Topics: Greens-Liberal preference deal, Niki Savva’s book, tax policy, negative gearing

E&OE…

RAF EPSTEIN

Joining me in the Melbourne studio is Labor’s member for the seat of Gellibrand which could be under threat if the Liberal party and the Greens do a deal. His name is Tim Watts – Tim, welcome.

TIM WATTS

Great to be with you, Raf.

EPSTEIN

And in Canberra, Fight Club regular, Senator for Victoria, Minister for Vocational Education and Skills, Deputy Manager of Government Business in the Senate, the wheeler-dealer, Scott Ryan he’s in Canberra – Hi there, Scott.

MINISTER RYAN

G’Day Raf, how are you?

EPSTEIN

I’m well. Have you booked a skiing holiday for the 2nd of July?

RYAN

Well I played rugby at school because I wasn’t good enough to play Aussie Rules, so I’ve never dared go near the ski slopes, because I know I’ll come off with a cast.

EPSTEIN (over the top)

Might be a nice time to go away? No? I’m just wondering because I might book my holidays in…

RYAN

Well one needs to know their limits and I know skiing is well beyond mine.

EPSTEIN

Are we going to get a Double D on the 2nd of July?

RYAN

Look, it’s an option. The Constitution provides the option for when the Senate blocks legislation the Government thinks is important that people can make that decision at an election.  It’s an option if the Senate continues to even refuse to consider the ABCC Bill which is not something new. Julia Gillard and the Greens got rid of it, we promised to bring it in before the 2010 and 2013 elections and just last, two weeks ago, the Senate refused to even debate it…

EPSTEIN

… So it is there as a trigger. But can I put something to you, that those who voted for the Coalition could see you as constantly promising, never delivering. Debt and deficit disaster didn’t materialise in significant budget action, the GST was clearly being amped by the Government – it’s on then it’s off – now you’ve got an early election amped up, amped up. If you back off that option, do you risk severely angering those who are keen to vote for you?

RYAN

On the debt and deficit firstly Raf, I think we actually got criticised in the first budget for acting too harshly and in some way contradicting what we said before the election. It was motivated by the fact that we have long said, and continue to say that the deficit the Commonwealth Government accrues every single day is unacceptable, and a lot of the measure we proposed to get rid of that – including measures that Labor promised at the election – they voted to block. I think that on that front in particular, you know, our bone fides have been on display because we have made some very difficult decisions. On the GST, as I’ve said to you before, on all these tax issues, the idea that a group of people can get in a room and decide that they’re the self-declared expert and decide on a policy and then present it to the people is not going to work. We said that we would do this publically, so we’ve actually considered this publically over the last five months.

EPSTEIN

So you would be comfortable if there wasn’t an early double dissolution, that went in August or something, you wouldn’t see that as yet another raising of expectations and then dashing them?

RYAN

Well let’s see what the Senate does with the ABCC Bill. You know we want to bring it back on, we’re going to try and bring it back on, but obviously if that passed, that’s a key part of the Government’s agenda. But you know, I’ve got a job to and the timing of an election and its calling is a matter for the PM and I’ve always made the point, I don’t give public advice to my boss.

EPSTEIN

(laughs) I do, all the time. Ah Tim Watts…

(interrupted)

RYAN

You’re allowed to!

EPSTEIN

Yeah  I know, different job. Tim, do you think there will be a second of July double dissolution?

WATTS

Oh look, who knows. It is extraordinary isn’t it; since Malcolm Turnbull became the Prime Minister, we have seen a series of great soliloquies. You know, it’s the Prime Minister is Hamlet, it’s… will he ‘to be, or not to be’ will he, won’t he? The GST, the early election… Frankly, it’s all just a distraction. I mean, what I’m interested in, is not the timing of the election, it’s the substance of what’s at stake at the next election.  I’d much rather be debating the merits of a tax policy, if the Government got around to having one. I much rather…

(interrupted)

EPSTEIN

But they could come up with a comprehensive set of ideas and policies. It’s not necessarily a disadvantage is it, to not have a detail in an area where you have detail at the moment, day in negative gearing? It’s not necessarily a disadvantage.

WATTS

It’s quite an extraordinary proposition, though, isn’t it Raf? I mean, we’re the Opposition, we’re the alternate government. We have an actual government that ought to have actual policies and propositions to take to the Australian public.

EPSTEIN

But the big ideas normally come in a budget, they don’t normally come just because the Opposition wants them to come.

WATTS

Well big ideas ought to flow from the fact that we have a government. Malcolm Turnbull was elected Prime Minister by his colleagues almost six months ago now, on the promise of economic leadership – that he would make the case to the Australian people that Tony Abbott was unable to make about the economic narrative about where we’re going as a country. Now since then, the Australian public have been relieved that we now have a Prime Minister that speaks in full sentences, however they’re a bit disturbed how many sentences there are, and they’re even more disturbed about how many of those sentences are actually about Malcolm himself. I’d rather see the Government doing less talking about itself, less talking about its internals and its past and who’s stabbed who in the back, more talking about the future of this nation, more talking about the policies that we need to make our country more prosperous and fairer.

EPSTEIN

Scott can I just ask you if there would be, or if you’re in favour of, a preference deal? Now, most people don’t understand preference deals. Every time I look into it I have to remind myself of the detail, however just to give people an idea, the rumour (and I think it’s fairly, probably a bit more than a rumour) that the Liberal Party would preference the Greens ahead of Labor in crucial seats like David Feeney’s Wills, maybe in Tim’s seat, that that was very different to what Tony Abbott did at the last election – the Greens were placed last in every seat – Is it a good idea? I mean it could work tactically. Are you comfortable with the idea?

RYAN

Well, in every election before the 2010 state election, that’s exactly what the Liberal Party did – and for years before that when I was an elected party office bearer I was arguing the case against that. I remember at the 2010 Federal Election I lost the argument, just as I lost the argument in 2007. But in 2010 later that year of course Ted Baillieu made that decision and that was followed through again in 2013. So look, I think these are matter we need to remember, they’re only what’s printed on a ‘how to vote’ card. A Party doesn’t direct a preference. In the House of Representatives, the vote goes where the person puts their preference…

(interrupted)

EPSTEIN

…But they make a difference. They make a difference. Not everyone follows the card.

RYAN

They do, they do make a difference. But it’s also important to what we’re trying to do in the Senate, because we’re trying to have the Senate voting system be the same as the House, where you mark the ballot paper, that’s where the vote goes – it’s entirely in the control of the voter. That’s not the case in the Senate at the moment. So, look these are matter that will be decided upon by the Federal organisation, the Federal Director in consultation with the Federal Leader. I don’t think that it’s something that occupies the public mind. Labor are in hysterics about it because… (interrupted) … Labor have done more preference deals with the Greens to get elected, than any other Party. The Greens have never done a preference deal with the Liberals, the Labor Party’s done preference deals with the Liberals, and they’re upset now because they’re losing their own seats to the Greens.

EPSTEIN

But isn’t it that…

(interrupted)

RYAN

…These are not seats that the Liberal Party can ever win.

EPSTEIN

You need the deals perhaps more, I’m guessing and I think the figures hold me up on this, Greens people are more likely to preference Labor anyway…

RYAN  (over the top)

…About 80 per cent of the time.

EPSTEIN

…If you get into a formal deal with them, so you sort of preference against Tim in a seat like his but in other places like La Trobe and Deakin seats like that, or maybe Anna Burke’s seat, you might get over the line if you did a deal with the Greens. I mean there’s more advantage in that deal for you than for Labor.

RYAN

Well, no I disagree. In 2010 Labor actually won the Federal Election and got less seats than the Coalition held in government because of preference deals with the Greens. Let’s not pretend Labor don’t have dirty hands, here. They do a preference deal with the Greens at every election. John Brumby used to scream about it but he did preference deals with the Greens. And then they relied on the Greens in an effective coalition agreement to maintain their position in government after the 2010 election. Now, there’s only on example of this historically, and the truth is the differences, if I recall, is roughly instead of 80% of Greens preferences going to Labor,  70% of Greens preferences went to Labor. So we’re talking on the margin. This Labor hysterics is all about the fact that their voters are abandoning them.

EPSTEIN

I think there are lists today in the Australian newspaper Tim of twelve seats that were won off the back of Greens preferences, it would make a difference to some seats, wouldn’t it, if there was a formal deal between the Liberal Party and the Greens? I know that some people don’t understand it, but just a reminders: you preference me here, I will preference you there. So, where you have a strong vote you get a bit of a bounce. It would make a difference, I don’t know if it would make a difference in your seat, but it would make a difference to the outcome.

WATTS

It does make a difference, but we should be clear here that the proposal, as articulated in the newspapers this morning, wasn’t that the Greens would make preferences toward the Liberal Party, rather that they would run dead – that they would have what is called an open ticket, that they wouldn’t direct preferences in any way. And that does impact preference flows but less so than preference direction. What that means, for your listeners Raf, is that take a seat like Deakin – a marginal seat in Melbourne – the sitting Member is Michael Sukkar, literally Tony Abbott’s numbers man as we found out from the Karvelas book recently, stridently against marriage equality…

(Interrupted)

EPSTEIN

I think you meant Savva.

WATTS

Niki Savva, apologies! Stridently against marriage equality, wrote an op-ed against Safe Schools in the paper on the weekend, right. An open ticket would see the Greens Party saying: there is no difference between Michael Sukkar and Tony Clarke (the Labor Candidate for Deakin).

EPSTEIN

It is not quite saying that. It is saying: you can make up your own mind…

(Interrupted)

WATTS

And saying that the position of the Greens Party is that they will not make a recommendation over literally Tony Abbott’s numbers man against a Labor Party candidate. What that means is that it makes it more likely that the Liberal Party will be elected in marginal seats. Now, I think that is a travesty for progressive politics. I went into politics to actually get something done, to get into government, to deliver funding for schools and education, to expand equality of opportunity both economic and social. I didn’t get in there to be a protester. Now, if the Greens want to do a deal that sees more protesters elected in the inner-city that are unable to do anything in government in exchange for more Liberals being elected in marginal seats and delivering Government to the Liberal Party and the conservatives, then I think they are going to have a lot to answer for from the progressive movement.

EPSTEIN

I don’t know, I think the Greens are doing a fair bit in the Senate. However, 1300 222 774 is the phone number, you might have a query for Tim Watts or Scott Ryan yourself. The Business Council have come out, they are remarkably reticent to talk about it, however they have come out with a series of ideas – everyone can grab something that they like, as John Daley told Jon Faine this morning – but Scott can I put it to you that the Business Council along with the Productivity Commission, the Reserve Bank and others, are looking at doing something on negative gearing and the way it interacts with the Capital Gains Tax. That would put you in an odd position, wouldn’t it? To not do what the Business Council, Productivity Commission, and some of the economists are suggesting?

RYAN

The Reserve Bank has done some things on loaning to residential property investment, which is not doing the same thing on negative gearing. They have asked the banks and they have changed the…

(Interrupted)

EPSTEIN

The Government has said though that negative gearing fuels house prices as well though.

RYAN

The point that I make though is just because the Business Council of Australia has put out a policy, we are not beholden to any particular group, they are one stakeholder in this debate. And as the Prime Minister has made clear, we are not going to see policies produced that damages the value of the single greatest asset that most Australians will ever own…

(Interrupted)

EPSTEIN

Would you agree that most stakeholders think that something should be done? They might not go as far as Labor, but most stakeholders think that something should be done?

RYAN

This is the thing, Labor’s policy is not just on property investment, it actually limits the ability of people to claim the costs in investment generally against their income. That will have an even more profound impact. It will impact thousands of small businesses around Australia, that is why you cannot do these silver bullet solutions that Labor has. Like, the Marlborough Man is apparently going to fund our schools for the next ten years. No one believes that to be true, even the Parliamentary Budget Office says that is an estimate of low reliability. But Labor claims that they have funded schools, and they haven’t. This attempted silver bullet solution has the complexity of damaging house prices, where it has happened anywhere in the world and where it has happened in places like Melbourne in the early ‘90s, has had a profound economic impact and it has a profoundly negative economic impact. We don’t want to go down that path. We are seriously considering tax options, and Tim criticises us for taking the time to consider, I will take that criticism because when we come forward before the Budget with our policy proposals everyone will know that we have considered all of the options, rather than have these bumper sticker solutions that Labor tries on.

EPSTEIN

Feel free to respond Tim, however it is a big idea, it is a big change. Most Australians have most of their wealth in their home. There is risk associated with your ideas, isn’t there?

WATTS

Australians have nothing to worry about in terms of the value of their home and Labor’s policy. It is a bold policy, we have articulated a detailed tax policy across issues from not only the tobacco excise that Scott was talking about but also superannuation concessions that allegedly the Government is considering as well, around negative gearing, around a whole gamut of issues. We released 50 policies last year. Now, the extraordinary thing though is that Malcolm Turnbull who came to the Prime Ministership to deliver this economic leadership that Tony Abbott allegedly wasn’t providing, is left with Tony Abbott’s tax policy which is: nope, nope, nope. There is a veritable chorus of people saying that we need action on negative gearing now…

(Interrupted)

EPSTEIN

Not everyone is urging people to go as far as Labor is going.

WATTS

There is a veritable chorus of people saying that something needs to be done here and Malcolm Turnbull’s position is: nope, nope, nope. It is Tony Abbott’s policy on tax and it is a shame about how he has descended into the leadership of this country.

EPSTEIN

Scott Ryan is with me, he is the Minister for Vocational Education and Skills in Malcolm Turnbull’s Government. Tim Watts is the ALP Member for the seat of Gellibrand, unicorn boy is what we will call him and we won’t explain why. Quiet now. Let’s get a quick traffic check in a moment, 1300 222 774 is the phone number if you have a question or a comment.

(Traffic update and promo)

EPSTEIN

I did not know that promo was going to be on while I was talking to Scott Ryan and Tim Watts. Look, gentlemen, I will get you both to address this kind of attitude, we address it from time to time and I think it needs to be addressed.

Let me read you two texts: the Government is going to die from dithering, the Opposition is increasingly sanctimonious, they both just need a good hard look at themselves. The electorate has had a belly full of Canberra.

Someone else has texted in: I won’t be skiing in July, I will be busy carving cows listening to politicians deciding if they are more important to nation building than me.

Scott, do you think we are, and I will include the media in this, do you think we are offering up a better offering to people in recent months or has nothing changed?

RYAN

I think we are, I am conscious that no one should go into politics, or journalism, hoping for acclamation from the public. Politics in many ways is a necessary evil. But, when we have said that we would go about the way we have discussed tax, we would do it publically, we would do it in the full eyes of the public. We would let people have their say that would be both inside the Government, inside the Liberal Party, as well as all of the stakeholders. When we make our announcement at some point before the Budget, so in the next six weeks or so, I think we can legitimately say that things have been considered. The idea that all of these decisions should be taken in two or three months – I mean, in 1997-1998 it took Howard and Costello over a year – tax proposals that came out of the ‘85 tax summit were in development for a year. So, these are serious issues that require serious consideration, and that takes a bit of time. We have decided to do it publically, rather than in secret as Labor did the Henry Tax Review. And I think that we’ll – well I am not going to expect that it gets public acclamation – but I think when we go to the people with it, it will earn their trust.

EPSTEIN

Tim, are we giving people a bit more of what they want? A bit more meat on the bone?

WATTS

We haven’t seen any of it from Turnbull yet, Scott Ryan was talking then about going through a diligent process of tax reform, okay I can see that if I could see a substantive process. Now, the processes that he talked about earlier, they involve Green Papers, White Papers, Summits bringing people in, to actually have a fact-based discussion in the public arena. It wasn’t a situation of having the Treasurer and the Prime Minister having a will-they won’t-they behind the scenes, musing publically on the one hand on the other hand not actually doing anything, not actually arguing a case. The tax summit, the Treasurer – Paul Keating – went into that summit with a very specific proposition, he argued it hard, lots of it got up, we CGT out of it, FBT out of that…

(Interrupted)

EPSTEIN

But he didn’t get GST out of it.

WATTS

But we didn’t get GST out of that. But, he at least argued the case. Now, what we have seen from the Treasurer Scott Morrison and from Malcolm Turnbull is that you wouldn’t know what they stand for, they talk a lot, but they don’t do anything.

EPSTEIN

Can I just ask you both about Niki Savva’s book and only from this perspective.  She’s detailed a lot of the dysfunction, I think a lot of the dysfunction is backed up in other books like that written by Peter van Onselen and Wayne Errington.  But, separate question, and I will start with you Scott, would have Peta Credlin received the same internal criticism and press criticism if she’d been a man?

RYAN

Look, Raf, I’ve made it a point to never comment on staff; they don’t seek public office, they’re not public officials and I’m not going to add to that.

EPSTEIN

Did her gender engender extra internal criticism though, because clearly she feels it did?

RYAN

I don’t think it’s appropriate for me to add public comment to this.  Staff don’t seek public office; we put our names on the ballot paper, our staff, and I’m sure Tim will agree with this, work particularly hard, and it’s not an easy job. There is as much time away from families as there is for MPs and I’ve never provided comment around staffing matters publicly, Labor or Liberal, when there’s been other issues in the public domain and I don’t plan to start today.

EPSTEIN

Tim, was gender an extra weight for Peta Credlin?

WATTS

Some of the discussion has made me uncomfortable, to be frank, but in general agree with Scott in that staff, as a general principle, get a rough trot in politics; it’s an extremely hard job, generally you don’t get to defend yourself, you don’t have the same platform to defend your integrity, your reputation as political principals do, so I think it is incumbent on Members of Parliament to go into bat for staff because they can’t do it themselves a lot of the time.  That being said, some of the conversation particularly around Peta Credlin has made me pretty uncomfortable; it’s not a kind of critique that she would have received if she was a man, I think that’s pretty undisputable.

EPSTEIN

Scott, there are a lot of Ministers, including the Deputy Prime Minister, willing to criticise Tony Abbott’s prime ministership in a significant way, does it paint a fair way about how difficult it was to produce policy under the former Prime Minister?

RYAN

Look, I haven’t read it all, I’ve read part of it…

EPSTEIN

You feature in it, Scott.

RYAN

I know. I think politics over the last ten years has changed and I think some elements have got a little bit harder.  One of the them is…advice is now much more contestable – so, for example, take a debate like the Renewable Energy Target – in the old days like the 80s we all agreed on the facts and argued on what we wanted to do, but we had a big debate on the Renewable Energy Target; was it a factor in electricity prices going up or down? So we often start from different points and I think that has made politics a bit more complex. We’re also dealing with some more complex issues, it is difficult, for example, to, and contestable, to decide whether more money in schools makes a difference to outcomes. Now, Tim and I may different views on what has happened over the last ten years, so I think that has made politics as lot more difficult. And, to be honest, I think both sides of politics have found this over the last decade including the end of the Howard Government.

EPSTEIN

Do you think Malcolm Turnbull is the answer to the question of whether or not everyone in the office in the last three times has just not been up to it, or if the actual system has systemic problems. Is the fate of his prime ministership an answer to whether or not we are kind of all a bit stuffed?

RYAN

No, I don’t there is a systemic problem. I think Australia has been particularly blessed with…I have always said that Bob Hawke was a remarkable leader and so was John Howard, and John Howard was very complementary about Bob Hawke as well. I think the job is incredibly difficult and I am glad that it is not something that I have ever had aspiration of or opportunity to do, because I find it an extraordinarily difficult job to be on demand. I think demands on the times, it is the one thing you cannot buy more of no matter how many staff you get, no matter how wealthy you get, if you are a businessperson you cannot get more time, and I think it is the new political environment that all of the demands, all of the stakeholders makes it a lot more testing.

EPSTEIN

Gentlemen, thank you both for coming along.

WATTS

Thanks Raf.

RYAN

Thanks Raf.

EPSTEIN

Tim Watts is the Labor Member for Gellibrand, Scott Ryan a Minister in Malcolm Turnbull’s Government.

 (ENDS)