THE HON. TANYA PLIBERSEK MP
ACTING LEADER OF THE OPPOSITION
SHADOW MINISTER FOR FOREIGN AFFAIRS AND INTERNATIONAL DEVELOPMENT
THE HON. CHRIS BOWEN MP
WEDNESDAY, 6 NOVEMBER 2013
SUBJECTS: Joe Hockey’s mini-Budget, superannuation tax slug on lower and middle income earners, Abbott Government priorities, GrainCorp, bilateral relationship with Indonesia, Abbott Government’s culture of secrecy, car industry.
TANYA PLIBERSEK: I just want to start by talking about a couple of things today. In a moment I'll hand over to Chris Bowen to talk about the Liberal Party's tax announcements. The Government's made a number of important announcements today and Chris Bowen will go through the details of those.
Just very briefly on that, I'd like to say how incredible it is that we had a campaign that was so firmly based on debt and deficit and since coming to Government all Joe Hockey has done is super-size the deficit.
I also wanted to make mention of the fact that the announcements that the Government have made today very clearly show their priorities. There's a number of announcements here that hit ordinary families, including the fact that 3.6 million low and middle income workers' superannuation will be reduced to benefit 16,000 of the highest income earners and their superannuation. Coming on top of the 1.3 million families that are missing out on the Schoolkids' Bonus it really does show where the priorities of this Government lie and it does further underline the fact that Australians aren't getting the Tony Abbott they voted for.
When Chris has made his announcements today I will make a few extra comments about our diplomatic relationship with Indonesia.
CHRIS BOWEN: Thank you very much, Tanya. We see two things very starkly today. We see Liberal Party's hypocrisy and we see their values and their priorities - their twisted values and their wrong priorities.
On hypocrisy, Tony Abbott and Joe Hockey campaigned on the platform of reducing the budget deficit. Since the election, all they've done is blow the budget deficit. And they have shown us their values and priorities by giving higher income earners a bigger tax break on superannuation while insisting, insisting on scaling back the tax concessions for low and middle income workers. Since the election we've seen Mr Hockey provide a $9 billion grant to the Reserve Bank, which was not asked for, which has a debt impact, an increase in the deficit each year of $350 million.
And today seen him give a tax break to with 16,000 very high income earners with more than $2 million in their superannuation accounts to provide a watering down of Labor's measures to improve the tax integrity of our largest businesses and at the same time we see the Government insisting on scaling back tax concessions for Australia's hard working small businesses, taking away previous tax concessions that the previous Government gave Australia's small businesses.
They are attacking 3.6 million low and middle income earners by refusing to proceed with Labor's tax concessions. This Government fundamentally doesn't understand, fundamentally does not get that it's unfair for Australia's low and middle income earners to receive effectively zero tax concession on superannuation when Australia's high income earners get substantial tax concessions for superannuation. They just don't get the unfairness of that. And they're scaling back of our tax concessions for low and middle income earners is a slap in the face to Australia's hard-working, low and middle income families - to shop assistants, to cleaners, services indeed to our essential services workers right across Australia - that this Government thinks they don't deserve a superannuation tax concession at the same time as this Government is deliberately giving more tax concessions to those people with $2 million or more in their superannuation accounts.
Now we saw Mr Hockey again today say that the budget since the situation had deteriorated since the election and we see him today announce a raft of measures with a huge impact on the Budget. Mr Hockey has no excuse. He must release the mid-year economic forecast. He should not wait until just before Christmas. There is it nothing stopping him releasing it now. It's been released by now in other years - it should be released now. And make no mistake, that with these changes that Mr Hockey's made, that this Government's made with a $9 billion grant, with the tax changes made today, MYEFO would be Mr Hockey's mini-budget.
He can't hide behind and create excuses that it's not his fault. He's the Treasurer of Australia, he must take responsibility for his own decisions and he must update the Australian people on state of the budget which he refuses to do. He refuses to provide the update. He said before it would be done January – he briefed out and leaked it would be done in January. We've shamed them in to agreeing to do Christmas but it should be done now.
I just want to cover one other matter before I hand back to Tanya.
We saw on the weekend the extraordinary spectacle of the Deputy Prime Minister of trying to publicly bounce the Treasurer into making a decision on GrainCorp to knock back foreign investment. We see the Government at war with itself on this issue and today we saw the even more spectacular statement by Treasurer Hockey that he would not be bullied into this decision. I think there's only one conclusion to make out of that comment; he feels he's being bullied by the Deputy Prime Minister, or perhaps it's by the Agriculture Minister, Mr Joyce.
We clearly have a Government at war with itself on this issue. For the Deputy Prime Minister to try to publicly shame the Treasurer into a decision and for the Treasurer to publicly respond in a press conference by saying that he won't be bullied, shows these deep divisions.
The Treasurer has an obligation to explain to the Australian people the benefits of foreign investment in the agriculture sector and in the economy more broadly and if he were to knock back this foreign investment decision he would need to have very good reasons indeed. But I call on the Treasurer to show leadership and to not hide behind claims of being bullied by his Cabinet colleagues and to make the right decision in the national interest.
TANYA PLIBERSEK: Thanks very much, Chris. I want to make a few additional comments about Australia's diplomatic relationship with Indonesia. Not, of course, on any security matters or intelligence matters - there's long-standing convention that we don't comment on those issues. What's at stake here, however, is our very long and strong and close relationship with Indonesia.
Indonesia is an important neighbour. It's been partner an important friend and trading partner and Labor in Government worked very closely with Indonesia to strengthen that relationship. Recently, however, that relationship has soured and unfortunately it's not difficult to understand why.
As Greg Sheridan pointed out this morning, Indonesia's Foreign Minister seems to be taking too much pleasure at having a go at us lately. Despite claiming before the election that their foreign policy would be more Jakarta and less Geneva, there's been a series of missteps by the incoming Government that have affected our relationship with Indonesia. Before the election the Liberals made claims about policies how their asylum seeker policies would operate within Indonesian territory without discussing those plans with Indonesia.
Tony Abbott and Julie Bishop failed to talk to Indonesia about the Liberal's turn back the boats or buy back the boats policies leading the Indonesian Foreign Minister to describe them as unilateral and worrying plans. The Indonesian Foreign Minister warned Julie Bishop in New York that Indonesia cannot accept any Australian policy that would in nature violate Indonesian sovereignty. That was his exact quote.
Of course in response to that Tony Abbott made much of his first visit to Indonesia, however, it really didn't go very well. He locked Indonesian journalists out of a press conference and the suggestion by the Indonesian journalists union at the time was that that might have contravened Indonesian law. Of course it went down very poorly. Tony Abbott was forced during that visit to spend much of his time apologising for the things that he had said before the election and the policies that he'd announced with no consultation and of course he came back empty-handed on both his turn back the boats and buy back the boats policies.
The diplomatic relationship which Labor handed to the incoming government was in fine working order but in a very short time Tony Abbott and Julie Bishop have managed to run it into the ground. The current difficulties in the relationship are of course, magnified by the poor footing that this relationship is built on. And the fact is that Julie Bishop and Tony Abbott insulted the Indonesians on more than one occasion. I wrote very recently to suggest that she should visit Indonesia immediately to repair this damaged relationship. I note that indeed she will arrive in Indonesia today. So the test for the new Foreign Minister is to restore the good will in our relationship with our near neighbour because anything less undermines the mutual cooperation we have with Indonesia and the stability that that brings to our region.
Thanks. Any questions?
JOURNALIST: Do you think the Foreign Minister has the character to deal with this?
PLIBERSEK: I'm not going to make personal comments about other Members of Parliament. What I would say about our relationship with Indonesia is that it is one of our most important. It's been built on over a long period of time by successive governments; it was handed to the incoming Government in very good working order. There was a very close rapport between Bob Carr, for example, as our Foreign Minister and Marty Natalegawa as the Indonesian Foreign Minister and it's absolutely now imperative that Julie Bishop now go to retrieve the relationship that these loose comments over time have led to.
JOURNALIST: Do you think Indonesia's Foreign Minister sees this as a form of payback given Mr Abbott's posturing on boats before the election?
PLIBERSEK: Again, I'm not going to speculate on the motivations of the Indonesian Foreign Minister. What's of interest to us is our Indonesia relationship as a nation with Indonesia as a nation. What I can say is that the relationship has been good, strong and deep for many years and in recent months has deteriorated very substantially because of a number of missteps taken by Julie Bishop and Tony Abbott before the election and unfortunately also since the election.
JOURNALIST: So is there one specific thing the Minister could do to start to repair the relationship?
PLIBERSEK: Well, I think it's very important that she has gone to Indonesia now. I'm pleased to see that she went to Indonesia. I think she needs meet obviously with the Foreign Minister and any other senior Indonesian officials and listen to their concerns. The fact the Indonesian Foreign Minister repudiated Australian Government policy in New York was troubling at the time. There's obviously a fractured relationship there, the relationship is strained and it's very important that the Australian Foreign Minister listen to the concerns of the Indonesians.
JOURNALIST: Mr Bowen, the profit shifting crackdown that was abandoned by Joe Hockey, I think he said it was unrealisable, what do you say to that?
BOWEN: I think the measures that he announced today will save $1.1 billion compared to the $1.8 billion that they would have saved in the way the previous government was implementing them.
Now we saw Mr Hockey a few weeks ago beating his chest saying tax minimization crackdowns will watered be the hallmark of his chairmanship of the G20 Finance Ministers. Now he’s watered down based on advice from the previous Government. Advice from the various economic agencies that the Government has available to it, most notably the Treasury and the tax office, that this was a workable way of reducing tax minimization. So, it's up to him to justify this significant amount of revenue that would have been saved and how he can close the ring on that with his rhetoric as the incoming Chairman of the G20 Finance Ministers, and the G20 Finance Ministers have made exactly these sorts of measures and agreeing on them across international borders, one of the key priorities for the next 12 months.
JOURNALIST: Mr Bowen, who owns these billions of dollars of tax hikes coming Australia's way, are they Labor’s or the Coalition’s?
BOWEN: The Treasurer is the Treasurer of Australia and he can take decisions and responsibility for the decisions he's announced today.
JOURNALIST: So if you're going to criticise him how can you given some of these were apparently Labor's ideas?
BOWEN: Well let's be clear, we announced a whole range of measures. Now Mr Hockey has today scrapped some of those measures, like he scrapped the improving of the tax integrity around high income earners’ superannuation. He's got to take responsibility for that. He's got to explain why his priority is to give a tax break to people with $2 million in their superannuation accounts at the same time he's cracking down on Australia's low and middle income earners and taking away the only tax concession they get, the only tax concession they get for their superannuation which Mr Hockey seems to think is appropriate that they don't get any.
JOURNALIST: Do you believe that doctors could rort the self-education arrangements to travel to conferences and education events?
BOWEN: I'm not going to talk about doctors in particular but I will say this, this was a measure designed again, to improve the fairness and integrity of the tax system. When I was Treasurer delayed this measure by a year to enable better consultation to ensure that it was properly targeted, to ensure it is cracking down on claimed self-education expenses which are over and above that which could be properly justified. I would include in that expensive overseas conferences which may have some educational element to them but which clearly also have other side benefits from the individual undertaking them. That I think is appropriate. Again Mr Hockey, again with this so-called ‘budget emergency; he thinks it's somehow okay to leave all that in place - Yeah, sure, go overseas as much as you like, claim as much money as you like, and claim it as self- education and we're at going to do anything about it at all. That underlines again his warped priorities and his incorrect prioritisation of the tax changes needed in Australia.
BOWEN: That's a matter for Mr McTernan. Each individual case should be looked at on its merits. As I say, if someone is going overseas, not using Australian education institutions, but going on it expensive conferences, claiming it as a government would be entitled to look very closely at that to take necessary and prudent steps to tighten that in the interest of fairness.
JOURNALIST: Why do there seem to be so many tax measures announced under your government that were not actually legislated?
BOWEN: That's pretty standard. I notice Mr Hockey said today one of these measures were announced in 2001. Yes, who was the Treasurer in 2001 and the Treasurer for the next 6 years and didn't implement that tax change? I think we all know the answer to that question.
JOURNALIST: There was some commentary today, particularly with the self-education cap, that its axing was a win for common sense and Joe Hockey was saying it actually helped further themselves. Do you make much of that argument?
BOWEN: Look, we all good agree that self-education is a good thing, that people trying to improve their and their productivity and their saleability in the labour market is a good thing for them and a good thing for the nation, there's no argument there. But it's a matter of ensuring that it's targeted at those people who do need do the tax concession to undertake their self-improvement, their education courses and not providing a wind-fall benefit for those who are in the position, and there's only a certain group of people who are in the position, where they're able to afford international courses and international travel at very considerable expense and then to claim that as a tax concession.
We're not talking about going down to the local TAFE and doing a course there, we're talking about very expensive international travel which some people have been claiming as a self-education expense.
JOURNALIST: They’ve given themselves another few weeks to look at some of these tax initiatives they haven’t made a decision on, I’m not sure which ones they are. Do you have any views about what should happen there
BOWEN: It should be dealt with on a case by case basis. A couple of weeks of consultation I think is not necessarily ideal but that's a matter for the Assistant Treasurer to ensure the consultation is proper.
JOURNALIST: Is leaving 62 options up in the air, is this adding to the uncertainty of the business community?
BOWEN: I think that can be overblown. I think the business community certainly wasn't banging my door down to say we need these legislated or not legislated. I think a couple of weeks of consultation if that’s the way the Assistant Treasurer wants to do it, I’ll be very critical of many of the things they have announced today, but I’m not going to criticise a couple of weeks of consultation.
JOURNALIST: You'd like the midyear economic outlook out before that?
BOWEN: Absolutely. There's no excuse for not releasing the mid-year economic outlook it now. I mean this is our Treasurer who wants us to approve an increase in the debt cap of 67% to half a trillion dollars but is not going to release the economic forecast to back that up. This is a Treasurer who wants to give $9 billion to the Reserve Bank but is not going to release the mid-year economic outlook. This is a Treasurer who says there's been a further deterioration since the election in the time that he's been Treasurer but I'm not going to tell you how much and I'm not going to outline the figures. So the culture of secrecy which encounters so much of this Government is well and truly at place in the Treasury.
JOURNALIST: Will you be campaigning for a Fringe Benefits Tax on cars over the next three years?
BOWEN: Well the next election is three years away and we will be developing our policy. On the Fringe Benefits Tax let me say this. I saw Mr Hockey in a moment of Orwellian hutzpah say that the car industry is open for business. Well that will come as a bit of a surprise to the workers at Holden and Toyota who are waiting day by day to find out if they have a job because of this Government's refusal to give the car industry the necessary assurances it needs because of the Government’s insistence on ripping away half a billion dollars from the car industry.
So we're not going to be lectured by Mr Hockey about the car industry. He's in no position to do that. In relation to the integrity of the budget we said it was fair enough that if people are claiming tax deduction on the basis that they're using their car for work purposes that it would not provide be unreasonable for them to provide some evidence, some evidence that that's the case. Now, what policy we take to the between next election we'll announce between now and the next election.
JOURNALIST: If the Foreign Minister were to come back from Indonesia and the Indonesian President of Foreign Minister were to make remarks that they've been making over the last couple of months, does that leave us, our kind of relationship in dire straits?
PLIBERSEK: Well, I think the relationship is seriously fractured, or we wouldn’t have seen the level of response we've seen from Indonesia over the last few days, I think the test for come Julie Bishop, if she doesn't come back from Indonesia with the obvious good will of the Indonesian Government behind her you would have to judge very harshly the series of the steps that have occurred over the last few months that have led us to this position.
We handed over a relationship that and was in very good working order and now we've got the Australian Foreign Minster having to fly to Indonesia and to explain herself and apologise. It really has deteriorated to a great extent that we're in this situation at the moment.
JOURNALIST: The substance of the allegations, would Indonesia know that Australia has an ASIS station in Jakarta?
PLIBERSEK: We have never commented on intelligence matters and I'm not going to start doing that now.