Sky Interview with Laura Jayes

02 February 2016


SUBJECT/S: Trade Union Royal Commission; Malcolm Turnbull’s plan for a 15 per cent GST on everything; Labor’s ‘Your Child, Our Future’ schools funding plan; Tax Reform

JAYES: Welcome back to The Latest. Joining me now is the Shadow Superannuation Minister Jim Chalmers here in the studio. Welcome Jim. Can I first ask you about what Michaelia Cash just announced that the secret volume in the Heydon Royal Commission will be released to one person from Labor and one person from the Greens as well as the crossbench now? All of those people will have their names redacted and identifying features. What do you say to that, do you accept that?

JIM CHALMERS, SHADOW MINISTER FOR FINANCIAL SERVICES AND SUPERANNUATION: Well the Minister has made an awful mess of this from the very beginning. They have leaned on the Justice's recommendation that it be kept confidential and then she tried to come up with some kind of transactional politics which said that she would show it to some people and not others. This is just an extension of that. We need to know the legal basis of the Minister's position. We will respond formally tomorrow to the offer that's been made by Senator Cash. But our point is it's either confidential or it's not. If there's a way to release this material to Members of Parliament and Senators, if there's a way to do that to one or two people, surely there's a way to do that for everyone.  So the Minister has to decide and the Government has to decide if it's confidential or not and come up with some kind of rational process for the release of this thing. This is what happens when you make a mess of these things when you try and work backwards, when you start salivating over some kind of political outcome which is what the Minister has done here, and she's been caught out.

JAYES: But Justice Heydon did recommend that this volume of the Report be kept secret, so isn't that good enough?

CHALMERS: Well then the Minister said she was going to show it to some Senate crossbenchers. You can't lean on that advice - that it's confidential - then say that I'll show it to some people that I've selected out of the Senate. Our point is that it's confidential or it's not. Stop making a mess of it, stop salivating over the political outcome and try and come up with a genuinely held, well-motivated outcome with a legal basis.

JAYES: Even so, if Labor does see this so-called secret volume without the names, is it going to change anything in your view?

CHALMERS: Well I can't say without having seen the Report.

JAYES: But you don't need to see names here do you?

CHALMERS: Not necessarily, no. We will think about it overnight. We will respond properly to the Government in the morning via either Mark Dreyfus or Brendan O'Connor. But we do want to make the point that this has been going round and round, back and forth - the Minister has made a pretty awful mess of it. We should have an outcome that's got a basis in legal opinion and fact and not this kind of ridiculous politicking that we've seen as recently as a few minutes ago on this program.

JAYES: Well, you do see the political motivation in this. But it does seem to have some resonance in the community and what we've seen from the Royal Commission - and not just the Royal Commission, we've seen multiple members of the CFMEU prosecuted - there is a problem, however small you say it is. Why not just pass it with some amendments? Can it get down to that point where some negotiation may be done?

CHALMERS: My position starts from the fact that unions are overwhelmingly a force for good in this country. Where people have done the wrong thing, they should have the book thrown at them by the police and/or the Crime Commission. That's the right way to go about it. I'm as disappointed as anyone when it comes to wrongdoing, whether it's on the union side of the equation or on the business side of it, people who do the wrong thing should be prosecuted. We think what's going on here is that they want to create another set of laws. The law should apply to everybody equally. They shouldn't have these sets of arrangements. They're salivating, as I said, about a political outcome. If they started again and worked from the basis of what's good for the country, they wouldn't end up where they have.

JAYES: If they do have a double dissolution trigger – well they do have a double dissolution trigger on the ABCC – is that something you're willing to fight an election on?

CHALMERS: I'd love to fight an election on industrial relations, that's the truth of it. I think almost everyone on the Labor side would want to fight an election on looking after people who work in this country. I think that people in the Australian community will be really suspicious if the Government rush to that sort of election on that sort of issue. That's really Abbott-like behaviour. Things are supposed to be different and we've seen that they're not really different when it comes to trade unions.

JAYES: Can I turn to the GST now? We've seen Jay Weatherill certainly making his point clear that he wants to have a conversation about the GST. And I think looking at a state like South Australia, something drastic probably needs to happen. But how difficult is his stance making it for Federal Labor to prosecute?

CHALMERS: I think it's good for any premier or anyone in a position of leadership around the country to participate in the debate. The price of admission into that conversation though is to have some elementary grasp of the facts. I think some of the things that Premier Weatherill has said in the last little while shows that he hasn't fully grasped some of the facts on this.

JAYES: Like what?

CHALMERS: Well the thing about Labor's fully-funded plan for school improvement to make every school in Australia better. It is fully funded. It's more than fully funded with the announcements that we've made so far. So if he wants to participate in the debate, he should get his facts straight. That's the price of admission into that conversation.

JAYES: I take the point that you have made in opposition $70 billion worth of revenue measures and some savings measures - on a smaller scale you'd have to say. But yes, the fully-funded Gonski scheme is going to take up about half of that. This does threaten this $70 billion to turn into some kind of magic pudding in an election year.  So every announcement you have in terms of spending, will you have an equal amount of savings? Because that $70 billion is going to run out quite quickly and it's over ten years.

CHALMERS: Just think about that question for a moment Laura. So, your criticism of us is that we have found twice as many savings as is required to pay for an ambitious, the most important program of school improvement in a generation.

JAYES: But we're yet to see a lot of detail on things like your emission trading scheme and other policies we haven't seen fleshed out yet.

CHALMERS: What other Opposition since we have been alive has come up with such big savings this far out from an election? I think that the work that our side has done to pay for our promises dwarfs anything that I've seen in my time in politics. Seventy billion dollars over ten years in savings from Opposition, a year out from an election.

JAYES: But in one announcement you just spent $37 billion?

CHALMERS: That's around only half of the savings.

JAYES: I'll put it this way. Is Labor going to make significant savings measures rather than just revenue-raising measures?

CHALMERS: You were right to point out a moment ago that already it's a combination of revenue and spending.

JAYES: Slightly unbalanced.

CHALMERS: We've always said that it should be a combination. We've also said that we haven't finished our announcements when it comes to measures on both sides of that equation. There's always work to be done when it comes to improving the budget. You don't just make an announcement and rest on your laurels. There's always ways that you can do better and do more. And there will be further announcements, no doubt, between now and the election.

JAYES: And will we see a plan to look at how to tackle bracket creep? Because many economists argue that is more painful and more regressive than a GST.

CHALMERS: Well one of the ironies of the current debate is that the Government says - look, we will compensate people for jacking up the GST (by 50% by the way, a huge tax increase on an existing tax), we'll compensate people with income tax cuts. That's at the same time as they're saying that bracket creep means that those tax cuts disappear. So the irony of their argument is they say bracket creep is evil, but they're trying to pull a swifty on the Australian people by saying - we will compensate for a permanent increase in the GST with a temporary cut to your income tax. You can't have it both ways.

JAYES: Well how do you tackle bracket creep then?

CHALMERS: Well there have been income tax cuts in the past which have not necessarily been funded by -

JAYES: Expensive though, how do you pay for them?

CHALMERS: Always expensive, indeed. That's a challenge. Our priority in the tax system is making it fairer -

JAYES: Is your priority tackling bracket creep and to come up with a plan to pay for it?

CHALMERS: Our announced priorities are in superannuation, in multinational tax, in trying to make multinational companies pay their fair share. We think if you're serious about tax reform, you begin in those two areas. That's the glaring unfairness in the tax system.

JAYES: Obviously, Jim Chalmers, you'd know that there's a lot of history here when it comes to the GST, the 1998 election. There was an interesting piece in The Australian today from John Black, a former Labor Senator. Now he explained that Labor got a swing - quite a substantial swing - to them in that election but it wasn't won in the seats where it was necessary. There's probably some kind of comparison here for the Liberals in the most recent South Australian State election. But how do you make sure that the message is getting through to the seats that you need it the most.

CHALMERS: That is a challenge of course. Two things I would say about John Black's piece in the paper today. The first thing is he was describing a swing of 4.6% as somehow inadequate. That was an extraordinary recovery by my friend Kim Beazley and his colleagues. I think I've read that was the biggest recovery by a first-term Opposition in history.

JAYES: He still didn't win the election which is the point he was making. A substantial swing, but you didn't win.

CHALMERS: He had to come back from a far bigger hole than we're in now, but a big swing. If you were to take some value out of what John Black wrote - and you always look for the value in these pieces if you read them - his point is that you need to focus on middle Australia. And I couldn't agree more. You need to have a really aspirational agenda that reaches out right across into the sort-of soft voters of middle Australia. I think there's nothing more aspirational in our community than telling the parents of Australia, in middle Australia, people who work, that we're going to improve every school in the country and give every kid an opportunity. That is, by my standards, the very definition of aspirationalism, wanting something better for your kids. And middle Australia has a lot to fear from an increase in the GST. Arguably, they've got the most to fear when it comes to where the compensation would drop off and all of those sorts of things. So if you're looking for value in what John wrote, yes - we need to reach right into middle Australia. I think that we're doing that really successfully and I think that we'll be competitive on that basis.

JAYES: So you're not just playing to your natural constituents at the moment? You really need to convince some of those, because the polls at the moment are showing that they're going to vote for the Coalition.

CHALMERS: Well it's a fact of political life that if you don't win the centre ground of Australian politics in our system then you can't prevail, so of course our interest is in maintaining a really broad coalition right across working class Australia and middle Australia to make sure that we've got a suite of policies that appeal to them. I think we do when you combine schools, renewable energy, our opposition to the GST - all of those sorts of things will be very compelling.

JAYES: Well Jim Chalmers, we were so busy talking about policy, we forgot to talk about the polls.

CHALMERS: That's a good outcome!

JAYES: We'll get into that in depth another time. Thanks so much for your time, I appreciate it.