Topics: Mining tax, NDIS funding, the Greens and the Gillard Government’s economic woes
Peter Van Onselen: Welcome back, you’re watching The Contrarians. Make sure you keep those tweets and emails coming, it is my intention to bombard our political guests with those tweets and emails. As long as you can ask serious questions, or at least semi-serious questions that would be good.
Two rules as we work our way around with our political guests. Firstly, no spin. We’ll knock them out when there is spin, not physically of course. And secondly, no allowing them to purely go on the assault of their opponents. It is about them being able to say positive things about their own side and defend their own record when they’re asked about it, rather than try to turn it around and make the issue about the other side of politics. We’ll see how they go.
Shortly we’re going to bring in Simon Sheikh for the Greens; he is running for the Greens in the ACT and I think he has got no chance. I’ll ask about that in a moment. We’ll also bring in Senator Scott Ryan out of Melbourne, they’re both waiting there for us. Gentlemen, thanks for your company.
But before that, I want to talk here to Ed Husic, Labor MP for Chifley. Welcome to the program.
Ed Husic: I have to say I’m very excited for my last ever appearance on Contrarians. I think this will be a good show, or not.
Van Onselen: Monthly thing from now on, it’s all been agreed on, and we know Labor MPs don’t break their promises.
Husic: I actually have appeal rights so we’ll be talking after the show.
Van Onselen: So, let me ask a serious question, jokes aside. Julia Gillard confronted the Labor Caucus and she said that there has been leaking, there has been destabilisation and detractors and it must stop. How does it feel to be so personally targeted?
Husic: Like I said at the start, I am looking forward to my last ever appearance on Contrarians and thank you for starting off on a serious note, I love it.
Van Onselen: But she has made this serious comment. How widespread is it? There are clear divisions in the Labor Party and why wouldn’t there be because the Prime Minister is obviously taking you all off a cliff and you know it.
Husic: I love how you start the questions, they seem to go ok and then they just go off the cliff themselves. If I can make the point, what I noticed this week and everyone is saying, they’ve detected an irony in that the PM was talking about leaking and then suddenly that conversation was leaked. In actual fact, Anthony Albanese, as the Caucus spokesperson, has to tell everyone what was said in Caucus.
Van Onselen: It leaked before he got a chance to do that.
Husic: I don’t think so, but in any case, I’ll go to the video tape.
Van Onselen: I’m pretty sure Simon Bensen got it. Free plug for our friend over there at News Ltd. Let’s talk about the mining tax. A lot of pain, a lot of effort by the Government to get the mining tax into law and then to have the revenue come in from it. Wayne Swan, if he decides to go on a big infrastructure build with the revenue he received in that quarter, he will be able to build just over one kilometre of arterial road. Is that impressive?
Husic: Well, I think the big problem with where we’re at is we’ve got global economic uncertainty, we’ve got volatile commodity prices, revenue is generally down. With a profits-based tax you can’t …
Van Onselen: Which is why you shouldn’t be putting it all into recurrent expenditure. Hold that thought Ed Husic, I want to bring in Simon Sheikh from the Greens. Greens are well known for their economic prudence. I want to ask you Simon, if I can, you’re running for the ACT. I want to ask you a little bit about the strategy of your chances there. It’s my view you had a better gig at GetUp! personally. I’ll ask you about that in a moment. The mining tax, the Greens have been very critical including today your leader has been out really having a crack at the Government over this issue.
Simon Sheikh: Yeah that’s right because the mining industry seems to run the economic policy of this country. We’ve seen today, on today’s figures, they’ve earned about a $3.5 billion discount off a $20 million advertising campaign. I think that’s really sad.
Van Onselen: That’s going to be our one exception about you going on the attack because it was actually my question that put you in that direction.
Let me ask you about your run for the ACT Greens. Why are you wasting your time in the ACT? You’ve got almost no chance. You should have gone for a state, got yourself in there and then turned this party into what it could be.
Sheikh: Well here in the ACT we face a really important election. On the one hand, the Greens have a positive vision for the future: high-speed rail connecting Sydney, Canberra and Melbourne, saving the public service from 20,000 job cuts. On the other hand, we do have a negative vision but I won’t talk about it because I know you don’t want to go in that direction on this show. This is the tightest Senate race in the country and I think we do have a strong chance of being successful on September 14.
Van Onselen: So which side of politics are you looking to knock off? The Liberal Party or the Labor Party?
Sheikh: That’s right. We don’t know exactly who will be the candidate on the Liberal Party side, but that’s where the race is.
Van Onselen: So you can’t take out the Labor person, it is the Liberal you’re going for? With Labor preferences I presume.
Sheikh: It is also the Liberal Party who will do some very negative things to our community if they have the balance of power in the Senate. Again, I won’t go into the details.
Van Onselen: That sounds like spin to me Simon.
Sheikh: That’s not spin. 20,000 job cuts is not spin.
Van Onselen: I’m going to cut you off, it sounds like spin. I’m going to jump in on you. Scott Ryan, let me ask you before you get a chance to spin. Electoral strategising is one of those things you’ve long done before even becoming a senator, as I understand it talking to your mates in the Liberal Party. Has Simon Sheikh got a chance?
Senator Scott Ryan: Every election is close …
Van Onselen: That is spin and you haven’t even finished your first sentence.
Senator Ryan: In the ACT you need a third of the vote to get elected. I’m confident that we’ve always won a position there and at the next election, I’m confident we will win the third of the vote we need to hold a Senate spot in the ACT.
Van Onselen: Let me ask you a question in terms of Liberal Party positioning on things, Senator, you’re in a sense part of the ginger group that have long been pushing for economic liberalising of thought in the Liberal Party. You’re not quite in the position to be able to do so now that you’re a Parliamentary Secretary for the party, but at the end of the day, is it your hope that the Coalition will be much more robust in Government than it has prepared to be in Opposition in terms of embracing policy change?
Senator Ryan: You’re putting words into my mouth there Peter. I think the truth is that we had a great record in government and our record in Opposition has actually been very good. We opposed the stimulus cash splash, we said it would end in tears. For all the money being splashed around –pink batts, we said the school halls would be over-priced – that’s exactly what happened. We’ve been committed to fiscal consolidation now every single year we’ve been in Opposition, and it’s only now that Labor has had to walk away from its own problems.
Van Onselen: Give us a figure Senator. Give us a figure on this because Opposition members always run away from this. But in cold, hard numbers, how much lower would your spending have been during the GFC?
Senator Ryan: Look Peter, you don’t want spin? Trying to predict an alternative history is not in my repertoire, but we did oppose the second cash splash. We did oppose the second stimulus, and there’s $20-plus billion we did not think was necessary and we voted against it and we stand by that record.
Van Onselen: It’s a couple of hundred billion they’re now in deficit …
Senator Ryan: We’ve got $160 billion in accumulated net debt, add on the $50 billion we actually had in the bank so that’s a couple of hundred billion dollars this Government’s run up. You can’t draw an alternative history but you can look at people’s records. We opposed the cash splash, we’ve opposed the school kids’ bonus that they’re paying out to people with borrowed money, our record speaks for itself.
Van Onselen: Ed Husic, let me bring you in – our record speaks for itself, that’s spin by the way Senator – but we’ll stick here with Ed Husic. You said about the mining tax before …
Husic: I started talking about it but you cut me off …
Van Onselen: We’ll continue now. When revenue goes down, that’s fine, the concept of a super profits tax, that makes sense if commodity prices are suppressed, but isn’t the problem that the way Wayne Swan characterised this is all based around the very issue of basing it on recurrent expenditure that it was going to fund. So if you’ve got consistent expenditure and you’ve got an inconsistent tax to fund, then they’re obvious logical problems with that.
Husic: You also need to remember there was this discussion about this resources boom and what would happen at the tail-end of it: it would generate a lot of wealth, but what would it generate for the nation? What we were trying to do was determine a way in which we could get revenue to make long-lasting investments. Either ensure in those mining areas that the infrastructure spend we had there wasn’t taking away from other parts on the country, that superannuation and the boost in national savings we could do something with that.
Van Onselen: Hang on, you’re spinning now. You’ve got consistent costs …
Husic: You’ve got a fixation on the spin. What I’m trying to point to is that we’re trying to leave something enduring in terms of the nation’s overall economic position.
Van Onselen: Let me ask you Senator Ryan, if the view is that a super-profits tax can provide additional revenue in times of super-profit, that’s not illogical, but surely it should go into something like a sovereign wealth fund and not be spent on recurring expenditure? The second part of my questions is at least they’ve got a mining tax to generate some revenue, you guys are continuing the spending side of it – i.e. the super increases – without the tax itself.
Senator Ryan: The mining tax is flawed and it was Peter Walsh, the Labor finance minister in 1993, who wrote you don’t need a mining tax on iron ore because there is no economic rent in it. When Norway has a tax, it is on petroleum, we have a PRRT.
Van Onselen: We didn’t even have a dollar that was floated in 1983, who cares what he said about it?
Senator Ryan: 1993. After the period of reform Peter Walsh wrote there is rarely, if ever, any economic rent in iron ore. This tax is flawed because it is not taxing products that have economic rent, like coal and iron ore. Petroleum does, coal and iron ore are common, they’re all around the world. What we’ve learnt today is that this Government , $50 million to collect $126 million in revenue, which is allegedly funding $15 billion of spending over the forward estimates.
Van Onselen: Now the Greens are getting fired up at us that we haven’t turned to Simon Sheikh, he ran away from us but he is back and we will turn to him in a moment, we will go to him now. Let’s go to him now while he is getting miked-up. Simon Sheikh, where did you go?
Sheikh: Just a sharp cough that I didn’t want to splutter all over the screen.
Van Onselen: I saw you on the screen and I just assumed you were having the same reaction I was to the Senator’s spin, but no, it was different to that. Let me ask you, we’ve just been talking about the mining tax a little bit more, this is a general question a lot of our viewers have about the Greens –and give us an honest answer – a real criticism the Greens have put at them is that they’re very good at spending initiatives, which are often popular, but they’re not so big on the savings initiatives, which like it or not, major parties, even the Labor Party to a small extent, have to adhere to
Sheikh: It’s not just about spending and saving, it’s also about making investments in the future. It is my belief we can get economic growth, which means we get more tax revenue in the future, if we make the right investments. Productivity growth comes from education, to give you one example. So the spend and save methodology is just not complex enough to represent the future of our economy.
Van Onselen: Senator Ryan, that’s not an unfair observation about education. One of the interesting things is that any report that you see tells you that productivity increases in education come through increased investment in education. Yet for some reason, the Liberal Party have been historical under-investors in education, you have to accept that, certainly in terms of higher education.
Senator Ryan: Peter hang on. The Liberal Party is the party that has funded independent schools and choice in schools and believe it or not, the biggest productivity growth in education comes from high school education and having people complete it. Simon’s rationale there was a rationale for increased spending because the deficit doesn’t matter, spending and saving doesn’t matter. You’ve got to tie your investments to outcomes and the problem with that proposal is that we hear of extra productivity, we don’t hear of hard numbers. We don’t say “investing this amount of money will lead to this amount of tax or this amount of economic activity”. They’re all rubbery figures the Greens put around to justify a pre-determined view.
Sheikh: We’re not a high debt country, we’re not a high debt country, we can afford to make these investments in the future. You know, the reason we need to make them is because we’ve got to get off the mining train alive. We actually need to be able to have a more diverse economy, we know in the 21st century, sectors like the clean-tech sector will drive our future growth.
Van Onselen: Gentlemen hold those thoughts, we are going to continue with this when we come back from the break.
<BREAK, THEN NEWS UPDATE>
Van Onselen: Thanks very much for that Leigh. We are now going to go back to Simon Sheikh, we sort of missed you because you went AWOL briefly before. But take us through this. There is a tweet question that has come in from one of our viewers asking: “Simon do you support the view that the coal industry should be shut down? If so, where will the economic growth come from?”
Sheikh: No I think what’s very important here is that over time, we transition to cleaner, renewable energy sources. The Renewable Energy Target is one of the policies that gets us there, the carbon price is one of the policies that gets us there. But I am very worried about the expansion of coal facilities along the Queensland coast and along the Great Barrier Reef. There is an approach to this that means we can continue with this and grow our economic growth even further, but we need to be reasonable about our approach here.
Van Onselen: Can I ask you a question now Scott Ryan? Tony Abbott has ruled out making any changes to his frontbench. But you’d agree with me that there are just a whole lot of time-servers who have got to go?
Senator Ryan: Not at all Peter. I was given an opportunity for a junior position on the frontbench after only two years and one of the great privileges of that is working with people to learn. One of the great problems with this Labor Government is you had all these ministers come in who thought they knew everything and we saw that in disaster after disaster.
Van Onselen: Let me ask you this straight-up question, if you were prime minister, who would you make speaker out of your ranks?
Senator Ryan: I’m a senator, so I can’t be deluded by grandeur.
Van Onselen: Come on, you can answer the question. Ed Husic, if you were prime minister, who would you make speaker?
Husic: In the current Parliament?
Van Onselen: Would you put Peter Slipper back?
Husic: I’ve been on the record as saying that Peter Slipper was a good speaker. There are these separate issues that people have obviously focussed on, but certainly Peter was great and Anna [Bourke] has done a fantastic job and I got on great with Harry [Jenkins].
Van Onselen: That’s obviously spin now.
Husic: No it’s not.
Van Onselen: I want to ask you a serious question now that’s not spin. You came out in Parliament yesterday, I think it was, and made the point that you think the NDIS should be funded by an increase in the Medicare Levy.
Husic: In part. The truth is, if you look at the situation …
Van Onselen: But that’s not Government policy.
Husic: I know, but I’m, as a backbencher, trying to express a view and trying to get a conversation started. Both sides of politics agree with the NDIS, we accept that it will cost about $15 billion, at least in the first year. There are clearly revenue pressures. We’ve seen $130 billion tank out of revenue, it is an issue – and I’m not making a partisan point even though I’m sure it will be interpreted this way – but the Coalition has not been able to maintain its commitment to surplus within 12 months of coming into government because, again, of the revenue pressures that exist.
Van Onselen: I’ll come back to Scott Ryan on that because I think that’s a fair point.
Husic: You need to look at other ways in which to fund it. I’ll get disagreement from people who think we should just use savings to fund it.
Van Onselen: There’s disagreement and there’s being outright ignored. Have you had any reaction or interest in debate on this? Or is your side saying “forget it, this is done and dusted, we’re not putting the Medicare Levy up?”
Husic: I’ve actually had people say they’re supportive of what I’m saying.
Van Onselen: What about the people who matter? Finance Minister, Treasurer? You name it.
Husic: I can safely say to you here no one has raced to call me.
Van Onselen: I’m not surprised there. Now Scott Ryan, we just had a rare moment of honesty from a major party politician. It’s a fair point, both sides of politics are saying they’re pro-NDIS, but both sides really don’t have the revenue measures, public at least yet, of exactly how they’re going to pay for it beyond the trial.
Senator Ryan: We’ve said time and time again that we’re waiting to see the Government’s proposals. But let’s not get into this delusion that somehow government has less money than it did last year or the year before. The Government is collecting $70 billion a year more than it did five years ago, so there is actually plenty of money in government. There is a failure of prioritisation from the Labor Party.
Van Onselen: So what would you cut then?
Senator Ryan: We’ve only just heard from Ed there and it’s not my portfolio area so it is probably not something we can have a 30-second discussion on.
Van Onselen: You’re saying there’s plenty of stuff that can be cut, let’s start and work our way through.
Senator Ryan: I’m saying there’s $70 billion of revenue today that wasn’t there five years ago, so let’s not pretend the Government has lost money. Prioritisation is the job of government.
Van Onselen: Simon Sheikh what about an example?
Sheikh: I’d love to give an example. The mining industry has tax loopholes written in right now. The diesel fuel tax subsidy, the rebate there. If we stop paying out subsidies and the royalties the states are increasing, there are plenty of loopholes in the budget that could be closed where we could find enough money for Gonski, enough money for the NDIS, enough money for a whole range of things, if only we actually looked at a proper analysis of where those loopholes are.
Van Onselen: Both major party representatives here were shaking their heads when you mentioned that about the diesel fuel rebate. Let me ask you Ed Husic, why?
Husic: It impacts on economic activity. There are companies that factor that in, businesses that factor that into their operations.
Van Onselen: You guys were thinking of it, you just didn’t actually do it.
Husic: My point is, the reason why I reckon in terms of the Medicare Levy is because it taps into the notion that a lot of Australians would be willing to help those in need and would see the Medicare Levy as the right way to do it. I certainly don’t think the levy should stay in place once revenues actually repair, you can look at cutting back the Medicare Levy and finding other ways to fund.
Van Onselen: Scott Ryan?
Sheikh: Why should we all pay when the mining industry are off making huge profits. It doesn’t make sense.
Senator Ryan: It’s pretty obvious you’re running for Canberra because every tax increase you propose is actually about increasing tax on people outside Canberra. You want to close loopholes? The Greens are all about loopholes. You’ve got a $10 billion Clean Energy Finance Fund that’s off-budget, pretending it’s somehow not borrowed money, so don’t come at me with the Greens pretending they’re against loopholes. You’re against loopholes on people who don’t vote for you, you want to increase taxes on people who don’t vote for you. Coal mining is an important export industry.
Van Onselen: But isn’t that politics for everyone? You tax the constituents that don’t vote for you?
Senator Ryan: This is a major export industry and what the Greens are proposing is actually making it less competitive. Now the mining industry pays mining tax, corporate tax and it pays state royalties.
Sheikh: It doesn’t pay the mining tax, come on, it doesn’t pay the mining tax, that’s a nonsense statement.
Senator Ryan: We found out someone is. It’s got to comply with it. So there are three levels of state and Commonwealth taxation on the mining industry. Yet Simon wants to effectively tax it even more.
Sheikh: No all I want to do is remove loopholes, remove loopholes. You and I pay more for our fuel than the mining industry does, why does that make sense?
Senator Ryan: Because of you everybody pays more for their electricity.
Van Onselen: Ed Husic, it’s a rare moment where the Labor Party can just sit idly by on the side while others are fighting.
Husic: I actually think one of the things about the NDIS is that it’s allowed people to actually come together and you’ve got both major political parties agreeing that it’s something that needs to be done. You’re not going to fully fund it out of the Medicare rise but it is something people could get around to be able to do. The minute you go to cut, you make a saving, someone is complaining, it has some sort of impact. This is a way of actually getting some uniform agreement on something that we all agree should be done to lift the level of anxiety from people who are worried about those with a disability and their carers and their families.
Van Onselen: You got the last say here Ed Husic. We’re right out of time.