Topics: Senator Sinodinos, taxation reform, WA Senate Election
E&OE…
Kieran Gilbert
With me on the program this morning now, Liberal frontbencher Senator Scott Ryan and Labor’s Nick Champion. Nick Champion first to you on this, it seems any links to Obeid, whether known or not, come back to haunt in some fashion or another.
Nick Champion
Well look, I think we just have to wait and see what the ICAC processes do and how they finish up to know the full consequence of them. But certainly it’s quite the story and I guess we all wait to see what occurs with it.
Gilbert
Senator Ryan, an important day for your Senate counterpart, and the stood aside Assistant Treasurer today.
Scott Ryan
And a friend, in Arthur. Look, let’s put this in context, Arthur Sinodinos has not been accused of anything. Even the reports covering this, the name of the organisation, ICAC, can be used to imply things. But Arthur has been involved in public life for decades, he is a man of the highest public integrity. He has been accused of nothing, he is appearing as a witness today. So I have no doubt that he will be able to explain, and that he will re-join the Government.
Gilbert
In that context, do you think that the ICAC, the way it operates, is fair to people when they are mentioned in those opening statements and so-on when, as you rightly point out, there’s no direct allegation against Senator Sinodinos at this point.
Ryan
Well, being from Victoria and from the Liberal Party, I’m not as familiar with the operations of ICAC as colleagues from New South Wales Labor, Kieran. I think we have to be careful to not have even the name of the organisation, the Independent Commission Against Corruption, being used to draw imputations without evidence, or in this case without even an accusation, against people appearing as witnesses. I know Andrew Robb had some words to say about that recently and I think that’s a very legitimate concern.
Gilbert
Nick Champion, the fact is it’s not just the Liberal Party where this can happen. Labor figures have appeared only in the witness box in recent times. Is it something that we need to be cautious about?
Champion
Well look, of course you’ve got to get the balance right, between having an open, accountable and transparent government system that’s free of corruption, and of course protecting individuals from, I guess, unfair inferences and trial by the media. But that’s a balance we have to face in society all the time, we don’t always get it right but overall, if you look at public administration over the last hundred years, it’s been improving. So, I think we have to continue that process, clearly both political parties have got responsibilities to prevent corruption in our system.
Gilbert
I want to play you now, and move on to the speech of Martin Parkinson last night, the Treasury Secretary, I want to play you a little bit of what he had to say. Basically, he’s making the case for a greater focus on indirect taxes, the GST the big one, and says that both the major parties need to grapple with this. Let’s have a look at a little of his speech to the Sydney Institute.
(Clip: Martin Parkinson)
Gilbert
Senator Ryan, I know the Prime Minister has said there’ll be no change in this term, but does he, does Joe Hockey, do your colleagues need to make the case for that change that Martin Parkinson clearly believes needs to happen?
Ryan
Well I think there’s a more important part of Martin Parkinson’s speech yesterday, Kieran, and that’s when he outlined the rapid spending growth that occurred over the last five years. Under Labor, spending increased by 3.8% a year in real terms, despite the fact that they were promising to have spending growth of only 2%. Martin Parkinson last night blew the whistle on Chris Bowen and Labor’s lies, basically, about how they thought the Budget was going to come back to surplus, that’s the most important part. In terms of tax, Martin Parkinson outlined the consequences of what may happen over the next few years, but let’s remember that it’s the Coalition that’s been the party of firstly, tax reform fifteen years ago, and secondly, the party of income tax cuts throughout our course of government.
Gilbert
But as you know, the then Treasurer, Peter Costello, back in the early 2000s was worried about the exclusions that were made within the GST, negotiating with the Democrats and that’s come back to cause problems hasn’t it, in terms of the Budget bottom line, and ensuring that revenue is sustainable in this country?
Ryan
Well it’s not Kieran because firstly, we made a commitment we wouldn’t touch the GST, that is a rock-solid commitment, and unlike Labor…
Gilbert
…this term.
Ryan
…when we say we’re not going to introduce a tax, we won’t do it. But more importantly, the GST revenues all go to the state budgets, so a change in the GST would have no impact on the Commonwealth Budget balance whatsoever.
Gilbert
Nick Champion, your thoughts on this debate? Is it something that both sides of politics need to get a handle on, because it seems every time the consumption tax is raised, that it leads to a scare campaign.
Champion
Well for good reason, a lift in the consumption tax or an expansion of its base would hit the poor and the middle class far more than it would hit people in other income brackets, in higher income brackets. It’s a regressive taxation change…
Gilbert
Not if you lower income tax rates at the same time.
Champion
No no, it’s always. Indirect tax rises are always regressive and they always impact the poor more than they affect the rich because you can’t lower the income tax of people who don’t pay income taxes and you can never lift their benefits to adequately compensate them. By nature if you’re on a low income, you consume more of your income than if you’re on a high income. So these changes are regressive, we wait to see if the Government will actually accept them, but if the Government wants to talk about spending, they’re about to spend billions of dollars on direct action, which we know won’t work, we’ve had Senate evidence of that effect, and they’re about to embark on a paid parental leave scheme which gives $75,000 a year for people to have babies. So, you know, if they want to cut back on spending they can start walking the walk.
Gilbert
Nick Champion, on the GST, I’ll come to you Senator Ryan in a moment, but Nick on the GST first of all, you say it’s regressive, but what about the impact that it has…
Champion
Well it is regressive.
Gilbert
It’s a very simple point you make, but I’ll make this simple point back to you, what about the tax minimisation at those at the higher levels, who can get around paying the taxes and are earning a heap.
Champion
Well Kieran, it’s quite an extraordinary point to put, that because the rich refuse to do their civic duty and pay the taxes that are owed to the Commonwealth, because they evade those taxes, that we should lower their tax rate. It’s a pretty weird assumption. If people at the bottom were evading their taxes, they’d be sending the Australian Tax Office after them. If you were a small business and you weren’t paying your taxes obligations, the Tax Office would be knocking on your door. And yet because a few rich individuals seek to evade their tax through complex arrangements…
Gilbert
A few.
Champion
Well, a few, I mean we’re actually talking about not that many people who are involved in these tax arrangements. Ordinary pay-as-you-go taxpayers aren’t involved in it, nobody I know in my electorate is involved in it. So we’re talking about a very small number of individuals and you’re suggesting changing the whole system to a regressive taxation measure.
Gilbert
I’m not suggesting it, this was the Treasury Secretary last night suggesting it.
Champion
And I don’t agree with those assumptions. I don’t agree that high income taxes promote either evading or minimising your tax arrangements. I think that’s a question of behaviour.
Gilbert
Ok, let’s go to Senator Ryan, your thoughts. I know you wanted to interject there at one point.
Ryan
Well I think what Martin Parkinson was saying last night was about incentives for legal tax minimisation arrangements, entirely legal ones. Let’s put this in context, more than two thirds of income tax in Australia is paid for by just under a quarter of taxpayers. So people in Australia, apart from individual circumstances, which the ATO pursues, are paying their fair share. But to go back to the point that Nick Champion raised about Coalition policies, the PPL scheme that the Coalition is introducing is fully funded. Unlike Labor, we actually funded our policies, Labor just kept adding it to the credit card…
Champion
How is it funded Scott? Is it funded by taxation?
Ryan
It is funded by a levy on larger businesses, on larger businesses only…
Champion
Yeah, a tax.
Ryan
And that gives workers in small business, for the first time, an equal opportunity to access a parental leave scheme.
Champion
So it’s a tax on businesses, you can confirm that?
Ryan
A temporary levy on larger businesses.
Gilbert
We’re going to go to a break, gents back in just a moment. AM Agenda, stay with us, we’ll be back shortly.
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Gilbert
This is AM Agenda thanks for your company, with me this morning Labor MP Nick Champion and Liberal front bencher Senator Scott Ryan. Senator Ryan, to you on the announcement from Boeing, three hundred jobs to go at its Port Melbourne facility. Another difficult day for manufacturing in Victoria, with Phillip Morris making those announcements yesterday with jobs to go there too.
Ryan
Well I think the Boeing announcement’s slightly different Kieran. I mean Boeing have actually said that that is a cyclical thing, part of the response to them going to a normal business model after scaling up production for the products they export. So, the Boeing announcement while very sad for the contractors, I understand eighty of those three hundred will be offered permanent jobs with Boeing, but that was part of scaling up of the business, to actually contribute to the exports they do, particularly to the 787 Dreamliner, with Boeing International. It’s always sad when people lose their jobs, and I do feel for the families involved, but that’s very different to what happened…
Gilbert
But you’re not worried about the viability there of a very important manufacturing set-up there in Port Melbourne of the aerospace company.
Ryan
The issue with Boeing and they’ve made it clear, was that it was cyclical, it was actually part of scaling up manufacturing those positions to actually export the products that they now have sustainable markets for in Boeing international. Let’s put this in context, February, the last month of job figures available, showed just over 80,000 full-time jobs were created in February. That is the largest monthly increase in full-time employment since 1991, more than twenty years. So while we feel for the families involved, the policies of this Government, giving confidence back to companies to invest, trying to repeal the carbon tax and the mining tax, are having an impact in turning around the 200,000 person increase in unemployment that Labor left us with.
Gilbert
Nick Champion, your thoughts?
Champion
Well look, this is a Government that’s all care and no responsibility on jobs and we’re seen this with the car industry. You know, 50,000 people looking down the barrel of unemployment and I can tell you we see very little action on the ground by this government, either in employment services or infrastructure services of infrastructure building to prepare local economies for these shuttering shocks in our labour market and we now see more job losses, some of them cyclical, some of them unexpected, but for many of these workers, what they’re wondering is, what plan does this government have, other than the free market, to protect and build jobs in the community? And that’s the big problem here, that we’ve got a Government that’s really all care and no responsibility.
Gilbert
Let’s move on to the WA Senate, Senator Ryan if you want to make a point, you can before we move on, sure.
Ryan
I just wanted to say, Nick wants to give people false hope that the Government can protect or create jobs. In the car industry alone, his Government handed out nearly half a billion dollars over the last five years with promises of job increases, and those positions were shrunken and Ford announced job losses a year before the election…
Champion
…50,000 people, Scott, were still employed in the sector.
Ryan
This started under your watch Nick. You made promises you couldn’t keep.
Gilbert
Ok, let’s move on to the WA Senate Election re-run now. This Saturday, Senator Ryan, what’s your best guess, obviously you’d be hoping the status quo, three seats won by the Liberal Party in the September Election with the botched count, that’s the Liberal Party’s best hope. What’s your best guess looking at the Saturday campaign?
Ryan
Well given that we did win three Senate positions, on both counts the AEC conducted after the last election, we are hoping that we will again win three positions, but we’re taking nothing for granted. There’s no historical precedent for this, not for over a hundred years, where we have a state-wide Senate election separate from any other election across the country. So, people in Western Australia, where they put their vote, they need to seriously think that that’s the party they want in the Senate. So when it comes to repealing the mining tax, that hurts WA, and the carbon tax, that hurts WA mining so much as well, only the Liberal Party and the Coalition Government can deliver that because the Senate preference system can throw up some extraordinary results.
Gilbert
We saw that last time with the Sports Party getting a guernsey at one point, Nick Champion, the situation is as well, with the way the system works, is that while we might know four or five of the seats Saturday or early Sunday morning, the sixth might take a fair while to conclude, with all those micro parties in the mix, I think there’s nearly eighty candidates in there.
Champion
Well I don’t care for micro parties, I think they make the Senate a mess, but if people want to mark Tony Abbott’s report card, and if they’re unimpressed by his government, then there’s one clear way to do that, and that’s to vote Labor in the Western Australia Senate count. The more people voting Labor, the badder the mark for Tony Abbott so all the sandgropers can get out there and vote.
Gilbert
Senator Ryan, we’ve discussed the impact of the micro parties, as a Senator and as a close observer of our political and electoral system, do you think it’s inevitable that there will have to be change in this Parliament to, I suppose, possibly lift the quota of the amount of votes a candidate must get before they can secure a seat?
Ryan
I don’t think such change is inevitable Kieran and I think measures like that need to be considered very carefully against some previous High Court rulings, where the High Court takes a very careful view of changes to our electoral laws, so I wouldn’t be so presumptuous. I’m not someone that necessarily thinks “change the rules if you don’t get the result you want”. I think the issue is that people need to know where their vote is going, especially if they vote for a party on a very, very long ballot paper. One of the challenges we do have, and I know this is an odd one, is that the ballot paper’s as physically large as it can be, so in New South Wales and Victoria, they actually handed out magnifying glasses at the polling booth and I don’t know if that’s sustainable. If the list kept getting longer and longer that you would need magnifying glasses to vote.
Gilbert
That is bizarre. Nick Champion, any thoughts on that? You said you don’t care for the micro parties, but is there any reform that should be undertaken to try and preclude someone, say with five hundred or less than a thousand votes securing a seat?
Champion
Well look, as Scott points out, it is getting ridiculous when people are having to use magnifying glasses, when we’ve got people in essence trying to enter public life as if it was some sort of lottery rather than, you know, a conscious effort to actually win people’s support. I think that does mean there does have to be some sort of reform, but we have to be very careful and we have to be fair, that’s the Australian way. So it will take some time and I guess we’ll have to put up with the present circumstances for a little bit longer.
Gilbert
Indeed, it should be interesting viewing anyway Saturday night here on Sky News, the WA Senate re-run. Nick Champion so much, as always, and Senator Scott Ryan, good to see you, appreciate it. We’re out of time for our chat this morning.
(Ends)