Interview on ABC Radio Adelaide, Breakfast with Ali Clarke and David Bevan
Topics: Enterprise tax plan; Proposed higher education reforms; Mark Butler
David Bevan: Let’s welcome our Super Wednesday panellists. Simon Birmingham, Education Minister and Liberal Senator from South Australia. Good morning.
Simon Birmingham: Good morning, David.
David Bevan: Kate Ellis, Labor MP for Adelaide. Good morning to you.
Kate Ellis: Good morning, David.
David Bevan: And Stirling Griff, Centre Alliance Senator for South Australia. Good morning to you.
Stirling Griff: Good morning David.
David Bevan: Kate Ellis, did Bill Shorten mean what he said when he announced in a press conference unprompted- well, it came from a journalist asking him a question, and he just announced – I don’t whether deliberate, or was it a brain fade – that Labor will be repealing tax cuts for companies with a turnover of between $10 and $50 million?
Kate Ellis: Look, I mean, our position remains unchanged. We’ve never supported tax cuts for the top end of town. We made that clear when they were first announced and all throughout…
David Bevan: So you think 10 to 50 is the top end?
Kate Ellis: Well, we know that 98 per cent of small businesses have a turnover of under $10 million. We want to back our small businesses, but we don’t want to- I mean, politics is all about priorities
their priority is the top end of town, and we’ve made clear that we think that Australians need and deserve better schools, better hospitals, better services and less debt. So it’s important that we’ve been upfront from the beginning with the Australian public and we continue to hold that position. We’ll take it to the next election when the Australian public are going to have a very clear choice.
Ali Clarke: So you knew it was coming then?
Kate Ellis: Well as I said, I think that this is no surprise. This is what has been the position since the government first announced that their priority was handing billions of taxpayer dollars to corporate Australia, including $17 billion to the banks who are currently before the Royal Commission.
David Bevan: Because there are plenty of reports in the media today of Labor MPs who were shocked, who were surprised, including according to sources shadow Cabinet members.
Kate Ellis: Well as you know, I dedicate all my time to being the member for Adelaide now that I’ve stepped onto the backbench. I mean, I can’t- even if I was in the room, I couldn’t speculate on what happens at Shadow Cabinet, but I’m not in the Shadow Cabinet. All I can say is I think that we’ve been completely consistent on this. I don’t think that anyone would be shocked to know that Labor is prioritising supporting small business, supporting our schools, supporting our hospitals and relieving the debt burden which we’ve seen explode under this government.
David Bevan: Simon Birmingham, Labor’s worried about debt and it’s going to deliver services. You’re looking after the big end of town.
Simon Birmingham: Well, I cannot believe that Kate Ellis is describing the 700 South Australian businesses – who employ probably 50, 60 South Australian people each – as the top end of town. These are hardworking South Australians who invest in South Australia and create jobs for South Australians, and Labor wants to increase the rate of company tax that they will pay in the future. And that will mean they’ve got less money to invest in South Australia, less money to employ South Australians, less money to pay better wages to their employees in South Australia. This is of course just another example that Bill Shorten is all about taxing a lot so that he can spend a lot. Whereas Malcolm Turnbull, is about empowering businesses to grow and create more jobs, and we’ve had great success on that to date with record jobs growth under this government, and our focus to make sure we continue that so that we see more jobs growth, more wages growth in the future. All of that being underpinned by making sure that businesses – and it’s 700 in South Australia, it’s around 20,000 across the rest of the country – who employ around 1.5 million Australians in total. They’re real jobs, they’re real people who depend upon those businesses being viable, and Bill Shorten wants to give them amongst the world’s highest tax rate rather than a competitive tax rate.
David Bevan: Stirling Griff, you have a background in business. Do you consider $10 to $50 million in turnover the big end of town?
Stirling Griff: Not at all, David. In fact, a reasonable sized IGA, owned by a family, would be turning over around $50 million or close to $50 million. So we’re not talking about large corporations at all. So there’s absolutely no way that we would ever support it. I mean, small business itself is the powerhouse of the economy, so why would any future government want to stifle them? I mean, we helped get this package through last year, so if Labor does end up getting in, they’re going to be well and truly in for a big fight from us.
Ali Clarke: Simon Birmingham, as Education Minister, how do you justify asking students to pay back a loan on a degree which hasn’t necessarily got them any more income and they don’t have much to go around?
Simon Birmingham: Ali, this is about making sure that our student loan system, which is amongst the most generous in the world, is also sustainable for future generations. Currently, we have about $50 billion worth of student loan debt on the government books. And on current repayment terms, around a quarter of that is estimated never to be repaid. So what we’re trying to do is ensure that that scheme doesn’t blow out to a point where access to uni is jeopardised for future Australians. So the changes we’re making are actually quite modest. Currently the first repayment rate for students is a 2 per cent repayment rate. We’re actually introducing a new 1 per cent repayment rate, so it’s a lower rate of repayment…
David Bevan: But that 2 per cent kicks in, Minister, that 2 per cent kicks in at when at the moment?
Simon Birmingham: At around $54,000. We’re proposing the 1 per cent kicks in at $45,000. That 1 per cent repayment rate is between $8 and $9 a week for students to start repaying a student debt…
David Bevan: And you don’t think $8 or $9 a week is worth much to somebody who’s on $45,000?
Simon Birmingham: I think every dollar matters but what is also important is that we make sure that the world’s most generous student loan scheme stays viable into the future.
David Bevan: Hang on. If you’re earning $45,000 a week after getting your university degree, clearly your degree has not delivered what is was promising. Is that fair?
Simon Birmingham: We’re talking starting salaries for university graduates in a lot of those cases, so in many cases, of course, those salaries will increase over time.
David Bevan: But the whole point of the HECS system was that these people would be earning good money. And so it was just fair to ask them to pay back some of the cost of their education which delivered this good money when they get the good money. What I’m putting to you is $45,000 isn’t anywhere near the good money. It’s nowhere near above average wage.
Simon Birmingham: Well your average graduate starting salary is around $60,000…
David Bevan: Well why don’t you kick it in at $60,000?
Simon Birmingham: Of course, we have though many people who do university degrees now, not just straight out of school but at various stages in their life. Working part time or in different circumstances. And ultimately, if we’re going to provide them with the same type of student loan that’s been available for a number of years now into the future, we’ve got to see those loans repaid to a reasonable extent, and losing around a quarter of $50 billion on the current books is not a viable proposition for the future. That’s why we’ve got to ensure that it is done in what is a fair and measured way, a 1 per cent rate of repayment. And as I say, it equates to about $8 or $9 a week. It’s not of course forcing somebody to repay their whole debt. It’s just about making what is a balanced contribution.
Ali Clarke: Kate Ellis, is this balanced contribution fair as it gets?
Kate Ellis: No. Well, I mean, what we’re seeing again here, this is the same minister who just a couple of minutes ago was telling us that we had billions of dollars for corporate tax cuts. But they, on the other hand, tell us that they’re forced to make cuts to students, to make cuts to our schools, to make cuts to our hospitals, to make cuts to the services that Australians are relying upon each and every day. And we know- I mean, this week, the Government confirmed that even if there was a recession in the future, even if we saw another GFC, the corporate tax cuts would stay…
David Bevan: Yeah, but we’re asking you about the student loans. Do you think that it’s fair to ask a student to start paying back their loan at $45,000?
Kate Ellis: Look, I think that if you’re earning $45,000, $8 or $9 a week is an extremely…
David Bevan: Yeah, we know that, we know that. So do you think $45,000 is a fair threshold to pay back your student loan?
Kate Ellis: I have always pushed for our thresholds to be increased and that’s what Labor has also pushed for. We think …
David Bevan: Okay. So what do you think it should be?
Kate Ellis: Well, I’m not going to sit and name a figure off the top of my head. What I am going to do is keep working with my party so that we can make sure that students are better supported. So that we can make sure that students from less wealthy backgrounds are not deterred from going to university because they don’t want to take on the debt, which is bigger than their families have ever taken on before. This is the government that have also brought about policies, which we’ve heard, would bring about $100,000 degrees. We want to make sure that university is an option regardless of your background if that’s what a student wants to pursue, and this government is doing everything in their power to turn back the clock and make sure that you have to be wealthy to go to university or else it’s just too big a risk to take. And that is unfair, but it’s in line with all the other policies they’re putting forward at the moment.
Ali Clarke: Okay. Centre Alliance’s Stirling Griff, what do you think is the fair threshold – $45,000?
Stirling Griff: Well yes, Ali. I mean, we support the proposed changes, particularly so people can start paying off their debt sooner. And one key component that we also negotiated with the government was the renewable cap, which means that once the, if you like, the debt has been paid down, if there are other degrees and the likes that people want to switch to or change to, that cap is renewable rather than being fixed.
David Bevan: So you’re quite happy with a student on $45,000 having to pay back an extra $8, $9 a week?
Stirling Griff: Yes. Yes.
David Bevan: Okay.
Stirling Griff: I mean, we’ve had extensive consultation on this.
David Bevan: Have you got any students in your family?
Stirling Griff: Yes I do.
David Bevan: And they’re happy to pay it back at $45,000?
Stirling Griff: Yes.
David Bevan: They can talk to uncle Stirling over Christmas and all be very happy?
Stirling Griff: Look, as you kind of know, David, and particularly going forward, is that the parents ultimately end up paying in many cases anyway, even if we don’t want to. So, no. No, we’re managing within our family.
David Bevan: Yeah but hang on, what if mum and dad can’t pay it?
Stirling Griff: This isn’t an issue of whether mum and dad can pay it or whether the student can pay it.
David Bevan: But you just said often mum and dad end up paying it.
Stirling Griff: No, no, no. I’m just being a little bit frivolous. [Indistinct].
David Bevan: No, I don’t think you are being frivolous at all. That is what often happens, and my point is – and I think this is what Kate Ellis is getting to – that if you want people who don’t come from well-off backgrounds to get into university, they haven’t got a mum or a dad who can step in and make the payments.
Stirling Griff: No they don’t.
David Bevan: So what about the people who haven’t got a well-off mum and dad?
Stirling Griff: David, you’ve got people, in this particular case, they’re earning $700 a week. They have committed themselves to a degree. It is important that they start paying the debt off soon. If they don’t pay the debt off soon it’s going to be a higher debt, it’s going accrue more over the years, and it just really isn’t- doesn’t make the system sustainable. Seven hundred dollars is not somebody that’s sitting on the poverty line. They are earning money and they’re earning money out of education that they’ve gained via their degree.
Ali Clarke: It’s 8.48. Oh- sorry, just a second, Simon Birmingham. We’ll just have to bring you up. I’ll just reset the- we are at 8.49 here and it is Super Wednesday. Stirling Griff is who you heard from Centre Alliance, Kate Ellis, Labor MP for Adelaide, is part of the conversation, and Simon Birmingham, the Education Minister, is there. Simon, have we got you?
Simon Birmingham: Yes indeed.
Ali Clarke: Okay.
Simon Birmingham: Sorry, Ali, I was just saying, very little in terms of student fees is paid upfront by parents. Most of it is put in terms of the HECS debt or HELP debt, as it’s now known. And so, most of that is then repaid, if it is repaid, through the repayment rate in the tax system when people go back to work. So, I think it’s a bit of a myth that a lot is paid by mums and dads. Some is. Certainly there are cases of that. But overwhelmingly, students pay it themselves. But what we have seen, right since this scheme was introduced by the Hawke-Keating Government, is that with any variation to it, with any changes that have increased repayment rates, student participation has only gone up. And we have more people from wider variety of backgrounds in our universities today than ever before. And the architects of HELP and HECS have all been very clear that this change will not impact on that at all.
David Bevan: Kate Ellis, are you going to help find a spot for Mark Butler?
Kate Ellis: Look, there’s no question Mark Butler is a huge talent. He is a good friend and his contribution to public life isn’t finished. You know, this is a really bad result in terms of the redistribution, which was announced yesterday. A really bad result for South Australia and a really bad result for the Labor Party.
David Bevan: And your faction, the right faction, have made it quite clear this is- if you love him that much, if we all love Mark Butler say the right, then you sort it out because he’s a member of the left. Your faction is not going to give up your seat when you retire at the next election without cutting a very hard deal. So the question, Kate Ellis, is are you going to help Mark Butler cut a deal?
Kate Ellis: Look, what I’m going to do is- the reason I announced so early on that I wouldn’t be contesting the next election is so that we had a chance to make sure that we find the best possible person to represent the people of Adelaide. That’s what I care about – that our community is well-represented. But obviously we have to go through processes. We’ll handle it like adults. We’re not going to be like the Liberal Party who are busy out there knifing each other and undermining each other. We’ll sit down. We’ll see what sort of solutions that we can some up with. We’ll negotiate and we’ll make sure that we put the best team for South Australia forward at the next election.
David Bevan: Well, one solution is that Georganas, also from the left, moves up and takes your seat of Adelaide, but apparently, according to the ‘Tiser, it would just be a one-off deal. Again, everybody loves Steve, he’s the nice guy in the party. Presumably he’s going to retire after one term but we’ve got to see him off. So he gets- in Adelaide under this arrangement for a term and Butler gets his old seat.
Kate Ellis: Well, you’ve clearly been involved in these negotiations much more than I have because- I mean, this was announced yesterday. This is the beginning of a process. We will sit down, we will work through it and we will make sure that we put our best team forward. And that’s what the people of Adelaide, the people of South Australia expect, and that’s what we’ll do. And we’re in a fortunate position, I guess, of having a number of talented individuals who are ambitious and keen to contribute. So, we’ll find a way through and put the best team forward.
David Bevan: So whatever happens, Butler will be a candidate, either in the senate or the lower house at the next election. There’s no doubt about that. It’s just finding him a spot.
Kate Ellis: Well, there is a process to go through, but I mean, I think that both Mark and Steve are great contributors. I think they’ve played a really important role for the Labor Party in South Australia and I think that we need to find a way that we can accommodate what is going to best for the people of South Australia, first and foremost, and of course for our Labor colleagues and Labor team. There’s a whole range of considerations here and there’s also a whole range of options. So that’s something we’ll work through.
Ali Clarke: Well Kate Ellis, we do have to leave it there, Labor MP for Adelaide. Simon Birmingham, thank you for your time, Education Minister and Liberal Senator, and Stirling Griff there, Centre Alliance Senator for South Australia.