Interview on Sky News with Tom Connell

EO&E…………………………………………………………

TOM CONNELL:

Campaign spokesperson and the Trade Minister as well, thanks for your time.

SIMON BIRMINGHAM:

G’day Tom, good to be with you.

TOM CONNELL:

Just to start off, in one of your old areas, child care. Now Labor’s used essentially your model, your latest reform, to increase subsidies. That’s a welcome surely for families that are going to be better off under Labor?

SIMON BIRMINGHAM:

Well it’s not because they’re undermining some of the integrity measures that are there. The Productivity Commission report that we commissioned was clear in terms of recommending a model where there was at least a small co-payment, so you could have confidence that claims made by child care centres were legitimate, that parents were actually making some payment towards the cost of that child care. It’s an important part of the integrity because we know that historically there’s been massive rorting in terms of child care subsidies, billions of dollars taken out. We as a government have had to step in, clean up that system by suspending and cancelling many services that had been left to run by the Labor Party.

We also know that child care payments under our new model, in terms of out-of-pocket costs that families face have gone down by around 9 per cent over the first nine months of operation of that new model and that’s been one of the reasons why inflationary data has been down because we’ve driven down those out-of-pocket expenses. Whereas when the Labor Party was last in office and they tipped billions of extra dollars into poorly thought out subsidisation of child care, you saw prices skyrocket by 50 per cent which was just to the benefit of providers, rather than to families.

TOM CONNELL:

So you’re saying families all need to pay something otherwise there’s going to be an issue with rorting, what is the sum you want, would 5 per cent be enough? Some countries have a few dollars a day that parents pay. Is that enough to avoid this so-called rorting? There’s a lot of parents getting 100 per cent subsidies at low income level, would say, well trust me, I’m working, why should I have to pay for it?

SIMON BIRMINGHAM:

Well in many cases we have managed to bring those subsidies down to just $10-12 a day depending on what people are paying in terms of their daily child care rate. So we’ve managed to bring that to a very negligible cost while dramatically increasing the support for families, some families with a couple of children in child care system earning just $80,000 combined income as a family are often around $8,000 better off. So we’ve delivered substantial savings to those household budgets while driving down the out-of-pocket costs. This is I guess, the key contrast that runs as a common theme throughout this election campaign. Our policies, carefully thought through, done in a manner that ensures that Australia’s taxpayer dollars are used wisely to deliver the maximum benefit to households.

Labor’s are big spending policies but those big spending policies often end up being poorly targeted and result in a waste of taxpayer dollars.

TOM CONNELL:

When you look at child care this is an area essentially of productivity. Is it true to say that?

SIMON BIRMINGHAM:

It is, and you know what else we’ve seen since our new child care subsidy came in? More children into care, more hours, more Indigenous children, people are using our model.

TOM CONNELL:

People right up until the high sort of 150s will be better off under Labor. Is it true to say that it really needs to be affordable but the more money that can be given towards child care the more you can encourage people to get back into the work, the better off those families are going to be?

SIMON BIRMINGHAM:

Well the more money government spends, the more money government has to tax. So you’ve got to make sure in every area of government spending you target your spending effectively and now we’ve managed to achieve record levels of women’s workforce participation as part of the 1.3 million jobs that we’ve created. We’ve seen women’s workforce participation hit record levels. That’s a really proud achievement of our government. And the childcare reforms are part of that and making it easier for people to do so.

TOM CONNELL:

On workers, sorry, you’ve had a bit of an issue with Labor talking about an increase for pay in government, funded increase pay. Do you think there’s a special case at all in terms of child care workers being qualified but it’s hard to give them a pay rise because that means parents would pay more?

SIMON BIRMINGHAM:

Well our view is that you have to back the independent processes that exist. In terms of the setting of award wages, that’s what we have a fair work commission and politicians get in the middle of that then the whole system unravels and you saw that yesterday with completely polar opposite positions taken by Chris Bowen and Bill Shorten from lunchtime to dinnertime.

At lunchtime Chris Bowen was there saying actually this will be really limited measure to just 100,000 of the 195,000 childcare workers. He was there saying that not everyone who is a childcare worker is an early childhood educator. They were his words and that’s what he said to justify why Labor’s measure they’ve budgeted for is only 100,000. Even though there are 195,000 at least working in the sector. At dinnertime Bill Shorten was on Q & A and he was there saying that not only would this extend to childcare workers it was opening the door again to extending into aged care workers, disability workers. This is already a $10 billion promise.

TOM CONNELL:

I understand that.

SIMON BIRMINGHAM:

And where does it end if the government is going to subsidise all these wages?

TOM CONNELL:

But to you, do you think there’s anything different about these workers because it’s not just a question of getting the Fair Work Commission but any pay rise has to be factored off against parents ability to pay, whether they get back to work, this is a unique industry isn’t it?

SIMON BIRMINGHAM:

Well this is a very important sector. There’s no doubt that they work early childhood educators do is incredibly valuable but the work that aged care workers do is incredibly valuable as well. The work that people in our disability services sector do is incredibly valuable too.

TOM CONNELL:

They’re all heavily subsidised by government as well. How can you give a government pay increase to childcare workers, the vast majority of money going to pay child care anyway is government money. So is a pay increase by the government that unusual?

SIMON BIRMINGHAM:

Well, it is in the sense that this is not about subsidising the costs of child care. And this is government saying that somehow and Mr Shorten is there to work out the details after the election, but somehow the Labor party says they’re going to step in and subsidise directly private sector wages. Now this is something that’s never been done before and will that extend to government picking up the superannuation contribution that is additional, how will it be done? Will it require as the last time Labor tried this, a conditionality of union membership as part of it. Is it really just a drive to get more people into the United Voice as union members and these are the questions that are completely unanswered as are so many when it comes to Labor’s higher taxing policies.

TOM CONNELL:

We keep asking them and we get on the program. I want to talk negative gearing if Labor wins power, the crossbench is already talking about not supporting it and perhaps as well, a different approach, kerbing the amount you can negatively gear rather than just cutting it off from that date. What’s the argument against saying capping, capping negative gearing at five properties?

SIMON BIRMINGHAM:

Well Tom, that’s not Labor’s policy. Now if somebody wants to put forward that policy it’s something the Parliament might consider down the track. But Labor’s policy is to abolish negative gearing in the future outright and yet we know that negative gearing is used commonly, frequently by low and middle income households as a way to save for..

TOM CONNELL:

and I understand that, but this is what the crossbench has now moved the argument onto, essentially Labor looks as though they won’t get the support whatever happens…

SIMON BIRMINGHAM:

…I’m firstly not accepting the premise that the Labour Party win the election…

TOM CONNELL:

…sure…

SIMON BIRMINGHAM:

…so, so

TOM CONNELL:

…this is if the argument is there?

SIMON BIRMINGHAM:

Our argument here and now is against Labor’s policy and their pitch and again you’ve got to look at the holes in the detail of their policy. You know of course they have a whole lot of detail that was on the website of the Labor Party that went missing at the start of this campaign, it’s never been replaced that used to claim, it used to claim that around 93 per cent of properties that were subject to negative gearing, new investment were actually of existing dwellings…

TOM CONNELL:

That’s detail, none of their policies actually changed…

SIMON BIRMINGHAM:

…That’s important because this week Labor’s going to release, they say, their Budget costings. If those costings are premised on that assumption, then there’s probably a big hole in those Budget costings…

TOM CONNELL:

Well we’ll see there, we will see there…

SIMON BIRMINGHAM:

…because we know that other independent experts put as low as 50 odd per cent the actual rate at which investment in negatively geared properties is targeted towards existing dwellings… 

TOM CONNELL:

…and we’ll see those numbers because they’ll come out and they’ll be, I understand in two or three day’s time now. But is it fair to say it’s harder to mount an argument if the crossbench says let’s cap it to say five properties? You emphasised low- and middle-income families, low income families are not going to have five negatively geared properties, are they?

SIMON BIRMINGHAM:

Well I heard the Shadow Finance Minister ruling out such consideration this morning Labor are clearly sticking to their policy and their policy hits the the very first home that somebody on 50 or 60 or 80 thousand dollars as a family decides to invest in, as a way to work towards their retirement, as a way of potentially – in some cases even get into the housing market. You know I know and I’m sure you know many young Australians who, because of the mobility of their work decide that the property they’ll buy first is not a residential property it’s a property that they choose to negatively gear and Labor is going to shut the door on that opportunity for those people too.

TOM CONNELL:

Yeah, the rent investor perhaps we’ll visit once the crossbench – well if Labor wins perhaps down the track Simon Birmingham…

SIMON BIRMINGHAM:

…I hope that’s not the case…

TOM CONNELL:

No, I know you do…

SIMON BIRMINGHAM:

…for the sake of Australia…

TOM CONNELL:

Now Donald Trump has made another threat against China on tariffs. What do you make of the way he’s handling this trade dispute?

SIMON BIRMINGHAM:

Look I think there’s commonly a degree of perhaps tactical brinksmanship that we see as part of some of these considerations in the way in which they play out publicly. Now, we have been pleased that further elevation in tariffs that had been proposed earlier on had been deferred to enable discussions to occur and we welcome those discussions. We would encourage them to continue rather than to see an escalation in tariffs and trade tensions that would be damaging potentially for global economic outlook and it’s a reminder, a very strong reminder that we do have economically uncertain times around the globe and that’s why I would be exactly the wrong time in Australia’s history to embark on a big spending, big taxing experiment that Mr Shorten…

TOM CONNELL:

…in every direct way though do you agree with the Senate that China is cheating the U.S and some other countries? With tariffs. Also, with having you know companies working collaboratively within China. Is that a sentiment you agree with? 

SIMON BIRMINGHAM:

Look we have elements with which we concur with some of the U.S arguments or concerns they’ve elaborated with China in terms of the way in which you make sure that intellectual property is protected, the way in which you ensure that technology is protected and ensure that trade considerations are done by the common rule law. And we urge the United States and China to play by World Trade Organization rules. They’ve served us well for decades in allowing trade to grow around the world, lifting hundreds of millions of people out of poverty and for Australia, they’ve served us very well as under our Government we’ve shifted to a record trade surplus under the trade deals we’ve done.

TOM CONNELL:

Just finally, an ALP Deakin candidate, the Coalition claims could be a dual citizen, Labor say they’re not. This is our unresolved really isn’t it broadly in the Parliament. I mean we’ve had legal advice from both sides claiming things that hasn’t turned out to be true.

SIMON BIRMINGHAM:

Well in the case of this candidate for Deakin it’s for Mr Shorten and the Labor Party to explain how it is that her apparent Fijian citizenship would enable her to be elected and to sit within the Australian Parliament. These are issues where we put in place reforms to the nomination process, reforms to the parliamentary disclosure process and they are important reforms that our Government put in to try to ensure that we clean up the issues around Section 44. Mr Shorten now to outline whether in fact his candidate is complying with those reforms and the rulings of the High Court made in the last term in Parliament.

TOM CONNELL:

Given that we even had some fall foul recently in Liberal Party I mean can you guarantee right now there are no Liberal candidates that could fall foul of this section in the next Parliament? 

SIMON BIRMINGHAM:

Look I’m confident that we have worked very hard with our candidates across our Liberal held seats, across our winnable seats and across the board to ensure…

TOM CONNELL:

…but you can’t guarantee it? That this issue with this – ongoing issue for both sides? 

SIMON BIRMINGHAM:

Look Tom, I’m confident that that work has been done. I certainly know in my home division in South Australia that within the Liberal Party we have done exhaustive checks on those who have sought to nominate, that for a number of people their request to nominate was rejected because of the concerns that we had about their potential eligibility around Section 44. In relation to Labor’s Deakin candidate, there questions are for Bill Shorten to answer and to provide that assurance to the people of Deakin; were they to elect that candidate they wouldn’t subsequently face an unnecessary by-election.

TOM CONNELL:

Thank you for your time Simon Birmingham we’ll have to leave.