LATELINE, FRIDAY FORUM
FRIDAY, 13 NOVEMBER 2015
SUBJECT/S: Nuclear Waste Sites; Tax Reform; Increasing the GST; Julie Bishop’s involvement in the dumping of Tony Abbott.
EMMA ALBERICI: To dissect the week that was, the Minister for International Development, Steve Ciobo, and the Shadow Minister for Finance, Tony Burke, joined me a short time ago. Gentlemen, thank you very much for joining us.
MINISTER FOR INTERNATIONAL DEVELOPMENT, STEVEN CIOBO: Good evening.
SHADOW MINISTER FOR FINANCE AND MANAGER OF OPPOSITION BUSINESS, TONY BURKE: Good evening.
ALBERICI: Let's start with the news of the day. A shortlist of six sites have been identified as potential dumping grounds for Australia's nuclear waste. I understand about 95 per cent of it is currently held at Lucas Heights in Sydney and Woomera in SA. Why can't it stay there, Steve Ciobo?
CIOBO: Well, those are temporary facilities but let's look at this process.
Australia, through nuclear medicine, I'm told, deals with about 10,000 cases per week. We generate a lot of this nuclear waste as a consequence of nuclear medicine. This is helping to change lives, helping to save lives.
We need to come up with a long-term solution so the six sites that have been identified are off the back of people voluntarily - local Governments, different groups voluntarily putting forward suggestions for sites.
Those have been evaluated, they've been looked at in terms of the stability of the region in terms of a range of different economic, social and other factors and these sites have been identified.
ALBERICI: Tony Burke, the minister responsible, Josh Frydenberg, has vowed to tick every box when it comes to regulatory and environmental consideration. Do you have any concerns at all with this process?
BURKE: So far the Government's been handling this one the right way. We're talking about material that's already held at different places within Australia and the option for having it in a more secure location.
The owners of the different sites, people have been putting voluntarily forward areas and that's the right way for it to be being done. Certainly up to this point the Government's been handling this the right way.
ALBERICI: We'll move on to this week's debate about tax reform if we can call it that.
Steve Ciobo, is it fair to say, broadly speaking, the Government is predisposed to raising the rate or base of the GST and lowering income taxes?
CIOBO: No, I don't it's fair to say that at all. What we're doing is trying to have a discussion around what's best for Australia's future, about what our tax mix should look like to encourage incentives to provide the kind of incentive that will drive economic growth, that will drive employment, that will drive investment, that will drive prosperity.
These are the things that the Government is trying to have a conversation around and as much as it pains me, Tony, after your praise on the first question but unfortunately Labor's approach to this is not right.
Labor's approach is wrong because instead of having a conversation we're seeing the Labor Party refusing to actually engage in a proactive way, in a positive way, around tax reform, instead doing the same thing that they did when the GST was first introduced and just saying, "no, no, no, no, no."
And I think it's a great shame because I think Australians recognise this is a discussion we have to have and the fact that Labor just rules it out and says, "under no circumstances," just reinforces that they're prepared to walk away from the national interest for short-term politics.
ALBERICI: Tony Burke?
BURKE: It's pretty weird if the position from the Liberal Party Government is to say, "You're not participating in the discussion if you have a view."
Labor has a view on the GST. We believe if you expand the base, increase the rate, then it's a regressive tax, it's exactly what happens. You look at the difference, if you bump it up to 15 per cent, make it across the board, then you do have a much bigger impact.
People on the lowest 20 per cent of incomes pay something in the order of seven per cent more, people on the highest incomes, as a proportion of their income, pay about three per cent more. The impact unfairly hits people at the lower end.
ALBERICI: Isn't that the point of - I beg your pardon I was just going to say isn't that the whole point of compensation?
To compensate people who are more disproportionally affected?
BURKE: But then think through the compensation point. In the first instance, Scott Morrison says they won't increase the total tax take. So, if you were to do that, and I think he'll have to back track from that because that effectively says you're not going to have compensation for people who are in the payment system on the pension.
If you are on the payment system and you are providing compensation in that way, well, they're the same payments that the Government is currently cutting.
They're currently cutting $4,000 from families and they're saying, "We'll cut that but then we might give some of it to you back at the same time that we increase the cost of everything with a GST."
But for other people, if you look at the sorts of compensation given by John Howard or, Scott Morrison has flagged, the carbon price as an example, when John Howard introduced the GST he abolished a series of taxes that were already on prices. He took away the wholesale sales tax. You can't do that twice. That's already gone, so you're having a much more inflationary impact this time round.
As far as the carbon price compensation's concerned, for people on low incomes, say a retail worker on 18,000 or something like that working part-time, they're already out of the tax system because we tripled the tax-free threshold and took it to $18,200. So if you're not in the payment system and not paying any income tax, simply saying, "we'll shift the income tax scales to remove bracket creep," doesn't help you one bit because you're already outside of the tax system.
ALBERICI: Steve Ciobo, there's quite a bit to unpick there.
CIOBO: Well you know Emma, Tony's got a job to do. He's trying to sound all principled and make out this is all about the Labor Party's rejection of so-called regressive taxation but the problem with that is Labor's track record.
ALBERICI: Let's draw you to the direct - let's have a conversation about an actual issue and what's in play here is the issue of compensation, whether you can adequately compensate those who would be unfairly and disproportionately affected by an increase in the GST.
CIOBO: There's two things at play here and I'm happy to discuss the first limb because that's one part of it but the second one is a Labor's response to the discussion. This is the point I was going to and I will come back to your question.
Labor's position is to say we don't support regressive taxation but the fact is when you look at when Labor introduced a carbon tax - and I know Tony went to great pains to only call it a carbon price - but when Labor introduced a carbon tax the households which felt that most strongly were of course poorer households who actually spend a greater percentage of their income on paying for utilities like electricity which rose significantly under Labor's carbon tax so that's the reason why I can't take Labor that seriously when Tony stands here and tries to make out it's a matter of principle because Labor's form is a complete rejection of that principle so that's just the limb I wanted to talk about.
To go back to your issue about compensation though, look, this is why we're having the conversation. We haven't pathed out a road map saying we're going to do this, this and this, we're saying let's talk about what makes this nation more competitive, let's talk about what it might look like if the GST was, for example too, go to 15 per cent.
ALBERICI: At some point you've got to stop talking and make a decision.
CIOBO: We're at the very start of this process and this is just the beginning.
ALBERICI: But you're almost at the end of your term in government.
CIOBO: This is the reason why we foreshadowed now for a number of years that we were going to have a discussion around tax reform. It's not as if we just woke up a week ago and suddently came up with this thought bubble and threw it on the table.
BURKE: Hang on, a few months ago you were ruling out changes to the GST.
ALBERICI: Tony Burke, earlier in the week Chris Bowen said you can't balance the budget without raising more revenue so which taxes does Labor propose to hike?
BURKE: There's two we've already put on the table which are the multinational tax avoidance and using the worldwide gearing ratio, the second one we've put on the table is doing something about high income superannuation tax concessions.
Now, when we put that on the table previously Steve Ciobo himself has been on the record saying that idea is absolute rubbish, whether - these tax concessions are going to end up costing more to the budget than the entire aged pension system so there's significant revenue, that's not the end of the story but we've put those ideas out there as policies that we'll take to the election for quite some time now.
ALBERICI: Finally, and we are running out of time, we've learned this week that Julie Bishop's Chief of Staff was at the meeting with Malcolm Turnbull and his supporters that plotted the downfall of Tony Abbott. Given the deputy knew her leader was about to be ousted, wasn't it her duty to tell him immediately?
CIOBO: Well first of all let me pull you up on the premise of saying the Deputy knew the leader was about to be ousted. I don't think that's the case at all, and I don't think it's fair to say that.
ALBERICI: So you don't think her chief of staff didn't tell her what was going on at that meeting?
CIOBO: Well hang on, two separate things here.The chief of staff was at the meeting taking soundings which I think is appropriate for the Deputy Leader to do, that information was conveyed back to the Foreign Minister, Julie has confirmed that, and then at her first opportunity she conveyed that to the Prime Minister. So I think that the chronology is important.
I think that as our Deputy Leader, as our Foreign Minister, Julie Bishop's role was to inform the Prime Minister. She did that, she's said that on a number of occasions. I don't think there's anything wrong with having a chief of staff taking soundings as indeed we all do, we all talk to colleagues, we all try to get a bearing on what's going on.
ALBERICI: Tony Burke, what do you make of this episode?
BURKE: Well I know from some bitter experience how issues of this nature don't go away.
You get the damage and the disgruntlement within a political party after something like this and you think you're over and you think you've moved on and then it keeps on coming back to haunt you. When Julie Bishop's gone around effectively saying, "nothing to do with me", and then it emerges it looks like she was up to her neck in it, then a whole lot of Liberal Party supporters are going to have some really strong views and every time Eric Abetz pops up on the television, Labor supporters turn up the volume because we know what's coming.
ALBERICI: Alright now we are unfortunately out of time. I thank you both very much.
CIOBO: Thanks, Emma.
BURKE: Good to talk.