Interview on ABC Radio Adelaide with Matthew Abraham
Topics: The benefits for families and the economy of corporate tax cuts; One Nation WA candidate’s comments on single mothers
Matthew Abraham: This is Super Wednesday, when we talk to three local politicians. Get three of them together, who often don’t agree on anything, but we agree on the fact that they are all players in the Federal Parliament.
Simon Birmingham is Federal Education Minister. He joins us now. Liberal Senator, good morning, Simon Birmingham.
Simon Birmingham: Good morning, Matthew.
Matthew Abraham: Rebekha Sharkie, NX Team member for Mayo, welcome.
Rebekha Sharkie: Good morning, thanks for having me.
Matthew Abraham: Thank you for coming in. And also in, Nick Champion, Labor MP for Wakefield, Shadow Parliamentary Secretary for Manufacturing.
Nick Champion: Good morning.
Matthew Abraham: You apparently can’t catch fish, but I’ve let you in the studio anyway.
Nick Champion: I can’t catch fish at all. No. I’m not much of a fisherman.
Matthew Abraham: Do you throw up on a boat?
Nick Champion: No, no, I’m good in boats, but the fish, they depart for other places.
Matthew Abraham: And Rebekha Sharkie, and this is totally a-political and I don’t want anyone to change their vote on the basis of this, but you did point me to a sure fire spot. I had to line up the big pine tree, and I didn’t get anything for about six hours so …
Rebekha Sharkie: I’m heartbroken to hear that. I really am. Because it’s a good- it is a good spot.
Matthew Abraham: Yeah, thank you.
Nick Champion: It sounds like the sort of practical joke that one might play on an ABC Radio host …
Rebekha Sharkie: I would never do that. Fishermen do not that to each other.
Matthew Abraham: Well can you trust the Xenophon team? I mean, you know [laughs].
Rebekha Sharkie: Well we thought we …
Nick Champion: It’s a broken promise.
Matthew Abraham: [Laughs] Exactly. That’s what I was thinking Nick, when I was out there. Because that’s what I was saying, actually.
Rebekha Sharkie: I need to work out how to get the proper GPS …
Matthew Abraham: [Talks over] No I wouldn’t want any improper advantage. Simon Birmingham, do you throw up on boats, or are you okay?
Simon Birmingham: [Laughs] I’m okay on boats. I might need to get my tips from you though Matthew, because my six-year-old daughter told me the other day that she’d like to go fishing one day. So you’re clearly the go-to man …
Matthew Abraham: [Talks over] No, she needs to go out fishing with Rebekha Sharkie, that’s what you need to do. Fishing for votes and fishing for jobs. We’ve got Malcolm Turnbull speaking at the Press Club today. It’s obviously pretty clear he’s talking about creating jobs and creating tax cuts for people via a tax cut for business.
Simon Birmingham, will a 25 per cent- well a significant cut in the business tax rate, how does that equivalent? Who worked out that that would mean $750 more pay for people?
Simon Birmingham: Well there have been many economists over the years who’ve demonstrated that when company tax rates have been reduced there have been flow on benefits – not just in terms of increased investment and more jobs growth – but also higher wages for employees who get more hours …
Matthew Abraham: [Talks over] But can you actually- how can you quantify the figure though?
Simon Birmingham: Well economists and ultimately this is a Treasury calculation. So the Australian Treasury calculated this figure that if we had a 25 per cent company tax rate today; people on an average wage in Australia would be $750 a year better off.
Matthew Abraham: And how did they work that out, do you reckon?
Simon Birmingham: Well they work it out based on economic modelling. And it’s a type of modelling that even Labor’s own Shadow Assistant Treasurer, Andrew Leigh, has previously backed and written in his previous life as an economist at the Australian National University. So it’s been proven over the years. But this is about ultimately stimulating investment, jobs growth. I mean South Australia, there are many thousands of companies who would be significantly better off under our proposed company tax changes. And all of that is of course about making it, Australia overall, but in SA a more attractive place for those companies to invest, to spend more money, to create more jobs in the future, because that’s where jobs really come from. They don’t come from government, they come from people investing and growing businesses.
Matthew Abraham: A lot of jobs come from government in this state. I mean the public service workforce is about 97,000, I think.
Simon Birmingham: Indeed. But you can’t sustain an economy just on government jobs. So if you want to create more jobs in the future, that’s got to be by creating more export opportunities …
Matthew Abraham: So why did we get the submarine contract then?
Simon Birmingham: Well we got the submarine contract because the government believes that we should invest where we are directly spending government dollars already …
Matthew Abraham: [Talks over] Because it was a job threat.
Simon Birmingham: … in Australian industry and in backing the development of those skills. But even there, what we now want to do is leverage more employment opportunities in the private sector. See businesses not just contribute to building submarines and ships, but develop the capacity to be able to leverage the technology and so on out of that. To contribute in other areas of the economy, to exporting the products around the world. To be parts of the supply chain for other ship builders and the like.
Matthew Abraham: Okay, Nick Champion, Labor MP for Wakefield. The Labor Party doesn’t support, now in this life, company tax cuts. Is that correct?
Nick Champion: Well we oppose a $50 billion company tax cut for good reason. First of all it would threaten the AAA credit rating. So the Government’s own finances would be threatened by this tax cut. The second this is: while you can get an army of people who spend their time in computer labs and offices to provide you economic modelling that says that everybody will be $750 better off. Out in the real world, if you talk to electricians – which I was doing yesterday – they’ll tell you about how companies are using the industrial relations system to terminate agreements, to reduce wages often in many cases …
Matthew Abraham: [Interrupts] But maybe they’re doing that because the company tax rate’s too high? They’re paying too much tax so they have to somehow …
Nick Champion: [Laughs] I’m just telling you that corporate behaviour at the moment in Australia, is not about putting wages up, it’s about putting wages down. It’s about under-employment rather than fulltime work. It’s about contracting out, it’s about casualisation. And it’s about treating labour as if it’s a cost. And if they reduce it, that’s a good thing for their shareholders.
But it’s a tremendously bad thing for your macro economy because if you cut – you know – one company’s labour costs, well that might help that one company, but it hurts the overall economy. It’s like cutting penalty rates. It hurts the overall economy because workers have less money. You have a declining middle class rather than an expanding one. And so they’re the reasons why we oppose it.
Matthew Abraham: Rebekha Sharkie, we’ve just seen a few minutes ago, your leader, Nick Xenophon, on television saying that we’re not a highly taxed country. We’re about in the middle. Is the Xenophon Team going to cut a deal on the company tax rate?
Rebekha Sharkie: We’ve been quite clear that we believe that up to turnover of around 10 million, that that’s fair to have a cut there but beyond 10 million, as the turnover for a company, it’s hard to understand why we would need to be giving those companies an even greater tax break.
Matthew Abraham: So it’s not going to be supported?
Rebekha Sharkie: Our position is up to 10 million. I mean that covers, you know, your average IGA. That covers a lot of businesses that could be classed, really, as a family business but beyond that, no, we’re not committing.
Matthew Abraham: Are you – The Australian reports this morning that Mr Turnbull is hopeful now of getting a child care package through. That offers a $3 billion spending boost but also there’ll be cuts, obviously, to existing support to families – quite significant cuts. And he’s quite chuffed with negotiations – that’s my word – with key Senate crossbenchers, including Pauline Hanson and Nick Xenophon.
Rebekha Sharkie: Well I can say that our party has not met to discuss with the Government post-Christmas either of those two issues. We certainly have many discussions beforehand but …
Matthew Abraham: [Talks over] So Nick Xenophon hasn’t been negotiating with the Prime Minister?
Nick Champion: Maybe Nick’s doing his old trick of caucusing with himself shaving in front of the mirror.
Rebekha Sharkie: [Talks over] No I’ve got to say, look there’s certainly social services legislation and the child care is something that both Skye Kakoschke-Moore and myself have been taking the lead on for the party and while we’ve had …
Matthew Abraham: [Interrupts] So Nick wouldn’t be negotiating directly with the Prime Minister and not telling you?
Rebekha Sharkie: No not at all. Nick and I talk …
Matthew Abraham: [Talks over] You sure?
Rebekha Sharkie: Yeah absolutely. Look we talk constantly about this and we will be meeting with the Treasurer later this week. But at this point, we’ve planned nothing with the Government.
Matthew Abraham: Are you going to give ground on the Family Tax Benefits though to pay for child care boost? This seems to be the trade-off that the Government’s aiming for.
Rebekha Sharkie: It is the trade-off and I think it’s a particularly unfair trade off because we’re talking about two different families. When we’re talking about cuts to Family Tax Part A and B, we’re essentially talking about families with older children, children with teenagers and when we look at child care, we’re looking at younger families. I don’t think it’s fair to trade one off against the other. It will – the current – what’s currently there will hurt families who are struggling already. So this position, at this point, we do not agree with the Government with what they’re putting forward.
Matthew Abraham: Okay. Simon Birmingham, has the Prime Minister been meeting with Nick Xenophon and not telling his colleagues?
Simon Birmingham: Well I’m not aware of all of the Prime Minister’s meetings, let along all of Nick’s meetings. But Rebekha’s right: there’ve been a number of conversations pre-Christmas. And of course we’re having a look at how we can best get through the Parliament a significant additional investment in child care that we want to make that removes the $7500 cap that many parents hit up against for all lower and middle income families. It would increase support for child care rebates for particularly low income families that will put in place a mechanism to keep a lid on price growth in the child care sector. Really important reforms that we want to see get through that will see significant extra investment in child care but it does have to be paid for. And that’s why we’ve proposed a range of savings that take, in a sense, payments that go in passive welfare assistance at present, to instead support people for their participations …
Matthew Abraham: [Interrupts] What’s passive welfare assistance?
Simon Birmingham: Well it’s money essentially just handed over.
Matthew Abraham: Yeah.
Simon Birmingham: Versus of course, in the child care sector, you’re supporting families to work more hours, to participate in the workforce, to undertake training to get that type of assistance they need …
Matthew Abraham: [Interrupts] Weren’t those Family Tax Benefits put in place by John Howard?
Simon Birmingham: A number of them were, yes.
Matthew Abraham: Okay so it was a bad thing to do because it was just handing money over, look here’s a bundle of cash. Do what you want with it, go and buy a telly.
Simon Birmingham: Well it was a nice thing to do when the country had lots and lots of money and when the Government was significantly in surplus …
Matthew Abraham: [Talks over] But that’s not how you should run policy isn't it?
Simon Birmingham: … and when we were delivering tax cuts each and every year as well. But the reality today is that we have a very different budget situation and decisions like …
Matthew Abraham: [Talks over] So it’s a bad idea now?
Simon Birmingham: … this have to be paid for. And so to put the extra investment into child care, we’re saying that it’s got to be paid for. We think this is a fair and reasonable way of paying for it.
Matthew Abraham: But aren’t we deeper in deficit now than we’ve ever been? And we’re certainly deeper in deficit now than we were, say, five years ago. We’re running a record level of debt. The Government’s having to change its parameters for debt to accommodate for that and for the deficit and yet you’re now going to say well we can hand out money for child care. Well under your rules, you shouldn’t be handing out any money should you?
Simon Birmingham: Well we are saying that we would need to pay for our child care reforms and that’s exactly the point of what Malcolm Turnbull’s announcing today in terms of making it crystal clear that savings have to be achieved to pay for the improvements to child care that many people say they want to see. Even the Labor Party come out and say they want to see improvements to child care but don’t demonstrate or say how it is that they will pay for them.
Nick Champion, before, commented that our company tax reforms will threaten the AAA credit rating. Of course, at the election campaign, Labor said they wouldn’t do that, but they did promise to spend all the money instead, in fact even spend more and have higher deficits over the forward estimates. So that’s a real threat to our AAA credit rating. The point about …
Matthew Abraham: [Interrupts] Well you’re both a threat to the AAA credit rating. Do you concede that, Nick Champion? I mean both parties are a threat to the AAA credit rating.
Nick Champion: Well I think that’s a sort of an interesting way of putting it. I think the nation does need to accommodate to this new situation. You quite rightly pointed out before that perhaps, I think, with the benefit of reflection, we might have attempted to save a bit more during those boom years, during the Howard years. I’m not blaming John Howard for that, less people want to get critical. But I think it’s a point of history, we had this massive influx of revenue from a booming economy, driven by high commodity prices, it would have been prudent to perhaps be a little tighter on the nation’s finances then and put much of that revenue away in a locked box for future years. But we didn’t do that as a country. We had tax cuts, we had higher spending, we had relaxation of a whole series of policy parameters and we’re now looking at a very difficult challenge.
It’s one of the reasons why we’ve offered up very big structural savings in reforming negative gearing and capital gains tax exemptions which only benefit people who are on very high incomes.
Simon Birmingham: But let’s not confuse savings with collecting more tax, which is what you’re saying you’ll do there, Nick. You’re saying you will increase the level of tax collection in government …
Nick Champion: [Talks over] Well these are tax concessions, aren’t they Simon?
Simon Birmingham: Sure. You’re proposing that you’ll increase the revenue to government which is collecting more tax off of Australians and that won’t do anything to help housing affordability or rental costs in particular for Australians because you’ll simply, as was demonstrated historically, see a risk of less investment in housing capital in the future.
Matthew Abraham: You’re on ABC Adelaide, this is Super Wednesday. That’s Simon Birmingham, he’s on the phone, Liberal Senator, Education Minister; Nick Champion in the studio, he’s the Labor MP for Wakefield, frontbencher with Bill Shorten’s team; and Rebekha Sharkie, Xenophon Team member for Mayo.
Rebekha Sharkie, and we’ll ask all of you this, but One Nation and the Xenophon Team do negotiate together, I don’t know if you have many shared values … But we understand in a 2015 Quadrant article, pointed to the ABC News, One Nation candidate David Archibald – I don’t know why it had taken a year to find this out, but anyway – described single mothers as too lazy to attract and hold a mate, undoing the work of possibly three million years of evolutionary pressure; this will result in a rapid rise in the portion of the population that is lazy and ugly. And you sort of share benches and I suppose negotiations with these people.
Rebekha Sharkie: Well, look, obviously as a party we need to negotiate with everybody else that’s in the Parliament. I don’t think that we share much with One Nation. Look, we’re respectful towards all people, both in the Senate and I of course have a working relationship with a number of colleagues in the House of Reps.
His comments, I think, are rather unfortunate. I was a single parent for many, many years and during that time I worked full time, I worked part time, I worked whatever hours I could get. I think that those sorts of comments belong back in about a hundred years ago.
Matthew Abraham: Nick Champion?
Nick Champion: Well I’m the child of single parent and I think my mum’s beautiful. So this guy, of course, can go jump off a jetty.
Matthew Abraham: I’d have to say, I think you’re beautiful too.
Nick Champion: Yeah, yeah. Well I was talking about my mum, but …
Matthew Abraham: No but he says the children.
Nick Champion: The children?
Matthew Abraham: Well he says that it’s going to result in the rapid rise of …
Nick Champion: Oh right. Well I’ll leave that to the judgement of your viewers, or your listeners [laughs].
Simon Birmingham: I’m sure Nick’s mum thinks he’s beautiful.
Matthew Abraham: I think we can agree on that!
Nick Champion: But look this guy’s going to be, he’ll be kicked out of the One Nation Party. Pauline Hanson’s got rid of a number of candidates so far. But I just point your listeners and voters generally to the dangers of thinking that the system’s broken and so we’ve got to put all these new people in. Often the people you put in, you know, they’re politicians too, but they’re just people with very extreme views who have only been able to find a place …
Matthew Abraham: Oh don’t elect this, stick with all the old ones! [Laughs]
Nick Champion: Well, no, what I’m saying is: run the same scrutiny that you would run over a major party candidate, run them over a minor party candidate. Because often people have sort of a rose tinted glasses view of these new parties and what they find is they operate exactly like the old political parties. And we see this with the Nick Xenophon Team, Rebekha’s sticking to the party line, but meanwhile the leader – I think he’s the leader, or co-convenor or we’re not quite sure – is off negotiating with the Prime Minister. It’s in the papers. So, you know, the difficulty is people think they’re voting for something new, they might get more of the same, or worse; they might get something that’s new and bad.
Rebekha Sharkie: So, sorry, hang on. Let me just check here. So you’re saying that your leader, Bill Shorten, if he’s discussing things with the Prime Minister that that’s acceptable, but if the leader of the Nick Xenophon Team is then that’s not?
Nick Champion: No, what I’m saying is we have spokesmen and we have a leader and we have, after 100 years, pretty established ways of dealing with one another and so when people say, you know, when we say something you can be pretty sure, but with these minor parties it’s a kaleidoscope of personalities, frequent- and we’ve already seen One Nation implode the first time, it will happen again.
Matthew Abraham: We need to move on. Simon Birmingham, Education Minister, thank you.
Simon Birmingham: Thank you. I should just add the views are wrong, offensive and have no place in 2017. To make sure I get that on the record lest anybody think that …
Matthew Abraham: [Interrupts] But you’re continuing negotiating with a party that maybe fosters views?
Simon Birmingham: We will negotiate with everybody in the Senate where we have to, but most ideally the Labor Party would support sensible reforms.
Matthew Abraham: Okay, Simon Birmingham, Ediucation Minister, Liberal Senator for South Australia; Rebekha Sharkie, Nick Xenophon Team member from Mayo; and Nick Champion, Labor MP for Wakefield, Shadow Parliamentary Secretary for Manufacturing. It’s 8.53.