The Whip

13 February 2018




SUBJECT/S: Barnaby Joyce; Closing the Gap; Cashless welfare card; Liberals’ $65 billion big business tax cuts; Payday lending


SARAH MARTIN: Hello, and welcome to the West Australian's federal politics podcast, The Whip. My name is Sarah Martin, I'm the West's federal political editor based in Canberra. I'm delighted to be joined in the studio by my colleague Phoebe Wearne and Labor's Finance spokesman, Jim Chalmers. Jim, thanks for joining us.


JIM CHALMERS, SHADOW MINISTER FOR FINANCE: G'day, Sarah and Phoebe. Thanks for having me on The Whip.


MARTIN: You're very welcome. So firstly, the big controversial issue of the week is of course the Deputy Prime Minister, Barnaby Joyce. Labor in Question Time today has obviously decided to keep the pressure on Mr Joyce. Do you think he can survive this?


CHALMERS: I think there is a lot of pressure on Barnaby Joyce, but I don't necessarily think that the pressure's come from the Labor Party. I mean, he's got a very difficult set of personal circumstances that he's dealing with, and like my colleagues, I really don't want to get into the personal and the private aspects of that. I can only imagine what that's all like for him and his family. So, you'll understand that I don't have anything to add on the personal side of it. On Question Time, and on the role of the Labor Party, I think our questions are quite deliberately focused; not on the personal stuff or the private stuff, but on the allocation of public money, for example. And also the performance of Barnaby Joyce's public duties, and most of the questions we asked in Question Time today were actually about his role as the infrastructure minister, and I think his answers showed that he's not across that job. He's not doing the first job that people have elected him to do as the Deputy Prime Minister and Minister for Infrastructure. For example, we asked him a question about Tasmania and he talked about Badgerys Creek Airport in Western Sydney; he talked about the Inland Rail along the east coast of the mainland. I think that's just an indication that his mind is elsewhere and he's not actually up to the job.


MARTIN: And do you think - given this was obviously going on last year - do you think it would have been a distraction to his core business?


CHALMERS: I don't think he's been an especially good minister or Deputy Prime Minister anyway. You'd expect me to say that of course, Sarah, but I think even absent this issue, I don't think you could objectively say he's been a particularly effective minister, particularly in this role that he has now, which is infrastructure. The Government's got a fairly substantial infrastructure deficit compared to what Labor had on the table. So I'm reluctant to say, you'd have to ask him whether he's been distracted over the last little while. It's not really for me to assess that, but I think an objective reading of his performance as minster has been that he's not been a particularly good one, and I think Question Time showed that again today.


MARTIN: And based on what you've seen so far, do you think that taxpayer funds have been used inappropriately?


CHALMERS: Well, it's hard to tell, Sarah. The Prime Minister read out a prepared statement that didn't really answer some of the questions that people in your line of work legitimately have about the allocation of public money. So I think a lot of those questions are still unanswered, and I don't think Scott Morrison added much in pretending to point out it was all about the National Party. So I think people have legitimate questions, not about the private stuff, but about the public aspect of it, and those questions are essentially unanswered still.


MARTIN: And so I can assume from that that this is something Labor will continue to pursue in Question Time this week?


CHALMERS: I'm not on the Tactics committee and it wouldn't be for me to pre-empt our questioning, but I think you can tell that we think there are some non-private aspects of this that need to be answered. But, more importantly, some aspects of his actual job as the Infrastructure Minister, where he's fallen well short. We'll make our strategic judgements as we do in the usual way, but there's still some questions unanswered.


MARTIN: Today's obviously also a big day because it's the release of the Closing the Gap report. Kevin Rudd was at the Press Club today. He spoke about the impact that he believes Commonwealth funding cuts have had on trying to meet those targets, and of course we're falling short across most of them. I guess, as Labor's Finance spokesman and alternative Finance Minister, would you like to see that funding restored?


CHALMERS: I think the 10th anniversary of The Apology to the Parliament was really one of Kevin Rudd's outstanding achievements along with working with Wayne Swan and Julia Gillard to get Australia through the Global Financial Crisis. The Apology really was a nation-changing event. I think the 10th anniversary this week does give us the opportunity to mark the progress that has been made, but also to recognise where we've fallen short and especially to recognise the damage that has been done by that half-a-billion dollar cut to funding for the First Australians. So we'll make our judgements about spending as we get closer to the election, but I think even as the Shadow Finance Minister, I can recognise that pulling $500 million out of Indigenous Affairs can only have a detrimental impact on the First Australians. And when you hear the Government talking about refreshing the targets and all of that sort of thing, trying to lower our sights, I think that's precisely the wrong way to be going about this challenge.


PHOEBE WEARNE: As you just referenced, we are falling short on meeting four of those seven targets. The life expectancy target, to reach an equal life expectancy by 2030, some might say is not realistic at this point. Do we double down, or do we seriously need to rethink those targets?


CHALMERS: I think on the refresh of the targets, it's unfortunate that the Government wants to lower our sights when it comes to some of these important measures. The refresh should be about doing better, not settling for worse. And I think that has been an unfortunate aspect of the Government's contribution today; this sense that it's all too hard and so the refresh has to be about what they and you in your question might describe as being more realistic. I think we need to lift our horizons. I think there's an appetite, not just in the indigenous community in this country, but right around the country, to do better by the First Australians. That means, not just having targets that we talk about annually, but working harder to reach a standard that we should be able to expect for all of our fellow Australians.


WEARNE: Figures put out by the Productivity Commission last year show that each year we're spending about $33.4 billion on Indigenous Australians. I think that's about $44,800 a year per head. Could that be enough money if it was better spent?


CHALMERS: A lot of money does go into doing the right thing by the First Australians and I don't dispute that. There're a lot of areas of very high need, as the conversation around the targets has shown; whether it be life expectancy, whether it be some of the areas where we are making some marginal progress, reading and writing and literacy, and all of those sorts of things where we're having trouble. So I wouldn't necessarily dispute the amount of money that's going into the challenge. We can obviously do better. But also we're making the broader point today: it's not just about inputs and outputs, as important as they are, but also the view that Bill put, I think, pretty eloquently in his contribution to the Parliament, which is that we can't properly close the gap in this country until we give the First Australians a proper voice in the issues that affect their own lives, and that's part of it as well.


WEARNE: A common criticism is that expenditure's being wasted; there's money being spent on administration rather than being spent on the ground. Do you agree with that assessment?


CHALMERS: I've heard that said about a whole range of Government programs and I think, not just because I'm the Shadow Finance Minister, but generally I think all of us in the Parliament need to make sure that public money is going where it can do the most good. And no area of public expenditure should be immune from that. We want to do the best that we can for the people we are investing in, and that means making sure that the money is well spent. But occasionally I think - and I'm not suggesting in your question - but I think occasionally people use that as sort of a shorthand when they oppose the effort itself, and I don't want to give any encouragement to that line of argument. There's a lot of need in the indigenous community. We have a responsibility as Australians to invest in people, particularly people doing it the toughest. And part of that means making sure that we're getting value for money.


WEARNE: On the cashless welfare card, Labor has backed the continuing of the existing trials and also the third trial that's allowed for in the existing legislation. The cost is reportedly about $12,000 per participant and Labor and the Nick Xenophon team have both recently criticised the Government-commissioned analysis of that trial. Is that money well spent, to continue the trial if there's no proof?


CHALMERS: We draw a distinction in the Labor Party, and Jenny Macklin and others have done a terrific job outlining our position, which is that when communities have properly been consulted, and genuinely want the cashless debit card, then that is okay. Where there are communities where it's being imposed on them, where there's not proper consultation, then we take a dim view of it. I think there have been occasions where the Government, under multiple ministers now, have tried to use this sort of issue as some kind of wedge. They like to talk about welfare in a very different way than we like to talk about welfare or social security. So if you take the politics out of it, we're up for consultation. If a community is properly consulted and genuinely wants it, we've ticked off on it. And where they haven't, we haven't.


MARTIN: So moving onto the other big issue that we're talking about a lot so far this year, and that is the Government's company tax cut policy. So this week we've had indications that they're really going to double down on this, that they're absolutely prepared to take this to the next election. How happy are you about that?

CHALMERS: There's multiple ways to look at that, Sarah, I think. They have locked it in now, and they will take it to the election, even though the Senate looks unlikely to pass those company tax cuts. From an economic point of view, it's disappointing that they'll stick to it. From a fiscal point of view, from the point of view of the Budget, it's a horrific decision; a $65 billion ram raid when we've already got record and growing debt. From a political point of view, I think it helps sharpen the differences between Labor and Liberal. From that point of view, I'm very, very happy going to the election with that being, I think, the defining contrast between Labor and Liberal. See, we both say we want to grow the economy, right, but what they think is you can grow the economy by favouring the top end of town at the expense of middle Australia. We know that that won't work. Even the Government's own Treasury Department said that the benefits of that big tax cut for multinationals and the big banks will be negligible and only felt down the track. We think if you're serious about growing the economy, you've got to invest in people and their productivity; you've got to make sure people are being rewarded for their effort, they've got money to spend in the economy, they can provide for their families. So we've got two very different concepts of growth. Only ours will work and I'm very confident - I would happily make the case for our alternative to their $65 billion gift to big business. I will talk about that every day between now and the next election, because I think people need to know that this is a Government that thinks that big multinational corporations pay too much tax, seven million workers that their jacking up income tax on pay too little tax, and people get paid too much to work on the weekends. All absurd propositions, and reasons why if you go out and about in the community, the Government's economic agenda is not well supported.


MARTIN: I was going to ask about that. When you're in the electorate and you're speaking to people about the tax plan, just how on the nose is it?


CHALMERS: They are absolutely filthy about it. The idea that big foreign multinational companies and the big four banks deserve a multi-billion dollar tax cut, at the same time as the Government is jacking up income taxes on middle Australia, drives people absolutely wild. And every time - like today when the Government and Malcolm Turnbull who they just see as this sort of elitist, out-of-touch caricature and Scott Morrison, who's just not up to being Treasurer - whenever they see them banging on about how these company tax cuts for the big banks will miraculously show up in higher wages, people are smarter than that. They see through it. I think the more they talk about this company tax cut, the worse off they'll be in the community. 


MARTIN: Interesting. Sorry, just to pull you up on these tax cuts for big business and multinationals and big banks - so $30 billion of the tax cuts are already legislated for businesses with a turnover up to $50 million. Now they're by no means big multinational companies. They're small and medium-sized businesses. Labor hasn't made its position clear on what it will do in the lead-up to the next election. Would you like to see those tax cuts for small businesses stay in place?


CHALMERS: You asked me, Sarah, about those tax cuts that they'll take to the election, and what they said they'll take to the election is the tax cuts for the big multinational and the big banks.


MARTIN: Well they'll take the whole package. Are you going to reverse those?


CHALMERS: Part of it is legislated. What we said about that is that we support tax relief for genuinely small companies up to $2 million.


MARTIN: But they're sort of micro-level aren't they? You know, a lot of businesses in that slightly bigger category, up to $100 million, are not massive companies. 


CHALMERS: We've said that we support up to $2 million, we don't support them at the very top end and we've said that we'll make our view known on those medium-sized companies well before the next election. We're still working through it. So that the listeners of The Whip understand, when you're in the Opposition, and particularly this Labor Opposition, we are so careful about the commitments we make, and we want to make sure they add up, and we want to make sure that we go to the election with the most responsible set of policies. And that means weighing different things up, different priorities up. And we care about investing in people and productivity and economic growth and jobs. So we have to weigh up all the different things coming at us, so we can do that in the most fiscally-responsible way. That means sometimes we can't just commit to something every day, or spend money every day. We spend hours and hours - I'm sure Chris Bowen spends more time with me than he would like - going through the numbers making sure it all adds up, and that's part of that effort; working out what we can commit to in terms of middle-sized companies.


MARTIN: But in an ideal world, you would like to see those tax cuts remain?


CHALMERS: I wouldn't commit to that, Sarah. I think the best way to understand it is, "yes" for genuinely small, "no" to genuinely massive, and we'll have more to say on the others closer to the election.


MARTIN: Okay, one thing the Government likes to do is bring up old comments by yourself or Andrew Leigh or Chris Bowen or Bill Shorten about...


CHALMERS: Can you please ask me about this?!


MARTIN: (Laughs)


CHALMERS: I'm so pleased about this.


MARTIN: Well look, it's your lucky day - about previous support for company tax cuts.


CHALMERS: Yes, thank you, Sarah!


MARTIN: So, which is right? Were you right back then? Or are you right now?


CHALMERS: There's so many different ways to look at this, right. But the thing I really want your listeners to know is that every time they get up in the Parliament - Morrison, Turnbull and the other characters - and they talk about Bill's comments or Chris Bowen's comments from that period - I wasn't on the record then, I wasn't a Member of Parliament - but their comments from then, and they talk about how right Chris Bowen and Bill Shorten were back then to support a company tax cut. You're listeners probably don't appreciate this: the Government didn't support those tax cuts! The reason they didn't become law is because Turnbull and Morrison said they would vote against them! That's the most important point that gets missed in this. The other difference between back then, and we're talking about I think seven or eight years ago, the big difference is that those company tax cuts were funded by elsewhere in the company tax system, right. So the Government didn't support them. They didn't like the idea of paying for a tax cut for business out of a tax hike for business. Now the reason they're all for it is because it comes out of the pockets of middle Australia. They're all for it now because they can jack up income taxes on people who work and struggle, who we represent. But it can be a big redistribution of wealth in the wrong direction towards the biggest multinational companies. So those are the two big differences that people need to appreciate whenever Turnbull and Morrison get all puffed up about this.


MARTIN: Often the comments that are brought up in Parliament are things like "tax cuts lead to investment and jobs". Is that basic statement true?


CHALMERS: No, because these tax cuts come at the expense of people's living standards. What we have to understand is we're talking about $65 billion in total going to companies paid for by harsh cuts to social security, paid for by jacking up income taxes on seven million Australian workers, paid for out of the pockets who we need to prosper. We need their effort rewarded. We need them to be about to spend in the economy and invest and provide for their families. We need to be able to do all those things. And what the Government is doing, like a big vacuum, is sucking up all of this money out of middle Australia, transferring it to the bottom line of big companies, and that's not good for the economy; that's bad for the economy.


MARTIN: Well thank you so much for that. Now we're going to finish up with our new segment, which we like to call "The Roughie".


CHALMERS: You didn't ask Mathias for a roughie, I noticed!


MARTIN: (Laughs) I know, well we didn't have the segment last week. But we have a roughie this week. So basically, we're asking you, is there something happening this week that perhaps might fly under the radar unless you give us a hot tip for the podcast?


CHALMERS: I think there's an issue which impacts on a lot of people, particularly a lot of people who are disadvantaged in our community that people need to know about it, which is the necessary changes to the way that payday lending happens. So a lot are in the big shopping malls; near my office there's five or six of them, payday lenders. And for a long time, the arrangement for payday lending has been really unfair. The Government has said they'd look at it. The Government actually had a way forward to look at it, and then in the usual way, aspects of the Liberal partyroom have yanked on people's chain and that reform won't be progressing. I've got a couple of colleagues, Tim Hammond and Milton Dick, who are really on the case here with payday lending, and I think it won't be bigger in the news than Barnaby Joyce, or company tax cuts, or Closing the Gap, but I think in communities - particularly in communities like mine and Milton's and others - it's a really important issue. And it shows that the Parliament is capable of getting on and dealing with big issues, even when we have some of this other stuff that we're seeing on the front page of the tabloids.


MARTIN: Fantastic. Well that's one for us to keep an eye on. Jim Chalmers, thank you so much for joining us, and thank you to my colleague Phoebe Wearne. We're going to be back to have a little bit of a debrief after we say goodbye to you.


CHALMERS: Well, be kind!


MARTIN: We'll certainly be kind. Thank you so much, Jim.


CHALMERS: Thank you.