ABC NATIONAL WRAP
SUNDAY, 29 APRIL 2018
SUBJECTS: Tampon tax, Banking Royal Commission, Malcolm Turnbull’s $13 billion handout to big banks, the Turnbull Government’s Medicare backflip, immigration, Michael Sukkar’s ‘termite’ comments.
PATRICIA KARVELAS: Labor’s Shadow Assistant Treasurer Dr Andrew Leigh and Assistant Treasurer Michael Sukkar join me now, Welcome to National Wrap.
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Great to be with you, PK
MICHAEL SUKKAR: Thanks, Patricia.
KARVELAS: Under Labor’s proposal, Michael, that was announced today tampons and women’s sanitary products will no longer be taxed. Why doesn’t the government move in this direction as well, given these products are a necessity?
SUKKAR: Well, Patricia, under the intergovernmental agreement, it requires any change to the base or rate of the GST requires the consent of all of the states and territories including the Commonwealth and as recently as 2015 we took this to the Council of Financial Relations – essentially the Treasurers COAG – we put it forward in 2015, the states and territories couldn’t agree to it and since then none of the territories or states have raised it. The announcement from Labor today was meaningless without a signed piece of paper from every state and territory saying they supported this. Because without their support, it doesn’t change.
KARVELAS: So, Andrew, is that right? Do you have their support?
LEIGH: Patricia, there’s a simple reason Joe Hockey couldn’t get this done in 2015 and that’s because he couldn’t find an offset source of revenue. What we’ve done today – and it’s a real credit to Catherine King, Chris Bowen, Tanya Plibersek and Bill Shorten – is to identify natural therapies not supported by clinical evidence and under a bipartisan policy not supported by the private health insurance rebate and say we would put the GST onto those natural therapies and as a result provide the additional revenue. Indeed, over the decade we’re providing the states with more revenue from the natural therapies decision than from the tampon tax. But it’s the kind of positive policy you can expect to be coming out of a party that is now 48 per cent women.
KARVELAS: So Michael Sukkar, you say you couldn’t get it through, but in an ideal scenario, would you like to get an agreement with the states?
SUKKAR: Well, Andrew Leigh has just admitted right there that they don’t have the consent of the states and territories. Today-
KARVELAS: But I’m asking would you ideally like to get the consent of the states?
SUKKAR: Well, well well today was meaningless without a piece of paper from-
KARVELAS: My question to you is it worth trying to pursue, getting the support of the states?
SUKKAR: Well, we tried in 2015.
KARVELAS: Would you do it again?
SUKKAR: No state has raised this with us. If a state raised and brought it forward to the Council of Federal Financial Relations, of course it would be considered. But we can’t unilaterally make this decision as we most recently found out in 2015. Today was a great photo opp for the Labor Party but they should have had a piece of paper there with the signature of every state and territory treasurer. The fact that they didn’t means it was a pointless photo opportunity.
KARVELAS: Michael, the news coming out the banking royal commission has been shocking. Should AMP chairwomen Catherine Brenner take responsibility and resign? That’s what Jim Chalmers from Labor has called for.
SUKKAR: Well, Patricia, I would say in the end the leader of any organisation must take responsibility. One of the things that the government has done through its banking accountability regime is say no more buck passing in these large organisations. Someone has got to take responsibility. I’m not going to talk about individual cases other than the broad point that of course leaders of large organisations must be accountable for the actions-
KARVELAS: So she should resign?
SUKKAR: No, I’m not saying that. I don’t want, I don’t think it’s appropriate for a government and indeed an opposition to actually speak about specific cases. I think that’s a general principle I can agree on and I’m sure Andrew would agree on that those in the leadership of organisation including corporates and banks, they should take account for the actions of those who work for them.
KARVELAS: Andrew Leigh, should she resign?
LEIGH: I think Jim Chalmers has made the right comment there. It reflects the evidence that’s coming out – advice being charged to dead people, the impersonating of clients, the falsifying of signatures – and you’ve got Malcolm Turnbull saying that he’s very cross about what he’s seeing coming out. Indeed, he’s so cross that he’s going to provide a $13 billion company tax cut to the big banks. When they hear news like that, I imagine most Australians would wish that Malcolm Turnbull would get angry with them from time to time. The fact is the government fought against this royal commission. They tried to water down Labor’s Future of Financial Advice reforms, which required a ‘best interest’ duty for financial advisors. We’ve seen evidence coming out now which clearly vindicates Labor’s position on the royal commission.
KARVELAS: Michael, your Liberal colleague Sarah Henderson wants Australian Security and Investments Commission to be overhauled after the corporate regulator conceded it negotiated rather than prosecuted misconduct cases. Should it be overhauled? Do you agree?
SUKKAR: Well, Patricia, if you look at the work that Kelly O'Dwyer has done recently – a new commissioner of ASIC has been appointed and a new deputy commissioner has been appointed to take charge of these exact types of issues – I think a lot of that overhauling has occurred,. But there’s no doubt that corporate regulators, whichever area they are in, need to reflect on themselves when really bad conduct like this occurs. I mean, it was ah during the years when Bill Shorten was minister for financial services that a host of pretty bad things happened with financial advisors. Storm Financial collapsed and left people literally losing everything they’d ever built up. No action was taken then, but Kelly O'Dwyer is certainly taking action, I’d say one of the outcomes of the banking royal commission I suspect will be a really good look at how some of the regulators weren’t able to pick up some of this pretty egregious conduct up.
KARVELAS: Andrew Leigh, on the turnaround on the budget position, which has seen the NDIS and Medicare levy go, we know that a few years ago everyone – well, the government at least – was talking about a budget emergency. Do you give the government credit for getting that under control?
LEIGH: The deficit this year is eight times larger than it was projected to be when the government came into office, Patricia. We’ve got net debt now doubled, gross debt going through the half a trillion dollar barrier. Indeed the increase in the rate of Australia’s debt is now more rapid than it was during the global financial crisis. So what the government needs to do is drop their big business tax cut. That’s the most expensive policy on the table at the moment and the government ‘s own numbers say it would add only 0.1 per cent to household income in the 2030s. It’s simply not a policy which is going to boost wages. The first round beneficiaries are going to be overseas shareholders. So for goodness sake, if we’re concerned about the budget, let’s drop that $65 billion unfunded corporate tax cut. Just as the government has made the right call finally on the royal commission, finally they’ve made the right call on the Medicare levy for low income earners; hopefully they’ll finally make the right call on the company tax cut.
KARVELAS: Michael Sukkar, part of the problem for you with the corporate tax cut is the banks get it and get quite a big share of it. Even some of the crucial senate crossbenchers you need don’t support it because of that element. That’s a pretty big issue for you, isn’t it? People don’t think the banks deserve a tax cut.
SUKKAR: Well, Patricia, I’ll touch on that but I mean the reality is that, that diatribe from Andrew failed to mention that irrespective of those very contorted supposed facts he outlined, Labor’s budget deficit at the last election was $16 billion worse than the government’s. So, what he is saying is bad, but he’s saying we’re $16 billion less worse and I think that gap has grown exponentially. On the banks, Patricia, my view is whether you love banks or you hate banks, they're the arteries of the economy, they’re an integral part of the economy because every small business, whether they want to expand, whether they want to buy a new piece of equipment, whether they want to potentially-
KARVELAS: So, you might say that there is no support for your tax cuts for banks?
SUKKAR: - They need finance. I think once we get to the point where we start carving out certain sectors or another from corporate tax cuts, I think that is wrong. And let’s remember – we’re not reducing taxes out of some benevolence to corporate Australia. We’re reducing taxes because we have one of the highest corporate tax rates in the OECD. We need to compete for mobile capital, we want them to invest money here, create jobs here, create prosperity here and ah the small business tax cuts which Labor had opposed, I think we’ve seen the benefit of them already with hundreds of thousands of new jobs, record jobs growth coming at a time when we’ve given small business that tax relief and they’ve paid dividends to the economy through additional jobs and that will continue with the remainder of our corporate tax plan.
KARVELAS: John Howard has said tonight, it’s in a story published by the Australian newspaper, that he thinks perhaps that the top rate of immigration should be looked at. I wonder what you think, Michael Sukkar – do you think it’s too high? We’ve heard of course Tony Abbott, your former leader, say that it is and now a former and very respected prime minister John Howard saying the same. Should it be looked at?
SUKKAR: Well, I think John Howard said it’s worthwhile having a debate and I think we’re having that debate, Patricia – the fact that we’re speaking about it tonight, the fact that it’s been spoken about before. The reality is again we don’t, outside of our social humanitarian intake we don’t run a benevolent regime of immigration. We bring people into this country who our economy need, who that relied our prosperity, we need to ensure our economy continues ticking over at the rate we would like. The issue is and I know this coming from Melbourne, a big growing city and indeed a city that’s taking more net migrants than any other city, that’s how our cities cope with that additional migration. That’s the heart of the issue. If governments can ensure that infrastructure keeps up, I think a lot of the other issues go away and that why a big part of this year’s budget as you’ve already seen has been infrastructure, including the $5 billion committed to –
KARVELAS: So, don’t cut the top rate? Don’t cut that cap and just build more infrastructure, is that your message?
SUKKAR: No, my message Patricia is once you’ve got control of the borders like our government has you can make decisions as we do every year in our national interest and we will continue to make decisions on how many migrants we bring into Australia in our national interest. I’m making the broader point that some of the anxiety in our community comes from the fact that they want to see infrastructure keeping up with an increased population and I think that completely understandable.
KARVELAS: Andrew Leigh, is it just all about infrastructure? Or does that top cap need to be looked at?
LEIGH: As an economist, Patricia, I’ve always thought that migration isn’t just about more mouths to feed. It’s about more minds to inspire, more muscles to build. Migrants are more likely to start a new business, more likely to file a patent, more likely to be exporters. We have great migrant success stories in Australia – not just filling jobs but creating them. The estimates from the Migration Council are that migrants will over their lifetimes add trillions to the economy. The Treasury says they'll add billions to the budget bottom line. We do need to tackle infrastructure – Michael is absolutely right about that – but the problem is we’re sliding down those international rankings of infrastructure spending, such as the recent one from the World Economic Forum. Projections for infrastructure spending as a share of GDP has it falling markedly over the course of the next decade, as Anthony Albanese has been pointing out. So we’ve got to do a whole lot better on infrastructure and similarly on housing. We need policies that ensure that we get more housing affordability. Labor’s housing affordability plan not just addresses the overly generous tax concessions that are seeing investors beat out first home buyers, but also restores the Housing Supply Council, and with Doug Cameron’s leadership tackles the issue of homelessness. We have to do this, as Michael says, through smart policy. But where I differ from him is I don’t see those smart policies coming forward from the Coalition.
KARVELAS: Michael, just on something personal that has been in the news in relation to you – termites is what you call moderates in your own party. You just had the Liberal State Council. Let’s cut to the chase – do you support all sitting members of the House of Representatives and senators being pre-selected again in the Victorian branch?
SUKKAR: Well, Patricia, can I just say ah I I don’t ah concede that I called anyone in my party a termite. What I-
KARVELAS: But I’ve heard the tape! We’ve heard the story.
SUKKAR: What I speak about very often-
KARVELAS: Hang on, but it is the word you used?
SUKKAR: Correct. It’s part of my stump speech, in fact – I talk about public institutions often being hollowed out by people with radical agendas and I say one of the last bastions of our country where that hasn’t occurred has been the Liberal party and it’s been the great success of the Liberal Party and I can assure you it’s a very popular view in the Liberal Party that we don’t want radical left wingers infiltrating our party-
KARVELAS: But are moderates in your party radical left wingers, really?
SUKKAR: Of course not. But what we talk about in our branch meetings are pretty colourful affairs and I’d say anyone who wants to join the party should-
KARVELAS: Ok, this is the ABC – we’re not recruiting for the Liberal Party here. I do want to check, will you back all sitting MPs and Senators for pre selection again?
SUKKAR: Well, Patricia, our party is democratic. It’s not up to-
KARVELAS: I want to know what your view is.
SUKKAR: I don’t get a vote in pre selection-
KARVELAS: What is your view? Do you support them all?
SUKKAR: Members get a vote in pre-
KARVELAS: Do you support them all?
SUKKAR: Of course I support all my colleagues in every way-
KARVELAS: So you want them all to be returned?
SUKKAR: - shape or form. But in the end we’re a democratic party. It’s up the members. It’s not my place as a member of parliament to tell members of the party what they should or shouldn’t do.
KARVELAS: Michael Sukkar, Andrew Leigh, thank you so much for your time on National Wrap.
Authorised by Noah Carroll ALP Canberra