Q&A recap: Labor and Liberal MPs clash on tax breaks for big business and low income earners

THE panel clashed over billions of dollars in Budget tax breaks for big business with a Liberal MP saying the $40-a-day Newstart allowance was “liveable”.

Labor’s Linda Burney was not impressed with Tim Wilson’s remark that older people access more welfare.

WITH the heady whiff of a $65 billion tax cut for big business in the air, a Liberal MP has said people can live off the $40-a-day Newstart allowance. But he’s conceded, it’s not a prospect he fancies much.

Tim Wilson, the MP for Goldstein which covers some of Melbourne’s most affluent areas, told the Q&A audience on Monday night that, “the social safety net is not supposed to be a hammock where people get accommodated to it.”

He clashed with a steely Linda Burney, Shadow Human Services Minister, who asked him directly “what’s your point?” when he questioned the amount older people accessed in government welfare.

But Mr Wilson stuck to his guns saying the entire taxation system needed an overhaul because it was “set up on the assumption (people) would die at the age of 68.”

Victorian Liberal MP Tim Wilson said Newstart was liveable but “it’s not easy”.

‘YOU CAN LIVE ON NEWSTART’

On Monday, the ABC reported that Treasurer Scott Morrison is planning $5bn worth of tax cuts in Tuesday’s Budget for low to middle income earners that could mean they are up to $10.50 a week better off.

It’s a relatively modest sop to less well-off Australians and follows controversy over a $65 billion Budget win for business that could see them pay 25 per less on their returns.

Just how much people needed to survive on became a hot topic last week when Mr Wilson’s fellow Liberal MP, Julia Banks, said she could, “live on 40 bucks a day knowing that the government is supporting me with Newstart.”

Roughly $40, is the amount recipients receive on the allowance.

A Q&A audience member raised Ms Bank’s comments and said that given there were “virtually no rentals” available in the price range of Newstart recipients, surely the amount had to be raised?

“It’s not an easy lifestyle. No-one’s pretending otherwise,” said Mr Wilson. But, “you can live on Newstart. Is Newstart something people can live on easily? The short answer is no. I couldn’t live on it on my current lifestyle.

“People who are on it will always want more money but the reality is that money has to be taken from someone else.”

Mr Wilson said when he was at university and financially stretched he had to make sacrifices, such as living in a share house.

“The focus of Newstart is people don’t end up there. The social safety net is not supposed to be a hammock where people get accommodated to it.”

Labor’s Linda Burney was not impressed with Tim Wilson’s remark that older people access more welfare.

NOT BLUDGERS AND CHEATS

But Jeremy Heimans, the co-founder of campaign group GetUp! had an idea of how to increase Newstart.

“The $65bn proposed of business tax cuts — that’s a fantastic place to take the money.”

Ms Burney agreed with Mr Wilson to a certain extent, even using the same words, saying Newstart was “not there for people to get into a hammock, it’s for people who are in between jobs.

“I meet many people … trying to survive on Newstart and I can see the absolute problem here. People who are on a social service statement should not be seen as bludgers and cheats. They should be seen as people that need the support of government.”

If Labor got into power they would review the social security system but she made no commitment to increasing the allowance.

She dismissed the flagged $10.50 extra per week for low and middle income earners saying it amounted to just two coffees.

Mr Wilson said he supported the cut for lower income earners in the Budget: “That’s $10 that people either use to offset debt, lead to more consumption, to drive the economy.”

Jeremy Heimans, the co-founder of activist group GetUp!

‘WHAT’S YOUR POINT WITH THAT?’

However, what he’d really like to see is the whole tax system up-ended, said Mr Wilson.

“(There’s) a huge imbalance where most of the taxes are paid between the people of 35 and 55 (but) most of the beneficiaries of the tax system are people over the age of 55.”

Ms Burney looked askance: “What’s your point with that?”

She seemed incredulous as to why there should be an issue that older people would more frequently access government services.

“The point is the people who are earning, paying the taxes, aren’t necessarily the people who are getting the benefits of the tax,” Mr Wilson replied. He said 71 per cent of the tax burden was shouldered by workers in the two decades up to their 55th birthday.

“The tax system was set up on the assumption they would die at the age of 68 and we’re going to have to confront that reality. We need to have an honest conversation,” said Mr Wilson.

Tim Wilson said you couldn’t pick and choose which companies should get tax cuts in order to punish the banks. Other panellists said you could and you should.

Mr Heimans wasn’t convinced the Budget had its priorities right: “Australia has all this wealth and opportunity and we’re squandering it on a $10 tax cut and that’s it and give the rest to business?”

Ms Burney said the Budget bonus for business might not make it past the Senate anyway given $17bn of the $65bn cut would end up with the under fire banks.

“The idea there’s going to be a big chunk of the company tax cut given to the banks I think is worrying many Australians.”

She questioned the whole premise of the tax break.

“The theory is that the company tax cut will create more jobs ... there’s no evidence that’s going to be the go.”

Rather, she said, funnel the proposed $65bn to companies funnelled to schools and hospitals.

But Mr Wilson said quarantining the cuts from the bank would be unwise.

“If we had just a tax cut for banks it would be disgraceful and outrageous.

“(But) the reality is that tax applies to everybody equally. You have a company tax structure that covers all companies … It doesn’t discriminate.”