SUBJECTS: Age pension deeming rates; tax cuts; election review

LAURA JAYES: Joining me now is the Shadow Minister for Families and Social Services Linda Burney. Linda Burney thanks so much for your time. Should it be set by an independent body?

LINDA BURNEY, SHADOW MINISTER FOR FAMILIES AND SOCIAL SERVICES: Thank you. Look I think that the government going forward needs to consider whether or not an independent body is appropriate. My position is that sure, you should consider it. But it is the government’s decision. But most importantly Laura, the government can’t have it two ways. They can’t demand the Reserve Bank to pass on interest rates cuts to mortgages holders in full and leave the deeming rate where it is at the moment.

JAYES: Well there are two deeming rates. What do you think needs to be changed, the lower one at 1.75%, or 3.25%, or both?

BURNEY: Well I think they both need to be changed and need to be considered. Clearly the government needs to look at what is the best secure return that part pensioners can get at the moment through term deposits or sort of secure investments like that? And the best they can get is about two per cent and the government needs to look at the 3.25% which affects most part pensioners, to bring it more in line with what the best secure investment they can get through any sort of reputable financial institution.

JAYES: If it was so urgent, why didn’t Labor make this part of your election platform? I note that Labor has been quite critical of the government of being slow to act on this. But this wasn’t event mentioned by any Labor MPs during the election.

BURNEY: Well it has been an issue that labor has raised consistently. My predecessor Jenny Macklin, if you look back through transcripts of the parliament, you will see that she asked questions about the deeming rate. And we’ve been raising it for four years. And during the election campaign, clearly I did raise it on occasion but the more important thing is Laura, what is the government’s responsibility now? And like I said, they can’t display the hypocrisy that they’re displaying in the sense of having a deeming rate that’s incredibly inflated, and having that as the rate that determines what a part pensioner or what a pensioner should get. And so many pensioners have gone on to part pensions and probably as a result of this deeming rate.

JAYES: The deeming rate is one thing. Franking credit reform is another. So in that vein, if we’re having this argument about these two things affecting pensioners, retirees in many senses, do you think that now it’s time to drop that franking credit reform as part of your platform altogether?

BURNEY: Well let’s be clear, the franking credit policy that Labor had throughout the election did not affect pensioners.


BURNEY: Pensioners were exempt from that. It was self-funded retirees. And I think that it’s clear through the comments of both our leader Anthony Albanese and through Jim Chalmers, the Shadow Treasurer, that there are – there is going to be an absolute review of all the policies that Labor took to the election. Some we will keep and some we will not keep. Obviously the franking credits is part of that review and it’s a very important part of that review, and I appreciate your question.

JAYES: Do you – what do you think about where Labor should land on this – the Minister that looks at Social Services more broadly – and in New South Wales – do you think the franking credit policy was something that really did quite significantly contribute to Labor’s loss?

BURNEY: I mean that will come out through the review that’s been announced. I understand that the two people that are going to undertake that review is Jay Weatherill and also –

JAYES: Craig Emerson –

BURNEY: Craig Emerson, who is of course a very senior person within the party and very well respected. I think that that review is absolutely crucial and that review will inform us on our way forward. And it will look at many more things than the franking credits policy but you’re right Laura. The policies that we took to the federal election were many and I think they were good. But whether they were not they were the right ones for the right time is something the review will look at.

JAYES: Craig Emerson, as we’ve just mentioned him in terms of looking at this review, also a couple of weeks ago – I guess invoking the Hawke era with Paul Keating – said that the 49 cent tax rate, marginal tax rate, is too high for high income earners. Now we have a huge giant in the union movement, in Bill Kelty, also a giant of that era, saying that it is also too high. What’s your view?

BURNEY: Well my view is that everything should be looked at and looked at with enormous honesty and that is what will go forward. I just remember, speaking of Craig Emerson, the brilliant role that he played in the Hawke memorial and I think that shows the status – both Bill Kelty and Craig Emerson carry within the party. And we should be listening to what they’ve got to say. They’re not the fountain of all wisdom, but they are certainly important people to listen to.

JAYES: Do you think there should be an active consideration of reducing that top marginal tax rate within Labor then? Would that be part of the election platform going forward?

BURNEY: Well I’m sure that’ll be part of what is being examined and in particular, we’ve just gone through – and you‘ve covered it extensively – the issue around the tax cuts the government pursued last week within both houses of parliament. And obviously Labor was very keen to make sure that immediate tax relief was given to lower income earners and middle income earners. Where we go with the rest of the tax package as Jim and both Anthony have talked about is something that will be part of our review. But at the end of the day, Scott Morisson said – and I know it’s getting bit away from what you asked directly – but at the end of the day, Scott Morrsion said very clearly, as did Josh Frydenberg, very clearly within the parliament that there will be no services cut as a result of the tax package. And I think that’s something that Labor will be watching very, very clearly and carefully.

JAYES: Linda Burney, appreciate your time this morning.