Bill's Transcripts

ABC AM: Australia-China relations; Tony Abbott’s cuts to pension indexation






SUBJECT/S: Australia-China relations; Tony Abbott’s cuts to pension indexation; superannuation


MICHAEL BRISSENDEN, HOST: Mr Shorten, welcome to the program.




BRISSENDEN: What was the sense you got about where the Chinese economy is going and what it might mean for us?


SHORTEN: There is a big change underway in China where they are moving from a development economy, with very high rates of GDP growth, to what they call a mid-to-high speed economy, or as the President of China said ‘a new normal’ whereby they are going to focus less on investment growth rates and more on quality of life, lifting of consumption within China, which is creating a strong middle class in China. I think that’s good news for Australia. It certainly does put some greater pressure though, as we have seen in recent weeks and months, on our commodity prices because the demand is going to diminish over time.


BRISSENDEN: It certainly does and the economy, although it is changing, it’s transitioning. It is also slowing – we do have a rapidly declining iron-ore price as you said – that makes budget preparations even more complex and it would add more responsibility on Labor to put the national interest above politics doesn’t it?


SHORTEN: Labor puts the national interest first in our considerations Michael, just to correct any implication that we don’t. I think that when you look at the challenge of revenue write-downs, previous Labor administrations had significant revenue write-downs. They’re always a challenge but it is also important that we make sure we don’t stifle growth or confidence in the Australian economy. It is also important that when Governments prepare their budgets that they keep the promises they made before the previous election.


BRISSENDEN: Labor certainly rode the resources boom though didn’t it? The situation is different for this Government – you’d have to accept that?


SHORTEN: There is no question that iron-ore prices are lower but again, I am far more upbeat about the future of China and therefore, the potential for Australia to do well. We are moving from our historic high of investment in infrastructure and mining. Courtesy though of that investment, we have much greater volumes for our resources than we ever had before. But the big transition going on in Australia therefore is to a non-mining economy and there is greater opportunities as China has greater demand for services, for us to be a part of fulfilling their desires to lift literally millions of people over the next couple of years into the middle class and indeed that goes for the whole of Asia in total.


BRISSENDEN: Were you surprised then Luke Foley in New South Wales, invoked Chinese ownership of the electricity network in an attempt to scare voters and was that raised at all with you by Chinese officials?


SHORTEN: The Chinese Government did not raise the New South Wales state election with me which I think when you think about it, it isn’t really surprising they didn’t. There’s a deep reservoir of good-will from China to Australia and courtesy also of the good work done by Australian business, Australian academics and of course, successive Australian governments. There is great good-will I believe for Australia to draw upon. China sees Australia as a place that can be a collaborator in their growth. Belatedly, the Federal Government has caught up with Labor and is now saying that they will support the Asian Infrastructure Investment Bank. There’s plenty of opportunities with the current rise of China for Australian business and indeed, for forward thinking foreign policy for Australian Governments.


BRISSENDEN: Do you think Australians should be worried about the Chinese owning any part of our electricity network?


SHORTEN: I think the debate here is that in New South Wales there was a clear debate on privatisation – New South Wales Labor went to the last election with a policy being opposed to privatisation. The Liberals went with a different policy.


The Liberals successfully won the election but the results came in while I was in China – there was a 9 per cent swing to Labor so –


BRISSENDEN: But as many have pointed out, it was the second worst result for Labor in New South Wales ever and you lost ground to the Greens.


SHORTEN: Well Michael again, Labor, you’re right the Liberal’s won the election but Labor did very well in the election, they were starting from a low base and they improved their position -


BRISSENDEN: It was the second worst result for Labor though wasn’t it?


SHORTEN: Well again, I’m not going to re-litigate Saturday’s election. It was a 9 per cent swing and I don’t think I’ve had the chance to do it in Australia, I congratulate Premier Baird on winning and I also congratulate Luke Foley on the campaign, in getting Labor an extra 9 per cent and winning seats.


BRISSENDEN: Ok, well just before we move onto other issues, if it had been a bad result for the Coalition this would certainly have been seen as bad news for Tony Abbott, equally this result would have to reflect on your leadership wouldn’t it?


SHORTEN: I think if the Abbott Government and Joe Hockey and Tony Abbott think that there’s good news for them in the New South Wales state election, they’re not reading I think what people really think about the Federal Government. There’s no doubt Mike Baird was a strong performer but to the extent that if Joe Hockey and Tony Abbott thinks that this justifies their bad Budget from last year – from pensions, through to higher education, increasing the cost to $100,000 degrees – I think that would be a mistake by them to draw that conclusion.


BRISSENDEN: Ok, we're getting a few pointers to some of the savings measure we can expect in the Budget. On pensions, for instance, you rejected the Government's indexation proposals, now they're talking about a proposal that would scale back access to the pension for more wealthy Australians. You'd support that I'd assume?


SHORTEN: Oh well Michael let's just go through what you've said and what's actually been reported in the paper. It is correct that Labor has opposed the Government cutting the rate of pension indexation and today for the first time it appears that after nearly a year of Tony Abbott and Joe Hockey saying the Government was being - Government policies were unfairly being targeted by Labor through a scare campaign, for the first time we now see some chinks in the armour of the Government's propaganda campaign where they’ve tried to pretend that somehow what they're doing was good for pensioners. Their Budget last year proposed over 10 years cuts of billions of dollars from pensioners, up to $80 a week over the next-


BRISSENDEN: Nevertheless, the history aside, would you support, would you support this position?


SHORTEN: Well first of all, when we say the history aside, there is no new proposal on the table from the Government. There is no new proposal and the second point, and this is why I can't agree when you say just dismiss it as history, the current Government is proposing to cut pensions by up to $80 over the next 10 years. Now the Government is not walking away from any of that. We see a thought bubble where the Government says on one hand maybe we'd consider another idea but by the way we haven't taken our existing election-breaking promise proposal off the table, but what I take out of today's story is nothing more and nothing less that after ten and a half months of Tony Abbott and Joe Hockey saying that Labor was exaggerating the implications of their pension cuts, they seem to be at last agreeing that there is an issue here.


BRISSENDEN: So you would it support it? You would support scaling back access to the pension for more wealthy Australians?


SHORTEN: Again Michael, I'm not going to give this Government a blank cheque. What I would support is well thought out detailed policies which they haven't put to us. The article which, the discussion in this morning's newspapers is nothing more than Scott Morrison having a thought bubble, ‘maybe I might go this way, maybe I might go that way’.


In the meantime, the only fact that can be drawn from today's thought bubbles is that Tony Abbott and Joe Hockey know that they have been saying on one hand that Labor's scaring people unfairly about their pension cuts and on the other hand they're conceding, I think any reasonable person says they're conceding that their proposed pension cuts which will see billions of dollars taken off pensioners or in practical terms up to $80 a week being taken away from pensioners because they're tinkering with the rate of pension indexation.


BRISSENDEN: Okay, now the Shadow Treasurer Chris Bowen has indicated that you will support a crackdown on generous super tax breaks. How far would you go?


SHORTEN: Well, as an illustration of this point, we are very committed to people being encouraged to save for their retirement. We want to have a sustainable aged pension system and the best way to do that isn't this sort of thought bubble, cut pension rates in the last Budget that the Liberal Government have. What they should be doing is unfreezing superannuation increases. Now part of the debate about superannuation is that in order to encourage people to save for their retirement they receive tax concessions. The debate which, and the idea which Labor has, which is supported by a lot of independent financial analysts and indeed occasionally by parts of the Government, although soon as we have an idea the Government run screaming from the room saying, "we don't want a part of this idea."

What we'd look at is that if you have two, three million dollars in your superannuation account in the draw-down phase, do you really need a 45 cent tax concession? No-one's against tax concessions helping people save for retirement, but what happened is that John Howard scrapped what was called the reasonable benefits limit and that was a limit where, above that once the taxpayer had helped you get to a certain amount of savings in your superannuation, did you need the same tax concession above that level?

Now Howard scrapped it so it's created, in my opinion, for a few very lucky people who've had the ability to save millions of dollars in their superannuation, they get a tax-funded concession. My aim and Labor's aim is to make sure that many Australians can get more money in their superannuation and you do have to ask the question should you have the same generous 45 per cent tax concession for people who already have millions of dollars? Is it the job of the taxpayer to help people who –


BRISSENDEN: So you do now think there should be change?


SHORTEN: Well we did before the last election.


BRISSENDEN: Well back in 2012 when you were the superannuation Minister we were also talking about this.


SHORTEN: In fact we put up a proposal at the last election and, so this is not a debate about should people receive tax concessions to help them save. This is a debate about how generous should millions of taxpayers be to a few tens of thousands of people who have millions already saved and I don't think secretly in the heart of hearts of the Government they can see any case for keeping it but what I do notice is that this Government has been banging on saying, ‘Labor, you know, you don't give us your ideas,’ because, let's face it, the Government don't have lot of their own. We said we'd be bipartisan on reining in some of the excessive tax concessions in superannuation and the day after which we say that we look around for, you know, the sort of guru of policy bipartisanship, Tony Abbott, he's gone, he's left the room. He's not in for this.


So they've undermined Hockey's authority and we see that. How hard is it to have a serious policy for reform in this country when as soon as Labor says we're up for some of the dialogue and conversation be it multinational taxation loopholes or the excessive tax concessions at the very top end, the Government just, they’re not in for it. Bipartisanship for them is just a way to talk and to distract from fact they have no plan for Australia's future and they’re cutting pensions and superannuation for ordinary people.


BRISSENDEN: Bill Shorten, we will have to leave it there. Thanks very much for joining us.


SHORTEN: Thanks Michael.