WEDNESDAY, 1 MAY 2019
Subjects: Climate change policy; Adani; early educators pay; A Fair Go for Australia
Subjects: Climate change policy; Adani; early educators pay; A Fair Go for Australia
LEIGH SALES: The Opposition Leader, Bill Shorten, joins me now from Melbourne. Thank you very much for being with us.
BILL SHORTEN, LEADER OF THE OPPOSITION: No worries Leigh.
SALES: Bill Shorten, you're unapologetically running for government on a big new agenda. So let's run through some of the detail of it beginning with climate change. Can we go back to first principles. Is it a fact that moving to a lower emissions economy will impose a short-term economic cost?
SHORTEN: Well, I was in Whyalla today, talking to the people who run OneSteel and they made it clear that they're investing in more renewable energy. So there is a cost to investing in new technology but they're absolutely convinced that the only way we will keep making steel in Australia is by investing in renewable energy. I had the same discussion up at Sun Metals in zinc in Townsville, or indeed let's just talk to the two million Australian householders who have invested in solar power. There is an initial cost and depending on the deals they can get, but most people who go to solar on households they don't go back, do they?
SALES: So if there is a short-term economic cost, you have a 45 per cent target for the reduction of greenhouse gas emissions, what will be the estimated cost of that to the economy over the next decade, not in dollar terms, but as a percentage of economic growth?
SHORTEN: It won't have a negative effect on economic growth. In fact, most of the mainstream modelling shows that our economy will continue to grow.
SALES: But if you have firms that have to be shifting and making the transition to having lower carbon emissions, that may mean that they have less money to spend on other forms of investment, it may mean they have lower profits so therefore they have less money to deliver in the form of company tax into government coffers. Those things could have a spin-off impact on to the GDP numbers?
SHORTEN: The problem with what you're saying is that you assume that there's no cost to doing nothing, and there is. That's why Australians wants real change at this election. They're sick of doing nothing.
SALES: I don't assume that there's no cost to doing nothing. I accept your position there's a long-term benefit. What I'm asking you to do is to square with the voters about exactly what the short-term cost is of getting to that position?
SHORTEN: Well, my absolute conviction and belief, is that if we don't change, then the cost will be far greater than any initial investments.
SALES: But what is the initial -
SHORTEN: If you're asking me to specify what a particular company in a particular factory will have to do, I can't do that, nor could you, nor can the Government.
SALES: Isn't it a reasonable -
SHORTEN: Let's be fair here, Leigh. Let’s be fair. I'm not going to get caught up in this Government came of gotcha when you have got to invent a number which you can't possibly.
SALES: But -
SHORTEN: There's 250 companies caught by our safeguards mechanism, the same safeguard mechanism the current government applies to 120, each company will respond differently. You and I know that the reason why the government's trying to focus on how much it might cost to put in a new renewable energy system is that they're trying to distract from the fact they have no climate change policy.
SALES: But if we could stick with Labor -
SHORTEN: It's so dishonest this debate. It is so dishonest -
SALES: You can't just pluck a number out of nowhere. You've come up with the 45 per cent target.
SHORTEN: Sorry, I didn't pluck that out of nowhere. That was the Paris Agreement. That's what the scientists tell us.
SALES: But if you are choosing that yes we will go with that number, with 45 per cent, you must have done...
SHORTEN: I'm not choosing it, the scientists say it. It's what we've got to do to stop the planet getting warmer.
SALES: But as a government you are adopting it as your policy. You must have done some projections short-term to what that will mean to GDP. Will it take say 0.1 per cent off GDP, 0.5 per cent off GDP over 10 years?
SHORTEN: Let's go to Citibank, they're an internationally reputable bank. They say that the consequences in terms of cost, of policies on climate change like ours are immaterial. So I am saying to you very clearly that both in the short term and the long term, the cost of not acting on climate change is far worse than acting on climate change. And, again, let's, when you talk about cost, what's the cost to the environment? The cost is in not acting. When you talk about the cost to business, the reality is, that lots of businesses are so far ahead of government they're already investing. This is the problem with this short-term vacuous government who has no policies in the election other than to say they're not Labor. Australian people and business are so far ahead of the political debate, you must be bored by the Government's rhetoric which simply wants to you know say we can't do this and we can't do that. The rest of the world is so far ahead of us it's embarrassing.
SALES: Let's turn to the Adani coal mine in Queensland. If there's a miner sitting in Rockhampton tonight watching and she wants to know, "Mr Shorten, do you reckon this mine will be a good thing for my industry and for Queensland?" What would you say to her?
SHORTEN: I'd say that my view on this mine is going to be based on the best science, whether or not it stacks up, and if it is, if it stacks up and passes all the scientific tests, I won't engage in sovereign risk. So in other words we won't arbitrarily upend things. But what I'll also say to that woman miner in central Queensland, is that if you're a labour hire miner, not a direct employee, I'll make sure you get paid the same as the direct employee. If you're a casual or on a fixed term contract I'll make sure you get a fairer go.
SALES: If we can stick to Adani for now?
SHORTEN: Okay sure.
SALES: We'll go to a range of other things shortly.
SHORTEN: By all means.
SALES: In an interview with me on 7:30 in April last year you said, "I'm a sceptic of the project, I'm not a fan of the project. I'm happy to tell people my personal opinion." So your position has changed since then?
SHORTEN: I think you'd be fair enough to acknowledge that then, Adani didn't get the finance but now they appear to have got the finance. The other thing of course back then is they were talking about a 60 million tonne mine with 10,000 jobs. Now the promises have shrunk to a 10 million tonne mine.
SALES: You're less sceptical of it now?
SHORTEN: In terms of the commercial high jump bar, yeah they've passed that.
SALES: How about the environmental one?
SHORTEN: Well that's going to be a matter for the state and federal regulators isn't it.
SALES: Various Labor candidates and MPs have had differing positions on Adani, it seems a little confusing what the party's actual position is. What do you say to the suggestion that you've created that situation by saying one thing to people in regional Queensland and one thing to environmentalists?
SHORTEN: I'd say that's wrong. Our position's very clear. Got to stack up commercially. Got to stack up scientifically. Got to stack up according to the law and we won't engage in sovereign risk.
SALES: Okay -
SHORTEN: If we want to talk about conflicting positions, let's be even handed here, Leigh. You have got all these Scott Morrison Liberals down in Melbourne and Sydney, they call themselves "modern Liberals", and you've got the LNP in Queensland with a different view. You have the civil war between Matt Canavan and Josh Frydenberg about where poor old Melissa Price was going to finally...
SALES: And I'll have the chance to ask the Prime Minister about some of that when he comes on the program. Let's move on to some other areas, you would have heard in our earlier story 83-year-old Chris Phillips, the retired carpenter who has $36,000 a year in income and he will lose $9,000 per year under your franking credits policy. Your policy is driving somebody like Chris heavily on to the public purse isn't it for everything from healthcare to social welfare?
SHORTEN: Well he already is and this is the real heart of the issue. When you get an income tax credit, when you haven't paid income tax, it's a gift from the Government.
You're already on the public purse. But the criteria by which you get this money is that you just happen to own shares. Now Mr Morrison has been most dishonest in this. Where he says we're coming for people's savings. No, we're not. And then he's been most dishonest and saying somehow this is a tax. What currently happens - and I have people come up to me all over Australia who say, really, I mean seriously can you believe it Leigh, when you don't pay income tax you get a tax credit?
See what the Liberals don't say to you is that when you get this dividend income, you own shares, you get the interest or the dividend from the shares, it's tax-free. But what this government does and previous governments have done it on both sides, is not only do you get the income tax free, you then get a 30 percent top-up from the government, it's a government payment.
Now, it's not illegal and it's not immoral. But did you know Leigh that this generous gift going to some people purely on the basis they get dividends from shares and don't pay tax, it's costing $6 billion a year, nearly $8 billion a year in the very near future. It is eating the Budget and it's just a gift.
SALES: Will your negative gearing policy make houses cheaper?
SHORTEN: It won't have an appreciable impact on the price of housing.
SALES: So what's the point of having it then? Because I seem to recall when it was introduced, it was partly to make housing more affordable?
SHORTEN: Well what we want to do is create a level playing field, first of all. Why should a pair of first-home buyers, you know supported by their parents, they could be in their late 20s, early 30s. They go to bid for a house, get the deposit together, they've got to look at getting the stamp duty together, it's a lot more expensive than it was 20 years ago. And then what happens is they're bidding against someone in the crowd who is getting a taxpayer subsidy in the form of negative gearing. It's not fair and the other thing is this, this nation can't afford to keep giving away money to property investors to make losses on property. Now we are grandfathering it, though so no-one will be affected who is currently invested under these laws it's prospective.
SALES: You say it won't drive housing prices down by very much. Can Australia afford to adopt a policy that drives housing prices down at the moment at all given that the Reserve Bank said in its last minutes that rapidly falling housing prices are currently a downside risk in the economy?
SHORTEN: Well, that's all happened under the current government and that's at the heart of this election. This government loves to talk about a strong economy but strong for who? Corporate profits are up 39 per cent but wages are only up 5 per cent. First-home buyers find it hard to get in the market, but if you're a property investor buying your sixth or seventh property, this Government gives you a subsidy. Is that really fair? I mean the heart of the problem in Australia at the moment is that we don't have any economic confidence. Wages are stagnating, cost of living is going up. What we have is that capital in this country is taxed very lightly but income is taxed very heavily. It's not fair on our young people, it's not fair on our pensioners, it's not fair on people on fixed incomes.
SALES: I'll come to some of those points in a second. I just want to ask about another of your controversial policies which is superannuation...
SHORTEN: Sorry just to correct, when you say controversial, some in the property industry don't like negative gearing changes but a lot of people actually do like it.
SALES: Superannuation I'm talking about. Paul Keating and others set up superannuation so it would entice people to save for their retirement so they would be less of a burden on Government across all demographics. Why are you making it less enticing for any Australian given that that's the whole point of it?
SHORTEN: Well, I don't accept your assumption it's less enticing. It's preferentially taxed on the way in. So in other words, the income you pay into superannuation up to a certain level is still taxed below income you take in your daily pay packet. So it is preferentially taxed on the way in and preferentially or more favourably taxed while it's in the superannuation. So I don't accept the characterisation it's less interesting. What has happened though, is we've got to make sure that the function of superannuation is to make sure that people have money for their retirement. It's not about making multimillionaires, multi-multimillionaires is it?
SALES: You spoke about the tax on income versus the tax on capital. Paul Keating made a point in a letter to the editor of the Financial Review last August that having 49 percent as the top marginal tax rate is way too high, especially when company tax is 30 percent. Where's Labor going to draw the line on relying on the rich to fund new spending? For example would more than 50 percent as the top marginal income tax rate be too much? Would 60 percent be where you'd draw the line? Where would you draw it?
SHORTEN: Leigh, you know there's no plans for 60 per cent or indeed 50 per cent, but I agree that what we need to do is eventually lighten the burden of income tax across all the levels. But to be fair, we already are offering 3.6 million Australians lower income tax at the bottom end. We've matched, we were ahead of the Government until the last budget and they basically matched our proposal for 10 million wage earners so when it comes to income tax, we are doing what we think is sensible. But the way which we also need to go in this country is not fund tax cuts on the never-never like this government is currently promising in five years’ time and the only way they can fund it is if they cut services. See this is one of the big numbers in this election. Don't worry about what a business has to do in terms of their decisions which they control. This is something Mr Morrison controls.
Did you know Leigh, that he's handing $77 billion back over the next 10 years to the top tier of income earners? So a millionaire is getting $11,000 in Scott Morrison's land a year - yet someone on a much more modest income is only getting $11 a week tax cut - it's not fair.
SALES: Let’s talk about what you might control if you are the Prime Minister by the end of the month, you've said that you'll deliver a 20 percent wage increase to childcare workers, that it's the only sector for which you'll do that because it's unique. What's unique about childcare workers but not aged care workers or disability carers?
SHORTEN: First of all, when it comes to community sector, there was some wage improvement made for them when Labor was last in power. When it comes to aged care, let's see what the Royal Commission does. But there are unique features of the early childhood education industry. First of all, if you look at 96 different occupations in Australia, it ranks 92nd- that's 92nd bottom, not 92nd top.
What we are relying on is these people are the first people that we trust our kids to outside the family home. We rely on them to teach our kids to learn. And also it's 96 per cent feminised. In other words -
SALES: Everybody would agree with that but doesn't it set a precedent -
SHORTEN: That's right.
SALE: Doesn't it set a precedent for the Federal Government to pay wages for other private sector workers in the form of direct subsidies?
SHORTEN: No. Let's go to that. First of all, if we agree - and you were generous enough to observe that everyone knows that early childhood educators are both important and underpaid. There's four options we've got. One, we just ask them to keep working for bugger all. Well, I don't think that's an option. So two, we can ask the parents to pay more. I don't think that's an option because child care is already horrendously expensive. In fact, we're going to provide $2,000 per family, in some cases $1,500 per-family per-child and others. But the parents shouldn't be asked to necessarily pay the whole tariff, should they? We could ask the providers and it's a hybrid industry; there's not-for-profit and for-profit operators but they're operating on increasingly tight margins. Or, the alternative is the Government recognises this is an important sector, it recognises that we shouldn't be asking parents to pay more. So we should be able to find some scarce resources to help pay the adults who are educating our kids, who have been sorely neglected. Now, this is not our wages policy for everyone else. You said, why this sector and what will you do for everyone else? There are plenty of levers if you're a fair dinkum government where we can help have real change to help working people get back on top.
SALES: When we take all of the policies that we've talked about tonight, is it fair for a viewer to conclude that a Shorten Labor Government will be at its core about the redistribution of wealth, that you want to take more from the wealthy and give more to people on lower incomes?
SHORTEN: No, that wouldn't be right. What we want to do is have real change, because, frankly, more of the same under this government isn't good enough for Australians -
SALES: But as I said, when we go through your policies, a lot of where you're getting your revenue from is taxes on wealthy people, closing loopholes that mostly wealthy people can exploit and you're wanting to spend money on lower income people. How is that not a form of changing the economy towards a model of redistribution?
SHORTEN: Perhaps if you bear with me for a moment, I'll answer your question.
First of all, we are advocating for real change. Everywhere I go in Australia, people are sick of a lack of vision. You know this election is about a choice. The Government are saying stay the course, stay with the current mob. We're staying no actually, this nation can do better. That's why we are closing loopholes, we're stopping spending money on franking credits - we're going to stop giving out tax cheques to people who haven't paid income tax and instead we're going to spend that money for example, on pensioner dental.
SALE: But if you - if you reject the assertion -
SHORTEN: No, no, hang on, Leigh. You keep characterising my policies -
SALES: No, no, no, but what I want you to do is try to do it -
SHORTEN: Well, I want to try and answer -
SALES: Because if I'm wrong, if I am wrong and it's the core of your government is not about taxing wealthy people to redistribute income to lower incomes, in a sentence, what is going to be the core of the Shorten Labor Government?
SHORTEN: A fair go for all. We're going to invest in people and invest in infrastructure. You ask, you want - let's not dumb politics down to six second sound bites, that's what annoys people. I'll tell you what we will do - I'll give you as quick as possibly I can. We're going to have real change because more of the same isn't good enough. We're going to get wages moving again. We're going to take real action on climate change. We're going to look after three million pensioners and Commonwealth Senior Health Card holders with dental care, we're going to provide a million Australian families with better support child care then they are getting. And we're going to end the chaos. One topic we haven't talked about tonight is the lurch to the right by the current Government.
SALES: That's a matter for me to Scott Morrison about. With all -
SHORTEN: Ok, but I'm happy to contribute, though.
SALES: If you need to have a glass of water while I ask the question, please feel free.
SHORTEN: That's alright.
SALE: If - you listed out that list of things that you would like to deliver, the issue for you in an election campaign are that voters have to trust that you will actually deliver on that. Why should they trust Labor to deliver on that? You'd point, for example, just to your last thing there, to chaos. People remember the last couple of terms of Labor in office.
SHORTEN: Well, fair's fair. In the six years that the current government have been in, Labor has been united. I have got a tremendously talented Shadow Cabinet. People can also trust us because we're actually not hiding our policies. You said in your introduction that Labor - I think Laura Tingle did, sorry. She said Labor is putting forward a big agenda. Well, we are. We believe that if we want the Australian people to trust us, we have to trust them and tell them what we're going to do.
Now, I know not everyone is going to agree with everything. But for six years, we've learned our lesson. We're not chaotic and divided. The other thing of course is if you vote for me, you get a Labor Government. Whereas if you vote for Mr Morrison, who knows what deals he's done with Pauline Hanson and Clive Palmer and the other assorted extreme right-wing bar scene from Star Wars.
SALES: If you're elected, you're unlikely to have a majority in the Senate. If you can't get through your revenue-raising reforms - super, franking credits, negative gearing and so forth - which of your promised spending will you be dropping?
SHORTEN: Leigh, let's see how we go in the election first. We haven't won and we haven't lost. But one thing's for sure. In the event we do win, we have put our policies to the people beforehand. What business tell me, what families tell me, what small business, what farmers tell me is that they're sick of surprises. What we are doing is we are putting our policies before the election to the people. So even though people use the word mandate quite casually in politics, I genuinely believe we will have a mandate and we'll do our best to convince the Senate. I mean, one thing I should say is that seeing the profusion of small and cranky parties in the Senate, I do think people should vote the same way in the Senate as they do in the House. What we don't want is instability. People are sick and tired of us politicians always being at each other's throats. What they want to see is us putting the people first. So what we're doing is putting people at the centre of all of our decisions.
SALES: Mr Shorten, we've covered a lot of ground tonight. I'm sure our viewers appreciate your time very much. Thank you.
SHORTEN: Thanks for the conversation, Leigh. It was great.