774 ABC Melbourne, Mornings with Jon Faine
Topics: vocational education and training, ministerial reshuffle, tax reform.
E&OE…
Jon Faine
Malcolm Turnbull, the Prime Minister announced a new Ministry after just months in office he was forced into a reshuffle, he hopes this is the one that will take the Liberal Party through to the next federal election. One of the big winners is one of the back room machine operators, and indeed one of the key numbers organisers for Malcolm Turnbull to defeat Tony Abbott; Victorian Senator Scott Ryan has been promoted and will become the Minister for Vocational Education and Skills when sworn in on Thursday. Senator Ryan, congratulations, good morning
Scott Ryan
Good morning Jon, and thank you very much it’s an incredible honour to be offered this opportunity to serve by the Prime Minister.
Faine
Yes indeed it is, that’s the cliché, let’s move on beyond that. Now that you’ve got your hands on the leavers what do you plan to do with it?
Ryan
Well, I’m heading from this interview Jon, straight to my first briefing with officials. I’ve asked them yesterday, there are a number of issues I wanted to cover. I do have a background in education having been Christopher Pyne’s Parliamentary Secretary for the first part of the Abbott Government, but it’s not something, vocational education, that I’ve had a great deal to do with until now, so I will leave specific comments until I receive those briefings today and tomorrow.
Faine
It’s an area that’s been in plagued with rorts and scandals. What are you going to do about them?
Ryan
Well Jon as I mentioned when we spoke, it’s one of the priorities I’ve asked to be briefed upon, the various actions that have been taken over the last few months because I’m aware of the public commentary, I’m aware of some of the interviews you’ve conducted, having tuned in. I want to know what went wrong and what’s being done to fix it because this is an issue that is varying across different states, it’s an issue that has links between Commonwealth and State Governments of different regulatory regimes, and it’s an area where I have met people for who the vocational system has worked exceptionally well and given them opportunities, and I have met people victims of programs that have not worked, and they’ve been scammed. So I want to know what went wrong, what we’re doing to fix it, and as a first priority, what I need to do next and what issues I need to look at immediately.
Faine
Your predecessors, Labor and Liberal, federal and state, I should also say, have been obsessed with deregulation. Will you consider re-regulation?
Ryan
Well they’re clichés too Jon. I don’t know exactly what people mean when they say deregulation or re-regulation when we’re looking at a sector that has always been regulated. No one’s ever going to propose that it’s a complete free-for-all, whether it be in outcomes in terms of qualifications people have, we have a qualifications framework, or whether it be in how we provide a public subsidy because there’s a role for a public subsidy for students through state providers like TAFE, through private providers…
Faine
Hundreds of thousands of people with enormous debts for qualifications they either never finished or that are absolutely useless – debts they can never repay that remain as a burden for the Commonwealth, if nobody else, because of an obsession with getting rid of red tape.
Ryan
I’m not sure if it’s hundreds of thousands of people would fit the description you just offered. I’m not dismissing the fact that there are thousands of people. That’s why the first priority I’ve asked the Department to brief me on: what has gone wrong, what has done to be fix it, and what issues do I need to look at immediately. That’s the first priority I have in my briefings today because you’re quite right, we shouldn’t be seeing a situation where people trying to set themselves up for a life of viable and productive employment end up with debts and qualifications that don’t actually allow them to pay them off and go onto fruitful lives of employment. That’s not what anyone wants to see and quite rightly, the regime needs to ensure that doesn’t happen. There’s never been a real proposal between complete deregulation or absolute regulation. I know that some of the reforms you’re referring to happened under the Bracks and Brumby Governments in Victoria, some of them happened under the Howard Government, then under the Rudd-Gillard-Rudd Governments. So yes, I take the point, there has been a problem and that’s why my first priority is what else needs to be done to stop it happening again.
Faine
Why not just offer better incentives to employers to provide appropriate apprenticeships with the right sort of tertiary backup, whether it’s through a TAFE or a private provider doesn’t matter, as long as it’s done with some integrity. If it ain’t broke don’t fix it, and the old system wasn’t really broken.
Ryan
Well Jon I disagree with you. The old system, and I’m not sure what you’re referring to is, the old system was broken. I know people who lost apprenticeships pretty savagely in the 1990’s recession, people close to me.
Faine
That’s not because the training system was broken, it’s because unemployment soared.
Ryan
No, but at the same time when business comes under stress, we don’t want to have a situation that just serves the interests of employers, we need to have a situation that serves the interests of students and there is a role for, as we have a state and Commonwealth role, public providers, the Commonwealth loans scheme, there’s a role here for different approaches. I do not think, given the diversity in our economy, the diversity of vocational education, that a one-size-fits-all model will ever work.
Faine
Senator Ryan those briefings should be fascinating, I look forward to learning more. But while I have you: you are one of the key architects and numbers crunchers for the Liberal Party, particularly here in Victoria. Scott Morrison’s saying that excessive negative gearing needs to be dealt with, and Bill Shorten putting negative gearing front and centre of policy reform. Does that mean that both sides, it seems now, are absolutely committed to doing something about the impact negative gearing has on the Treasury’s bottom line?
Ryan
Well, I don’t want to speak personally on behalf of the Treasurer, I read his opinion piece this morning, this is part of the continuum of things that the Treasurer and the Prime Minister said they would look at as part of tax reform. We looked at the GST, we’re looking at negative gearing, we’re looking at superannuation concessions. Sometimes the media aren’t used to this being done so openly where the discussion takes place in public, and I think this has actually got a much higher chance of generating public support and consent for necessary change. On negative gearing, yes we’re looking at it, and I saw the policy that Labor announced over the weekend, but we’ve also got to keep in context what Labor announced. It’s not going to bring in significant revenue over the next four years, I think it’s about $600 million, which is a drop in the ocean. And on a personal level, I think we need to be careful to not say ‘everyone who’s got into the system now, you can keep your gains, but we’re going to legislate to stop other people getting into it from a particular date.’ I think there’s a fairness question about that, and I know the Treasurer has alluded to that in the way that he wants to look at negative gearing.
Faine
But it seems that you’re going to end up inevitably locking horns with the real estate lobby, who are already shouting doom and gloom and ‘sky’s falling down’ and running around like Chicken Little’s even with the merest whiff of reform.
Ryan
Well Jon, you know me personally, and I think you know that I’m never particularly worried about lobby groups running around reacting like that. I mean, that happens whether you propose any change in some cases, we’ve seen it in various areas of public policy. That’s why you have to mount the case, generate public support and consent for a new position and then seek to legislate – and that’s the way you go about public policy.
Faine
And just finally, a survey conducted by IPSOS for one of the big insurance companies has discovered that Australians with household incomes as much as even $200,000 a year think of themselves as lower-middle class. 20% of those earning that much live from pay cheque to pay cheque and think that they’re struggling. $200,000 and struggling, Senator Ryan.
Ryan
I’m very conscious of how lucky I am, I know people who aren’t as lucky. I think however this is an interesting element for our tax debate here because if someone wealthier with say a quarter of a million dollar annual income, but a $900,000-$1 million mortgage and no real assets other than what they’ve paid off, or someone on half that income that has paid off their house, or got a trust fund or something like that. I think the real challenge we have is that there’s a generation now seeking to buy houses, and to buy a house in Glen Waverley or out in Niddrie where I grew up, out in Glen Waverley’s going to hit you $1 million, out in Niddrie not far short of $1 million. So our tax system does tend to define wealth purely by income and so without in any way dismissing the fact that anyone on that income, and I am as a federal politician, is exceptionally lucky and in the top probably 5% of households in the country. I think what it reflects is that people on high incomes without much asset base can feel squeezed and I don’t know the tax system always accommodates that when people on much lower incomes with a higher asset base, might seem less wealthy on an income level, but in reality be a lot more well off.
Faine
The cost of living in Australia is extremely high, the value of money doesn’t give you the purchasing power that notionally you think it should have, and a lot of families are trying to live beyond their means is the bottom line, is it not?
Ryan
Well, I don’t think anyone tries to live beyond their means Jon. I honestly think if people do it’s a reflection of their circumstances. Now sometimes that can be bad luck; health, loss of a job, sometimes it could be people who have trouble with financial planning, and we do our financial literacy programs for that, and that’s now done in schools. So sometimes it can be as a result of costs just going up, but when you look at for example, I mean everyone looks at their rates bill, we’ve got councils complaining in Victoria about how rates are being capped at the rate of inflation, but most people’s wages aren’t going up at the rate of inflation. So every year you find a lot of the fixed charges in your life, often set by government, can sometimes increase by more than your wages. So again, yes, those of us on those incomes are exceptionally well off, but at the same time I can understand how people on lower incomes aren’t trying to live beyond their means, it’s the product of circumstance and they’re doing their best.
Faine
Thank you for your time this morning, I look forward to having other opportunities as the year rolls on.
Ryan
Thanks Jon.
(ENDS)