RN Drive with Patricia Karvelas (1)

10 February 2016


SUBJECT/S: Stuart Robert and ministerial standards; Medicare privatisation; GST and tax concessions

KARVELAS: It's six past six and it's Tuesday, which means we're firing up the RN Drive political panel. Joining me from Parliament House in Canberra is the Cabinet Secretary Arthur Sinodinos. Hi, Arthur.

SINODINOS: Hey, Patricia.

KARVELAS: And Jim Chalmers, the Shadow Minister for Financial Services and Superannuation.


KARVELAS: I want to start with you, Jim. Stuart Robert's 2014 trip to China is really the big political issue again today. What precisely is Labor trying to find out?

CHALMERS: Look, this isn't just about Stuart Robert any more. I think this goes right to the Prime Minister's judgement. He's hanging on to Stuart Robert at a time when -

KARVELAS: Hang on a minute. He's launched an investigation with the head of his Department.

CHALMERS: When you sit in the House of Representatives in Question Time as I did today, I mean, the whole place knows that Stuart Robert's gone, except for the Prime Minister. So when he clings on like he did to Mal Brough and like Tony Abbott did to Bronwyn Bishop, it really does go to his judgement. We think that there is grounds there for Stuart Robert to go. When you look at the facts - take all the politics out of it, all the argy-bargy in Question Time out of it - we're talking about a guy who used his public position for private gain to advantage a company that he had shares in, a company whose head had given two million dollars to the Liberal Party. I mean the list goes on and on. We know now from a story that's just popped on the web this afternoon that the press release that's been translated at the Chinese end shows beyond any doubt that Stuart Robert was there as a Minister in the Government. That's how the Chinese end and how the companies were selling it. We also know that he met the Chinese Minister the day after meeting with the company. The list just goes on and on, Patricia. It's just gone beyond doubt.

KARVELAS: But Jim Chalmers, the Prime Minister has referred this to the Secretary of his Department, the highest public servant in the country. For this moment, the PM has acted on this, hasn't he? Because he's launched an investigation, and presumably he'll follow the outcome of that.

CHALMERS: I don't think this is a case where you can hide behind a bureaucratic process. When you look at the Prime Minister's ministerial code of conduct, it's right there in black and white. It's a very clear breach. If Malcolm Turnbull was any kind of leader, he would have already moved Stuart Robert on. He hasn't learned the lesson from that earlier episode with Mal Brough or Tony Abbott's earlier episode with Bronwyn Bishop. It's all of a piece, and we think that it's gone way beyond the time where Malcolm should have shown some leadership.

KARVELAS: Arthur Sinodinos, in Question Time today, Stuart Robert deflected questions on this on the basis that Martin Parkinson is looking at the issue. If Dr Parkinson reports back to the Prime Minister that Stuart Robert has done the wrong thing, will that be decisive?

SINODINOS: Patricia, you're right. We've got to get the facts. And unlike Jim, I won't pre-judge the situation. I'll wait until the Secretary of the Department has reported. I think it would be good if he reports sooner rather than later. We've already had reports on Sky News - sorry to mention a competitor - that he travelled there on a tourist visa and had no facilitation for his visit. I just put that on the record, because that's sort of come out of the ether. I think the sooner the facts can be put on the table, the sooner we can rest the whole situation. I know Stuart Robert, he is a good man. If he put in a leave application to the former Prime Minister's office and said he's going there on a private trip and they accepted that, then he would have understood, they would have understood, the circumstances under which he could go and what he could and could not do while he's on the trip. So let's wait and get this Report. The Prime Minister, as you say Patricia, has acted very quickly to get a report. There is no point the minute an application is made to then say, well this Minister is now gone. There's got to be some due process. There's got to be some natural justice and it's something that, I suggest to Labor that if they make the benchmark that every time an allegation is raised, a Minister has to formally resign straight away or completely stand down, there's setting a very high benchmark for themselves if and when they come back into Government.

KARVELAS: Okay, but ultimately, Arthur Sinodinos, even if he went on a holiday and got his own visa and all of that, do you really think it's appropriate? The stories that have come out about his position clearly being used by this company and talked about being used in this context, I mean, surely that breaks the ministerial code.

SINODINOS: I think these are matters of judgement. And clearly the judgement that was made at the time when the leave was approved was that he would conduct himself in a way so as to avoid any appearance of that sort of conflict of interest.

CHALMERS: Patricia, I mean Arthur wants you to believe, and wants your listeners to believe, that Stuart Robert packs his suit and tie and goes on holiday to meet with Chinese ministers with Liberal Party donors for companies that he's got a shareholding in. Arthur's been knocking around this building for a long, long, long time and I find it very hard to believe that what he's saying now he actually believes. Everybody here knows that the writing is on the wall for Stuart Robert, except for Malcolm Turnbull. He should act.

KARVELAS: Arthur Sinodinos, you stepped aside when you were previously in a ministerial role. Why should you have stepped aside and Stuart Robert doesn't have to? It seems that you had a higher burden on you than he does.

SINODINOS: Well, he has undertaken to give an explanation to the Secretary of the Prime Minister's Department. As I said before, the sooner that gets done, the sooner we can dispel some of the rumours and get to the facts around this and then everybody can be satisfied.

KARVELAS: How much of a distraction is this, though? Arthur Sinodinos, whether or not you draw the dots to Mal Brough and Jamie Briggs - at a time when the Government has some pretty tough policy battles on its hands, this is very bad timing isn't it?

SINODINOS: Well I invite Labor to focus on those tough policy battles. They don't have to focus on this, they can just wait for the report and we can get on with debating the big issues.

KARVELAS: Come on, Arthur Sinodinos.

SINODINOS: You've got a big brain here in Jim Chalmers. We can debate a lot of these issues, we don't have to worry about the other stuff.

CHALMERS: We don't know what your positions are on half these issues to debate them.

KARVELAS: Let me intervene - I'm taking the talking stick here. Isn't it the role of the Opposition to hold Ministers to account and ask questions? I mean that is part of their role, isn't it Arthur?

SINODINOS: It's a part of their role and it's also part of the Prime Minister's role which is why he has asked for that report. Let's give them the natural justice and due process and see what comes from it.

KARVELAS: Jim, has the Opposition checked its own records about overseas travel? Because you're obviously now happy for all of your colleagues to be scrutinised the same way about what they do when they're travelling. I mean, have you checked everything?

CHALMERS: Well every Minister should be held to the standard that's set out in black and white by the Prime Minister's ministerial code of conduct. I mean, Arthur can pretend all he likes that it was somehow Labor's idea for Stuart Robert to breach those arrangements. We'd love to be talking about policy, the GST, privatising Medicare, all these sorts of things. But the reality is, there's a fundamental breach here, an egregious breach of the ministerial code of conduct. People should be held to that standard.

KARVELAS: I just want to ask one more question of you Arthur.

SINODINOS: But Patricia, your question is right - what are the Shadow Ministers doing in this regard? How are they acting? What is the standard to which they are held by the Opposition Leader?

KARVELAS: I want to know this though Arthur. Based on the fact that we know now, they're very much on the public record, do you think he has broken the ministerial code of conduct?

SINODINOS: If he has acted in accordance with the terms under which he undertook the trip when it was approved by the former Prime Minister's office, then no.

KARVELAS: So you don't think at this stage -


KARVELAS: From all of the information we have -


KARVELAS: He hasn't broken the code of conduct?

CHALMERS: If he was one of John Howard's ministers, you would have had him out on his ear by now!

KARVELAS: Is that right, Arthur? You were pretty tough when you were chief of staff to John Howard. Wouldn't you have?

SINODINOS: Well, John Howard gave ministers the opportunity to explain their position. And that's what Malcolm Turnbull has done with Stuart Robert, utilising the services of the Secretary of the Prime Minister's Department. Let's have that process go to its natural conclusion.

KARVELAS: On RN Drive, we're clearly having a political debate because already it's fiery with Senator Arthur Sinodinos - he's the Cabinet Secretary - and Dr Jim Chalmers who's the Shadow Minister for Financial Services and Superannuation. Our number here - I'd love to get your views - 0418 226 576. You can also tweet us @RNDrive.

I want to move on to this Medicare story that's been circulating today. Stuart Robert's portfolio of human services effectively is also in the spotlight. With the Government considering options to outsource Medicare and other health services to the private sector, are you kind of chipping away at Medicare under the cover of digitisation and innovation, Arthur?

SINODINOS: No, we're chipping away the rigidity and twentieth century ways of doing things and looking at how in the 21st century we look at digital technologies to provide better services to the customers, the clients of Medicare, the Health Insurance Commission and the like. I think it's very exciting that we look at different ways of delivering services. It's not about undermining any services. It's not about undermining the Medicare schedule or aged care services. Look, when it comes to public spending, the debate now is what is the best way to deliver the social outcome that we all want. And if we can't look at better technology to do that, we might as well all pack up and go on.

KARVELAS: Okay, but there's better technology and then there's also outsourcing all of our private information to a private company. And that's what this is about - this is pretty, pretty confidential information. Aren't there risks involved with that, Arthur?

SINODINOS: Look, there are risks in everything you do. There are risks in doing nothing. So what you do is you manage the risks. And in relation to the protection of confidential information, it's not my province but I'm sure the Minister for Health will deal with this with appropriate protocols.

KARVELAS: Jim, isn't the Government's duty to look at options to make Medicare and other health services more efficient - to make payments faster, more consumer-friendly as Sussan Ley puts it? Isn't that actually what a Government is meant to be doing?

CHALMERS: Well you can have innovation, Patricia, without privatisation. All of those objectives that you mentioned are very important, but they don't necessarily lead you to this outcome that the Government is seeking - the privatisation of Medicare. I mean, barely a month goes by in this term of government where there's not some form of attack on Medicare. And the Government just won't -

KARVELAS: But how is this an attack on Medicare? I mean, it's not the payments people get, it's the administration of the payments?

CHALMERS: Because it fundamentally, puts for a private provider, profits before good outcomes for people. That's the main problem that we have with what's being proposed. In addition to that, we have the issues around data security that you've mentioned and also the job losses issue that have come from the community sector as well. But fundamentally, we think you can harness technology, you can innovate, you can do all those things that Arthur mentioned without flogging off Medicare to private providers, making it less safe and putting profits before people.

KARVELAS: There's a story going around that the Medicare payment system might be privatised. I wonder what you think out there. You can also tweet us @RNDrive. Jim, why can't we trust private firms to look after sensitive information? If you talk about potential stuff-ups, we've seen some pretty significant stuff-ups from the public sector in recent times too. There's no monopoly on not stuffing up is there?

CHALMERS: There's no monopoly on that, of course. But I think that privatising Medicare in the way that's being floated by the Government makes it far more likely - whether it's an overseas provider or somebody else - that we lose control over some of the key safeguard of people's information - those hundreds and hundreds of millions of transactions that happen every year. You don't want to lightly put that out to market and risk all of that information. We think if you're serious about innovation and harnessing technology, let's look at that. But let's look at it in a way that doesn't cede control over all those things that Australians care about when it comes to their Medicare system.

KARVELAS: Alright, we've got to get to tax, guys, because that's really a big thing we're all waiting on from both of your sides, I think. We know a bit about your super plans there, Jim, but there are more plans we would like to hear about from the Labor side as well as the Government which we're waiting for. Arthur Sinodinos, on tax reform, we were pretty sure you were retreating on the 15% GST, then you say it's still on the table and now we're getting our attention turned to other issues like negative gearing. But yesterday, I had Kelly O'Dwyer on the program and she said that she's not convinced that negative gearing should be touched at all. Can you understand why the average person could be completely lost at what the Government is trying to do? We're hearing a lot of conflicting messages.

SINODINOS: Patricia, the next step in this debate is that the Government will be putting out more information around the modelling which looks at things like the growth and other impacts of say a tax mix switch between a GST and personal income taxes and potential other options and the contribution they make to the bottom line and will help to inform the next stage of the debate. That's a matter for the Prime Minister and the Treasurer but they'll be doing that over the next period - very soon in fact, so I won't pre-empt that. When Kelly and others are on programs like this and they're asked for a view, well, often they're putting a personal view because the Government has not come to a considered view and it won't until after it's released the sort of data I've just mentioned and has the capacity to take the conversation with the community to the next level. The reason it's taken since September to take the conversation to the next level is that since Malcolm Turnbull became Prime Minister, he's spent a fair bit of time - as has the new Treasurer - actually getting cross what is already there, looking at how we disentangle tax reform from dealing with the states on their particular issues and also separating tax reform from what we do with budget repair. So it's a complex process, it's been an iterative process in the run-up to Christmas and after. But we're now at a stage with the sort of figures that the Prime Minister has been alluding to that we can take the debate to the next stage. And I think that will help frame the alternatives and make people understand better what the implications are of any potential tax mix switch.

KARVELAS: Well you say it was a personal view that Kelly O'Dwyer was sharing and it's true, she was and she said that explicitly in the interview. So I will ask you your personal view on negative gearing - should it be reformed?

SINODINOS: I think it's worth a look at. I think it's worth a look at for this reason. That when we look across the various methods of saving, are the incentives to save in different forms, if you like, as neutral as possible? Do we favour some forms of saving over us? And do we favour more productive forms of saving over less productive forms? The issue with negative gearing has always been - and this is why it's a vexed debate - is that when you look at the distribution of people who negatively gear, there's quite a few - as many if not more - who are under say, $80,000 a year as there is over $80,000. So you have to be careful to de-layer who is negatively gearing and for what purpose. Negative gearing on its own, like we negatively gear for shares as well as property, is not necessarily a bad thing. But the interaction between that and other tax policies potentially can lead to distortions in markets. So it's worth having a look at. So, if you're asking me have I got a settled position - no. But I've been prepared to help put super back on the table, and I commend Labor for also wanting to discuss super, because in this constrained environment fiscally, we need to look at where we can tighten up concessions and features of the tax system, because if we want to lower tax rate, if you, particularly on income tax, you've also got to look at the various concessions and deductions in the system. Are they fit for purpose, and is the money better used for personal income tax cuts to incentivise people?

KARVELAS: Jim Chalmers, Labor likes to talk a lot about how many policies you've announced in Opposition, so why don't you have one yet on negative gearing? Because Chris Bowen told me yesterday - yes, you know, you're open to it, needs a look at as well, which is what the Government's saying. You're effectively saying the same thing aren't you?

CHALMERS: I thought there was a lot of sense in what Arthur just said about the concessions including the need to look at negative gearing. I'm certainly in that cart myself. You're right to point out that we're proud that we've got more tax policy on the table than the Government and more tax policy on the table as an Opposition than any opposition in two decades. So yes, we do have a very substantial plan - not just superannuation but multinational tax, smokes, all of that. And we will have more to say about a lot of these issues in the time between now and the election and we will give people a choice between a fairer approach to tax and the Government's approach to tax. They're still desperate to jack up a GST, I know Arthur's of that view, Scott Morrison's of that view-

KARVELAS: Arthur hasn't expressed any desperation in this interview. Arthur, are you desperate to jack up the GST?

SINODINOS: I'm not desperate to do anything except look at things calmly and logically because one of the hallmarks of the Turnbull administration is to carefully look at things before we go out there and start putting views to the public.

CHALMERS: I don't think anyone would describe this process as careful.

SINODINOS: I think it's been very careful.

KARVELAS: I want to ask one thing to you, Jim, about the process, though. It's been criticised a lot for being - you know - untidy, if I can use that language. But isn't it also a good thing for the first time that we can have a discussion about all sorts of things but the Government isn't tightly speaking from speaking notes. Isn't that something they should be applauded for?

CHALMERS: Well I don't think we should applaud the sort of chaos and confusion that's reigned the last week or so when it came to the GST. They said they wouldn't rule it in or out - that's true. But then they simultaneously ruled it in and out after that. They can't tell us, Arthur can't tell us, Fiona Nash on Q&A last night couldn't tell us whether the GST was on the table or whether it's fallen to the floor. That has serious consequences for confidence in the Government, for business confidence. They said that Malcolm Turnbull's rationale for knocking over Tony Abbott was that he'd provide better economic leadership. It takes a special kind of incompetence to make Joe Hockey and Tony Abbott look good when it comes to managing the economy, but somehow Malcolm Turnbull and Scott Morrison have managed it.

KARVELAS: Arthur Sinodinos, what's your response to that? Is GST still on the table, because he makes a point doesn't he, that we have got mixed messages about whether if the table has GST on it?

CHALMERS: Is it on or off?

SINODINOS: It is still on the table. And that's why Scott Morrison and Malcolm Turnbull over the next little while will be providing more information to explain some of the trade-offs we have been talking about and whether it is worth - in terms of the GDP impacts - to have the sort of tax mix which people have been talking about. Can I say to Jim, if he ever wants to be Prime Minister, he's got to start by differentiating himself from the sort of Labor spin of some of his colleagues. He's got to mark out some of his own territory. Because in this game, it's important to be authentic. And I think he should stand up for the sort of things he stood up for in books that he's written, around cutting company tax and all the rest of it.

CHALMERS: Some free advice from Arthur.

KARVELAS: Jim, do you want to be Prime Minister?


KARVELAS: Come on, don't you?

CHALMERS: No, I want Bill Shorten to be Prime Minister.

KARVELAS: Alright, that's a very political answer.

SINODINOS: I'd prefer Jim Chalmers.

KARVELAS: One last question to you Arthur, and if you could just give me a line on this. I'm really interested to hear this. The Prime Minister is giving his first Closing the Gap report tomorrow. You're his Cabinet Secretary, you are close to what he's doing in this space. We haven't heard much from him about what he might do. Will his speech be significant? Will there be new announcements? Will he say something significant on what he will do on indigenous affairs?

SINODINOS: Patricia, I won't pre-empt the substance of the speech except to say that he's also been thinking long and hard about how to promote greater entrepreneurialism within indigenous communities and how we also strengthen the capacity to have a bottom up approach to policy in this area. Because it's very important that we keep empowering local communities and getting them to call the shots when it comes to the sort of services and economic development that they need. This is an ongoing project, it's a bipartisan project, but we have miles still to go in this, and he'll have more to say on that tomorrow.

KARVELAS: I want to thank you both. I've actually had quite a good time. I've enjoyed speaking to both of you. Thank you.

CHALMERS: So have we.

SINODINOS: Thank you.

KARVELAS: And that is Jim Chalmers, the Shadow Minister for Financial Services and Superannuation and also Senator Arthur Sinodinos, the Cabinet Secretary.