774 ABC Melbourne, Fight Club with Nicole Chvastek
Topics: HILDA report; Kevin Rudd’s UN bid.
E&OE…
NICOLE CHVASTEK:
Crikey, that is quite the sting isn’t it? If you’d like to join Fight Club you are welcome to, 1300 222 774. In the studio with me today – do I say in the red corner? It is Mark Dreyfus, the Member for Isaacs, Shadow Attorney General, Shadow Minister for the Arts and the Deputy Manager of Opposition Business. Mark Dreyfus, good afternoon.
MARK DREYFUS:
Very good to be with you Nicole.
NICOLE CHVASTEK:
Are you in the blue corner?
MARK DREYFUS:
No, I think I am the red corner.
NICOLE CHVASTEK:
Okay, sorry, you’re in the…yeah of course. That puts Scott Ryan, Liberal Senator for Victoria, Australian Special Minister of State and Minister Assisting the Cabinet Secretary in the blue corner. Hello Scott Ryan.
SCOTT RYAN:
G’day Nicole, g’day Mark.
MARK DREYFUS:
Hello Scott.
NICOLE CHVASTEK:
Gentlemen, the HILDA report today says that we are poorer, more tired, and less likely to own a home. Scott Ryan, if I could just direct my question to you, this survey finds that the typical household was better off each year until 2009 and then the global financial crisis hit, and household wealth, which had been climbing has been on the slide since 2010. Now we look to Governments, and you’ve been in office since 2013, to make our living better, to make our standard of living better and to impove those sorts of figures, and they are going down, down, down. What sort of explanation can give you us in relation to that? And what sort of trust can we place in you, given that you haven’t been able to arrest this slide.
SCOTT RYAN:
Nicole, I think first to understand, the Government can’t actually increase wealth. The policy parameters you set, and which Mark and I may well argue about, can drive the private generation of wealth. But it is not something that government can create by (inaudible). What we have seen all around world since 2008/09 is this sort of issue, what you might call a small ‘s’ economic stagnation. Australia has had flatter incomes, other countries have had substantial declines. We have got a unique issue, that in the 2000s – particularly in the late 2000s – we had the biggest mining boom since the Victorian Gold Rush. The terms of trade were higher in 2008/09 than they were in 2003/04 by substantial numbers. And coming off that, as the mining construction phase, which had huge multipliers through the economy, which did see the money flow right round the country as we had higher employment, higher investment, that combined with the global financial crisis and the stagnation in some of our trading partners – although not so much China – has led to this flatness in household income and household wealth. Australia has fared better than many other countries around the world, but it is an important reminded of why people feel the cost of living is getting a little bit away from them. Because they are not doing that little bit better every year they did through the 90s, particularly the late 90s and early 2000s, yet their costs are going up.
NICOLE CHVASTEK:
But you’re a government that promises jobs and growth. Isn’t it your responsibility to generate those things from which wealth will then flow?
SCOTT RYAN:
Government can set policy parameters but government can’t create masses of wealth. We saw for example, last year the highest level of employment growth that we have seen in many years. The number slips my head at the moment, but it was in the hundreds of thousands. Whereas in previous years it had been substantially below that.
NICOLE CHVASTEK:
But people are working longer and earning less.
SCOTT RYAN:
What we are seeing right across the economy, you would expect as our terms of trade have declined substantially that this is the sort of effect you can have. In years gone past, in decades gone past when we had a mining boom in particular, or the Korean wool price boom come off, what you saw were increases in unemployment. So, yes, we have had flatter incomes over the last 7 or 8 years, but part of that has been the result of international factors. We are seeing a turnaround in employment numbers which are important in a country with growing population like Australia.
NICOLE CHVASTEK:
It just seems that when everything is going well, then the government of the day will claim that this is their doing. And when things are going poorly, then this is to do with international factors.
SCOTT RYAN:
You will always hear me saying the same thing Nicole, that it is important the Government set the right policy parameters where wealth can be generated, where jobs and income growth can be generated. But on its own, the Government cannot generate sustained economic growth. It is the policies you put in place that allow the private sector, investment, employment, it is the policies you put in place to allow it to be generated elsewhere. Government has an important role in protecting the vulnerable in society, in providing public and community services, at the margins around education policy, around how you fund significant economic factors like health policy can make a difference. But the prime generation of economic growth is always something that comes out of the private sector within the parameters set by Government.
NICOLE CHVASTEK:
I guess it is just surprising to hear you say that the Government cannot deliver sustained economic growth when your mantra in the last election campaign was jobs and growth.
SCOTT RYAN:
What I am saying Nicole, is that government on its own, government on its own, it can set the right policy parameters where that growth is generated, but government action by fiat on its own is not what does that. It is the parameters you put in place that see the economy through the spontaneous efforts of millions of people around Australia, that is what generates economic growth. You have to have the right policy parameters to make it happen though.
NICOLE CHVASTEK:
1300 222 774 if you would like to join the conversation. Mark Dreyfus?
MARK DREYFUS:
For a moment there I thought Scott was going to give some credit to the last Labor government for steering us through the global financial crisis, but of course we didn’t hear that in the end from Scott. I do agree with him on one thing, which is there are some policy parameters which the government can do something about. One of the key findings of this HILDA report is that we are reaching this dreadful historical milestone next year which is that home-ownership is going to drop below 50 per cent. That is something that government policy settings can start to deal with. That is why Labor in the last election put forward new policy settings to deal with negative gearing and the capital gains discount rate. And I think if this Government wants to find some policies that it could do something about, it should adopt Labor’s policies in relation to negative gearing and capital gains. And not stick with the policy that the Prime Minister announced in, I think, a studio next door to here where he said ‘get rich parents’ that is the Liberal Party’s answer to housing affordability. There are things that the Government can do something about, housing affordability is one of them, and the sooner that this Government does something and picks up Labor’s ideas on negative gearing and capital gains, the better.
NICOLE CHVASTEK:
Scott Ryan?
SCOTT RYAN:
The single biggest driving of housing affordability, every report has shown, has been the amount of land made available for housing stock development. We are a country with a fast growing population. Part of that is due to an immigration program I strongly support, part of it is due to strong local population growth. That is something great about our cities and something great about our country. But, every report has shown that is the biggest factor. The second biggest factor is how strong your economy is. Which is why all of our policies are directed to supporting employment growth and supporting wages growth, and addressing some of the factors you mentioned earlier. In the HILDA report, the author was on this station earlier this morning and made it clear that negative gearing wasn’t a big driver of housing price issues. If the state governments had proper development policies in place, and actually had invested some of their windfall land tax and stamp duty booms in transport infrastructure, that addressed people being able to live a little bit further out but not having massively longer commutes, then that would do wonders for housing affordability.
MARK DREYFUS:
There is something that the Commonwealth government can do, which is do something on negative gearing and do something on capital gains. And just ducking, as Scott Ryan has just done, saying ‘oh, the state government should do something’ that is not good enough. The Commonwealth government should do something when it can, and it can do something about housing affordability.
SCOTT RYAN:
And we are investing in urban infrastructure. We are investing in urban transport infrastructure, which is critical in addressing housing affordability, so people are not competing for a smaller and smaller footprint of our cities because we have such strong population growth there.
NICOLE CHVASTEK:
1300 222 774 if you would like to join the conversation. Kim is in Caulfield. Kim , good afternoon.
CALLER:
Good afternoon, some of my thunder has just been stolen. But if you look at our population densities, we are going down the path of what Europe, England, America has gone and what we really need is to have really high speed rail out to our regional centres – so Geelong, Ballarat, Bendigo, La Trobe valley. Those areas (inaudible)…but we can’t talk about medium fast rail, we have to talk about fast rail. If you go from Oxford to London in less than 40 odd minutes that is the type of timeframe will do it. If it is anything more than that, people just won’t do it. That is where the Commonwealth can fund those really high speed rail infrastructure projects.
NICOLE CHVASTEK:
Scott Ryan any plans for very fast rail into regional Victoria?
SCOTT RYAN:
This is the key question when anyone proposes an additional Commonwealth responsibility or funding measure; the discussion must start with ‘okay, that may well be a good idea but where does the funding come from?’. And there is simply no capacity in the Budget situation we have inherited and have been trying to fix and continue to try to attend to, for substantially and massively increased Commonwealth responsibilities. The Commonwealth contributes substantial amounts to urban infrastructure and we will continue that. But there is not a lot of room for massive expansion in that.
NICOLE CHVASTEK:
Mark Dreyfus?
MARK DREYFUS:
This is a government that had to be dragged kicking and screaming to support urban rail at all. When Tony Abbott was prime minister he actually ruled out supporting any urban rail projects at all, saying that is not a matter for the Commonwealth. Finally, we have got the Commonwealth agreeing that it might, perhaps, fund some state rail projects, but here in Victoria we are left with a $10 million contribution to the Melbourne Metro Rail Project which everyone agrees is the most important infrastructure project that could be done in the city of Melbourne.
SCOTT RYAN:
Be honest about that Mark –
MARK DREYFUS:
I am always honest Scott, thanks very much.
SCOTT RYAN:
The state government sent through its business case to be looked at by infrastructure Australia, and we found out, almost by press release. The business case wasn’t finished, and at the same time the Labor Party demands infrastructure Australia assessment of business cases, you are now demanding money be spent before that process is complete. We are requesting further information from the state government because it was not complete.
MARK DREYFUS:
I am just thankful that we finally got this conservative government across the line to accepting that it is part of the role of Commonwealth –
SCOTT RYAN:
(interrupts) I don’t think anyone can doubt Malcolm Turnbull’s commitment to a mode-neutral transport policy.
MARK DREYFUS:
I do doubt his commitment because it hasn’t been backed up with money as yet.
SCOTT RYAN:
So are you saying that money should be spent without the business case being considered? Because that is your policy, you demand these business cases get considered.
NICOLE CHVASTEK:
1300 222 774 if you would like to join Fight Club. We are speaking to Scott Ryan Liberal Senator for Victoria, and Mark Dreyfus Member for Isaacs and Shadow Attorney General. Brian is in Notting Hill, Brian good afternoon.
CALLER:
About 12 months ago the Reserve Bank had a look at the housing bubble and said the main cause was ‘immigration’ and a simple case of supply and demand. By tempering immigration numbers, we can take the gas out of this bubble and have a fairly painless way of bringing it back. Or we could just let it go with negative gearing and wait for the bubble to burst and hurt people along the way.
NICOLE CHVASTEK:
Hang on, who said that immigration was driving higher house prices?
CALLER:
That was the Reserve Bank about a year ago.
NICOLE CHVASTEK:
In what publication Brian?
CALLER:
I heard it on ABC news, that is all I can tell you.
NICOLE CHVASTEK:
Okay, let’s go to Scott Ryan. Scott?
SCOTT RYAN:
I don’t recall the report –
NICOLE CHVASTEK:
No, neither do I.
SCOTT RYAN:
I think they may have said population growth, of which immigration is a factor.
NICOLE CHVASTEK:
Big difference though.
SCOTT RYAN:
It is a factor, but I am a supporter of our strong immigration program. In net terms it is a great contributor to Australia in a social and economic sense. But, population growth particularly in our large cities like Melbourne and Sydney, and increasingly Brisbane, is a main driver. Which is why supply of land housing stock, and transport infrastructure are so important to housing affordability. As well as a strong economy, so people feel the confidence to borrow, invest, and take out a mortgage for themselves of their families.
NICOLE CHVASTEK:
Mark Dreyfus?
MARK DREYFUS:
I think we have to look hard at a whole range of matters in relation to housing affordability, town planning policies is another. But I have not heard that immigration is the prime driver.
NICOLE CHVASTEK:
No. Paul is in the norther suburbs, Paul good afternoon.
CALLER:
I just want to discuss the housing affordability. I am just wondering why no one in the government ever mentions the role of private debt in housing affordability. It is always focussed on government debt, the economy etc but the level of private debt is approaching 200 per cent of GDP which is a huge problem when the banks become more reluctant to lend and also the customers are more reluctant to borrow.
NICOLE CHVASTEK:
Scott?
SCOTT RYAN:
Well the truth is that debt levels of households reflect a couple of things. They reflect the growth in incomes, particularly over the last 20 years, or that period before 2009 as we discussed earlier. They reflect the fact that most households now compared to when I was growing up are two-income families and they reflect that increased demand leads to increased prices and people borrow to pay for that. But the history of Australia in recent years, apart from 1991 to ’92 in places like Melbourne and Adelaide is that people borrow but it’s within the range of affordability. So I think our banks, and the strength of our banks is a testament to the regulatory system that we’ve had in place for many years and it’s very important to our economy, and we always keep an eye on debt figures. I take the point that the gentleman’s making but at the same time, these are private decisions made by individuals, families and households and banks in the sense that they lend the money.
NICOLE CHVASTEK:
Doesn’t it worry you that on your watch less than half of Australian will be able to afford to buy a house by next year, when the great Australian dream once saw home ownership levels up around 85 per cent.
SCOTT RYAN:
Look it is something that – I’m 43, I’m lucky enough to own part of a home, with the bank owning the rest but it is something I do think is a very, very important social and economic issue. I think it has been a key feature of Australia, particularly since 1949 when Robert Menzies opened up Australia to individual home ownership in a mass way. It’s defined Australia. We shouldn’t pretend there are silver bullets the way Labor does because it’s not going to address the issue. You can’t pretend that the most significant issue isn’t simply the ability to build and own a house and get to work in one of our major cities that are growing quite rapidly.
NICOLE CHVASTEK:
But the wealth is going to an elite few, isn’t it? And increasingly there is… (interrupted)
SCOTT RYAN:
(interrupts) Not at all. The HILDA report actually, I heard the interview this morning, talked about how we’ve become a fairer society and how poverty had decreased and our reliance on welfare had become static or reduced, and that was one of the things that showed out of the report today.
NICOLE CHVASTEK:
Are we becoming… (interrupted)
MARK DREYFUS:
(interrupts) It actually said that older generations had done much, much better in terms of increases to wealth, particularly people over 55 than younger generations. And I’m still waiting to hear from this Liberal government, any proposal that they are putting forward to deal with housing affordability. The commonwealth government has a role here. That’s why Labor took to the election some changes to policy settings which we think are good, which will assist people to get into their first home. This government seems more interested in assisting people to buy their tenth home.
SCOTT RYAN:
Mark, you’re just making it up. I mean we’re taking a serious approach to this, because Malcolm Turnbull made it clear –
MARK DREYFUS:
(interrupts, laughs) You rejected with a scare campaign our negative gearing policy.
SCOTT RYAN:
Are you saying that you want housing prices to fall? That’s the impact of your policy. Are you trying to imply to young people now that Labor’s policy is for housing prices to fall? Because if you think that’s going to be a good policy (inaudible) then go to the parts of the United States and Europe where that’s happened and look at the construction of social and economic fabric in those cities.
MARK DREYFUS:
No, no – you’re continuing this scare campaign, Scott,
SCOTT RYAN:
No I’m not. I’m telling the truth. We want a situation where employment growth and wage growth and better land development and better transport infrastructure actually support people being able to afford to buy their homes. It’s a complex policy area.
NICOLE CHVASTEK:
1300 222 774 if you’d like to join the conversation. It’s Fight Club with Mark Dreyfus, ALP member for Isaacs and Shadow Attorney-General, and also in Canberra, Scott Ryan. Liberal Senator for Victoria, Australian Special Minister of State and Minister Assisting the Cabinet Secretary. Let’s get the latest from the roads and catch up with Nigel who’s going to give us an update on the traffic.
(Traffic Report and advertisements)
NICOLE CHVASTEK:
Welcome to Fight Club, I’m with Mark Dreyfus and Scott Ryan. Mark Dreyfus would you like to see Kevin Rudd made United Nations Secretary General?
MARK DREYFUS:
I think we should be supporting Kevin Rudd for the Secretary General. This is the first time I think ever than an Australian even in the race to be Secretary General and of course we should be supporting him, it would be in Australia’s national interest, completely, to have an Australian as Secretary General. I’ve been really disappointed to hear some people in the Liberal playing on this issue, of all issues, party politics, taking some partisan interest in this. This isn’t – I’d repeat, this is an Australian, going for Secretary General. What a wonderful thing it would be if an Australian became Secretary General.
NICOLE CHVASTEK:
Your party dumped him as Prime Minister, why should he become Secretary General?
MARK DREYFUS:
Because he is an Australian, because he’s a man who speaks mandarin, he’s got a tremendous knowledge of foreign affairs and he’s been seriously considered in some quarters. I say again, I can’t remember ever, an Australian candidate for this job, and what a great thing that we’ve even got someone in the race.
NICOLE CHVASTEK:
But your own party decided that he was unqualified or unsuitable to run the country. As Cory Bernardi says, why would you impose him on the world?
MARK DREYFUS:
This is a different job, it’s a completely different job.
NICOLE CHVASTEK:
But it’s the same Kevin though, isn’t it?
MARK DREYFUS:
I think you’d find that this is a foreign affairs job. He was a diplomat before he went into the federal parliament. He’s always shown a great touch in foreign affairs, and it’s in Australia’s national interest for there to be an Australian in this job. I can’t believe that the Liberal party, that this Liberal government is waiting for a second before endorsing him.
NICOLE CHVASTEK:
Scott Ryan?
SCOTT RYAN:
Look, the Prime Minister and Julie Bishop have said it’s going to be a matter for Cabinet to consider, and I think that’s entirely the appropriate thing to do. I mean you just pointed out (inaudible, interrupted)… Mark, I tell you what Mark, as a Minister in the government, I’m actually not going to express a view publically, I’m going to actually let it run through the process of Cabinet deliberation. And Nicole, you pointed out the hypocrisy of Labor. They referred to this person as dysfunctional, unable to make a decision, almost sociopathic, I think one of them. So now they say, for purely partisan points now, to actually come out and say there should be a unilateral announcement by the Prime Minister or Foreign Minister that they’re going to support him. I think deliberating on this through Cabinet, deliberating on what the national interest is and then making a decision is entirely the appropriate thing to do. I don’t have a view on it, it’s not my area of specialisation, and I think it’s a testament to the Prime Minister and to Julie Bishop, that they’re not making a personal decision, they’re going to take it to the Cabinet.
NICOLE CHVASTEK:
Peter Dutton said Kevin’s ego made Donald Trump’s look like a rounding error.
SCOTT RYAN:
(laughs) Peter’s got a turn of phrase. Look, Peter’s a Queenslander and probably knows Kevin better than I do, being a Victorian. But I think Cabinet is the place to have these discussions. You deliberate, you give it serious thought, you give it serious consideration and then you make a decision.
NICOLE CHVASTEK:
Rich is in Mornington – Rich, good afternoon.
CALLER:
Mark Dreyfus please, it’s not that the candidate’s an Australian, it’s that he’s Kevon Rudd. You know, surely it’s the qualities of the candidate that are relevant. Not their nationality. I support Australia, but I don’t support Kevin Rudd’s candidature. Give me, you know Beazley – just to show I’m not being ideological about it, give me Kim Beazley for example. Many, many others, but just not Kevin Rudd.
NICOLE CHVASTEK:
What’s wrong with Kevin Rudd, Rich?
CALLER:
Well I just – members of the Labor party could put that more eloquently than I. For example have you heard what Kristina Keneally has said about him? Mark Latham and (inaudible). It is Kevin Rudd.
NICOLE CHVASTEK:
Mark?
MARK DREYFUS:
And I think you’d find there would be people from a party political background that might say something about Helen Clarke, or might say something about the other candidates for this very important job. But my view of this is an Australian sitting in the Secretary General’s position is indisputably in Australia’s national interest and the national government should be backing it.
NICOLE CHVASTEK:
Alex is in Vermont South. Alex, good afternoon.
CALLER:
I just wanted to say one thing n- I just arrive to Australia about four years ago and I’m not on one side or the other in the political scene. But since I arrived, I have been listening that the young generation does not have access to own a home. Well I have several friends, young friends, and I’m not that young, I’m 49, and they came as migrants, as legal residents I would say, and they own homes. They are paying mortgages. But they are living in the north of Melbourne for example, or the western side of the city. If you’re a young person and you want to buy a home in Fitzroy or Carlton or Glen Waverly, (inaudible) you cannot afford that. But if you provide good transportation systems to the western part or the northern parts, there are many, many opportunities for young people to live there.
NICOLE CHVASTEK:
Ok so, it’s about choices. Mark Dreyfus?
MARK DREYFUS:
I think young people are distinctly looking in outer suburbs. That’s the only place that most young people can even think about buying a house. And we’ve got to do everything we can. I go back to what I said before – we’ve got to do everything we can, the commonwealth government needs to be doing what it can to make housing more affordable and if one way to do that is to change the negative gearing settings, direct negative gearing towards new housing which would increase the stock and stop negative gearing being available for existing housing which is simply driving up prices and favouring investors.
NICOLE CHVASTEK:
Scott Ryan you’ve only got a couple of seconds unfortunately.
SCOTT RYAN:
Negative gearing supports rental stocks, so people can rent a house while they’re saving to buy one and Labor’s policy has massive unforeseen consequences. You can’t – it applies to negative gearing across a range of investments. Yet, if you’ve got a corporate structure, you can still do it that way, so it allows wealthy people to keep doing it.
NICOLE CHVASTEK:
Great to have you both in the studio – ah well you’re in Canberra. But great to have you in the Canberra studio, Scott Ryan.
SCOTT RYAN:
Thanks Nicole.
NICOLE CHVASTEK:
And Mark DDreyfus thank you so much. Thank you gentlemen for joining me today for Fight Club.
MARK DREYFUS:
Great to be with you Nicole, thanks Scott.
SCOTT RYAN:
Thanks Mark.
(ENDS)