've made in relation to decisions they've made this week. Companies have, of course, plans to invest in the country, some companies are domestic, others are foreign, and they've made those judgments based on the current tax policy which was settled at the general election apparently. And so, it's very important that we don't change those arrangements. And certainly, from a personal incentive point of view, I mean the whole point of getting rid of bracket creep effectively for people earning between 45 and 200K was that the incentives were aligned so that people would be encouraged to do more work, work an additional shift or whatever. So, it's really important that we maintain those settings. **‍** **Kieran Gilbert** ‍ Now, there's been some argument for the government to scrap those stage three tax cuts being cheered on to do so in a political sense, we've seen it in recent times, a number of prime ministers do that in an early stage of their prime ministership, and it hasn't landed very well. What are the implications here in a political sense if the government is to renege? ‍ **Senator Bragg** Well, I think it would be a huge breach of faith because the government have argued very strongly in favor of these tax cuts only just a few months ago. Certainly, there has been some deterioration, but it's not a materially different situation than it was just five months ago. So, I mean, I'll leave the political commentary to others. Certainly, from an economic point of view, it would be a big hit to Australian workers that are already in many cases facing the most difficult cost of living pressures in many years. And it would send the wrong message to people and organizations that are thinking about investing in our country that we are going to head the wrong direction in taxation policy sense. So, I think the economic implications are clear, there would be a lower level of investment in the country and therefore a likelihood of fewer jobs if these tax cuts were pulled up. **‍** **Kieran Gilbert** ‍ Senator Bragg, appreciate your time as always. **‍** **Senator Bragg** ‍ Thanks very much. **‍** **[ENDS]** **Media contact: 0401 392 624**