Radio Interview- ABC North and West with James Finlay

RADIO INTERVIEW
ABC NORTH AND WEST SA
FRIDAY, 25 January 2024

SUBJECTS: Changes to Stage 3 tax cuts

JAMES FINLAY, HOST:

Karen Grogan is a Labor senator for South Australia. Senator, good afternoon to you. The Prime Minister is being dragged through the mud today being called a liar from members of the opposition. Are these tax cuts really a good move given the response and the political heat that you're getting today?

KAREN GROGAN, LABOR SENATOR FOR SOUTH AUSTRALIA:

Good afternoon, James. Thanks for inviting me on. Yeah, you're right. The Prime Minister is copping some heat, that's for sure. But I think if anyone saw him at the Press club or heard his speech, he is not hiding from this, none of us are. We are very proud of what we've done in these changes. When these changes were legislated, this was before the pandemic, before we'd seen major conflicts break out across the world and before we've seen our economic fortunes change quite dramatically. So, sure, there was a commitment and we stick to our commitments. But when your entire economy changes, when the entire global outlook changes, and when the vast majority of people across the country are struggling, then yes, it is time to have a look and think about whether what you're doing is the right thing. And so that's what we've done.

JAMES FINLAY:

Why is now the best time to do this? Because inflation was worse last year. Could you have done it then?

KAREN GROGAN:

Well, I think because these changes, the stage three tax cuts were always scheduled to come in on July 1st this year, 2024. So, while the situation of increasing conflict around the world, changing economy, global economy, the recovery from the pandemic, while all of those variables are going on, we were obviously keeping a very solid eye on what was happening.  Jim Chalmers, the treasurer, has been working tirelessly on cost-of-living issues to try and get the right balance because, of course, as everyone knows, the inflationary pressures mean that everything we're buying in the supermarket is costing more, our rents are up, our mortgages are up. So I think it's about being really, mindful and really researched and steady about what changes are going to be made. And so what was also released today was an economic paper that came from Treasury. And I think that steps through some very useful arguments for their advice on amending tax cuts to deliver broader cost of living relief. Because your listeners out there, James, are doing it tough. Um, and we need to be doing everything we can as a government. Last year, we brought in about $23 billion worth of cost of living relief and people are still feeling the pinch. So this is an enormous, problem. And we are just working through doing everything we can and still looking at what else we can do, um, into the budget, which will see in May to take the pressure off people. Hmm.

JAMES FINLAY:

Uh, Senator Karen Grogan is with you on ABC Radio South Australia and Broken Hill. It's 4:11, and you're hearing about these changes to the stage three tax cuts that have been announced today, officially by the Prime Minister. He made a speech at the National Press Club today outlining them and also gave the paperwork, uh, out as to why and these decisions were made. Um, uh, Senator, how long had the government been planning this? isn't a last minute decision, is it?

KAREN GROGAN:

Oh, no, not at all. There's been work being done to consider, um, all aspects of our economy and how we best protect the people in this country. And take the pressure off, the cost of living that they're feeling, the cost of living increases that they are feeling. Um, and you will have seen throughout last year various, um, relief measures put in place. Um, and this is just the next of those relief measures. This is the next step in making sure that people out there get a level of relief, because we know, um, we know that there's so much pressure, prices going up, rents are high, mortgages are high. We need to do things that don't increase inflation. And we've had advice from the RBA that these changes will not impact inflation in their opinion, which is really important because if we take measures that increase inflation, then we'd be giving with one hand while the inflationary pressures are taking with the other. So it has been suggested that we should give lump sum payments to people, which has been done before, like in the GFC, uh, the global financial crisis. Um, and that was because we wanted to stimulate the economy. Then right now, that's the worst thing we could do because that will just tick up prices. So we've put money like a cash payment. It'll just increase prices elsewhere and people won't see the benefit of that, which is why we have to be so cautious at the measures we bring in so that we're actually not making the circumstances worse for people

JAMES FINLAY:

I know you've had a busy day, and so I won't keep you much longer, but, um, look, the problem is now and I don't want to harp on it, but I feel like it might be going on for a few more months or weeks. Is that now, how will voters be able to trust you, that you don't change your mind again? Has there been much thought gone into how you're going to combat that?

KAREN GROGAN:

Look, I think as the Prime Minister pointed out today, this is the right decision, not the easy decision. Um, and I think, well, I think for your listeners out there, if you think about your own household budget, if something fundamentally changes um, where you've promised a thing to the family, be it a, you know, um, a long weekend to the beach or whatever it might be, if something changes radically, you have to change with it. I think that's what we've done with the budget of the country. We've gone we have seen radical changes in the last few years since the decision for the stage three tax cuts were brought in, and we now have to change that to protect the people in this country. Sure, everyone is feeling the pinch from the highest incomes to the lowest incomes, but we had to recalibrate to make sure that those people who were out there desperately trying to pay their rent, desperately trying to pay their mortgage, and feeling the pinch so that they have more money every single week in their pocket to help them cope with these pressures.

KAREN GROGAN:

I appreciate your concern about is this a broken promise? It's a readjustment. We're still carrying on with stage three tax cuts. We've just recalibrated them to be fairer and more appropriate to the circumstances we find ourselves in.

JAMES FINLAY:

Um, it'll be interesting to see how the debate goes over the next few years and going into the next election. Um, and how the, voting public, how we, uh, you know, take those debates on, um, but I really appreciate your time this afternoon, Senator.

KAREN GROGAN:

No worries. Thanks very much, James.