Subjects: Backpacker’s tax, Labor’s border protection policies, superannuation, 2016 election campaign.
EO&E…
KIERAN GILBERT
Let’s go to our panel this morning, we have got Liberal frontbencher Scott Ryan and Labor’s Matt Thistlethwaite. Senator Ryan first to you on this change, it was only $40 million in revenue the change, why didn’t the Government react sooner to this. As you know, your colleagues right across the country in regional and rural areas worried about the impact on agriculture – in terms of fruit pickers and so on – also the pubs, the tourism industry. It wasn’t like this concern wasn’t put to the Government in previous weeks. Why wait until the campaign?
SCOTT RYAN
Look Kieran, good morning, but let’s wait to see what Kelly, as the Assistant Treasurer, announces at 9 o’clock. I don’t want to pre-empt anything she says, it is in her ministerial portfolio. Let’s wait to see what she has to say when she makes an announcement in about 30 minutes.
GILBERT
Okay, well Matt Thistlethwaite I am sure you would like to make a few comments on this. The Government listening to the concern of the farmers and the tourism sector, your reaction to this?
MATT THISTLETHWAITE
Kieran, they haven’t knocked it off they have just delayed it. So the uncertainty continues for backpackers and for employers in this industry. Really what they have done here Kieran is just kick this down the road. They have kicked the can down the road, to ensure that it doesn’t become an election issue. But really what the Government now needs to do is come clear because it was a revenue measure for the Budget, so the Government – are they going to adjust their Budget outlook, are they going to book this in their Budget costings, and are they going to include this revenue in their election costings? These are all of the questions that the Government will need to answer at this media conference at 9 o’clock.
GILBERT
Yeah, well I am sure they will be asked that, we will ensure that is one of the questions. It is a fair point, what happens to that $40 million? Scott Ryan, let me ask you again in a different way about this issue. You would accept that for a lot of your colleagues this has been a concern, Andrew Broad for example saying that if this tax was implemented that farmers would just be paying backpackers cash-in-hand that is nor really what you want out of a Government reform.
RYAN
Again, let’s wait and see what Kelly has to say. But on the general principle Kieran as to whether or not governments should actually occasionally reconsider policy where there is an implementation issue or whether the effect of it may be a little bit unforeseen, I actually think the Australian people want a Government who is more than happy to change course if, for example, there is an unforeseen consequence in a policy. I actually think politicians get credits when they say ‘hang on, yes we have listened to your concerns, we will address it in this way’ I think that is something Australian politics could do more with. And I don’t think it is something that it is necessarily going to be something that voters will criticise a government for.
GILBERT
That is a fair point Matt Thistlethwaite isn’t it? That leaders should listen to the electorate. If there is a compelling argument, well then accept it?
THISTLETHWAITE
Leaders should listen but they should develop good policies. If this is (inaudible) today then it is clearly a back down. This Government is very good at back downs. We had the Prime Minister float the idea of the states raising their own income tax, and then a back down the next day. They floated the idea of a 15 per cent increase in the GST, they backed away from that. They floated the idea of removing some of the concessions on negative gearing, they backed down on that. Clearly, this is a Government that has a lot of internal problems, a lot of internal division, and has a difficulty in making decisions and sticking to them. Labor has had a clear set of policies on tax reform, on education, on health that we have had in place for the last 12 months that we have been out there campaigning on and explaining to the Australian public. We have been very united in our focus on policy, and all you have from the Government is division and chaos, and they cannot make decisions.
GILBERT
Senator Ryan, your reaction to that given the Government is trying to keep its focus on jobs and growth and your tax cuts for companies, but there have been distractions. You would accept that wouldn’t you?
RYAN
The distractions have been on the Labor side Kieran. We have got 25 Labor MPs and candidates who are basically on the record as openly saying that you cannot trust Labor on boarder security. You have got Labor candidates saying some of the most outrageous things about policies that apparently we are meant to believe Bill Shorten will support. But we have seen when Labor won office in 2007 that these noises we hear from Labor MPs and candidates that these noises then become opinions within a Labor caucus that then change Labor government policy and we ended up with the disaster of border protections and the 50 000 unauthorised arrivals that we saw. The disunity and the chaos is on Labor’s side. Just because Matt Thistlethwaite comes here and repeats Bill Shorten’s lines on something, we know that on critical issues like border security that is not what happens. And yesterday we saw Labor’s chaos over penalty rates. Just because Labor say one thing, we know their track record means that they actually do another when they are in office.
GILBERT
Let’s get the response on penalty rates, Matt Thistlethwaite, because you are under pressure from the Greens, they have started an advertising campaign, the unions also want you to go further and legislate support for penalty rates. Your campaign says that you will see, if elected, penalty rates protected but you cannot give any guarantee of that.
THISTLETHWAITE
What the Greens are proposing Kieran, is to enshrine it in legislation. Now that has never happened before in Australia…
GILBERT
The unions as well.
THISTLETHWAITE
…and the unions. It has never happened before in Australia. For the last 100 years, penalty rates have been determined by the independent industrial umpire and placed in awards, that is the system that has ensured that we have had strong penalty rates and that Australians have liveable wages, and can participate in society. We are not proposing to change that. A Government, an opposition, can make a strong submission to an enquiry that is conducted by the independent umpire which is what is occurring at the moment – and Labor has made a strong submission supporting penalty rates – but we don’t support enshrining it in legislation…
(interrupted)
GILBERT
So should you change your campaign, your advertising and so which says you are going to guarantee penalty rates if you are elected. There is no room for nuance in your campaign. You say they will be protected under Labor, there is no guarantee though.
THISTLETHWAITE
They will be protected under Labor because Labor believes in the system that protects penalty rates, and that is the system that has existed for 100 years. To have penalty rates enshrined in awards, and to have employers bargain above those awards for superior wages and conditions through enterprise bargaining. Now, the Liberals’ philosophy, and we saw this with Work Choices, and this is the great danger with what the Greens are proposing Kieran. If you enshrine it in legislation, it opens it up for having penalty rates completely removed, to have that legislation by the Government. Particularly a Liberal government if they gain control of the Senate which is what they did with Work Choices. They gained controls of the Senate and they introduced a system through legislation that allowed employers to undercut penalty rates. Labor will not allow that to occur. We will protect the current system that enshrines them in awards and allows employers to bargain above them.
GILBERT
But it does also allow the Fair Work Commission to make judgements on whether Sunday rates, for example, should be commensurate with Saturday rates. That is what they are looking at at the moment, Senator Ryan your reaction to the comments there from Matt Thistlethwaite?
RYAN
This is just another example of Bill Shorten and Labor not being able to be trusted by the Australian people. They are trying to create a political campaign that leads to one impression, but the reality is very different. The Government’s policy is clear; we support the role and decision making role of the independent umpire. But, Bill Shorten and Labor are getting themselves into awful measures on this and border protection and other areas, because they are trying to say one thing on one hand to one audience through advertising in this case – saying there is a guarantee – but then they get caught out on radio when they get asked what does the guarantee actually mean? Now, our position is clear, we support the independent umpire, it is again Labor showing that they don’t have a plan for jobs, for the economic future of Australia. They only have Bill Shorten’s plan to play politics. It is all about the election, it is all about politics, it is not about the interest of the Australian people.
GILBERT
Let’s take a break, back in just a moment with Scott Ryan and Matt Thistlethwaite.
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GILBERT
This is AM Agenda. With me, the Minister for Vocational Education and Skills, Scott Ryan, and the Shadow Parliamentary Secretary for Foreign Affairs, Matt Thistlethwaite. Senator Ryan, I want to ask you about the concern among self-funded retirees and superannuants, this is really coming to, well boiling point according to the Morning Star Investment advice company. Morning Star’s put out its advice, its latest suggestion that self-funded retirees are at boiling point, accusing the government of being worse than Ned Kelly in terms of the changed to superannuation and its retrospectivity. Are you feeling this in terms of the backlash, particularly from true to shore Liberal supporters?
RYAN
I’ve had some people ask questions, and there are some misleading comments out in the public domain about this, but the truth is there’s no retrospectivity whatsoever. The changes apply from the time they were announced. They only actually affect the top one and four per cent respectively, of people who are self-funded, of Australians with superannuation accounts. And it’s about rebalancing the superannuation system to ensure a couple of things. Firstly, long term sustainability, that it supports retirement incomes. As Kelly and as the Prime Minister have said, it’s not about estate planning or being able to manage assets, it’s really to support income in retirement, but also, it has allowed us to institute some measures. For example, the catch-up provisions for concessional contributions for people who spend time out of the workforce, and they are primarily women at the moment. It does allow us to institute some measures that will lead to supporting people to save for their retirement as well. I understand the concern and superannuation is always a very complex area, but in this case, it’s clear the changes are not retrospective – I mean, most commentators have pointed that out. While difficult changes in this area are always difficult for people it’s important that we don’t let the Labor party and others misrepresent what these changes are.
GILBERT
Well I’ll get to Labor in a moment, but Morning Star’s Head of Equity, Peter Warnes was referring to it earlier. He says, ‘people are gobsmacked by the extent and complicated changes to our already complex superannuation laws, after carefully planning their retirement according to government legislation, self-funded retirees have been bush-whacked by an un-Australian bush ranger’. So your argument is not resonating in, well, the investment space, certainly not from Morning Star.
RYAN
Well that’s intentionally colourful language by someone that (inaudible) in the area, I mean I wouldn’t call that actual formal advice on the issue. Let’s put this in context, someone with more than 1.6 million dollars in their retirement account gets to keep all that money, but they only get to have $1.6 million of that in tax-free pension retirement phase. The rest of the money doesn’t get taken off them. They can keep that in an accumulation fund, which actually keeps the tax rate at 15 per cent. So it’s still a substantially concessional tax rate. People can make up to half a million dollars of contributions to their superannuation fund from their after-tax income, over the course of their life. Now people who trigger over both of those thresholds are in the top four per cent of superannuants, so it doesn’t affect a great number of people. Obviously, there are some people, such as the gentleman you mentioned, using colourful language and he’s obviously got a newsletter that he markets. But the important point to remember here is that we have addressed some of the imbalances in the superannuation system that do target a very small number of people, that still allow them to be very comfortable and they still have the ability to access existing tax concessions if they have for example more than $1.6 million in super (inaudible)
GILBERT
Well let’s go to Labor’s position now, because if people are going to be critical of the government on this and accuse it of retrospectivity, well its terms of its result, Labor’s policy is the same because you’re going to be taxing earnings from superannuation retirement nest eggs at upwards of $75,000 per annum. That is estimated to be a nest egg of $1.5 million, in terms of superannuation accounts. So that comes in at the same point that the Government’s taxes kick in for superannuation accounts.
THISTLETHWAITE
Kieran ours is not retrospective at all. It applies prospectively, so anyone that has a balance above that threshold and earns an income on an annual basis above $75,000, off the balance, so we’re not talking about reducing the balance, will pay 15 per cent tax on that amount above the $75,000. Now this is a policy that Labor developed over the course of the last two years, in consultation with the industry. You haven’t seen the criticism of Labor’s policy from the industry that you’ve seen on the government’s policy that was announced in the budget and that’s because we consulted with them, we did the proper costings on it and we’ve had it out there for a year for people to have a look at and make a decision. The government is making it up as they go, and their policy is retrospective because they introduced this lifetime non-concessional cap at $500,000 but it applies to contributions that are made after the first of July, 2007. That’s clearly retrospective and that’s why you’ve got people that work in this industry that do this for a day to day job, coming out and saying that it is retrospective and that it’s unfair.
GILBERT
Let’s wrap up, I want to finish if we can on – with the campaigns today, the Prime Minister is in the Northern Territory obviously trying to hold on to Natasha Griggs’ seat. What’s your sense of the campaign at this point? Scott Ryan, are you feeling comfortable as we are now into the second week of campaigning, do you feel like you’re on track? Because certainly Bill Shorten looks like he’s pretty relaxed at the moment.
RYAN
Oh well Kieran, I’ll let the voters judge that. It’s during a campaign, so I can never say that I’ve felt relaxed, anyone who knows me knows that (inaudible)… the Prime Minister for a short time last week, and when I’ve been out campaigning, and I was in regional Victoria yesterday, the feedback I’ve had from people in the streets and the small businesses I’ve visited is that people are interested in the government because it is clear that there’s a plan that supports economic growth, that supports jobs growth, that supports the transition in the economy, as well as understanding the risks from that transition and supporting people to go through that. People are interested in what’s good for the country, they’re a little bit over the politics that Bill Shorten’s playing, and they know that Labor can’t be trusted on key issues. Whether its border security or the deficit, or whether it’s even Labor’s empty promises on education, they know that Bill Shorten will say and do anything to win an election. What they want is a government which they’re seeing led by Malcolm Turnbull that has a nation’s interests at heart.
GILBERT
Matt Thistlethwaite, only a minute left but while I mentioned to Scott Ryan, obviously Shorten’s been performing a lot better than he did towards the end of last year, that’s for sure, but are you worried about these distractions with several candidates either making comments in this campaign or their comments previously being dredged up, but either way, very clear views against your own policy when it comes to border protection. That’s not a distraction you need right now.
THISTLETHWAITE
Bill Shorten is campaigning very well and he’s doing this Kieran because he’s outlining a clear set of policies that Labor’s had in place for a long time. And one of those policies is asylum seekers. We determined that policy at our national conference in August last year. It’s a policy that’s backed by the caucus and it’s a policy that we will take to the election and implement if we are in government. But also, Bill’s talking about the issues that matter to Australians. Last week we focussed on education, restoring the Gonski model of funding, ensuring that we’re funding schools based on needs. We’re talking about jobs and investment in infrastructure today, and we’ll have more on health on the economy and on renewables.
GILBERT
Matt Thistlethwaite, Scott Ryan, gents thank you for that. We’ll talk to you soon.
(ends)