SKY NEWS, PM AGENDA
TUESDAY, 20 DECEMBER 2016
SUBJECTS: Attack in Berlin; Israel/Palestine relations; MYEFO; AAA credit rating at risk under the Turnbull Government; Malcolm Turnbull cutting Tony Abbott’s Green Army project.
DAVID SPEERS: As mentioned, the Opposition Leader Bill Shorten is in Israel at the moment and he's been there as part of a delegation of Australian MP’s. He's met with the Israeli Prime Minister Benjamin Netanyahu amongst others and joins us now live from Jerusalem. Bill Shorten, thank you for your time. I want to start though before we get to your visit there in Israel with the situation in Germany. This truck attack in Berlin, the Foreign Minister Julie Bishop telling us last hour it has all the hallmarks of terrorism, do you share that view that this is most likely an act of terror?
BILL SHORTEN, LEADER OF THE OPPOSITION: We don't know finally and definitively, but yes I am very concerned that this seems to be a terror attack; it's dreadful, it reminds me of what happened in the south of France and obviously our thoughts go out to the German people at this time. It's dreadful.
SPEERS: The reality is it's very difficult to protect against an attack like this at a so-called soft target, that would have people worried around the world, including here in Australia. There is a review underway here about precautions at big events, mass attendance events, would you like to see tighter security around these sorts of gatherings, or does that worry you that we might be heading down that path?
SHORTEN: No I think our authorities already have contingency plans in place for major events and each time there is a dreadful event, as we've seen in Berlin, I'm sure that our police and security agencies review arrangements. They see if there is any tragic lessons to be learned. But I have confidence in our authorities that they are absorbing information right across the world and updating arrangements in Australia. One of the things I've seen in Israel is, they went through a terrible series of lone wolf attacks, it was called a knife Intifada and Israel's seen a lot more of the incidents than I think people realise and death and injuries from these sort of, almost lone wolf or random terror attacks.
SPEERS: Let's turn to the situation in Israel and what you've been discussing there. Based on your talks what is your view on the progress or lack of progress towards a lasting peace there?
SHORTEN: Well I've had the privilege of meeting not just with the Prime Minister and Opposition Leader and major party leaders in Israel but I've also met with the Prime Minister of the Palestinian Authority and some of his senior representatives. Progress is slow but I do believe that there is still commitment for pragmatic reasons on both sides of the debate, Palestinian and Israeli, towards what’s called a two-state solution. It would be good to see more progress made more quickly but the fundamentals that I'm reassured that both sides of the debate want to see a two-state solution. I think each though feels the other needs to move and I think there’s a role probably here for regional Arab nations to help provide greater stability.
SPEERS: Well I mean a two-state solution, we know your stated support for it, in fact it's bipartisan support in Australia. Donald Trump though has nominated an Ambassador to Israel, David Freedman, who is an opponent of the two-state solution. Do you see this as a potential shift in US policy?
SHORTEN: Well I've discussed the impact of having a new President in the White House with both the Palestinians and the Israelis and I think they're all going to hope that there is a spirit of pragmatism in terms of the way that the Americans approach their role here. So I think that people are waiting and watching to see how much of the Trump Presidency is pragmatic and how much is it sticking to some of the more unequivocal black and white rhetoric which they've been using previously. I think though that the smart money here is on a pragmatic approach from the Americans.
SPEERS: What's the reaction you're picking up there to the announcement of David Freedman though as Ambassador to Israel?
SHORTEN: Well I think everyone recognises it's up to the Americans who they pick. Again I think what people are looking at here is the role not just of America but the role of what they would view as sensible Arab nations. Be they Jordan, the Egyptians, Saudi Arabia, the Gulf Nations, the Emirates and other nations. I think there is a view that the rise of this sort of terrorist, militant Islamic factions elsewhere in the region has focused the minds of a lot of regional players on the need to work together more than they have in the past. Remains to be seen if this wish comes true. But I certainly detect a greater degree of optimism amongst some of the regional players that some of the Arab nations might work closely with Israel than they have in the past.
SPEERS: I mean clearly those regional players you mentioned are important. Israel's actions are important too. What is your position on the construction of settlements in the West Bank?
SHORTEN: I think that the Israelis need to be very mindful that the expansion of settlements could well be an obstacle to having a two-state solution. I think there is a number of issues to be worked out. The Israelis say they need to find partners in the peace process amongst the Palestinians and the Palestinians say that the Israelis need to put a brake on the settlement expansion. None of these are new issues. I do get the impression though that from all sides that the issues that have to be dealt with are known. I think the fundamental issue is, is there a willingness from the Palestinian side to recognise Israel and is there a willingness in Israel to recognise that concessions have to be made on the settlements. I don't think these issues are beyond capacity to resolve and that is why I think other regional players, other Arab nations, sending a signal they could work with Israel I think will focus everyone’s attention on progress.
SPEERS: Let me bring you back to domestic issues. The mid-year Budget update was released yesterday, Malcolm Turnbull today says repairing the Budget is a moral issue. Do you agree with him?
SHORTEN: Well this fellow is all talk and no action. Since the Liberals came in, I mean he can call it whatever, it's an important issue. But inflated rhetoric from Malcolm Turnbull doesn't solve anything. Ever since the Government's come in they've increased the deficit and I think they've, it would appear to me from the reports I've read, that this Government has gone soft on Budget repair and that they've missed an opportunity to help lock in the AAA credit rating. I do not understand why this Government keeps persisting with a $50 billion enterprise tax cut, corporate tax cuts, but they won't also pick up $30 billion in savings in terms of reforming negative gearing and capital gains tax deductions. There's $80 billion on the table over the next 10 years if the Coalition, Mr Turnbull, would just pick up Labor's sensible ideas. I mean they've borrowed some of our other ideas on the tobacco excise which they're welcome to do. But this Government needs to make Budget repair that is fair and they should start with not going ahead with this unfunded tax cut and this stubborn opposition to reforming housing affordability in this country which will save the Budget bottom line tens of billions of dollars.
SPEERS: You talk there about Labor's sensible approach but to be fair the plan you took to the election was to scrap the company tax cuts and reign in negative gearing and capital gains tax. But you would have left the Budget in an even worse position over the next four years because you were going to spend so much more. An extra $9.3 billion on education and skills, $7.7 billion on health, $7.4 billion on families and nearly $1 billion more on foreign aid. Is that still your policy?
SHORTEN: We're reviewing our policies, but let's be clear, this Government went to the last Budget with zombie tax cuts, zombie measures which they know were never going to pass the Parliament. Measures like increasing the pension age to 70. So they had a dubious set of books before the last election and in the six months since they've been re-elected they've done nothing and this nation has gone backwards. In terms of our commitment, the challenge here in the long term is to create sustainable economic growth and we want to do it by investing in people, not by investing in CEOs. So yes, we are committed to our skills agenda, we are also committed to boosting infrastructure, I mean you invest in people, invest in infrastructure and that's how you have sustainable growth. This Government is still persisting with a tax cut for big companies. They, you know, how much of a message do they need to get before they finally hear it? Our credit rating is in the danger zone and frankly Mr Morrison and Mr Turnbull went soft.
SPEERS: Okay well I'll come back to company taxes but let me just turn to this spending question. You say you're reviewing your policies, can we really in light of yesterday’s figures afford the sort of extra spending that you took to the election? Particularly on things like education, higher education, foreign aid?
SHORTEN: Well lets go to a couple of the key issues that you raised in that question, the last one. Education and health, they're big ticket items. I don't think we want to be a country where you put affordable healthcare out of the range of your citizens. So I don't regard investing in healthcare as a wrong priority. We've got an efficient health system but one of the reasons why we have an efficient health system is because we have universally accessible healthcare. So yes I will have an argument with Mr Turnbull about my priorities about defending Medicare. I mean he bangs on about Medicare and he says that Labor was scaring people but I notice that he is still proposing all the same cuts to the healthcare system. He's got the wrong priorities and when it comes to education that's about investing in skills for the future. Mr Turnbull loves to talk about children and grandchildren but the point about it is, I want them to have an excellent education system. We've been slipping backwards in the rankings in terms of academic performance of our young people and that's not good enough but also this Government it's seeing a -
SPEERS: But are you willing to compromise on this education spending?
SHORTEN: Well first of all the Government hasn't put forward any proper plans. You and I both know they haven't got a health policy worth a piece of paper, their education approach has seen a massacre in the number of apprenticeship places there are in Australia. No, this is not the time to turn our back on skills. But again why doesn't the Government just pick up our proposals to reform negative gearing which would save, I mean if they picked up our reforms on negative gearing and capital gains tax deductions rather than having this wafer thin $1 billion surplus which they claim to have by 2021, that would lock in an extra $4 billion and that would lock in the AAA credit rating. I mean why is this Government so hard of hearing that it won't just do the obvious things in front of it?
SPEERS: Alright, you focus on the company tax cuts, you say they should be scrapped. But where you are, Israel, they do a pretty good job of attracting foreign investment, the company tax rate in Israel is now 25 per cent, the OECD average is 25 per cent, the EU average is 22 per cent, Donald Trump wants to take the US company tax rate down to 15 per cent, the UK is dropping theirs as well. Do we really still have a competitive rate at 30 per cent?
SHORTEN: Well first of all, I'd argue that quite a lot of our Australian companies aren't paying 30 per cent. That's the headline rate but a lot of them claim deductions. Secondly if we're going to compare tax systems have a look at all the other taxes that are levied across the levels of Government in those other jurisdictions. Thirdly you talk about Israel, Israel invests in education. Part of the reason why they do well with technology is they just don't rely on a couple of sectors like resources and banking, which we do in Australia, and instead they've diversified their economy and they're leaders in technology. But one of the reasons why they're leaders in technology is they've got a well-funded quality education system.
See again it's all about the building block for the future. Labor's got a plan to create confidence in investment, it's by having a proper NBN, it's by making sure that we have a proper skills system and a training agenda in this country. It's also by making sure that we are investing in infrastructure. I mean that's how you generate long term growth, but you don't do it by cutting Medicare, by cutting funding to schools. And in terms of corporate tax cuts to go back to where we started, whenever there's been a reduction in corporate tax cuts in Australia there has been a compensatory revenue from other sources. This is where the Government’s plan is so fundamentally foolish, they're taking billions of dollars, giving it to big banks and multinationals, but they're not saying where they'll replace that revenue.
SPEERS: Final one, I know you've been hanging out there with Tony Abbott on this trip to Israel amongst a number of other MP’s. The Green Army, the Tony Abbott Green Army got the chop in the mid-year Budget update. Did you have a chat with him about that and will you bring it back?
SHORTEN: We've always been sceptical of the Green Army but I certainly have been going for a couple of jogs with Tony Abbott, it's quite hilly in Jerusalem so we've been giving it a fair old workout. He's pretty upbeat I have to say, Tony Abbott at the moment, he's in good spirits. I'm not sure that would reflect the demeanour of the other six government members here though.
SPEERS: Fair enough, Bill Shorten, thank you very much for your time. I know that's a special place to be this close to Christmas. Safe travels home, good luck to you and your family and hope you do enjoy a special Christmas together as well. Thank you very much for joining us.
SHORTEN: Thanks David and we are learning a lot in Israel it's very interesting.