INTERVIEW WITH KIERAN GILBERT, Sky Lunchtime Agenda

KIERAN GILBERT: Joining me on the program this afternoon, the Financial Services Minister and the ALP campaign spokesman, Chris Bowen.  Mr Bowen, thanks for your time.

CHRIS BOWEN: Pleasure, Kieran.

GILBERT: Before we get onto these other issues, the apparent leaks from within your Cabinet, I want to first of all talk about the Coalition commitment to reduce the company tax rate. Now, they’ve seen you and raised you, actually, probably more appropriately, seen you and lowered the rate. They’re going to be 0.5 per cent lower than what you’re committing to by 2013.

BOWEN: Kieran, they really expect us to take this seriously? They are proposing a 1.7 per cent increase in the company tax rate at the same time as they’re proposing a 1.5 per cent reduction in the company tax rate and they expect the Australian people to take that seriously. Tony Abbott wants us to believe he, as Prime Minister, would cut company tax at the same time he’s increasing company tax. His company tax increase on Australia’s medium sized and large businesses will still have a very clear impact on cost of living, on prices.

There’s a very clear choice here: we are cutting company tax for every business in Australia. He is proposing a card trick where he increases company tax and calls it a levy, and says an increase of 1.7 per cent isn’t really a tax rise, it’s a levy, but a 1.5 per cent cut is a tax cut, and he expects people to believe him and take him seriously. It’s economic policy on the run. This is a joke, frankly.

GILBERT: Let’s break it down, though. The two elements: you’ve got the small business community and the big business, the top 3,000 companies which would face that levy. First of all, small business: the bottom line is they’ll pay less tax under Tony Abbott than under you from 2013. That’s true.

BOWEN: We are proposing a tax cut for every small business. We’re also proposing the $5,000 upfront deduction which is very important in terms of cash flow and paperwork.

GILBERT: But the ongoing tax rate is less under the Coalition.

BOWEN: Well, so they say, but at the same time they’re putting an increase in tax for Australia’s medium and large businesses which will flow through to costs, and they expect people to take that seriously. It’s a card trick, Kieran, and let’s just look at this objectively for a minute. Can you imagine the alternative Prime Minister of Australia saying, ‘Ladies and gentlemen, men and women of Australia, I’m going to increase your tax at the same time I’m cutting it’ and the room isn’t meant to fall around in laughter? 

GILBERT: But in terms of the paid parental leave scheme and the levy upon big business, he did say that they would have more on that later in the campaign, so he was implying that they’d have a reworking of that.

BOWEN: Well, let’s wait and see. That’ll just be more policy on the run if they do that. They’ve been out saying that this policy’s fine, it’s not going to have any impact. We’ve been pointing out that it’s having an impact.

They are now cobbling together a tax policy on the run and expecting us to believe that it’s in some way credible. They have a 1.7 per cent tax rise; we have a one per cent cut for every Australian incorporated business, as well as the $5,000 upfront deduction for small businesses. I’m more than happy to argue the benefits of our tax plan compared to theirs. Ours is very clear.

Theirs is extraordinarily confusing. A tax rise and a tax cut at the same time for the same businesses, and we’re expected to take that seriously.

GILBERT: Okay. Well, let’s move on. A few other issues before we get to the leaks within your Government. Inflation rate less than expected; that’s got to be a relief, that the RBA would be less likely, it seems, to lift rates next week.

BOWEN: Well, Kieran, I’m not going to speculate on what the RBA may or may not do. Obviously, any inflation figure which is below market expectations is welcome. It shows the robustness of the economy. We welcome that. That’s not to take away, of course, from the cost of living pressures that many Australian families are facing, hence our cost of living policies: our tax cuts, our expansion of the education tax rebate, our increase in the child care rebate and our pension rise, compared to Mr Abbott’s tax increase on businesses which would flow through.

GILBERT: But surely you’d be hoping, I mean, I know you’re not going to speculate on it but you’d be hoping that they don’t lift the rates.

BOWEN: Kieran, I’m an economic Minister and I don’t comment on Reserve Bank movements one way or another, to speculate or hope or otherwise.

GILBERT: You say it shows the robustness of the economy. If consumer prices are down, then how does it do that?

BOWEN: Well, Joe Hockey’s been out there falsely claiming that the stimulus is adding to inflationary pressures and putting upward pressure on interest rates, and here we have today an inflation figure which is below expectations. Now, we can’t get carried away with one set of figures; you need to look at the total figures over the year. But nevertheless, lower inflation than the market might have been expecting is encouraging.

GILBERT: And you’re hoping, and do you foresee that it is going to moderate further?

BOWEN: Well, look, Kieran, we take these figures as they come. We have our inflationary projections in the Budget. We think they are still accurate. They were updated in the pre-election forecast and they weren’t changed, and we stand by those projections.

GILBERT: Okay. Let’s look at these leaks. Where are they coming from?

BOWEN: Well, Kieran, I’ll leave it for you and your colleagues to speculate.

GILBERT: Do you think it’s Kevin Rudd?

BOWEN: I’m not going to entertain speculation on that. You can make the accusation; I’m not going to speculate as to where it’s come from. Kevin Rudd’s made a statement today, I understand, saying he hasn’t and will not comment on Cabinet deliberations. But there’s a whole commentariat, a whole media apparatus out there which can commentate on leaks on both sides, and they happen from time to time on both sides of politics. Let’s deal with the facts.

GILBERT: Time to time, but it couldn’t have come at a worse time.

BOWEN: Well, Kieran, let’s just deal with the facts.

GILBERT: It’s an election campaign. Someone in your ranks doesn’t want you to win.

BOWEN: Let’s deal with the facts here. I thought Julia Gillard put in a very comprehensive performance this morning. She answered every media question. She stood at the lectern for as long as it took to deal with this issue. She made it very clear she supported and supports both policies, and that is also my recollection of all discussions I’ve ever had with her. Now, we don’t go into who said what at Cabinet meetings, but can I say this Kieran: I’ve worked closely with Julia Gillard. I’m the Human Services Minister; I’m responsible for Centrelink, which delivers in part both of these policies. I would know if Julia Gillard didn’t support these policies and she does.

And let’s also bear this in mind: she was the Deputy Prime Minister of Australia. Does anybody seriously think that if the Deputy Prime Minister of Australia, the second most senior person in the Government, seriously opposed these policies then they would have happened? Now, she very prudently and properly, as she’s laid out, wanted to make sure they were fiscally responsible. That was not only her right but it was her obligation to do so. And I think she’s dealt very comprehensively with this issue today.

GILBERT: She gave a flat-out denial on the pension question, whether or not, you know, she ever said older people don’t vote for Labor. She said that’s flat-out wrong. What there wasn’t was a flat-out denial, though, of, was the fact that people beyond child bearing age might resent the paid parental leave scheme.

BOWEN: Kieran, in all discussions I’ve ever had with Julia Gillard, she’s been a strong supporter of paid parental leave, not just in the last few months, not just in the last few years.

GILBERT: So she didn’t say it?

BOWEN: For as long as I have known her, she has been a strong supporter of paid parental leave and I have never heard her express any misgivings about paid parental leave. On the contrary, she’s been a supporter of it.

GILBERT: Okay. So she didn’t say, as far as you’re aware?

BOWEN: Kieran, there is only one candidate for Prime Minister on August the 21^st who ever said that paid parental leave would happen over their dead body and that was Tony Abbott.

GILBERT: But this is not the first leak. It’s clearly someone who’s happy for your Government, a member of your Government that’s happy for you to lose the election.

BOWEN: Well –

GILBERT: This is a huge distraction. It’s disastrous, isn’t it, the second week in?

BOWEN: Well, look, Kieran, you have days on the campaign where you’re marked as the winner; you have days on the campaign when you’re not, and that is up to you to do. I deal with the facts and the facts are I thought the Prime Minister put in a very impressive performance this morning dealing with these suggestions in a very comprehensive way and I think a lot of people would say that it was good to see the Prime Minister reacting so well to these accusations.

GILBERT: Now that you start canvassing, though, what’s gone on in Cabinet as the Prime Minister did earlier in terms of, you know, giving her background on her thinking behind the pension increase, her thinking behind the paid parental leave, where does that stop now that she’s done that? I mean, why can’t she now tell us her thinking behind her move to depose the Prime Minister?

BOWEN: Well, I think an accusation was made and she dealt with it. Now, she did not go into the details of who said what at the Cabinet meetings and nor will I, and nor will you find any Cabinet Minister doing that. It would be a breach of the Cabinet rules and in many ways would be a breach of the law. But nevertheless, it’s appropriate that she outlines her beliefs in relation to paid parental leave and the pension increase, and they are completely in accordance with my recollection of every discussion I’ve ever had with her.

GILBERT: It’s a fine line, though, isn’t it, surely? I mean, if she’s talking about the thinking behind her strategy in Cabinet –

BOWEN: Well, but Kieran –

GILBERT: The policy processes, I mean.

BOWEN: If she hadn’t done that, you would have been very critical and rightly critical if she hadn’t outlined her approach to these issues over the term in government. I think it’s perfectly appropriate for her to say, ‘Look, I’m a big supporter of paid parental leave, I was a big supporter of the pension increase, I looked at whether they were fiscally responsible and I satisfied myself that they were’.

GILBERT: So what do you say to the leakers, then?

BOWEN: Well, Kieran, every Cabinet Minister I talk to, every member of the Parliament I talk to on our side is completely dedicated to the return of our Government.

GILBERT: Have you spoken to Kevin Rudd?

BOWEN: Of course I’ve spoken to Kevin Rudd, not in recent days, though.

GILBERT: Okay. Alright, Chris Bowen, appreciate your time. Thank you.

BOWEN: Great pleasure.

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