Bill's Transcripts

Transcript: Interview with Sky News, 19 March 2012

SUBJECT  mining tax, superannuation changes



DAVID SPEERS: Welcome to the programme.  The Senate is tonight, set to pass the mining tax, finally ending what's been an enormous reform battle for Labor now for many years.

The Greens will back it but one of the key things the mining tax will pay for is less certain.  The company tax rate is set to be cut by one per cent, one of the big benefits of this mining tax.  It's why the Government says this is all about sharing the boom around, sharing the wealth around to companies who aren't benefiting from the mining boom at the moment.  Cutting this company tax rate is meant to do that.

The Greens are saying they'll only support a company tax cut for businesses with a turnover of up to $5 million.  Bigger business wouldn't get it if the Greens had their way.

So should the vote on the mining tax go ahead in the Senate tonight, given this uncertainty about the company tax rate cut?  Well joining me now is the Minister for Workplace Relations, Bill Shorten.

Bill Shorten, thanks for joining us.

BILL SHORTEN:  Good afternoon.

DAVID SPEERS:  Why should there be a vote on the mining tax tonight in the Senate if you're not sure about the goodies: the company tax cut that it's meant to pay for?

BILL SHORTEN:  Well the mining boom is good for Australia, but it is also pumping up our dollar to record highs, which is making life hard for a whole lot of other businesses in Australia. You know, if you're manufacturing locally, competing with imports, if you're running education services locally, if you're into tourism locally.  Our high dollar is giving an advantage to people overseas.

So it's important to share the prosperity of the mining boom and we shouldn't stop, we shouldn't stop the mining tax merely because the Liberal Party don't like the mining tax.  They have to face their backers and people who understand that if you reduce the company tax rate from thirty to twenty-nine per cent, that is a job-creating measure.

Also, what we're doing with the mining tax…

DAVID SPEERS: But if you can't guarantee that that's going to happen, that company tax rate is going to be delivered, why should you go ahead with the mining tax tonight?

BILL SHORTEN: Well two or three reasons.  First of all, just because the Liberals don't like something isn't a reason to give up and go home.  I mean they're against everything we do, from our skills announcements to better workplaces.

DAVID SPEERS: Well you do pull legislation like the migration - the Malaysian Solution legislation when you don't have the support so…

BILL SHORTEN: I think there is an overwhelming need to get on with cutting tax for seven hundred and twenty thousand small businesses.  We know we've got the numbers for that because the Greens have said they're going to back that.

DAVID SPEERS: Only up to - businesses of a turnover of five million dollars, which will give you a two-tiered system and would deny a lot of businesses a tax cut.

BILL SHORTEN:  That's right but I think the Liberal party need to buy a mirror and if they're looking around for who to blame for that.

DAVID SPEERS: Yeah, but the Liberals aren't backing the mining tax, so…

BILL SHORTEN: David, why should - one, just because they don't like taxing their billionaire mates, just because they want to act in the interests of the few against the many, why should we deny what we can get through?  One of the other big reforms, other than seven hundred and twenty thousand small businesses, seven hundred and twenty thousand small businesses will get a reduction in their tax.

One of the other things we're doing with the proceeds from the mining boom is subsidising the increase in superannuation.

DAVID SPEERS: Well I want to get to that, but you can't guarantee those seven hundred and twenty thousand businesses will get the tax cut so again, why put it to a vote tonight if you're not so sure that that's going to happen.  The Greens are pretty adamant on this.

BILL SHORTEN:      Well we've got to keep pushing to take the tax burden down and I think it's the right policy place for us to be in.  You know in life sometimes just because the other guys don't agree isn't a reason to give up.  We believe you should share the benefits of the mining boom.  We believe in reducing corporate tax rates, because that creates jobs, that helps businesses not currently benefiting from the mining boom and business is being hit by the high dollar.

DAVID SPEERS:  Will Labor agree to a tax cut only for a certain number of businesses or will you - what will you do in that situation if the Greens stick to their guns?

BILL SHORTEN: Well we'll have to wait and see what our negotiators do tonight.  But one thing's for sure: we will do whatever it takes to reduce the tax rate on companies.

Do you know, the Liberals love to play a game.  They love to say because we're the Liberal Party, we're the right wing of Australian politics, we don't need to have our pro-business credentials examined, just because we hate unions and we don't do anything for poor people, therefore anything we do for business should be just simply believed.  That's wrong and we're going to blow the whistle on that tonight. 

They're not backing small business, they're not backing tax cuts, they want to hand back ten billion dollars to Mr Palmer and Ms Rinehart and other people and that's not an economic policy.

DAVID SPEERS: Well they say it's a flawed tax for a number of reasons.

BILL SHORTEN: Well they say…

DAVID SPEERS:  But let's look at the superannuation part of this because - and that's the other key thing it'll pay for. 

BILL SHORTEN:  Absolutely.

DAVID SPEERS: Increasing the super contribution from nine to twelve per cent over a number of years.  Isn't the reality though employers will have to pay this, not the Government?

BILL SHORTEN:  Well what the mining tax will do is it'll take - well let me take back one step and just very straightforward explain what we're doing.  What we want to do is over seven instalments over the next seven years, increase compulsory superannuation from nine to twelve per cent.  So it goes to nine and a quarter, nine and a half, ten, ten and a half.  We're phasing that in over seven years, so it's not exactly too quick or rapid. 

So when a company of a hundred thousand dollars payroll, the first increase in 2013 is going to cost them two hundred and fifty dollars.  So if you've got a hundred thousand dollar payroll, this increase is two hundred and fifty dollars.  So yes, you're right, increasing superannuation is part of the wages negotiations that happens in all businesses but once we put more income, this twelve per cent ofAustralia's payroll to be put into superannuation, that's concessionally taxed, that is at fifteen per cent.

DAVID SPEERS: So it does cost you some.

BILL SHORTEN:  So there is foregone tax revenue, which you have to replace.

But the other thing which we're doing, which was another reason to press on with the mining tax tonight is three and a half million Australians earn less than thirty seven thousand dollars.  They currently pay super and they pay fifteen per cent tax, which is equal to the tax they already pay. 

We're going to get rid of all superannuation tax for three and a half million people, mainly women, under thirty seven thousand dollars, tonight.

DAVID SPEERS: On superannuation, Jeremy Cooper who conducted the Government's review of superannuation has raised some concerns about fund managers heavily favouring shares over bonds, putting our money into shares rather than bonds, particularly for older workers nearing retirement, that that's just too risky for their retirement savings.  Do you agree with that concern?

BILL SHORTEN: I do agree with a view which says that we need to make sure that there's always a diversified asset allocation.  In a superannuation portfolio of a hundred cents, most superannuation funds will have a certain percentage of that invested in Australian shares, some in international shares, some in listed property trusts, some in cash.

What we've seen from the year 2000 to the year 2010 is a gradual reduction.  You know in 2000, sixty cents in every hundred cents of Australian superannuation was in Aussie equities.  Now it's down to about fifty in every hundred cents.

Jeremy Cooper's making the point that if you're at the skinny end of your working career, but of course another thirty years of life, you don't necessarily want to be in risky stock.  But I am reluctant to start telling superannuation funds that you must invest in asset class A or B.

I can see the sentiment of what Mr Cooper's saying and we've discussed it plenty of times, but I'm wary of Government telling superannuation funds pick asset class A over asset class B.  That's a bit like trying to tell people which horse to put their money on.

DAVID SPEERS:  So you're concerned but not enough to dictate what should happen?

BILL SHORTEN:  Well I think we're seeing the gradual evolution into new asset classes.  That's why the Government set up a superannuation round table, to look at what sort of products should be available post-retirement, and I know that APRA is looking at these matters.

I have - I've got a lot of faith in the general wisdom, the collective wisdom of the market to over time, start changing its patterns.  I certainly don't think it's desirable to have all your money in Aussie equities.

DAVID SPEERS:  Can I turn to another piece of legislation which went through the lower house today.  This is your road safety tribunal, which will start up from July this year.  It's trying to tackle the problems in the trucking industry to have a tribunal that can better set rates of pay and other things because there have been what, two hundred and fifty fatal accidents in the last year alone, involving heavy vehicles.

But how can you be sure that higher pay is going to tackle these problems of speeding and very long hours that truckers do?  Aren't they still going to do that even if they are earning a bit more?

BILL SHORTEN:  You are right to the extent that safety on the roads is complex.  There's no silver bullet.  When there was a push for seatbelts in the early seventies, that doesn't mean that people have stopped dying on the roads, but it's taken out one of the factors. 

Ever since 1979 and indeed a bipartisan report - like where the report - study was done then, studying the relationship between owner-drivers and their methods of remuneration and safety, right through into the last decade where actually, the National Party member for Hinkler, Paul Neville and the member for Bendigo was his Deputy Chair, Steve Gibbons, they studied - they said that there's an issue here to be addressed.  The National Transport Commission did.

Our basic proposition is that yes, we do believe there is a link between unsafe rates of pay, excessive fatigue, speeding, illicit drugs, people dropping out of the industry, a lot of inexperienced drivers because of the high turnover.  We want to make the roads safe for the truck driver and the rest of our families.

DAVID SPEERS:  Will it push up industry costs and in the end retail costs for everyone?

BILL SHORTEN:  Sometimes, and I have to say this about the Liberals, they seem to know the price of everything and the value of very little.

The cost of our fatalities and serious injuries last year alone was two point seven billion dollars.  In fact, in workplace safety, for 2010, all the injuries that happened, sixty billion dollars.  When your dad doesn't come home, there's a cost to that too.

So I'm not dismissive of the issues of logistics and costs.  We're going to have a tribunal made up of experienced experts to balance it out.  This doesn't mean that there's going to be some giant red book on every issue to do with truck driving.  Not at all.  Let's not scare people.

But you know, someone asked me about is this too much red tape?  I'm worried about the crime scene tape where someone gets cleaned up by a heavy vehicle because the driver's been excessively fatigued making unrealistic deadlines.

DAVID SPEERS:  Now a final issue: the Fair Work Australia last week handed down its report on - one of its reports on the Health Service Union on the Victorian branch.  You were asked about this in Parliament this afternoon.

Can you just clarify, has there been a referral?  Has it been brought to the attention of the Tax Office or any other authorities?

BILL SHORTEN:  Yeah, first of all, there's a number of branches of the Health Services Union inVictoria.  There's only one of them - has been investigated.  So to all those members in the other branches, they're not caught up in this even if the name's caused confusion.

In terms of the Tax Office, we've certainly drawn it to the attention of the Tax Office.  I should say though that the Tax Office had worked out this issue as it was - what's happened with the report in terms of legal proceedings is that Fair Work Australia's General Manager has given it to the Australian Government Solicitor and with a recommendation to pursue matters there.

So I think that's going to be the main chain of events.

DAVID SPEERS:  But you have drawn it to the attention of the Tax Office.

BILL SHORTEN:  But we have drawn it to the attention of the Tax Office, yes.

DAVID SPEERS:  Okay.  And have you read the report yourself?

BILL SHORTEN:  I have scanned it, yes.  Yes, I've read it.

DAVID SPEERS:  So you've read the whole report?

BILL SHORTEN: Yes.

DAVID SPEERS:  Okay.  Bill Shorten, thank you.

BILL SHORTEN:  Thank you.

DAVID SPEERS:  After the break, our panel, Bruce Hawker and Grahame Morris, stay with us.