201511.11

Transcript – ABC 774 with Raf Epstein – GST, Christmas Island, childcare, Carbon Emission Targets

Wednesday 11 November 2015:

Subjects: GST and tax reform, Christmas Island, Childcare and Family Tax Benefits and Carbon Emission Targets

RAFAEL EPSTEIN:

I need Brad Pitt to re-record that so it’s not just gentlemen. However, in the blue corner is Bruce Billson. He is the liberal member for the seat of Dunkley, you will of course recall that he was the Minister for small business.. was, sadly for him. Bruce Billson, welcome.

 BRUCE BILLSON:

Raf, it is fab to be with you, your listeners and Clare. Thank you for having me back as a humble back bencher.

 RAFAEL EPSTEIN:

As a humble back bencher. Clare O’Neil..

BRUCE BILLSON:

It is still is the Rivera though, you got that right.

CLARE O’NEIL:

Only someone from Frankston would say that.

BRUCE BILLSON:

That’s harsh, isn’t it?

RAFAEL EPSTEIN:

Clare, your seat would sort of.. you’re half way towards Frankston.

CLARE O’NEIL:

Yeah, we are halfway towards Frankston.

BRUCE BILLSON:

Clare’s residents aspire to live in Frankston.

CLARE O’NEIL:

You wish! You wish, Bruce!

BRUCE BILLSON:

A little bit of real estate envy playing out there Raf.

RAFAEL EPSTEIN:

Ok so, Clare O’Neil, the suburb in your electorate closest to Frankston would be what? I can’t recall the electoral boundaries.

CLARE O’NEIL:

Probably Cheltenham.

RAFAEL EPSTEIN:

You’d get there in 10 minutes, wouldn’t you?

CLARE O’NEIL:

Maybe a little bit longer than that but Cheltenham is a gorgeous spot very close to the beach, Bruce, and a great place, great schools.

RAFAEL EPSTEIN:

A beautiful pocket. So Bruce Billson, firstly can I ask you Bruce, honest response, do you feel the pain of demotion?

BRUCE BILLSON:

It was not what I was looking for. No, I respect the fact that in politics, there is politics and part of what that means is sometimes performance and getting on with the programme that was making a real difference to energise enterprise in the small business and family enterprise economy…. I was hoping to keep doing that Raf, but that has not been afforded to me and I am doing hopefully virtuous and worthwhile things.

Still doing passionate things for that community which I love, admire and respect but my capacity to influence and directly implement change has changed somewhat Raf, you are very perceptive in picking that up.

CLARE O’NEIL:

We’re very disappointed though, Raf.

RAFAEL EPSTEIN:

Why?

CLARE O’NEIL:

All us Labor people, we so much enjoyed Bruce’s energy and enthusiasm that he brought to the parliament and I would have thought that, Turnbull has talked a lot about optimism and that is just the sort of person Bruce Billson is.

BRUCE BILLSON:

Maybe my positivity runneth over?

CLARE O’NEIL:

Not possible!

BRUCE BILLSON:

Not flash Raf, but it is what it is and we just get on with it and stay classy.

CLARE O’NEIL:

That’s politics, isn’t it.

RAFAEL EPSTEIN:

Bruce Billson, can you do something significant on tax reform and not do something to the GST?

BRUCE BILLSON:

Of course you can. The first thing though, is to work out what it is you are trying to achieve and what change you are trying to bring about – and then the tax system becomes a means to contribute towards those goals.

For me, those goals are a resilient, robust economy, more jobs, better incomes and a capacity to deal with the changing population.

In the 70’s, Raf, when you and I were lads, there were seven people in the workforce for one retiree.

Now, it is about five.

By the middle of this century, which frankly isn’t that far away, it will be 2.7 people in the workforce for every retiree.

We are going to need to have an economy and a society that is supported by a tax and transfer system that enables us to raise the revenue we need to sustain our living standards and quality of life. That is a real challenge.

RAFAEL EPSTEIN:

That scale is big. That’s why you need a change to the GST, isn’t it? You can’t do it with just company tax and super and those things.

BRUCE BILLSON:

Your question was not quite so pointed, it was can you do things without mucking around with the GST – and the answer is obviously yes.

Is that the best thing to do? Well, that is why there is a discussion taking place.

The GST is one of a range of taxes.

Our two workhorse taxes in the economy at a Federal level are company tax and personal income taxes and as the economy digitises and there are mobile employees and mobile businesses that can choose to pursue their goals and create opportunity and wealth in just about any country they choose, those workhorse taxes can be quite vulnerable and we have got to deal with that.

We also need to work out what the tax policy setting is that will best support the goals we have as a country.

All of that is being analysed, there is a long term for it but essentially, the commonwealth and state treasurers are coming together early in the new year.

A few of the Labor state treasurers, thought a bump up of the GST would be a cracking good idea. We think there is a bit more involved in proper analysis and making sure whatever proposals are thought to be best for our nation, that it is done in a thoughtful way that protects the vulnerable and supports our country to achieve its goals.

That is the point of all this.

RAFAEL EPSTEIN:

Clare O’Neil, you probably are going to have to do something with GST to make a big difference, aren’t you?

CLARE O’NEIL:

I don’t think so Raf. No, I don’t think so.

There’s many, many taxes that we pay as Australians and I just pointed to big tax changes that Labor has already costed and already put forward to the government, that we think can make a part of this solution.

One of them is trying to make sure that multinationals pay their fair share of tax. We know there are really significant businesses in this country that don’t pay the same taxes as some of the small businesses that Bruce so vigorously defended as Minister for two years.

The other one that I want to mention is about superannuation taxation.

RAFAEL EPSTEIN:

They are both ‘small beer’ though, Clare O’Neil. They are not getting us to a significant deficit reduction.

CLARE O’NEIL:

I don’t necessarily agree that they are ‘small beer’ – They are probably not 100% of the solution but they definitely need to be considered.

RAFAEL EPSTEIN:

The reduction would be 5% of the solution? That’s the issue isn’t it – that you need probably a little bit of everything including a GST broadening or raising.

CLARE O’NEIL:

No, I absolutely don’t agree with that Raf and I have to say the government has not put any evidence on the table to suggest that the GST has to be a part of the tax reform conversation.

Can I just make the point on this: The Government is going to need to articulate to us why it believes the GST is the answer and the idea that this is inherently a more efficient tax by the government’s own recent tax paper is being called into question.

But the point about the regressive, fundamentally unfair nature of this tax cannot be missed, this is absolutely crucial and we will be waiting to hear from the government as to how they’re going to broach this task of fairness if they’re going to raise by 50% the tax on everything that the GST is applied on today.

RAFAEL EPSTEIN:

IF they go to 15%… If… If…

CLARE O’NEIL:

If they go to 15% and we’re talking here as well Raf about broadening the base: fresh food, putting the tax on fresh food. These are the things that labor finds will be very hard to stomach.

BRUCE BILLSON:

This is what is difficult Raf, is that its been labor premiers advocating these changes.

CLARE O’NEIL:

I don’t know that anyone has advocated a GST and that’s  …

RAFAEL EPSTEIN:

Former labor premiers certainly have.

BRUCE BILLSON:

And also you have got in South Australia; they have got some particular ideas that are a little bit different from what the Queensland and Victorian Labor premiers have been advocating.

They think a simple game plan is to muck around with the Medicare levy.

I mean, there are all sorts of ideas around Raf , but the risk is that you look at what is a complex set of policy settings, both on the revenue raising side, what is needed to fund essential works and services.

You can look at any part of it through a straw and have a great discussion about the little bit you see through the end of the straw but there is every other thing that interacts with it.

That is why a sensible discussion is important.

RAFAEL EPSTEIN:

Can I ask you though, Bruce?

BRUCE BILLSON:

Yes, Raf.

RAFAEL EPSTEIN:

You need to take some of the responsibility. You were elected because when Tony Abbott was in opposition, you were fantastic at playing the rule in, rule out game.

You pursued that strategy incredibly aggressively, so successfully, you won government.

Now,  the government’s done this complete 180 degree turn and said oh no we don’t want to play the rule in, rule out game.

Do you think the government as a coalition has to accept some of the responsibility for the political culture that the prime minister wants to change?

BRUCE BILLSON:

Everyone is a participant in it Raf but thank you for drawing to people’s attention how effective the Abbott opposition was but I didn’t find too many..

CLARE O’NEIL:

It didn’t translate too well into government

BRUCE BILLSON:

Well, that is a view for others to arrive at.

I am a bit close to that but you might have picked up Raf, and I don’t mean to be discordant because you know it is your show and I want to be respectful – but I do recall the media kind of loves a bit of the old rule in, rule out game and I think you were sort of heading down that track a little way yourself.

So what we have done is we have learned from the sort of ‘painted into the corner’ situation I think the previous Rudd-Gillard-Rudd government got themselves into by reacting to calls for rule in, rule out.

Obviously some people want to engage in that discussion, we are not sure that is necessarily in the best interest of the country instead of having sensible discussion and working at what we need.

So yes, we have been resisting that and if your critique is we have learnt, we are a learning organisation, well that is great! I like learning organisations.

CLARE O’NEIL:

If I could just make a point, I mean I think Bruce is making a good point there, and we don’t want to be in a political culture where it’s constantly about gotcha politics sort of thing-  but at some point the government is going to have to make decision here about what their policy is going to be. It’s fine to say that everything’s on the table but as you make the point the table’s starting to get very heavy here – and we are yet to have clarity on what the objective of what tax reform should be and that’s not good enough.

RAFAEL EPSTEIN:

Can I put a bit of the clarity spotlight on the ALP. The government wants to.. and my understanding by the way, the changes to the childcare payments, which we won’t go into the detail of because it’s inherently complex, but the changes to those childcare payments are really about helping out people on lower incomes, they’re not actually going to make a significant difference to the budget.

Labor’s knocked those back Clare O’Neil, I mean that doesn’t bode too well for a bit of bipartisan tax progress.

CLARE O’NEIL:

So Raf, childcare is right at the heart of what labor stands.

Childcare is great for families, it’s great for helping women back to work, it’s really important for kids and we’ve made a lot of improvements to the system in the time that we were last in government.

We really want to engage in a discussion about how to continue to improve the childcare system because everyone in politics agrees..

RAFAEL EPSTEIN:

But you have knocked all of the government’s well all but one of the changes away…..

CLARE O’NEIL:

That’s not quite true Raf. What Labor is trying to do is protect the family payment system.

What the government has tried to do is make this real political linkage between the family tax benefit changes, the cuts that it wants to make to working families and the childcare package.

We haven’t rejected any of the changes in the childcare package. We are not in a position to do that because the government hasn’t really explained exactly what it wants to do.

The changes you’re referring to are cuts the government is trying to make to family tax benefit and Labor is trying to protect working families – in particular vulnerable families like grandparent carers, like single parents who are looking after teenage children..

RAFAEL EPSTEIN:

Can I ask you about your opposition to the family tax benefit changes?

I think I’m correct in saying all of those government payments were brought in by John Howard when times were better, so all of the payments you are trying to protect, all of those families were doing without those payments before John Howard’s time.

So surely you can give the government room to switch some of those payments around to fund the very childcare you say you support. I mean they did without them before Joh Howard was prime minister.

 CLARE O’NEIL:

We’re going back a fair few years there, but if this is about budget repair, Raf, I would just make the point that continuously the government tries to push the onus of repair onto the poorest families in the country.

It’s doing this while we know that tax concessions to millionaire superannuates -which are worth something like $40 billion every single year are going to the wealthiest people in the country. So what we would just say is why take from the most vulnerable families when there are other places that we can find savings in the budget.

BRUCE BILLSON:

Raf, can I jump in now?

That is not quite what’s happening here.

What we have heard, and I am sure, from your talkback callers, you twitter traffic, you would have picked up that for many families weighing up whether to go back into the workforce or engage in developing their own skills through training and further education and the like, there is some real complexity in the childcare system.

And for some people, earning a little bit of extra money can trigger a tax liability and the loss of childcare benefits where a lot of families think it is just not worth engaging in the workforce.

We want to change that with a simplified system that will see families with a household income between $65,000 and $175,000 on average $30 a week better off and they can plan with certainty and engage in the economy if that is their appetite and not run into these headwinds of this incredibly complicated childcare system, family tax benefit.

But we have to fund that Raf and how we are planning to fund that is to dial back some of the family tax benefits when the youngest child gets over the age 16 or if they are under 18 but actually receiving some other kind of payment so.

RAFAEL EPSTEIN:

You shouldn’t mention the teenager issue because I think that is the one point Labor has accepted.

BRUCE BILLSON:

Part of it accepted.

RAFAEL EPSTEIN:

However, I wanted to get a, let me try this on you. I want to move onto Christmas Island and other issues, however, a prediction from both of you, a yes or no, that we will be discussing a GST at the next election.

So this is a prediction, neither of you have the Prime Minister’s or the Treasurer’s inner workings before you. Bruce Billson, yes or no, do you think we will be debating a GST at the next election?

BRUCE BILLSON:

I think it will be part of the discussions because as Clare said there is no actual proposition of the table and we are discussing it so there is no chance of it not being discussed….

CLARE O’NEIL:

Hopefully by the next election we will have moved on.. Hopefully by the election a few things will have been taken off the table.

BRUCE BILLSON:

You asked me whether there is a discussion there..

CLARE O’NEIL:

Unfortunately Raf, I’m pretty confident the government is going to go ahead with this. It is right out of the Abbott-Turnbull playbook and Labor will be fighting it absolutely to the hilt.

BRUCE BILLSON:

The Abbott-Turnbull playbook..

RAFAEL EPSTEIN:

….It’s a big book..

BRUCE BILLSON:

That is an interesting line. I haven’t heard that one.

RAFAEL EPSTEIN:

As long as it’s not like republicans’ playbook.

CLARE O’NEIL:

The key move is forcing costs onto the poorest people in the community.

RAFAEL EPSTEIN:

Clare and Bruce, let me press pause there, I don’t want either of you to come up with a Carly Fiorina three page tax code because that type of talk in the United States scares me a lot.

However, we’ll continue with Clare and Bruce in just a moment.

TRAFFIC REPORT

RAFAEL EPSTEIN:

Bruce Billson is the Liberal member for the seat of Dunkley focused in many ways on Frankston.

Clare O’Neil is the ALP member for the seat of Hotham. Bruce Billson, I’ll start with you. The disturbance, well the riot on Christmas Island that boarder force insists on calling a disturbance.

I just wonder if you feel that everything was done that could have been done to stop that from happening. In particular, the criticism that people had been to prison for serious offences were detained alongside people who were essentially behind fences for immigration offenses.

BRUCE BILLSON:

Yes, I saw some of that report. I also, on the morning after, heard a New Zealand Labor member of parliament say how impressed he was that every effort had been made to negotiate and talk down the tension that was there at Christmas Island.

So yes, your point Raf is right, that the vast bulk of the detainees on Christmas Island are very serious characters who are non-citizens and have either had their visas cancelled or have been removed from Australia. And there is a criminal element peculating through some of those cases.

A full investigation needs to be carried out; we do need to hold people to account for the damage to the taxpayers’ property that occurred. Some injuries – yes, are regrettable but thankfully not too major in terms of that skirmish but I’m led to believe, and I can only go by reports Raf, that minimal force was used.

But there is a hardened population on Christmas Island as consequence of the really sincere and genuine efforts the government’s taking to see families, in particular, provided alternative arrangements in the community.

RAFAEL EPSTEIN:

Clare O’Neil, do you think they did all they could have before it got out of hand?

CLARE O’NEIL:

Yeah, I mean Raf, that’s a really good question and the unfortunate answer to it is that none of us at the moment have the information that we need to answer this question. And this is just part of the broader problem with the way that immigration and detention is being run by the government.

I mean even Bruce over here, poor man, is having to rely on a secondhand account from a New Zealand member of parliament as a piece of evidence. What Labor wants to do is put independent oversight in all of the offshore detention facilities, because we actually don’t know a lot of what is going on in these facilities and I’d love to be able to provide better comment on your question but I’m simply not in a position to do it.

RAFAEL EPSTEIN:

A quick question to both of you about the Paris climate change talks. Bruce Billson, is it actually worthwhile, these global agreements? I know there are people in the Coalition who think it’s a waste of time. They often cite people like Bjorn Lomborg. Is it worthwhile trying to get that type of global agreement?

BRUCE BILLSON:

Yes it is. Otherwise, you will find the important issue of climate change and containing emissions being dealt with by some economies with an impact on their citizens and not by others. And frankly the atmosphere doesn’t discern between where the emissions have come from so there is a need for a coherent framework that sees all nations making a contribution and a concerted effort to hold people to account for their undertakings at these sorts of summits and through these kinds of protocols – so that it is not just all talk, but there is follow up action, validation and a real genuine commitment to bring about change.

RAFAEL EPSTEIN:

Clare, do you think there will actually be tougher targets from Labor leading into an election than what will be taken to Paris?

CLARE O’NEIL:

Yeah, Raf, Labor hasn’t made formal announcement on it at the moment but you will have noticed that our response to the pretty paltry, mediocre targets that were set by the Abbott government looking beyond the immediate targets that we will be looking at doing something substantial in relation to climate change because it’s one of the biggest threats facing our country. It’s one of the most important issues we have and we have to tackle it head on.

BRUCE BILLSON:

…And that is why Australia on a per capita basis is making the greatest efforts to reduce our emissions of any developed economy in the world

RAFAEL EPSTEIN:

Or they would still be the growing population….

BRUCE BILLSON:

We can’t only look at one side of the coin.

Yes you are right, the economy we have has been grown out of our comparative advantage of abundant and cheap energy, so it’s not surprising that there is an energy dependency in the economy.

Now, that is working its way through. We are seeing wealth and employment and economic opportunity created with less energy.

But we have more work to do and we are prepared to do more work, but as people talk about paltry efforts, let’s get some facts on the table – There will be no group of citizens in the world, working harder and making a greater personal contribution to emissions reductions than Australians.

We should be pleased about that, we recognize our responsibilities and that is why we think Paris is important and serious.

RAFAEL EPSTEIN:

Clare and no one is doing it tougher than us?

CLARE O’NEIL:

I am sure that’s not what Bruce meant.

I don’t know on what basis you’ve calculated that we’re doing more than any other country but I’d simply make the point that when we look at the commitments that have been made by countries around the world to 2020 and 2030, Australia is lagging significantly behind people that we call laggers such as Canada.

Australia, it is actually in our best interests as a country to put forward ambitious targets. This is important that we make this transition to a lower carbon economy and let’s not forget that amazing economic opportunity that’s at the end of this which is being a renewable energy powerhouse. We are only going to make it if we have good climate policy and that’s not the case today.

BRUCE BILLSON:

26-28% reduction translated into a per capita effort is almost 50%.

RAFAEL EPSTEIN:

I might leave it there….

BRUCE BILLSON:

Boom boom!  There you go!

RAFAEL EPSTEIN:

I’m not going to go down the rabbit hole of….

BRUCE BILLSON:

You were going to agree there Raf… go on, go on…

RAFAEL EPSTEIN:

….climate change figures, without enough time to explore the issues…

RAFAEL EPSTEIN:

We don’t have enough time to explore the issues. Bruce Billson, Thank you so much for your time.

BRUCE BILLSON:

Raf, great to be back and thank you for having a humble backbencher on with your abundant listening audience and Clare.

CLARE O’NEIL:

Its been a real pleasure, Bruce. Thank so much Bruce and thanks Raf.

RAFAEL EPSTEIN:

Clare O’Neil’s the ALP member for Hotham. Bruce Billson’s the liberal member for Dunkley.

ENDS