Topics: Legislating tax cuts; Christopher Pyne; G20 outcomes; US-China trade, Huawei.



Patricia Karvelas: Simon Birmingham is the Minister for Trade, he is also a Senator so knows all about this.  Welcome to the program.

Simon Birmingham: Great to be with you Patricia.

Patricia Karvelas: Okay so Labor says that if you vote down their amendments that they are going to be putting to your bill, you’ll be standing in the way as the government from taxpayers receiving tax relief, do you accept that?

Simon Birmingham: Well what a ridiculous proposition Patricia.  The opposition is saying if we don’t enact what the opposition wants then we’re standing in the way of something. Hello we are the government. We took a policy to an election and we are simply trying to give effect to the promises that we made to the Australian people. And the Labor Party are the ones who are seemingly playing games on this. They’re putting forward a proposal that is not the policy they took to the election, and it’s not the policy we took to the election. They’ve come up with some other alternative they say that ought to apply. Well what the Australian Labor Party ought to do is heed the message of the election, which is very clearly that Australians wanted lower taxes. That’s why they voted for Scott Morrison and the Liberal and National Parties, not higher taxes, that’s why they did not vote for the Labor Party who had their lowest primary vote in 100 years.

Patricia Karvelas: You are right on one thing in that you are the government which means you are responsible for getting tax relief for voters…

Simon Birmingham: We are the ones who proposed tax relief for the voters.

Patricia Karvelas: You have to deliver it, you need to find a pathway but you can’t win over Labor and you can’t get them on side, do you have Jacqui Lambie’s support?

Simon Birmingham: Well we are not going to let the Labor Party off the hook. At each and every stage of this they have to be held to account and they ought to think long and hard about why it is that the Labor Party are continuing to stand for higher taxes on hardworking Australians. Why is it that they are against ultimately reducing the 32 and a half cents in the dollar tax rate down to 30 cents in the dollar for people who are earning more than $45,000? This is the only change that they are actually opposing in terms of the legislation coming before the Parliament.

Patricia Karvelas: But given you are insisting on passing the whole bill, you are actually yourselves holding up tax relief…

Simon Birmingham: Yes that change that I just referenced.

Patricia Karvelas: But you are actually holding up tax relief for voters immediately because you’re insisting on something which is five years down the track.

Simon Birmingham: It means we are insisting on implementing what we promised the Australian people we would do and on delivering…

Patricia Karvelas: You could implement it in a couple of months and you won’t miss your deadline will you?

Simon Birmingham: … and on delivering changes that start with income earners from $45,000 and cut that middle income tax rate essentially from thirty two and a half cents in the dollar, down to under 30 cents in the dollar. Now we will continue to have constructive discussions with anybody who wants to have discussions with us. That’s the approach our government has always taken to the Senate and we’re going to keep doing that with the Senate crossbenchers. But this will hang around the Labor party’s neck as a stench all the way through this term of Parliament if they genuinely stand in the way of the delivery of tax relief for Australians that the elected government promised the Australian people we would do, that we are delivering on that promise by bringing legislation to the parliament that is identical to what we promised. And all we’re doing is asking to pass that through the Parliament to give Australians the certainty they are going to get that tax relief as we promised.

Patricia Karvelas: But why insist on this as a mechanism when you would still get it passed way before it needs to be implemented if were to have that discussion in a couple of months? You would still be absolutely doing what you promised voters.

Simon Birmingham: Well firstly, because it is what we promised that we promised we would implement the entirety of our package. And so we’re getting on and doing that. Secondly, because is important that governments can look beyond the end of their nose and when we’re doing infrastructure projects we plan years sometimes even decades in advance. When we’re undertaking massive social reforms such as building the National Disability Insurance Scheme, we’re again undertaking reforms that take years in their implementation to bring in record numbers of people and to fully fund a program like that. Why is it that the Labor Party says the one thing you can’t look more than a year in advance of is how you reform the tax system how you bring down the tax burden on hardworking Australians? Governments ought to be able to look longer than a year or two in advance when it comes to tax reforms. That’s what we’re doing, that’s what the Labor Party is recklessly opposing, that type of longer term reform agenda in relation to making our tax system fairer and more, creating more incentives for Australians to be able to work harder and know they’re going to keep more of those hard earned earnings.

Patricia Karvelas: So do you think you can get Jacqui Lambie over the line?

Simon Birmingham: Look I hope that the message that we make to all of the Senate crossbenchers is a compelling one that having lower taxes is firstly what the Australian people voted for. Secondly, what the economy needs in terms of continuing to fuel growth in our economy, and thirdly that we’re creating a fairer tax system…

Patricia Karvelas: Sure I know that is your stump speech but do you have you have any indication from Jacqui Lambie that she is prepared to vote this up?  

Simon Birmingham: Well one of the things we’ve been very consistent on as a government is that we don’t play out negotiations with individual senators in public. Now we’ll talk consistently to each of the Senate crossbenchers about the merits of our proposal and it is a meritorious proposal. What is in dispute here with the Labor Party is simply reducing the 32 and a half cents in the dollar tax bracket down to 30 cents in the dollar for wage earners earning more than $45,000. I find it incredible that the Labor Party is still arguing against tax relief for people simply earning more than $45,000 and for bringing down that middle income tax bracket.

Patricia Karvelas: Are you prepared to do anything to get this through by the end of the week given there is already going to be a delay for some taxpayers?


Simon Birmingham: No it’s not about doing anything, we will continue to govern responsibly and sensibly in relation to these matters.


Patricia Karvelas: So will you guarantee that it will pass by the end of the week?


Simon Birmingham: Well we are going to do everything we can in terms of getting this bill passed. But we will always be responsible about what we do but in a parliamentary sense we’re going to keep the Parliament working, sitting, to do everything possible to make sure this passes this week so that there is no further doubt around the matter beyond that.  The government is 100 per cent committed to implementing the policy that we promised the Australian people and it is just the height of reckless, high taxing irresponsibility from the Labor Party that they remain seemingly opposed to tax relief for Australians and instead think that they can sit there from opposition and invent new policies that weren’t even the ones that even they took to the election let alone the ones that the Australian people endorsed at that election.


Patricia Karvelas: Senator Rex Patrick says there are the numbers now for a Senate inquiry into your former colleague Christopher Pyne’s new role as an adviser to EY on defence issues. Given he’s got the numbers it looks like he’s even got Cory Bernardi’s support. What do you make of the fact that even Cory Bernardi is prepared to support this?


Simon Birmingham: Well I don’t know who Rex has spoken to and whose support he has. I do know that Christopher has issued a statement making clear that in terms of the provisions of the code of conduct, he doesn’t believe that in any way he is breaching those. That he is not going to be engaging in any lobbying activities or engagement with government at all in relation to defence matters, that he’s not going to be providing or revealing information that was gleaned in secret or in-confidence in his activities as a minister.  That he will simply be undertaking advisory work that is based off of all the range of things that are in the public domain. That’s what Christopher has said, he’s also indicated that EY understand that and the limits of the code of conduct and that they have strict probity provisions in place. So I think all of those questions that Rex may be raising have essentially been answered by those clarifications.


Patricia Karvelas: Wouldn’t making Ministerial standards enforceable be an easy way to fix this?


Simon Birmingham: I’m not sure quite what you’ve got in mind there Patricia. Obviously Christopher Pyne is no longer a member of parliament; he’s no longer a member of the government, we have clear standards there. He’s indicating that he’s abiding by and working within those standards.


Patricia Karvelas: Okay, would you have taken this job?


Simon Birmingham: Would I have taken the job? Well I mean, I don’t know all the terms of the job Patricia, I mean it’s a very hypothetical question. Happily for me I am still in the Parliament and member of the leadership team in the Cabinet of Australia.


Patricia Karvelas: I think it’s a question about ethics, do you think it’s an ethical decision?


Simon Birmingham: Look I think if the job Christopher has taken is as he has described it to be and I’ve got no reason to doubt his word on that, and he and he and EY have discussed the boundaries of the work that he can do and the probity requirements that are necessary there. But it sounds like he has undertaken all of the necessary precautions to ensure that he continues to work within the code notwithstanding the fact that he’s no longer a member of the government or the Parliament.


Patricia Karvelas: Just on some G20 issues all the US and China managed to agree on was not to escalate the trade war. Is this in any way a victory as far as Australia is concerned it’s just a holding pattern isn’t it? 


Simon Birmingham: Well it is good news insofar as the G20 was informed by the leaders of the IMF that their analysis showed that if all of the threats were to be delivered upon in terms of escalating tariffs and counter tariffs against one another, and then their predictions for global economic growth that currently sit at around 3.6 percent would reduce to about 3.1 percent. So we have averted a very significant potential reduction in terms of global economic growth and the spillover effects that would have not just for businesses in the United States or in China but for businesses right around the globe. And so that’s a positive first step. Clearly there’s a lot more water to go under this bridge in terms of whether a true arrangement can be struck and that ultimately sees a reduction in the tariffs that have been applied to date and gets us back to where we were a couple of years ago in terms of the openness of markets that exist and hopefully addresses some of the significant issues that both parties have put on the table.


Patricia Karvelas: As part of the talks the US will allow its companies to begin to buy and sell from Chinese tech giant Huawei again does that have implications for Australia’s decision to ban them from participating in the 5G network given it was of course US advice that we that we relied on?


Simon Birmingham: Well once again there’s some details still to be ironed out here. I think it’s important to acknowledge that what President Trump had previously been speaking of in relation to Huawei was largely a blanket ban from all participation in terms of, in terms of the US communications markets. What Australia did was to say that in relation to the construction and development of our 5G network in the future that we would have certain limitations placed on the participation of companies who may be under the direct instruction or influence of foreign governments. So our restrictions were quite precise. What President Trump had been talking about was quite broad, it could come back from those broad statements and to something else that is a matter for the US. Australia took our decision based on the information we had in the national interest we believe of Australia. We’ll wait and see where the US lands.


Patricia Karvelas: I know you need to move on. Senator thanks for coming in.


Simon Birmingham: Thank you Patricia.


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