Interview on ABC Adelaide Breakfast with Matthew Abraham and David Bevan
Topics: Tax relief for Australian businesses; Port Augusta solar thermal plant; Reliable and affordable energy; GetUp!; Future schools funding arrangements
Matthew Abraham: Thank you to Peter Malinauskas, a very important person in the South Australian Labor Party, has sent us a text saying another option for the High Court – to sort out the whole Bob Day fiasco – is to call a whole of South Australia Senate by-election similar to what happened Western Australia post the 2013 election. Although that’s considered unlikely it is an option the High Court could go for.
David Bevan: They could just take their crazy pills and say; hey, why don’t we just have another election.
Matthew Abraham: There’s a-
David Bevan: Not that I think our good people of the High Court would ever do that.
Matthew Abraham: No! There’s a good explainer by Peter Jean in The ‘Tiser (*) but if by the time you get to option four and you add in that option your eyes aren’t spinning, then you’re doing very, very well indeed. It is going to be quite complicated. But there’s a lot riding on it. So a royal gold Senate seat up for grabs by the looks of it.
Let’s go right now to Simon Birmingham, Liberal Senator for South Australia, Education Minister. Simon Birmingham, welcome.
Simon Birmingham: Good morning, Matthew, David, listeners, Kate and who else is on this morning?
Matthew Abraham: Rebekha Sharkie!
Simon Birmingham: Rebekha! Excellent.
Matthew Abraham: Kate Ellis, Labor MP for Adelaide. I know the Liberal Party’s trying to forget Rebekha, Simon Birmingham, since she took one of your seats.
Kate Ellis, Labor MP for Adelaide, welcome.
Kate Ellis: Good morning. Good to be almost with you.
Matthew Abraham: Yeah, yeah, yeah. Well hang in there. Shadow Minister for Early Childhood Development and for TAFE and Vocational Education.
In our studio, Rebekha Sharkie, NXT member for the former Liberal seat of Mayo. Rebekha Sharkie, welcome.
Rebekha Sharkie: Good morning. Thank you for having me on.
Matthew Abraham: Simon Birmingham, the Liberal Senator for South Australia, has the Government yet worked out how much benefit in dollar terms it will be to the economy from its tax cut package for businesses with a turnover of up to $50 million?
Simon Birmingham: Matthew, I don’t have a precise figure at my fingertips but there will absolutely be billions of worth of benefits that will flow through. There’s 190,000 small and medium sized businesses here in South Australia alone who will be beneficiaries from this and of course many of those businesses will choose to invest the dividend they get from a company tax reduction back into their business to create more jobs, expand their business or to …
David Bevan: [Interrupts] Sorry, Senator, did you say billions with a ‘B’ or millions with an ‘M’?
Simon Birmingham: No, I said billions with a B.
David Bevan: So billions of dollars’ worth of benefits from these tax cuts.
Matthew Abraham: Do you want to pick a billion? Like is it going to be one billion, ten billion? I mean, I’m sure- has Treasury done modelling for instance on this?
Simon Birmingham: Matthew, I don’t have figures to my fingertips but there’s been modelling done for decades now about the fact that when company taxes reduce you do get an investment dividend partly from companies re-investing in their business, partly from companies investing back into their employees through higher wage growth. These are the types of things that Chris Bowen wrote about in his book and they’re the types of things that the Labor Party has spoken about, that Paul Keating spoke about when he delivered company tax cuts and they’re exactly the same types of things that we will expect to see as a result of these cuts. And there are of course real benefits here in SA; 190,000 South Australian small and medium sized businesses – largely family-owned businesses, small operators – who’ll get the chance to do better, to invest more, to create more jobs. All of the things that this state so desperately, desperately needs.
Matthew Abraham: We’ll cut to Rebekha Sharkie in a moment because the Xenophon candidates in the upper house or the Senators were pivotal to this deal getting through with some strings attached.
Kate Ellis, though, the question being asked of Labor is whether, if elected, you would reverse these company tax cuts if they’re so horrible?
Kate Ellis: Well obviously we want to consider our position with all the facts on the table and as you’ve just heard from the Minister, you know, we’re talking about billions with a B. This is ridiculous, like (1) they can’t tell us the gain from this, but (2) they can’t tell us how we’re going to pay for it. And you know it’s really interesting that Simon’s also the Minister that is cutting $29 billion from our schools and yet we can assign big billions of dollars to company tax cuts. We want to see how they’re being paid for, what cuts are being put in place in order to pay for them and then we’ll see how that lines up with our priorities.
Matthew Abraham: So you can’t say whether or not Labor will wind back the tax cuts.
Kate Ellis: Well I can’t say today, our position on the company tax cuts, until we have the facts on the table. You would hope …
Matthew Abraham: [Talks over] Well if you can’t say whether or not you’d wind them back until you get the facts, how could you oppose them without the facts?
Kate Ellis: Well we know that the Government hasn’t made the case, we know that the Budget can’t afford- the Government was pursuing $50 billion in corporate tax cuts at the same time that they are ripping up to $80 billion from our schools and hospitals. That’s not our priority. Now the Government didn’t make the case, they didn’t outline where the funding was coming from and they didn’t outline how this was going to benefit the economy in any convincing way which is why our position was that we would oppose those cuts – up to the $50 billion in cuts. Now they’ve done a last minute deal with the Xenophon Team which means that we now have a different proposal in front of the Parliament and in front of the Australian public which we’ll consider and we’ll make clear our position ahead of the next election.
Matthew Abraham: Simon Birmingham.
Simon Birmingham: Let me deal quickly with this ridiculous idea it’s not clear how the company tax reductions are funded. They’re clearly outlined in the Budget. Our Budget predicts a return to surplus in 2020/21 that includes the changes to company taxes coming into place, so that is all transparently in the Federal Budget papers …
Matthew Abraham: [Interrupts] Well your Federal Budget didn’t envisage a $110 million for Port Augusta solar thermal plant, nor did it envisage a one-off $75 payment for single pensioners, I think over a hundred for couples, correct?
Simon Birmingham: Well that’s not entirely correct. We, of course, took the solar thermal plant to the last election. You know, we’re working with the CEFC and ARENA through existing funding streams to support that project and so that’s not a direct additional cost. Others will be factored into the Budget that will be released in May so that will be clear for all to see any other variations. There are small variations in every Budget but all of these company tax changes are fully outlined in the Budget. The challenge for Labor is can they maintain their mantra of wanting to have much, much higher spending in a whole range of areas unless they’re going to roll these company tax cuts for small and medium sized businesses back?
Matthew Abraham: Rebekha Sharkie, NXT member for Mayo, in our studio. Rebekha Sharkie, why is the Xenophon Team – which is- Nick Xenophon portrays himself as the battler’s friend – looking after the big end of town?
Rebekha Sharkie: Well firstly, I’m not really sure that you could say a business with up to a $50 million turnover is really the big end of town. I initially thought it was until I got out and talked to my community. So we’re talking about independent service stations having turnovers of around $18 million, but they often only are making one cent per litre in fuel. Your average IGA tends to have a turnover somewhere between 12 and around 20 million. So these tax cuts will help those smaller businesses next to the duopoly.
Our focus was very much on how we can get some stability and some certainty into the energy market. We were very focused on ensuring that the Port Augusta solar thermal plant could be fast-tracked and knowing the challenges around pensioners paying for electricity and we know that this winter is going to be more expensive, we wanted some emergency relief.
Matthew Abraham: We do thank Tom Koutsantonis – who I think is trying to help the Liberal Party here, Simon Birmingham – saying they promised a grant for solar thermal at last election alone means it’s a saving for the Budget. Is that right?
Simon Birmingham: Well, look, Tom- I think we promised that we would analyse all of the business cases that was for it and that we would support the project. Now I don’t recall precisely the words that were given at the last election, I’d have to go back and look at those …
Matthew Abraham: That’s convenient.
Simon Birmingham: … but we are- Well it can be convenient, Matt, I don’t have a memory of every transcript for every statement made by every person at the election. What I can promise is that we want to see that project happen, Rowan Ramsey’s lobbied for it long and hard. As a result of last week it’s been given greater priority to make sure that we get those business cases in within a timely manner and that they are assessed and then hopefully we can see the $100 million of support flow through.
Matthew Abraham: This is Super Wednesday. That’s the voice of Simon Birmingham, Liberal Senator for South Australia; Kate Ellis is the Labor MP for Adelaide; and Rebekha Sharkie is in our studio, she’s the NXT member for Mayo.
While we’re talking about power, earlier this morning we had Peter Humphries in our studio and he wants to represent the NXT team in state parliament. He’s put himself up as a member of the party to be pre-selected at the next state election. He told our listeners it’s vanity politics to close down coal-fired power stations in this state. This is what he said:
Peter Humphries: It’s about 0.15 of one per cent of greenhouse gases come from South Australia. If we turn the state off, you wouldn’t be able to measure the difference, and yet because of this what I think is a reckless rush to embrace alternative energy target, the business community have really been dealt a pretty poor hand, I think. No-one seems to me to be really putting it out there that this is really vanity politics, in my opinion, and the state pays the price.
[End of excerpt]
David Bevan: Rebekha Sharkie, NXT Member for Mayo, do you agree with Peter Humphries that closing down coal-fired power stations in this state has been vanity politics?
Rebekha Sharkie: Well, I wouldn’t call it vanity politics. Myself and my team, Nick, Skye, and Stirling, we agree with a 50 per cent renewable energy target. However, there is no doubt that what we’ve seen in the last 12 months have been a huge amount of challenges for businesses and ensuring that …
Matthew Abraham: But even Humphries sounds like Old King Coal, doesn’t he?
David Bevan: Humphries is making the point that we could close down the entire state in terms of its energy consumption, and globally it would not make any impact at all. So why are we sticking our necks out, taking all this pain, closing down these power stations, when it has virtually no effect on global warming? Do you agree with what he’s saying?
Rebekha Sharkie: Look, I don’t agree, and I think that South Australia, Australia, and what we’re seeing across Asia is many countries are now saying look, we’re going to take the lead on renewable energy, that coal is not good for humanity. And I think that we need to make sure that within the energy mix there’s a good mix of solar. We’ve already seen in South Australia a very high mix of wind. We’ve seen some of the challenges that have been caused by that. But I can’t say that I think coal’s the future.
Matthew Abraham: Kate Ellis, thank you for making it into the studio …
Kate Ellis: Sorry I was a few minutes late.
Matthew Abraham: No, you’ve done very well. We appreciate you making the effort to come into the studio.
Kate Ellis: [Talks over] And thank you for the motorists of Adelaide for letting me through.
Matthew Abraham: I understand it was a bit like Moses parting the red sea once we put that call out.
Kate Ellis: It was a beautiful thing, yeah.
Matthew Abraham: Kate Ellis, we are seeing now this push/pull, that Labor Party is saying well, these tax cuts that Nick Xenophon’s negotiating – GetUp!’s going to run a campaign for you against him in South Australia, as it does in so many other places – are bad, and yet he’s negotiated a nice stack of dough for a much-cherished green project for Port Augusta. Where do you sit on this?
Kate Ellis: Well, I don’t know that I’d call it- there’s a couple of things in your question that I might take note with. GetUp! are not running a campaign for us. GetUp! run campaigns on a whole range of issues, including campaigns against us.
Matthew Abraham: Oh, come on. Oh, come on! Really?
Rebekha Sharkie: Does GetUp! receive donations from the Labor Party?
Kate Ellis: Not that I’m aware of.
David Bevan: GetUp! does the heavy lifting for the Labor Party and the Greens. That’s- there’s no doubt about that.
Kate Ellis: GetUp! runs campaigns on behalf of their members, and if any of you would care to- well, no, I was about to put out an invitation which I didn’t mean. I was about to say have a look at my email inbox, the calls that my office gets. We get campaigns. Of course we get GetUp! campaigns against us on a range of issues; immigration issues in particular, but a range of different issues. So one, I would say GetUp! aren’t campaigning for the Labor Party at all. It’s called democracy. They’re representing their membership as they’re allowed to do. I’ve almost forgotten what your actual question was, but I know I disagreed with other parts of it too.
Matthew Abraham: [Talks over] Well, here’s- I know, though. You probably disagreed with all of it.
Kate Ellis: Nick Xenophon didn’t negotiate a bundle- a stack of cash …
Matthew Abraham: [Interrupts] $110 million for solar thermal.
Kate Ellis: Well, when you’re talking about tens of billions of dollars to the Federal Budget, I think most people would say that was a pretty lame deal and a pretty cheap sell-out that we saw.
Matthew Abraham: I don’t think Tom Koutsantonis thinks it’s a lame deal. Or Jay Weatherill.
Kate Ellis: Well, I think when they look at the overall package, in terms of the corporate tax cuts the size of the funding envelope we were talking about, that is a pretty minor part of it.
Matthew Abraham: So people at Port Augusta here …
Simon Birmingham: [Interrupts] If Kate thinks those corporate tax cuts are so lame, then of course presumably she’d be happy to see the Labor Party say they will wind them back at the next election.
Kate Ellis: I was actually saying …
Simon Birmingham: I of course don’t think they should, but …
Kate Ellis: Sorry, I feel like I’m the fact checker here today, but Simon, I was actually saying the Xenophon deal was lame, which we saw again a couple of weeks earlier with the child care deal where we’ve seen the Xenophon Team sadly selling out for far too little.
But to get back to the actual point, which I think was when we look at coal-fired power stations, is there a future? Do we agree with the interview that was being played as I gracefully ran into the room there? The facts of the matter are that we know that our coal-fired infrastructure is dated and is in need of a massive infrastructure cash injection if it was ever going to be able to last us into the future. So the question that we as policy makers have is what do we invest money into? Do we invest it into new coal-fired power stations? Or do we invest it into renewable energy?
David Bevan: [Interrupts] Or you invest it in cheap and affordable, reliable power. That’s another part of the equation.
Kate Ellis: Of course, and all- but all of the evidence suggests that the funding case just does not stack up for new investments, new major investments in coal-fired power stations, and that’s not because of ideology. That’s on a purely economic basis as well.
David Bevan: But that’s really easy for you to say, isn’t it …
Kate Ellis: I found it quite difficult to get through all of that, actually.
David Bevan: You’ve got a really comfortable income as a Federal MP. You’re not affected by those blackouts. It didn’t cost your business hundreds of millions of dollars, which is what it cost BHP, what it has cost businesses across the state. I think the total was about $350 million. So it’s okay for you to say oh, well that’s the future. If some transitional arrangements- transition, not going to last forever, but some transitional arrangements had been put in place such as the coal-fired power station extending for a year or two, that might have been softened. It might have been avoided. But you don’t care, because it’s not affecting you. It’s not hurting you.
Kate Ellis: Of course I care, and of course I think that we need to have transitional arrangements in place. I don’t adopt the position which some on the extreme left might that we should automatically close down every coal-fired- coal-powered fire station tomorrow in order to switch over to 100 per cent renewable energy. We know that there are jobs at stake. We also know that there are power prices at stake, that we need to look at a transition, and we need to look at an orderly way to do that, which is why we’ve always had policy to support it.
Matthew Abraham: Let’s just quickly change gears. This is Super Wednesday. That’s Kate Ellis, a Labor MP for Adelaide, Federal Seat of Adelaide, who’s in our studio along with Rebekha Sharkie, NXT Member for the Federal Seat of Mayo, and Simon Birmingham, Federal Education Minister. The clock is ticking. Our news reports that you have until- well, this year you’re going to have to make a decision on schools funding. What are you going to do?
Simon Birmingham: Well, firstly schools funding keeps going up under the Turnbull Government. It was around $16 billion of funding last year; it will be more than $20 billion by 2020, so there’s no reason for any state or territory to feel that they’re going to receive anything but continued growth in their school funding into the future. We want to work out the way of getting out of the 27 different special deals that we’ve inherited from the Labor Party and find a sensible, needs-based way of distributing that record and growing level of funding. We said last year that that would be settled by COAG in the first half of this year. That remains exactly the case. Unfortunately, Premier Weatherill and Premier Daniel Andrews of Victoria deferred the meeting, date of the first COAG meeting. But we’ll still work towards that first COAG meeting to get these matters settled.
Matthew Abraham: Yeah. Well, what does that mean, though? Are you looking to save money? I mean, when you quote …
Simon Birmingham: [Interrupts] No, we’re not looking to save money, Matthew.
Matthew Abraham: Really?
Simon Birmingham: As I said, funding under the Turnbull Government is growing from $16 billion last year to more than $20 billion for Australian schools by 2020. It’s at record levels, and it keeps growing each and every single year into the future.
Matthew Abraham: Is that because schools have got more kids, because more kids keep getting [indistinct] …
Simon Birmingham: [Talks over] No, it’s growing above enrolment levels, above inflation levels. It’s real growth.
Matthew Abraham: Kate Ellis.
Kate Ellis: Well, first of all, the agreements that Simon now says he wants to get out of are the agreements which the Liberal Government was elected telling the community they were on a unity ticket when it came to those agreements. The second thing I’d say is you cannot say that there’ll be no less money spent, because there will be $29 billion less money spent than would have otherwise been if they didn’t rip up those agreements. That’s pretty substantial. We’re talking about every classroom, every school feeling a hit because this Government lied to the Australian people about the unity ticket they were on, about that historic school reform, and we still don’t know what the policy is to replace …
Matthew Abraham: [Interrupts] Rebekha Sharkie. Is the Xenophon Team, having dealt with business tax cuts and grants for renewable energy, with GetUp! on your back, going to fold cards on schools funding?
Rebekha Sharkie: We’ve always been very clear that we believe in a needs-based model for funding. Go back to the 2013 election, I think it was, was it, Kate?
Kate Ellis: [Talks over] It was. I remember it well.
Rebekha Sharkie: And that was when there was no cuts to the ABC, no cuts to education, and we would want the Government to honour that.
Matthew Abraham: Rebekha Sharkie, thank you very much for coming in. NXT Member for the Seat of Mayo. Kate Ellis, thank you for the effort you made as well, Labor MP for Adelaide; and also to Simon Birmingham on the phone, very busy Liberal Senator for South Australia and Federal Education Minister. That’s Super Wednesday. It’s five to nine.