Wednesday, 28 October 2026

Topics: spending; debt; inflation; small business.

E&OE……………………..

Tom Elliott: Well, our next guest thinks about this sort of thing 24 hours a day. He is the Federal Shadow Treasurer, Tim Wilson. Good morning.

Tim Wilson: Good morning, Tom.

Tom Elliott: Just before we get onto the tax office being a bunch of, you know what, the issue of the trajectory of our spending over our revenue and our debt going up, I mean, do you have a plan if you become the Treasurer in the next couple of years to do something about it?

Tim Wilson: Resolutely, yes. On Monday, we announced $31.3 billion worth of savings. Now, that's not the end of the story, that's just the beginning, because we've got to structurally change it so that Australians are financially independent rather than being dependent on government. Some people who need assistance, we need to make sure it's targeted and it gets to. But we should not want to support people who don't want to work, and more importantly, we need to be backing in small business, because they're the people most likely to hire other Australians and give them an economic opportunity. At the moment, the Federal Government is demonising and punishing small business.

Tom Elliott: Well, they are, and I have a personal experience of this. So, years ago I worked as a contractor, and there's various complicated rules about if you do that, and you can't get more than 80% of your income from one source. So, I got my income from here at 3AW, and I did other things like public speaking and writing for newspapers and that sort of thing to make up the other 20. Anyway, the problem was during the pandemic, public speaking revenue dried up to zero, because we weren't allowed outside of our front doors. And I had this conversation with the tax office, and they said, "Why don't you go interstate?" They didn't grasp that in Melbourne we were not allowed to go more than 5 kilometres from our houses, and not for more than an hour a day. And no one wanted to book a public speaker from Melbourne, because the risk was we'd go back into lockdown and you wouldn't be able to make their event. And I lost that against the tax office, and I couldn't believe it. Their sympathy was zero. But what really made me angry was I felt like they didn't even really understand what was happening during lockdowns here in Victoria. So it doesn't surprise me that complaints against the ATO have gone up 180% in two years.

Tim Wilson: Well, the problem at the moment is the ATO is being rapacious in its appetite for revenue. The government can't balance the books, so they're setting the ATO onto small businesses like Rottweilers. And you're right, I don't think they have a clear idea about what's happening. We're getting reports everywhere of them rejecting payment plans for people who owe money to the ATO, so the only alternative is they’ve basically got to go insolvent, which means the ATO doesn't get anything. We've got to have a wake-up call. One of the things that's most distressing we're asking about in the Senate today is they're now matching Single Touch Payroll data with superannuation data and saying if there's any discrepancy that they're assuming a small business hasn't paid super on time, even though they have no evidence to substantiate that, and threatening small businesses with 200% fines if they don't basically bow to the ATO's demands.

Tom Elliott: Yeah, I mean, but this is a theory I've had for a long time, that when governments are short of money, but they don't want to go down the politically unpopular path of raising taxes, they go to their tax officials, in this case the ATO, and say, "Look, we need you to squeeze every last drop out of the lemon here, you know, like, go as hard as you can on the taxes that we have." And often, as you say, you end up with businesses that say, "Stuff it, I'm giving up, I'll go broke, and see you in the next life."

Tim Wilson: Yeah, well we already have record small business insolvencies in Australia, substantially more people who are closing their small businesses voluntarily because they can't see hope and a future, or they can't get somebody to buy them, so they just walk away. And with that doesn't just go income, it goes dreams and aspirations for the future, and of course their financial security. But the real problem is the government can't kick its spending addiction, and so they're setting the ATO onto small businesses. And of course, because they can't kick their spending addiction, we also have high inflation, and of course that leads to higher interest rates, which is a cost of small business crisis.

Tom Elliott: The impression I get from some particularly Labor treasurers is that they don't see any difference between a small business and a giant business like one of the big banks or BHP. You know, they think if you have a business, you're obviously quite rich, we deserve more of that money, and we intend to get it from you. They perhaps don't realise that a lot of small business people, after they've paid their staff and so forth, actually don't make that much money themselves. But again, I just don't know if that's a government thing or a tax office thing or whether one sort of influences the other. Your thoughts?

Tim Wilson: Oh, I think it's a government thing, and then the tax office goes on and implements the government's agenda. But never underestimate, the government looks, I think you're right, particularly this Federal Government, but I think we've got the same with the Carroll government in Victoria. They look at small business like they engage as big business, and they think like big businesses, they have HR departments, industrial relations advisers, tax advisers, etc., etc., when small business doesn't have any of that. So every time they put on higher costs or higher regulation, it means it takes a disproportionate amount of a small business's time and, of course, a share of their profit.

Tom Elliott: So what would you do differently? Let's say, you know, there's a federal election in 12 or 18 months and you've won and you're now the Treasurer. Would you speak to the ATO and tell them to do things differently, or what?

Tim Wilson: Well, the first thing to do is we would contain spending, and that's why we've already announced the $31.3 billion of savings, because I don't see the solution if I can't pull my belt in is to turn around to small businesses and Australians and tell them they have to. One, then we believe very strongly the ATO should respect taxpayers. We've also proposed a Small Business Act, which is a legal shield for small businesses, particularly around things like the right to be heard in decision-making around the ATO, around the Reserve Bank and others to make sure that government's actually listening. At the moment, so many small businesses feel isolated, alone, and under attack from the government. And we want to completely change that structure, because big business is listened to, we need small business to be listened to.

Tom Elliott: So finally again, if you do become the Treasurer of this great nation, would you do what Peter Costello was able to do and completely repay our government debt inside 10 years?

Tim Wilson: Well, within 10 years, I think to be frank, that's going to be very difficult. Within 10 years, our objective is to get the budget back into balance. Currently, the Federal Government is projecting deficits for the next 40 years, so adding more debt on. Our objective is to contain it, and of course repay it. We've announced a Future Generations Fund, which means windfall gains from things like mining or inflation get saved rather than just spent. But it is a massive exercise to turn this ship around.

Tom Elliott: You'd have to run a surplus every year for 10 years of $100 billion to pay it off.

Tim Wilson: That's right, and so we're committed to doing everything we can to get the books back in order, and I'd love to pay down government debt. But it's also important to only promise what you can realistically deliver. This is going to be a massive task, and as your point's right, in 2007 we didn't leave the books in balance, we actually were in a surplus because we'd started saving through the Future Fund. And now we've got to turn the whole ship around because in that time period, less than 20 years, we've now gone to more than a trillion dollars of debt.

Tom Elliott: All right, thank you for your time, Tim Wilson there, Federal Shadow Treasurer.

[ENDS]