SUBJECT/S: Superannuation Policy; Economic growth figures.

DAVID SPEERS:  Labor has responded to the reports that we've had here on Sky News of Coalition unease amongst some MPs at least about the superannuation changes, and the talk that post-election if they are returned there will be a fight in the party room to try and stop these changes. Here is Jim Chalmers, the Shadow Minister responsible.

CHALMERS: The Budget today is in tatters. We know from what the members of the Liberal Party are saying that they intend to oppose the Government's own budget if they win the election. It is really quite an extraordinary thing. It used to take Joe Hockey's budgets a couple of months before they fell over. Scott Morrison's budget can't even last from May into June.

SPEERS: Let’s bring in our panel, the Cabinet Secretary Arthur Sinodinos and Joel Fitzgibbon the Shadow Agriculture Minister, good to see you both. Thank you very much for joining us. Arthur Sinodinos, let's start with you on superannuation, just clear up for us how much party room consultation was there on the superannuation changes?

ARTHUR SINODINOS, CABINET SECRETARY: Well the superannuation changes were part of the Budget, so they were presented to the party room before the Budget was handed down in the Parliament. The next process will be that if we win the election then there will be consultation on various changes and then legislation presented to the party room.

SPEERS: So they could change?

SINODINOS: Look, I'm not going to speculate on that. I think let's win the election and go from there. I believe once people see the changes to superannuation, their totality, and we get a mandate from the public to implement them, and then I think we'll have a capacity to take them through the party room again and through the Parliament. The important thing here, David, is that we can't go to other sections of the community and say, you've got to play your role in budget repair if we're not prepared to also take on areas like superannuation, the tax concessions, attaching there to and whether they are still fit for purpose. So this is about the burden of adjustment falling equitably across the whole community when it comes to budget repair. My only other point is that Jim Chalmers has no policy on behalf of Labor in relation to which measures they may or may not support when it comes to super -

SPEERS: Well that's a fair point and we’ll come to that but I’m just wondering and want to clear up what are you saying to your colleagues who do have concerns, and I'm not sure how much they've shared that with you but they certainly have with me, there won't be any change on this package post-election?

SINODINOS: Look I haven't had any colleague ring me up and say look I think this has got to change. We've had colleagues ring up who have focused on the changes and said I want to understand this or that aspect a bit more so I can understand it better when I'm out there in the community and when it is explained to people, people see the equity of what we're doing and what we're asking the rest of the community to undertake in budget repair, I think everybody thinks that is fair enough.

SPEERS: But just on when you say this was presented to the party room, that's the usual night of the Budget when it's all printed and about to be delivered in the Parliament. I'm told the transition to retirement element night wasn't actually discussed in the party room. Can you clear that up? You were there presumably?

SINODINOS: Not all individual measures in the Budget get discussed in the party room before it's handed down and that's the usual process. It’s been a process with Liberal budgets and with Labor budgets. But as I said before –

SPEERS:  That could be why people are confused in interviews trying to explain it?

SINODINOS: Well, and my suggestion there has been to any backbencher or anybody else  who has an issue to take it up with the Treasurer’s office get the appropriate briefing and then they go out into the community and they explain it to people in the community and that’s what backbenchers and others have been doing.

SPEERS: Joel Fitzgibbon, it's true that Labor is still to announce what it's going to do on superannuation. Surely people deserve to know? It's a big deal what they're going to get from Labor sooner rather than later.

JOEL FITZGIBBON: I should congratulate Arthur on his second preselection in as many months. I hope this one lasts longer than your superannuation policy has lasted. I thought Arthur just said that we'll deal with this after the election- we’ll put a Bill into the party room. This is backpacker's tax just revisited. What they are saying now is look we might change our mind, trust us. But we are going to book all the savings before the election so we can spend the money on other things. They're doing the same thing here. They’re saying look we hear your message –

SPEERS: Let’s clear that up.

FITZGIBBON: We hear your message, don't worry, trust us, we'll sort this out after the election. But in the meantime they'll go to the election spending all the money they expect to save as a result of the measures in full.

SPEERS: Alright, well just answer that one for us Senator. We'll be consulted after the election but what's the point of the consultation?

SINODINOS: Well, we indicated around the time of the Budget there would be consultation measures in the Budget, but let me be clear, if we win the election –

FITZGIBBON: Nah,nah, come on -

SINODINOS: We’ll have a mandate to introduce our superannuation changes and that’s what we’ll put up to the Parliament and that’s what we'll argue after the election, in the Parliament.

FITZGIBBON: How can you have a mandate Arthur if you’re going to do the consultation after Election Day? People will go to the polls and they will have heard you on Sky today making it clear that you are going to review it?

SINODINOS: No no our policy Joel is very clear, it’s out there. Your policy is not clear because you don't know from Labor exactly which measures they are going to be supporting or not supporting after the election.

SPEERS: Alright, I want to get to Labor but just to be clear there's no change. You'll have consultation but no change to the policy.

SINODINOS: We will have consultation but I'm saying we get a mandate from the people, we will argue in the Parliament, we have a mandate to implement these superannuation changes.

FITZGIBBON: You have a mandate to implement the thing you are going to consult on after the election Arthur? There's no logic in that I’m sorry.

SINODINOS: No no you get mandate for the policies – look David

FITZGIBBON: You can't have it both ways.

SINODINOS: You get a mandate for the policies you put to the election. That is one of those policies. We get a mandate for it. You can consult on how things are implemented but the point is, you get a mandate to implement the policy that you annunciated before the election.

FITZGIBBON: No the polices that you are foreshadowing may be changed after the election so there is no mandate. You're trying to walk both sides of the street. Indicate to the people who are complaining you may change it post-election but book all savings.

SINODINOS: No what I am saying is very clear, we're book the savings and we're asking people to support these changes-


SINODINOS: And if we win the election we'll have a mandate to implement them-

FITZGIBBON: Ok, well I’m glad you made that clear-

SPEERS: When are we going to see what Labor - we don't know what Labor is going to do on the transition to retirement or anything else.

FITZGIBBON: Well David the first point is that we have a very clear policy of our own and we stand by it. And that is to make sure –

SPEERS: What's the clear policy?

FITZGIBBON: The clear policy is to start taxing in the fund for those who receive more than $75,000 per year in earnings from their fund. You've got to have about $1.7 million in your fund to be affected by that. That remains our policy-

SPEERS: This transition to retirement part of it which has been debated the last couple of days, we don't know what Labor is going to do there do we?

FITZGIBBON: I heard Jim Chalmers, he made it very clear, he made the point there will be 18 months between when we first announced our policy and when people go to the polls. This mob have had this on the table for a very short time. We have been highly critical of their transition to retirement changes. We say they're retrospective, we say they won't just hit high income earners –

SPEERS: I don’t know if the transition to retirement part is retrospective.

FITZGIBBON: No, if you start taxing the earnings of the fund, then you're going to start having retrospective impacts and you are going to push the effect of it down the income scale.

SPEERS: So you won't do it?

FITZGIBBON: Jim Chalmers said we’re going to be sensible and look at all the measures. There’s about ten measures as I understand it in total. They're complex, as superannuation measures always are. I think Jim was correct not to rule out supporting any of them. But we’ve been highly critical of their approach.

SPEERS: Pre-polling starts in two weeks – just under two weeks - people deserve to know when they cast their ballot what's going to happen to their super?

FITZGIBBON: They will know.

SPEERS: In the next couple of weeks?

FITZGIBBON: I assume that when Jim and others and Chris Bowen have worked through all those issues, we’ll be have something more to say about them. The key point is the principle here is taking some savings from those who can most afford to give some money up. That’s the principle. What the Government is trying to do is goes well beyond that because it's both retrospective and goes back down the income scales and middle income earners will be hurt.

SPEERS: Arthur Sinodinos, might you push back the start date of some of these changes? Is that something you'd be willing to consult on?

SINODINOS: Look, how can we consult or implement something that we haven't been re-elected to govern on as yet. This is our policy for the election.  Let's get a mandate and go from there and can I say  Joel Fitzgibbon is a senior and key member of the Shadow Cabinet and he’s saying he doesn't know what Chris Bowen and Jim Chalmers may have up their sleeve on superannuation-

FITZGIBBON: That's not what I said at all, Arthur.

SINODINOS: My view is that Joel Fitzgibbon who is a very savvy political operator is the sort of person who should be consulted on super. The fact that they are not consulting people like Joel Fitzgibbon suggests to me that they have something prate nasty up they're sleeve they're trying to sneak past the Australian people

FITZGIBBON: Well I love you too Arthur. I've had conversations with both Jim Chalmers and Chris Bowen on this issue today and what Jim Chalmers said was amicably sensible. We'll take our time to have a look at your proposals. But our starting point is that you are acting retrospectively and you are hitting people further down the scale.

SPEERS: Arthur Sinodinos surely you’ll say before the election whether you’re willing to shift the start date of these changes?

SINODINOS: David, let's get a mandate for the policy and can I make another point,I was Assistant Treasurer when we looked at the policy that we inherited from Labor which is exactly the same as super policy to tax the earning in the retirment phase above $75,000 and the Treasury said and super funds said it was not implementable. So I think they have a policy that they can’t even implement. And I think what should happen is that the Treasury should release that advice.

FITZGIBBON: Well David can I just say, I'm glad Arthur has cleared this up. He's saying no change before the Election Day and if they win they have a mandate therefore, they will accept that mandate and make the changes as they are presenting them today. So he's criticised all those today who have been equivocating on what they intend to do. Arthur is saying that we're sticking with this and will get a mandate and will implement it as is. Is that right Arthur?


FITZGIBBON: I’m glad we cleared that up mate.

SPEERS: Alright but you're still going to consult on some aspects?

SINODINOS: Well you often consult on implementation. You know that, we all know that. You consult-

SPEERS: But what does implementation mean? That's why I'm asking about the start date. Is that what you’re consulting on?

SINODINOS: But I’m not no, we're consulting on subsidiary matters but not that, we are putting a clear policy to the election unlike Labor. That’s my point, we have a clear policy on superannuation. Very transparent-

SPEERS: Give us an idea.  What’s a subsidiary matter? I just want to clear this up so people are very attuned to this debate and they are wondering what might change. Just give us an example.

SINODINOS: Of what would be subsidiary matter? Well on my reading of what I've seen to date, I don't think there are any particular subsidiary matters. I'm just saying I’m just leaving it open because you're asking me a question about the nature of consultation but what I'm saying is if we get a mandate for the measure it will be implemented in the way it's been described to the public in this election because we'll have a mandate for it and we’ll have a promise we'll want to keep.

SPEERS: Alright, let's move on. Economic growth figures were out today. They were pretty good Joel Fitzgibbon. 3.1 per cent annual growth. Anything to quibble about there?

FITZGIBBON: Well they were beyond market expectations that’s true and they are good on the production side, not so good on the income side.

SPEERS: Did you give the Government any credit?

FITZGIBBON: No. because its what we'd expect given the fall-off in the mining boom and of course the lower Australian dollar. So just take my electorate to make it plain for people. The investment boom is over. The infrastructure is built. We are still shipping out record volumes of coal but we’re getting a lot less income for it. And of course with the low dollar, people are taking holidays in Australia rather than going overseas and overseas residents are coming to Australia because it's cheaper. They're the big impacts. That's good news that we went forwards, not backwards. Annualised 3.1 per cent so that’s a pretty good result beyond market expectations but I don't see how the Government can take any credit for it.

SPEERS: Well Arthur Sinodinos, does the Government take any credit for these particular figures?

SINODINOS: The Government gives the credit for these figures to Australian workers and Australian companies-

FITZGIBBON: Good on you, Arthur-

SINODINOS: Who are exporting and who are out there creating employment. Now we take some credit for providing some of the conditions which assist that process but our point is that the transition inthe economy is at an important stage and what we need is to really get non-mining investment going. That's why we want to have a policy of cutting taxes on jobs, an economic plan which promotes innovation, promotes exploitation of our export opportunities and does all the other things we're arguing which will create a more diversified forward-looking economy. We can't afford a philosophy of tax and spent going forward. For us, these national accounts are a reminder of the challenges ahead and there-in lies the opportunity for the Australian economy. We think we've got the policies to exploit those opportunities.

FITZGIBBON: Arthur, you should support our investment and tourism infrastructure in North Queensland then, surely.

SPEERS: Well let me ask you Joel Fitzgibbon what does Labor have to offer, to boost economic growth if this 3.1 per cent is largely based on mining production. We are in a transition in the economy. What does Labor have to offer to help that along?

FITZGIBBON: Well first of all we don't support this trickle down sort of idea that you give big tax cuts to the big end of town they’re going to spend more money –

SPEERS: You know the Government’s plan in the next three or four years isn’t the big end of town, its those businesses earning between two and ten million dollars.

FITZGIBBON: We support the tax cuts for small business up to $2 million absolutely.

SPEERS: Why not up to 10? Is $2 million –

FITZGIBBON: Well first of all they are on the never never but it's a weird situation where the Government is trying to change the definition of a small business to $10 million and then claim that it is going to give some boost to the economy.

SPEERS: But you would have these businesses in your electorate wouldn’t you who generate revenue of $10 million or even $5 million. They're not necessarily the big end of town, are they?

FITZGIBBON: Once you're beyond the $2 million turnover David you’re not talking about small businesses. We support the tax cut for small businesses. But there’s a whole range of policy initiatives required to lift the productive capacity of the economy. Malcolm Turnbull keeps waxing and waning about jobs and growth but he never puts any meat on it. And a good start of course because there are both short and medium and long-term strategies here - but a good start if we're going to talk about a smarter and brighter future would be to back the Gonski reforms, start getting onboard with skills training particularly through TAFE-

SPEERS: Is that going to deliver growth right now?

FITZGIBBON: We have to have people participating in the economy, David. And giving people the opportunity to participate of course is a key part of lifting economic growth, of course it is, yeah.

SPEERS: But there seems to be Arthur Sinodinos some confusion about what your company tax cuts will do for economic growth. Is it really just .1 of 1% each year?

SINODINOS: No no its about 1% of GDP  over the longer term once the tax cut is fully phased in-

SPEERS: Yer, over 10 years but over each year its .1 of 1% isn’t it?

SINODINOS:  It builds up over time. It builds up over time. And the 1% of GDP was the figure in the Budget in relation to the overall impact of the company tax cut. You also have to look at-

SPEERS: But that's over 10 years though isn't it?

SINODINOS: You'll also have to look at what happens in the near term to growth because we've embraced the full suite of competition policies that were part of the Harper Review and all the other things we're doing to free up the economy, reduce red tape, record levels of infrastructure investment, more funds for innovation and the like, more funds for cities, for smarter cities, more energy efficient cities. There’s a whole suite of programs the Government has a got to encourage economic growth going forward.

SPEERS: Alright, but to be clear, what's the economic growth impact over the coming three- year term you're asking voters to back you in for?

SINODINOS: Well it’ll be less than the full one per cent of GDP we're talking about. But the point is, once you get on that glide path and investment starts to respond, that's the important thing. And we're starting with smaller businesses, most of which are locally owned so the benefits of that will be local in terms of employment and the like. I think it's remarkable that the Labor Party would want to oppose reducing taxes on jobs and that's what we're talking about here.

SPEERS: We are out of time, we have to go, Arthur Sinodinos thank you, Joel Fitzgibbon it’s good to talk to you as well.


Be the first to comment

Please check your e-mail for a link to activate your account.