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Posted November 22, 2016


FRAN KELLY, HOST: The Shadow Treasurer Chris Bowen, he joins us in our Parliament House studios. Chris Bowen, welcome.


KELLY: Australia’s debt outlook is already negative, it’s down from stable so the ratings agencies have already put us on watch. How much responsibility do you accept, does Labor accept if we lose that gold standard triple-A rating?

BOWEN: Well the Government of the day has the responsibility to protect the rating Fran, and the Parliament of the day has the responsibility to ensure sensible plans are put in place and the Opposition has the responsibility to make sensible suggestions, as we have done and as we are doing right now. So if the Government was serious about protecting the triple-A rating, first they would adopt our plans on negative gearing and capital gains tax, they would drop their $50 billion tax cut, I mean the Government is lecturing the Australian people about the need for restraint while arguing at the same time for a $50 billion corporate tax cut, the biggest single hit on the budget that was provided in the last election campaign. And then finally, the Labor Party is of course suggesting improvements to the Government’s own superannuation package which would add an extra $1.4 billion over the next four years and more than $18 billion over the next decade. I mean this is very rare for an Opposition frankly to show such responsibility to be making all these sensible suggestions to the Government and the Government then refusing to take them up.

KELLY: Well hang on, yeah but Governments and Oppositions well have different policy tracks, that’s for sure. The truth is the Government is the Government, Standards & Poors doesn’t see this as entirely a job for the Government. It’s director Craig Michael says “whether we maintain our triple-A credit rating or not rests partly on the Government’s willingness and the ability to enact new budget savings or revenue measures to reduce fiscal deficits materially”.

BOWEN: Correct.

KELLY: So it’s not just a measure through the Government but to you too.

BOWEN: And your got a Treasurer who refuses to accept that Australia has a revenue problem. We’ve led the debate and made the difficult decisions, had the difficult conversations with the Australian people to say the Budget does have a revenue problem and we’ve made suggestions as to how it should be dealt with and firm policy commitments. But we have also shown Fran that we are prepared to work across the aisle on sensible suggestions, so the Government and the Opposition working together on the Omnibus Savings Bill for example, that was necessary. I said the Treasurer should go to the ratings agencies with my support to show “Look, the Parliament can do these things” but it’s not enough.

KELLY: That $6 billion is not enough

BOWEN: It’s not enough Fran and Standard & Poors has made the point that the Treasurer, Mr Morrison is wrong when he says “we don’t need any revenue measures, all we can do is cut spending and that will fix everything”. There is not credible evidence that that is the case and it’s about time the Treasurer accepted the reality that his position on that is unsustainable, the budget is taking the hit from that and Australia’s triple-A rating is under severe threat because this Treasurer is not up to the job and not willing to swallow his pride and accept Labor’s sensible suggestions.

KELLY: What about you suggesting as the Treasurer says that the estimated $19 billion worth of savings measures stranded in the Senate should be passed, some of them have been stranded there since Tony Abbott’s first Budget, we’ve had an election since then, the Coalition was re-elected, is it time to say “Alright, the Government has a mandate for these changes”?

BOWEN: Well these are the zombie measures Fran which I pointed out the Government’s numbers were predicated on passing which they would not, so we went to the election saying “these are matters….

KELLY: But the Government is saying they should pass, you should pass..

BOWEN: This is the infamous 2014 budget Fran, I mean this is the Budget which brought down Joe Hockey and Tony Abbott…

KELLY: I understand but they did get re-elected.

BOWEN: And these are policies which we have been very consistent on now for almost three years to say we cannot vote for because they offend our principles of fairness. Now these are matters which should not pass. Australians should not have to work until they are 70 to get the aged pension for example. These are measures which should not pass but what we have done is made other suggestions, and worked with the Government where we can, but if the Government was fair dinkum and look even if they didn’t want to adopt out policy exactly, they said “look, we’ve got a different way of dealing with capital gains tax, we’ve got a different way of dealing with negative gearing reform, we’ve got a different way of raising $1.4 billion on super” Okay, let’s have that conversation.

KELLY: Well they are trying to get some super changes through, and sure they’ve not the same as yours and they don’t go quite as far but they are significant. Will you drop your opposition and your rhetoric and support those changes?

BOWEN: No, no. Fran to be fair, I think you’ve mischaracterised our position there. We’ve always said we would pass the Government’s legislation because that is right for the ratings agencies. We have said it would be better if they accepted our amendments and our suggestions as to how they should raise more money and make the system fairer. But I’m not interested in giving Scott Morrison an opportunity to walk away from those superannuation reforms.

I won’t let the perfect be an enemy of the good, the package will pass but it could be passed in a more fiscally responsible way, the Government could add another $1.4 billion to the Budget over the next four years if they adopted Labor’s suggestions. They want to spend more money in superannuation at the same time as lecturing everybody about the triple-A credit rating, you know the superannuation policy for them has a been a rolling disaster but we are prepared to work across the aisle, we will pass the legislation, that’s the right thing to do but it could be better and we will go to the next election if they don’t accept our amendments, we will go to the next election with that policy.  

KELLY: You don’t want to pass the Government’s $50 billion worth of tax cuts, that’s tax cuts streamed to come in, or scheduled to come in over 10 years if the Government can get it through. You say that’s the wrong way to go, we shouldn’t be cutting revenue we should be adding it, but the Government says this is all about stimulating jobs and growth. Now has the landscape changed? Donald Trump’s been elected in the U.S. The Government and others point out that he will cut company tax rate in America from 35% to 15%, in this competitive globalised world, do you accept that puts the pressure on Australia to cut its corporate tax rate? That that’s changed now?

BOWEN: Well of course we always have to have a view to international competitiveness, but the Government was arguing that we needed a corporate tax cut when the US corporate tax rate was 35%, of course the headline rates, this is a very simplistic debate sometimes. In the United States there is state corporate tax as well and of course in Australia we have dividend imputation, one of the great Keating Government reforms, Paul Keating’s reforms, which means that no Australian in effect pays corporate tax. And that doesn’t exist in the United States or in effectively in any other comparable country. So what we see is a very different system in Australia which sees our headline rate not reflecting the true rate of corporate tax paid by Australian domestic investors.

Now again, in a perfect world, you could have a different conversation, but we’re about to lose the triple-A credit rating or at least it’s under real threat under this Treasurer’s watch, and what’s his big priority? To give away $50 billion in corporate tax cuts.

KELLY: You know, I think everybody listening says “Okay, we don’t want Australia to lose its triple-A rating” for many people might not really understand what that means but everyone understands it’s not a great thing, it’s not a great signal about the economy, so they would actually like you and the Government to work together without all this slagging off. We’ve been hearing this now for a few years and to make a difference. And how are you going to concede that something needs to change in the Opposition you’ve has as well.

BOWEN: Well Fran, the Parliament is meant to be a debating chamber, not an echo chamber. We are meant to….

KELLY: True, but the economy needs, we don’t want to lose the triple-A credit rating.

BOWEN: And where it’s possible, we have shown we can do that, again, with the omnibus savings bill, and we will pass the superannuation legislation, but we will continue to lead the debate. Remember Fran, when we announced our superannuation policy in April 2015, just for one example, the Government said that this was outrageous, that no one should ever touch superannuation, high income superannuation concessions, they would never do it. They were dragged kicking and screaming. Now the only debate is about how it’s done. When we went out and announced that, when Bill Shorten and I announced the policy, it was highly controversial because it was argued by the Government that no one should do it. Now there’s an argument about how far you go. That’s an example of how Labor has led the debate, and there are many more. For example, housing affordability..

KELLY: Ok, let’s not go over them again, because I’ve got a couple more issues I know you will want to comment on. It’s quarter to eight, our guest is the Shadow Treasurer Chris Bowen. You’re going to be giving a speech today, The Case for Opportunity, and you’ll argue that, quote, “In the land of the fair go, Australia is in fact a mediocre performer at best.” And you want the Productivity Commission to produce five yearly reports, what will a regular report like that, a review like that, tell us that we don’t already know?

BOWEN: Well I think Fran, that we sometimes tell ourselves that, as I said, we are the ‘land of the fair go’. That everybody has an equal chance in Australia. And all the evidence shows that that’s not the case. Now unless you measure something, then it’s very hard to improve it. And unless you put it on the national debate, through what I’m proposing as what I would do as Treasurer, five yearly Productivity Commission inquiries or reviews into equality of opportunity and how it’s measured and how we are doing in giving every Australian, regardless of their parents wealth, their race, their background, an equal chance in life. Unless we are having that conversation, unless we are measuring it, then we won’t improve it. And we are a mediocre performer, we like to tell ourselves we are not.

Politicians like to put ‘land of opportunity’ in all of their speeches but we don’t do that well. And it is a very important part of who the Labor Party is to ensure improved equality of opportunity. And I think, as the Treasurer, it would be a key priority for me, to say to the Productivity Commission, in a similar way to the intergenerational report puts an emphasis on fiscal intergenerational equity, what about intergenerational equity when it comes to a fair go, so that an Australian child born today, regardless of whether they are born in Mosman, Fairfield or Kununurra, has an equal chance of success in life to grow to their full maximum potential as an Australian. Now, we do not do well in that.

KELLY: Okay. Can I just ask you finally, you represent a Western Sydney seat that has a high migrant population, what is your reaction to the comments from the Immigration Minister Peter Dutton when he suggested Malcolm Fraser should not have let people of Lebanese-Muslim background into Australia. He cites the evidence that of thirty-three charged with terror related offenses in this country, twenty-two of them are from second of third generation Lebanese-Muslim background.

BOWEN: Fran, can I say to you calmly, soberly, and in as measured fashion as I can, I thought yesterday Peter Dutton did what I thought was probably impossible, brought the immigration debate in Australia to a new low. To suggest that somehow second and third generation migrants to Australia from one particular group, because some of them have engaged in criminal or terrorist activity, that their parents or grandparents should not have been brought to Australia. I thought was just extraordinary. I mean when you look at Malcolm Fraser, and the opportunities that he provided to people from Vietnam, from Cambodia, and yes from Lebanon, to flee persecution and war torn countries, but then to come to Australia and to make a new life. And I look at all the Australians of Vietnamese, Cambodian and Lebanese heritage who have started businesses, grown their businesses, invested in their children’s education, and have made an enormous contribution to Australia, and to see the Immigration Minister  get up and say, well twenty or thirty children or grandchildren, that Malcolm Fraser should have somehow divined, through DNA testing, that somehow or other in thirty years’ time some of these people would go off the rails, and that brought into question the 1970s immigration program? I mean I just thought that was a new low which I didn’t think I would see in Australia. It has been very divisive in the community.

I’ve had many people contact me to say ‘Well I don’t think my parents or grandparents coming here was a mistake because I’ve gone on and contributed to this country. I’ve worked hard, I’ve started a small business, my children are at university, my children are doctors.’ I mean I think it is incumbent on an Immigration Minister to tell the success story of immigration. Yes there are tough decisions necessary from time to time, but the success story, the almost unique success story of Australian multiculturalism, together with Canada, the most successful multicultural nation in the world. And an Immigration Minister should tell that story and not engage in that divisive, cheap politics for political purposes.

KELLY: Chris Bowen, thank you very much for joining us.

BOWEN: Good on you Fran. 

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