SUBJECTS: Labor’s $12.3 million flood research centre announcement; Lismore floods; Banking Royal Commission; negative gearing and capital gains tax; dividend imputation

BRUCE MACKENZIE, PRESENTER: Joined in the studio now by the Deputy Leader of the federal Opposition Tanya Plibersek, good morning.


MACKENZIE: Very well, thank you ma'am. You came with bags full of money yesterday announcing that a Labor government would fund a flood research centre at the Southern Cross University to the tune of $12.3 million. I've got to say my first reaction when I heard that was; "hang on, I thought that was announced in the middle of last year?" Different project I'm told?

PLIBERSEK: Yeah. They are doing flood research at Southern Cross University at the Lismore Campus, they've already got an excellent program there, they are working with other universities around Australia and internationally. This money allows us to really supercharge those efforts to give them more technical space as they do better work, but it's also going hand in hand with a flood response centre that will be on the university campus that will bring in state emergency services, other state government and local government efforts and it will mean that this area will have a better ability to prevent and predict floods and better resilience to floods and recovery from floods as well. So, some practical examples of the sort of research that will go on. There will be a much broader scattering of flood sensors so this area will be able to much earlier predict flood waters as they are coming. A lot of that will be done on private land with farmers and others who will be part of the research project. They're looking at different ways to reduce the likelihood of floods by changing the way watercourses are formed, making sure the plantations along watercourses reduce the likelihood of flood. They're looking at social impacts of flooding as well, so, for example, how do we teach our young kids to stay flood safe? It is tragic that we still lose young lives to kids who are playing in really dangerous flood waters. We still have adults who are driving through flood waters. So working out how to reduce the danger of floods is part of the response as well, so it's going to be a really comprehensive centre. It's a little bit sad that we were doing it this week when Townsville is facing the most terrible floods up there but I think the people of Lismore really have so much sympathy for the people of Townsville because, as I was walking down the main street yesterday, I saw businesses that still haven't recovered from 2017. I know it feels like just yesterday to the people of Lismore that the really bad floods were here, so being here...

MACKENZIE: Can I ask, what were people telling you, because just in the last couple of weeks, I've noticed some posts on social media two pretty iconic, or certainly well-known businesses with a long history in the city - in the CBD particularly - have announced that they are closing down. What was your sense and what were people saying to you?

PLIBERSEK: Well I saw the story about the toy shop that's closing down, I think after 65 years. Yeah I'd spoke to a lot of business owners yesterday - I was only here for a day - I spoke to quite a few business owners and they were saying that even though they were back up and operating pretty quickly after the floods, the economic impact continues. Some of them obviously are still in conflict with insurers who haven't fully paid out and it really has - when insurance becomes so expensive that it's hard to do business it really makes people question whether they can continue on.  And a lot of people who lost their homes at the time, or lost a place to live, if they were living underneath someone else's house. People moving away in those circumstances, not getting back on their own feet, that has an impact on what they've got to spend on local businesses, the effect on the economy is long lasting. We actually see the agricultural effect as well. This flood plain is one of the most frequently inundated flood plains in Australia, the agricultural output isn't just lower in the year of the flood, it's lower in the next year as well, the hangover is quite a long hangover.

MACKENZIE: Every time we have a natural disaster and, as someone who's worked most of his professional life here, covered a lot of natural disasters and in the wake of every single one of them you hear these horror stories emerging about people and their dealings with the insurance industry. Is that the next industry do you think maybe that we might need some sort of inquiry into to give voice to these public concerns?

PLIBERSEK: I think some of the Banking Royal Commission recommendations will push the insurance industry to be a bit better than it's been. A lot of the stories obviously that came out during the Banking Royal Commission included people who thought they had life insurance, or thought they had health insurance and were told, for example, that they had the wrong type of heart attack to be covered by their life insurance...

MACKENZIE: Extraordinary.

PLIBERSEK: ... or their health insurance. So, I hope - a lot of these banks have insurance arms as well and part of the problem has been this integration between elements of the financial services industry. We need to raise standards across the board; not just in banks, but in financial advice services, in insurance and so on. 

MACKENZIE: Tanya Plibersek, I have asked our listeners to text through some of their questions and unfortunately, we've only got a few minutes left. So I'll get through them as quickly as I can. Robert at Lennox has said; "Is it Labor's intention to raise capital gains tax for people who invest in a property, rent it for a few years and then sell it to fund retirement and move into a home; i.e. the self-funded retiree who is no burden on the public purse and who has paid tax all their lives?"

PLIBERSEK: Well, the changes to negative gearing and capital gains tax - we've been very clear about. If you are already negatively gearing and using capital gains - if you're already negatively gearing, you won't be affected, keep doing the negative gearing. If you want to negative gear in the future, you'll have to invest in a new property because we think if we're going to spend taxpayer money subsidising your investment purchase, we should at least add to the stock of housing that's available for rental. The capital gains discount that people currently get will be reduced under Labor because we just can't afford these very generous tax subsidies to people who need it least, let's face it. At the moment, one of the controversial ones has been the dividend imputation one. We are currently spending more on a tax refund paid in cash to people who haven't paid tax than we do on public schools as a Commonwealth government. I know people, once they have something, don't like to give it up but it's all about choices. Do we properly fund our schools and hospitals or do we continue to subsidise people to buy their seventh or eighth or tenth investment property or get more in cash rebates for tax they haven't paid than we actually pay people in pensions? 

MACKENZIE: I had an economics correspondent on or one of our economics people on yesterday. He was talking about that policy, he says it's entirely sensible but you are getting hammered in the press over that...


MACKENZIE: Are you just failing to sell what should be a very simple message?

PLIBERSEK: Do you know what? It's so hard to explain to people because hardly anybody uses it. We're talking about 4 per cent of Australians who benefit. - I mean the simplest way of saying it is: "it's a tax rebate paid in cash to people who haven't paid tax." How is that fair? And the reason the Liberals can run a scare campaign on it is because they're saying this is about retirees. Of course it's not. It's not about pensioners; in fact, the Liberals cut the pension for 300,000 pensioners and kicked 100,000 people off the pension. They tried to raise the pension age to 70, they tried to cut the pension. It's not about pensioners, it's about people predominantly with self-managed superannuation funds and half of the benefit of this that's going to self-managed superannuation funds goes to people with balances of more than $2.4 million in their self-managed super fund. So it's going predominantly to people who need it least and the cost is borne by every Australian taxpayer. We're spending more on this for 4 per cent of Australians than we spend on public schools as a Commonwealth government. Not fair. 

MACKENZIE: Tanya Plibersek, I suspect that we could talk for a lot longer than we've been able to but, unfortunately, as you know, the news waits for no person. Thanks so much for your time today. 

PLIBERSEK: It's a pleasure, Bruce.