PM defends handling of Coalition tax plan

Labor has lashed out at the Turnbull government for taking the “politicisation of the Treasury to a new low”.

Malcolm Turnbull’s office said the Prime Minister meant to say Treasury had modelled the cost, but had not identified it in the budget papers. Picture: John Feder

Labor has lashed out at the Turnbull government for taking the “politicisation of the Treasury to a new low”, as Malcolm Turnbull defends his handling of the 10-year plan to cut company taxes and reluctance to reveal its cost to the economy.

While Bill Shorten accused the Prime Minister of telling a “blatant political lie” when he said Treasury had not identified the policy’s hit to revenue, opposition treasury spokesman Chris Bowen slammed Scott Morrison for instructing his department to reveal the cost of the “tax enterprise plan” at the opening of a Senate committee.

“It is completely improper for the Treasurer of Australia to behave in this manner,” Mr Bowen said.

“The politicisation of the Treasury has reached a new low. Issuing the Treasury secretary last night with an instruction to release the figure today after the Leader of the Opposition had replied (to the budget), is a blatant political act on the eve of an election being called.”

Treasury revealed in a Senate estimates hearing this morning the 10-year plan would cost $48.2 billion, as foreshadowed in The Australian, fuelling a furious clash over economic reform as Labor vows to block the changes.

Treasury also confirmed the figure had been known for some weeks.

Mr Bowen seized on the confusion over the tax plan’s costing by declaring Mr Turnbull had “misled” the Australian people and did not deserve the trust of voters.

“We’ve outlined our policies, we’ve been up front about them. Malcolm Turnbull at two minutes to midnight has come up with policies but he’s not prepared to be honest about them,” Mr Bowen said.

“He’s prepared to mislead the Australian people about the cost, he’s even misled the Australian people about the reasons - pretending yesterday that budgets have never included 10-year costs when he was a member of a cabinet which in 2014 revealed in its budget the $80 billion cuts to schools and hospitals over 10 years.”

The Labor frontbencher claimed the budget was “under pressure” and the government had been hypocritical by insisting the country had to live within its means.

“They’ve changed the means,” Mr Bowen said.

“They say they can’t afford to invest in schools because $37 billion over the decade is too expensive. If $37 billion is too expensive for Australia’s schools, $50 billion is too expensive for Australia’s big companies.”

Cabinet minister Simon Birmingham said in context Mr Turnbull had made a “completely accurate reflection” of what was in the budget papers during the Sky News interview.

“The Prime Minister was deadly accurate about what the Treasury’s identified in the budget papers and what’s not identified,” he told Sky News.

“Today under questioning in Senate estimates the Treasury has revealed the cost of that and of course what that demonstrates is that Bill Shorten is proposing that Australian business should pay a further $48 billion in tax under a Labor government, which would be $48bn those businesses would not have to invest in growth opportunities to create jobs for Australians in the future.”

Trade Minister Steven Ciobo told Sky News Mr Shorten was engaging in a “disgraceful exercise of playing the man and not the ball”.

“Australians don’t want a negative carping opposition leader who wants to go on the personal attack against the Prime Minister instead of actually focusing on what he should be doing, which is outlining a vision for this country,” he said.

PM defends handling of Coalition tax plan

Mr Turnbull had defended his handling of the Coalition’s plan to cut company taxes and his reluctance to reveal its cost to the economy.

Mr Turnbull dodged questions in a Sky News interview where he claimed the economic benefits of the reform over 10 years but would not say how much it would cost over the same period — a key question to determine if the changes would be sustainable.

At one point he claimed Treasury had “not identified the dollar cost of that particular item”, prompting the Opposition Leader to call him a liar after the department revealed the figure.

“The Prime Minister of Australia looked down the barrel of the camera and he lied to Australians about whether or not Treasury had costed his expensive plan to give tax cuts to multinationals,” Mr Shorten said.

“Less than 24 hours later, Treasury is now producing costings which Mr Turnbull said did not exist yesterday. That is absolutely, absolutely very poor conduct by Mr Turnbull.”

Mr Turnbull’s office said the Prime Minister meant to say Treasury had modelled the cost, but had not identified it in the budget papers.

Mr Turnbull said it was “appropriate” Treasury as the authors of the budget calculations were the ones discussing and detailing them.

“As I said yesterday, the budget papers do not identify the dollar cost, the items in the 10-year projections,” he said in Sydney.

“The budget papers, and this has always been the case, lay out all of the detail for four years and then there is a medium-term outlook and of course the Treasury makes a whole range of assumptions across all of the elements but it is simply the conclusion that is published and it has been like that for a very long time. That’s standard practice and that was the point I made yesterday.”

Treasury secretary Ian Fraser, revealing the figure to the Senate’s economics committee, predicted the policy would boost national income by “a little over one per cent” in the long term.

“As with all tax projections over 10 years, these costings have considerable uncertainty attached to them,” Mr Fraser told the committee.

“I also note that the medium-term economic projections in the budget assume significant ongoing economic reforms.”

The government policy starts by cutting the company tax rate to 27.5 per cent to all companies with a turnover of up to $10 million, taking effect from July.

The road map over more than a decade then lowers the rate or changes the threshold to determine which companies get the benefits. The lower company tax rate of 27.5 per cent will be enjoyed by small businesses in the first years of the plan but will be extended to bigger companies year by year, followed by several years of cutting the overall rate to 25 per cent for all companies.