INTERVIEW WITH TONY JONES, ABC Lateline

TONY JONES: Now for our election campaign finance debate, and we're joined in Sydney by the Minister for Financial Services, Chris Bowen, and from Melbourne, by the Opposition finance spokesman Andrew Robb.

Thanks to both of you for being here.
CHRIS BOWEN: Evening, Tony.

ANDREW ROBB: Evening Tony.

JONES: Chris Bowen, we'll start with you, and on the obvious topic: Julia Gillard is now fighting battles on two fronts, against the Opposition and against rats in Labor's ranks. Are you starting to lose control of this campaign?

BOWEN: Not at all. I thought the Prime Minister put in a first-class performance today explaining her support for two of our landmark policies: paid parental leave and the big increase in the aged pension.

And she made it very clear what she believes in, what processes she believes in in terms of fiscal rectitude, and also, her social beliefs which led her to support these very two important Government policies.

JONES: Let's talk about these damaging leaks, because she's said today that you do get leaks from time to time, but have you ever seen a cabinet level leak during the height of a very tight election campaign?

BOWEN: Tony, I'm going to leave it to you and others speculate-

JONES: No, that's not speculation, that's a question.

BOWEN: No, but I'm going to deal with the facts. The facts of the matter is-

JONES: The facts are you've had a major leak at Cabinet level, so have you ever seen this before in an election campaign?

BOWEN: The fact of the matter is that Julia Gillard responded to some accusations that she opposed two policies. She responded very robustly today and pointed out that that wasn't the case.

JONES: To my question: has this sort of betrayal ever happened before to your knowledge during an election campaign?

BOWEN: Tony, I don't necessarily share your characterisation of these events. The suggestion was made - an unsourced suggestion's been made in media outlets which the Prime Minister responded to very robustly today and made very clear that that is not the case.

And I, and a number of other Cabinet colleagues have also made clear our views, and in my case, as Human Services Minister, the minister responsible for Centrelink which implements these programs, worked very closely with Julia Gillard to implement them.

And she has been a strong supporter of them from the beginning. Yes, she wanted to make sure they were affordable, but she also wanted to do them. And she has supported them strongly from the beginning, and that's the fact.

And the fact of the matter is there's one leader in this campaign who once said that paid parental leave would be introduced over their dead body, and it is not Julia Gillard.

JONES: Okay, Andrew Robb, and I'll remind you, Andrew Robb, that we are talking about the leaks for the time being.

ROBB: Yes, thanks very much, Tony. Tony, look, I thought tonight was an interview on 7.30 Report with Wayne Swan and Kerry O'Brien. You had the situation where the Deputy Prime Minister of the country said about his Government, his Cabinet, that there are leaks all the time and there's nothing that we can do about it.

Now, this is the most, sort of, damning statement. It just shows the chaos that has descended upon the Gillard Cabinet and the Gillard Government. The institution of cabinet, and the need for unity and the need for discipline, is fundamental to stable government in our system of government. And yet we've seen - here is the Deputy Prime Minister of the country saying that they can do nothing about the leaks.

This government not only has lost its way; it's got off the tracks and it's heading for a train wreck.

JONES: Andrew Robb, Julia Gillard was forced to reveal details - some details of her Cabinet positions today to defend herself against these leaks.  Do you agree though that she has at least put the allegations behind her that were contained in the leaked information?

ROBB: Tony, I thought, contrary to what Chris is saying - I found there was absolutely no credibility in what the Prime Minister had to say today. She said - and I've got the quote here, if I could - she said, “I looked at the pension increase and the paid paternal leave scheme from every angle. I held them up to the light. I examined every possibility. I asked every question because I wanted to satisfy myself that they were affordable - affordable today and affordable tomorrow."

How does that stack up with a Prime Minister who, over the last three years, has had responsible for programs such as the school halls program? Where did she hold those programs up to a light? She has wasted $6 billion plus - $6,000 million plus this Prime Minister has wasted. And what about the program announced even on Saturday? This cash for clunkers. You know, it's a nonsense scheme.

Her own minister said last year it would cost a billion, they've costed it at $400 million, it's failed around the world, and yet she has wasted again, this will...

JONES: Alright, okay-

ROBB: This will go like the green loans. I'm just telling you, this is not credible.

JONES: Right of reply, Chris Bowen.

BOWEN: Well look, Andrew can engage in all the empty rhetoric he likes. The fact of the matter is, we've engaged through our expenditure review committee process and other processes of Cabinet in a very robust set of arrangements, the review of expenditure.

When she was Deputy Prime Minister, Julia Gillard was very involved in that. And look, can we, could you really think, Tony, if the Deputy Prime Minister of Australia, the second most senior member of a government, was really opposed to two major Government initiatives that they wouldn't have happened.

Of course they wouldn't have happened. They happened because the Prime Minister, the then Prime Minister and the then Deputy Prime Minister and the Cabinet thought that they were very worthwhile policies properly costed.

JONES: We're only talking about this because of a Labor leaker, we should remind ourselves. If the identity of that leaker is made known, will they be sacked from the Labor Party?

BOWEN: I'm not going to speculate on hypotheticals about-

JONES: What sort of punishment should there be for that level of betrayal during an election campaign? I, I believe it's unprecedented.

BOWEN: Tony, I'm not going to get into hypotheticals about what if this happens, if somebody gets identified. That would be then a matter for the Prime Minister then to deal with as she sees fit.

JONES: It sounds like - if you don't mind me saying - it sounds like you'd prefer not to know, because if you find out who it is you're going to have to act.

BOWEN: I'd prefer to deal with the facts, Tony, and the facts are that we have two very worthwhile, great Government achievements: paid parental leave, long overdue - the Howard government never got around to it; happened elsewhere in the world, long before us. It took this government to deliver it.

And the biggest increase in the age pension in 100 years giving pensioners a more dignified and comfortable retirement - something the Howard Government never got around to. They're the facts that I'm more than happy to deal with, and I'm more than-

JONES: It's understandable why you don't want to deal with the fact of having rats in the ranks, but at the very least, you could tell us what kind of punishment there should be for someone who does something like this.

BOWEN: Well Tony, we're in the middle of an election campaign where people want to decide on issues like health, education, economic management, the robustness of public finances - I'm more than happy to have those debates here with Andrew Robb.  JONES: Alright. BOWEN: I don't think people are going to vote on internal speculation about internal machinations.

JONES: Andrew Robb ah-

ROBB: Tony, Tony-

JONES: Okay, a quick response.

ROBB: Look, the punishment should be that the Labor Party is thrown out of office. Here we are three and a half weeks from an election, and the discipline in the Federal Cabinet, the Government of Australia, has collapsed. It's disappeared. It's a dysfunctional government and it goes to trust. How can people trust a Gillard Government to manage all of those affairs at stake when they've got no disciplinal unity-
JONES: Alright-

ROBB: And, and how can we have stability in Government? And that's a critical thing when you're going to vote.

JONES: To be absolutely fair, you couldn't possibly know if it's a current Cabinet minister that you're talking about. It could be a former cabinet minister or someone that he or she has spoken to. So it's not quite as obvious as you put it.

ROBB: Well again, I guess, refer again tonight to what the Deputy - the current Deputy Prime Minister said. He said, "There are leaks all the time and there is nothing we can do about it." So here we have the Deputy Prime Minister admitting that this government is currently in a state of disarray and chaos and they're going to an election in three week's time-

JONES: Andrew Robb-

ROBB: How can you trust them?

JONES: From your point of view, victory on this day of the campaign was virtually handed to you by the rats in Labor's ranks. Didn't it just muddy the waters in the end when you released your new company tax policy?

ROBB: No, it didn't. We have a need not to take anything for granted here. They are in disarray; we have to demonstrate to the people that one, we've got a program, two, we will tackle the $90 billion debt - we will tackle the $100 million a day borrowing that Australians confront for the next two years - and we have to show how we will promote growth in the economy to pay back a debt which has taken just two and a half years to build up.

And that's why the cut in company tax across 700,000-odd companies is a very critical thing, and we're not going to be put off our game by the machinations and disarray on the other side of politics.

JONES: It's a confusing message to get across though, isn't it? We're going to give a 1.5 per cent tax cut to all companies, but a large number of them will still have to pay a 1.7 per cent increase. That's a confusing message, isn't it?

ROBB: Well that's the sort of message our opponents are putting out, but the fact of the matter is, something like 770,000 companies will get a tax cut of 1.5 per cent. Every company in Australia - 3,200 of them will pay a temporary levy until we get the debt down to a level where we can take that out of consolidated revenue.

So it will be a temporary levy like we've struck in two or three cases when we took over government some 12 years ago, again with a debt of $96 billion left by Labor. As we paid that down, we removed the levies as you will remember.

JONES: Okay, let's hear from Chris Bowen on this new tax policy.

BOWEN: What a pathetic con job. Tony Abbott and Andrew Robb want us to believe that, to quote Andrew, the mechanism for promoting growth is to say, ‘We're going to increase your company tax rate while we're reducing it. We're going to send the train in this direction and this direction. If we increase your company tax rate by 1.7 per cent, that's just a levy, don't worry about it. But we're going to reduce your company tax rate by 1.5 per cent at the same time’.

I mean, do they really think we're stupid? That the Australian people are going to be impressed by this sort of policy?

JONES: But you just heard the facts, the numbers. The vast majority of small businesses will receive a 1.5 per cent tax cut under their policy. That is a bigger tax cut than your...

BOWEN: And with our policy, you'll get a tax cut, and you'll get the $5000 up-front rebate. And there'll be no levy; no increased company tax which flows through to consumers and to small business through their ill-thought-out and ridiculous company tax policy. I mean, this is a laughing stock. If anybody else tried this around the world, they'd be laughed out of the political debate.

JONES: Andrew Robb.

ROBB: I don't know if Chris is realising what he is saying, but of course, they've just struck a $10 billion tax on, potentially, several hundred companies, which will pay for their tax cut - for a smaller tax cut than we're offering without a mining tax, I might add.

But he's just put the case that they're doing, they're increasing a tax on several hundred companies by $10.5 billion. Not $2.7 billion, $10.5 billion. And they've got a policy to bring in a carbon tax in this next term of office. That's another $20 billion tax across all companies and all consumers because that will feed into all sorts of cost of living pressures. This is hypocrisy writ large by the Labor Party and Chris knows it.

JONES: Andrew Robb, Joe Hockey threw a cat among the pigeons today when he said he will be having more to say about the 1.7 per cent parental leave levy. Is he going to put it up?

ROBB: No, he's not going to put it up.

JONES: Is he going to put it down?

ROBB: Look, what he said today, in a sense, and Tony Abbott confirmed it, was that within a few days, we will release the detail of our paid parental leave. Quite a lot of it is out there, but there are things like the start date and other things which we had to consider as we saw the economic statement and the budget and PEFO the other day. There are economic issues as to timing and all the rest, and we will relaunch that policy after having had this consultation and consideration of the budget situation.

JONES: Is he going to extend the life of the parental leave levy?

ROBB: The detail, Tony, will be out there for everyone to see within a few days.

JONES: Chris Bowen.

BOWEN: Tony, this policy is unravelling before our eyes. Yesterday, we saw the policy change quite dramatically.

Sharman Stone, the relevant shadow minister, was very clear when the policy was launched that paid parental leave would be paid at the salary rate of the primary care giver. Yesterday, we saw that evaporate. It's now going to be at the salary rate at the mother. And Tony Abbott has the hide to come out and say that was always going to be the case. I mean, this is a matter of integrity. He is misleading people about what his policy is, but just as importantly, the policy is unravelling. Yesterday, that part of the policy changed. Today, it's, ‘Oh, we'll have more to say about how this is going to be paid for’. Now this was always a rushed policy put together by Tony Abbott personally against the wishes of his shadow cabinet and against the wishes of his party room, and now, it's unravelling before our eyes.

And it goes to their economic credibility, frankly. This is the centrepiece of their election pitch. This is their one big policy, and they haven't got the details vaguely right. It's a changing feast from day to day, and it just goes with their other costing blunders which Andrew is responsible for, and Joe Hockey are responsible for, over this campaign to their fiscal and economic credibility.

JONES: Okay, Andrew Robb, aren't voters entitled to know these details on the day that you release your company tax policy? If this parental leave levy is going to change in some way, or if the policy is going to change in some fundamental way, aren't voters entitled to know that now?

ROBB: It's not going to change in some fundamental way. Chris is going on with a fantasy there. They are so desperate; they are making it up as they go along.

This is one of many, many superior policies in our arsenal. It is a productivity measure. The problem with the Labor Party is they're embarrassed by the fact that this is a much superior policy on paid parental leave to the one they've got.

This policy is going to encourage thousands, tens of thousands, hundreds of thousands of young women to have a child, bond for six months and stay in the workforce. Young women who are highly trained, a lot of money has been spent on their education, they're experienced, they want to stay in the workforce - this scheme will offer them their current wage for six months, unlike the 18 week program the Labor Party is putting up at the basic wage.

JONES: Alright, we haven't got much time left, but it seems to me, Chris Bowen, that you have a problem with your company tax cut too, and it's this: with one hand you're giving companies a one per cent tax cut; with the other hand you're going to take that away by making them pay more to their employees for superannuation.

BOWEN: Superannuation increase is a very important economic reform. We've got a massive savings gap in Australia. We all need to be saving more for retirement and the nation needs to be saving more.

JONES: Yeah, but come to my point, because-

BOWEN: I will-

JONES: I'll just make this point. It was reported yesterday that seven out of 10 businesses say that the additional cost of paying these higher superannuation contributions will impact on their capacity to employ people.

BOWEN: This is being introduced over nine years, Tony. Firstly, in increments of 0.25 per cent, and then in increments of 0.5 per cent. This is a slower implementation phase than the original introduction of the nine per cent superannuation guarantee.

It's been done that way very deliberately to enable businesses to build it into their planning and build it into their wage negotiations. So this is being done with a lot of thought towards the affordability of business, and as you say, combined with the corporate tax cut, which wasn't the case when the SG was originally introduced in many of those years, and is being done in a responsible way.

And it's a vital policy, and I'd like to know what the Opposition's policy on superannuation and the savings gap is.

JONES: Andrew Robb, I'm sorry, we're nearly out of time. We have about 30 seconds, but does the Coalition have any plans, at all, to increase the superannuation guarantee in the future and therefore increase people's retirement savings?

ROBB: We have not taken any final decision on this matter. We are desperately concerned about the state in which the Labor Party has got the economy, the vulnerability that we've got.

If there is some double-dip recession within a couple of years, none of which has been - no contingency made for that in the Budget, they could leave this economy in a highly vulnerable position.

If we impose these taxes, if we see these taxes imposed by Labor, the small business sector in particular could be put under enormous financial difficulties, so we are not committing at this stage to a further increase in superannuation.

We are looking to breathe life back into hundreds of thousands of small businesses that are desperately suffering, and to remove the cost of living pressures on families, and not look to impose more taxes on jobs and on small business, which is the growth engine of our economy.

JONES: Okay, so many questions, so little time. Andrew Robb, Chris Bowen, we'll have to leave it there. Thanks to both of you for being here.

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