SUBJECTS: Business tax cuts; Mark Latham; Victorian schools’ hairstyle rules; Housing affordability; Stargazing.

RICHARD GLOVER, PRESENTER: It's time for the Monday political forum. With us, Tanya Plibersek is the Deputy Labor Leader and Member for Sydney, Margy Osmond is the Chief Executive Officer of the Tourism and Transport Forum. They're both with me in Sydney, welcome. Thanks for coming in.



GLOVER: And Chris Berg, Postdoctoral Fellow at RMIT and a Senior Fellow at the Institute of Public Affairs, he joins us from Melbourne. Hi to you Chris.


GLOVER: Yeah, thanks for coming in. Now, the Government had a win in terms of its tax cuts for business with the crossbench agreeing to cuts for businesses whose turnover is under $50 million. The Government says it'll make Australia more internationally competitive and will create jobs. Have they got a point about that? Chris Berg?

BERG: Yeah absolutely. Now what they got through was not the most desirable form of the tax, I don't like the idea that we are moving towards a progressive corporate tax system, it doesn't make any sense as a structural thing, but at least they got something through. There's a lot of evidence to suggest, a lot of academic evidence to suggest that corporate tax reductions lead to an increase in foreign investment, hopefully this somewhat limited and slowly introduced corporate tax reduction will at least lead to some sort of increase in foreign investment and ultimately with foreign investment will come jobs and all the things that we want out of a good society.

GLOVER: The argument is often that we have to compete with people like the Americans and Trump is going to be cutting taxes so we need to join in or we'll lose out. On the other hand there were some figures from the Congressional Budget Office last week which suggested that once you take in all the complicated concessions and your ability to write off spending and all that sort of stuff, once you take all that into account the comparative corporate tax rate in Australia is something like 10 per cent, it's actually very low.

BERG: Well no their argument there is that it's 10 per cent for a number of American companies, that doesn't say that it's 10 per cent, we have a 10 per cent corporate tax rate. Different companies face different tax rates depending on their country of origin, depending on the business that they operate in, depending on their size. Basically all the deductions that they're able to do. What we do know though, is that our headline rate is very, very high compared to what the sort of headline rates that Donald Trump or even the United Kingdom are talking about at the moment. If we are going to be in a world where we're competing with our high corporate tax rate compared to, you know, 10 or 15 per cent in the United States, Theresa May was talking about turning the United Kingdom into a tax haven, this is the world we're entering in and we need to be competitive in that world.

GLOVER: Ok it's a competitive world, all fighting for funds and therefore the ability to create jobs. Do we need to do this? Tanya Plibersek?

PLIBERSEK: Well we think that this is a real mistake. Even the Government's own figures show that there's a growth benefit of 0.1 per cent per annum from this, it basically rounds down to 0 according to the Government's own figures. We know that companies, they do look at tax rates, of course they do, but they look at other things too. They look at the legal system, they look at the education of the workforce, they look at transport infrastructure, power prices, they look at a whole range of reasons when they're thinking about foreign investment. And we've got companies that invest from overseas into Australia from countries where the tax rate is lower, they're investing for other reasons in Australia, including some of those things I mentioned earlier. The other thing that really bothers us about this, Richard, is we don't know what else will be cut to pay for it. We know that there have been health cuts, education cuts in that notorious 2014 Budget, we know that there are other cuts likely in this Budget, where they will fall, we don't know. We also don't know what a $50 billion unfunded tax giveaway does to our AAA credit rating, again, something that should concern business.

GLOVER: Although if the Government is trying to get economic growth out of it, and some more employment out of it, some of it will pay for itself.

PLIBERSEK: Yeah. I think Julie Bishop got in a lot of trouble with the Laffer Curve Theory that if we just cut taxes enough that the ensuing growth will actually make up for the lost tax revenue. What we know is this will cost $50 billion, we don't know how it will be paid for, and the Government's own projections say that the growth dividend is minimal.

GLOVER: Does put you into a difficult position though, after the next Budget. You'll have to say either look we'll get rid of these cuts, we'll put the tax rate back up, which will be politically difficult, or you'll have to find all these savings yourself.

PLIBERSEK: Yeah, and we'll take our time and really consider the best way ahead, we won't be making a decision at 4am because the Senate horse trading is going on. We've said that we think this corporate tax cut is a bad idea, and that giving $7.6 billion to the four big banks in the hope that they'll employ a few extra people is laughable, that most of the benefits go to overseas shareholders, and we've made our criticisms very clear, particularly about the fact that we don't know how this will be paid for, but we'll take our time to decide our next steps.

GLOVER: And Margy Osmond?

OSMOND: Well, I mean, the tourism industry's very keen to see increased investment in a whole range of infrastructure, so anything that occurs in that space that helps has got to be a plus. I think, further to Tanya's point though, what a lot of overseas companies are now looking for is certainty and one of the big issues we have is the fact that there's very little policy certainty at all revolves around a small group of people in the Senate, which to many foreign investors seems like a very strange way to go. I think what concerns me about this is that my industry has been through a 12 month period where it seemed like a great idea to tax backpackers, it seemed like a terrific idea to increase the passenger movement charge. I would hate to think that they're looking at the 'dining not mining' revolution, which is, you know, us being bigger than the resources industry as a way to fund some of this into the future, because that would be death to foreign investment in this space.

GLOVER: The principal though that if you give people a tax cut they'll employ more people, do you think that actually works though? I mean, I must say Tanya Plibersek's example of the big banks suddenly having more profits and deciding to re-open some of those branches, it just seems a bit unlikely.

OSMOND: Well, look, I mean, I think the jury is out. You know, there's no guarantees in this, you know, the Government is arguing one thing, the Opposition will argue another and in the middle you'll a whole range of academics who'll have 15 different fabulous theories about why it will or won't work. Look, you know, there is a point too where policy paralysis is just policy paralysis. This is a move in a direction that may generate a positive result, we're just going to have to wait and see. But as I say, my concern is about where will the money come from, and who are you planning on taxing, it's not just the cuts themselves, who are you planning on making bear the brunt of this exercise.

GLOVER: Alright, it's no good giving with one hand and taking with another.

OSMOND: Exactly.

GLOVER: Now Tanya Plibersek, Margy Osmond and Chris Berg are here. Now Mark Latham, the former Labor Leader, was sacked by Sky news after a series of attacks on various people. He says it’s an issue of free speech and political correctness gone mad, and that he's fielding offers for a new position. Do you hope someone takes him up? Tanya Plibersek?

PLIBERSEK: Well, look -

BERG: Answer very carefully.


GLOVER: Tanya Plibersek, speechless. It is possible!


PLIBERSEK: I think staffing decisions for Sky are staffing decisions for Sky.

GLOVER: What did you think of what he said?

PLIBERSEK: Look I think, I mean, which thing? The last thing that I commented on were the comments that Mark made about the Sydney Boys' High teenagers who were trying to do a great thing on International Women's Day which is talk about why equality between men and women matters, and to give teenage boys a hard time for trying to make the world a better place I thought was pretty poor form.

GLOVER: Should everyone who voted Labor in 2004 go down their street, approach a neighbour who voted for the Coalition and say thank you very much, you saved us?


PLIBERSEK: Well, you know, in a democracy the people always get it right, don't they?

GLOVER: Chris Berg? What do you reckon?

BERG: Look, I'll take up this question of is it a challenge to his freedom of speech or is it political correctness gone mad. It's not a challenge to his freedom of speech, one of the basic ideas in any conception of freedom of speech is that you have a right to speak, but you don't have a right to go one somebody's TV show, you don't have a right to go on someone's radio program, you don't have a right to be broadcast, and the idea that being sacked for saying a series of things is an attack on his freedom of speech is nonsense, and of course it harms the arguments made by the people who actually do care about freedom of speech. And I think in the case of the debate that we've been seeing about 18C, and obviously I've been very involved in that, there are people who genuinely understand what freedom of speech is and isn't, and people who genuinely care about freedom of speech and the idea that a guy gets sacked for saying a series of offensive things claims that's the most important violation of freedom of speech in the country, that undermines every argument that we've been making.

GLOVER: Ok some people say also it's just a commercial decision, isn't it? With Australia's defamation laws being what they are, if you're a serial offender -

BERG: That's a problem too, that's a problem too. If it's because of defamation laws then I'd have a serious question there. If it's because of a commercial decision that they don't want those sort of statements made on their broadcast network that's a good thing, and that's really for the station and ultimately the market to decide.

GLOVER: It has been very interesting, hasn't it, to watch Google and YouTube in particular absolutely running for the hills as everyone says well look if you have offensive material we don't want our brand name associated with it, or Governments saying we don't want to essentially spend money on promoting values which we don't hold.

BERG: Well yeah, and isn't that the way that things should work? I mean, if people don't like what you have to say, they're under no obligation to advertise on your network, their under no obligation to buy your newspapers, read your blog, follow your twitter account. This is how the market of ideas is supposed to function.

GLOVER: Freedom is also the right to turn off and to say goodbye. Margy Osmond?

BERG: But stay online please.

OSMOND: I think the people of Australia made their opinion very clear some time ago on this one, but for me, and this is going to sound so old-fashioned, I'm sorry about this, there's just really no space for bad manners. You know, I'm all for -

GLOVER?: You can call it political correctness or just normal human decency.

OSMOND: Yeah, it's look, you know, yeah. There's just no space for bad manners. I mean, I think, I'm all up for the most robust of debates and I hate the political vanilla-ness that we now have, but at some point in time it's just grumpy old rudeness.

GLOVER: Do you know what went wrong for him, Tanya? I mean, there must've been a point where you read him and liked him and thought he had interesting ideas, those points where he put out quite thoughtful books about politics, for instance?

PLIBERSEK: I don't think I'm qualified to comment.


BERG: You're most qualified to comment!

GLOVER: Senior psychiatrist Tanya Plibersek.


PLIBERSEK: But I do agree with Margy that actually courtesy is a much underrated virtue, particularly in public life, but, you know, in priavte life too.

GLOVER: We can all agree on that. Monday Political Forum, we'll check the Sydney traffic in a second but Tanya Plibersek is here, Deputy Labor Leader, so is Margy Osmond, from the Tourism and Transport Forum, and Chris Berg from the Institute of Public Affairs, he joins us from our Melbourne studio. Now a Victorian school was criticised after two girls of South Sudanese background were told to get rid of the braids in their hair. Now the girls say it's part of their cultural identity, and they've had support from other students, a boy of African descent who had been told to get rid of his dreadlocks, for example. The school backed down in the end, but not before arguing that other students, returning from Bali, had been told to get rid of their braids, there were girls without a South Sudanese heritage, so it should be one policy for all. Who's right about this? Margy Osmond?

OSMOND: Have you seen the pictures of these two girls?

GLOVER: They look beautiful.

OSMOND: They look amazing, they look fabulous. Just put the ethnicity piece aside for one moment. They look incredibly tidy, amazingly attractive and very proud of their appearance in lovely school uniforms too, you know.

GLOVER: Ok, but the school might say, and I know they changed their mind in the end after being rounded upon, but they might say if they've told off Aussie girls, if I can put it that way, blonde Aussie girls for coming back from Bali with braids in their hair, and told them they have to remove them, why shouldn't it be one more for all?

OSMOND: I think they're probably wrong in that space too, if the braids look attractive and they're neat and they're tidy and they don't offend, what's the problem? I have to say, I had braids at school, they might have been long ones with the little bows on the bottom of the plaits -

PLIBERSEK: Like Bo Derek.

OSMOND: Not quite. I wish!

GLOVER: Pippi Longstockings is a reference.

OSMOND: Thank you so much Richard, thank you. Yes Pippi Longstockings is definitely me at that age. But I had plaits, I mean, let's get real here, are there not more important things to do with the education system to worry about.

GLOVER: Alright, back off school says Pippi. Chris Berg, you're down there in Melbourne where this madness has occurred, what do you think?

BERG: Well, isn't this a basic problem with the school's rule, I mean, rather than saying no braids, maybe they should just say be tidy, and that would resolve this entire problem. I think there's an eagerness to get very excited about some of these sorts of stories, clearly the school's made a mistake, clearly the school has easy ways to fix it with a be tidy rule rather than no braids rule and it should probably just get on with that.

GLOVER: But I mean, we were dragged to the hairdresser by our ears because the hair happened to touch the collar, shouldn't modern children suffer as we did?

BERG: One of my only memories of school is my headmaster saying Berg, get a haircut!

GLOVER: And look what has happened now, he's had to join the Institute of Public Affairs.

BERG: I know [inaudible].

GLOVER: Tanya Plibersek, are you supporting these girls?

PLIBERSEK: Look I think the school's already fixed the problem, they've said that the girls can keep the hairstyles. But it is a shame that it ever got to that, I agree with Margy the girls look terrifically neat and so on. I do think there's a little bit of a difference if you're talking about hair that is hard to manage, very curly and a lot of it, it makes a lot of sense to have that hairstyle. It is a bit different just to the Bali braids that people come home with, it is a different thing.

GLOVER: Because people from different backgrounds, there's a different physical quality to the hair sometimes, and that produces the cultural tradition.

PLIBERSEK: Yeah and it looks like those girls have a lot of hair, you know, it's beautiful.

GLOVER: And a fair amount of attitude too, actually.

PLIBERSEK: You know, good on them for standing up for themselves.

GLOVER: They sure did. It is currently 11 to six here on Drive. Now, Sydney house prices have again defied expectations that they will surely slow down their continual rise. Figures out today show Sydney prices are up again, with annual price growth now at 19 per cent. Same thing has happened in Melbourne. At the same time, apartment block construction is giving some suburbs, it was said in the Herald today, the same density as New York. Has this become a bubble, and how can we make housing more affordable? Chris Berg?

BERG: It's not a bubble. I know that's one of the least popular claims to make in Australian politics at the moment, but it's not a bubble insofar as that it's not driven, as far as we can tell, by a sort of irrational exuberance. I think all sides of politics agree that there are policy drivers behind these things, so the Labor party believes that it's the structure of our tax system, many people in the Liberal party believe that it's the supply side, because of restrictions on plannings, but neither of those two policy drivers means that it's a bubble, it means that it will start easing, regardless of which side is correct, when we start tackling whatever policy problem has caused it.

GLOVER: I guess though that if you change the policy quickly then the bubble could deflate rather rapidly. For instance if you -

BERG: Well yeah. You could do anything.

GLOVER: For instance if you really change the rules around negative gearing and capital gains tax discounting, you might create a sudden shudder in the system.

BERG: Well, I don't agree that those are the problems, I more believe that it's a supply side problem but regardless, if you make radical changes to the policy, of course it's going to have radical changes to the housing market, but I suspect either side of politics, whatever policies they introduce to tackle this problem, are going to do it in a, hopefully, pretty reasonable and sensible manner.

GLOVER: Tanya?

PLIBERSEK: Well, I'm a former Housing Minister, so you've got me on one of my favourite topics. It's not one thing. It's not the tax system or supply, it's both. We don't build enough houses in Australia, that's true. But we've got a tax system that makes it easier for people to buy their sixth or their tenth or their twentieth home, than for a first homer buyer to get into the market. And the social consequences of this are really important. You know, 25 years ago, it cost you five times the average annual wage to buy a house. Now it's 15 times the average annual wage. If you're looking at people in their peak, kind-of child bearing, settling down years, say between 25 and 34, 30 years ago, 62 per cent of them owned their own homes or were buying them, now it's 42 per cent. Now, that's a lot of pressure on family income, in those critical years where you're having your kids and so on, it's also a problem for us when people retire. If they haven't bought their own home by the time they retire it's much harder to live on the pension, much harder to live on their superannuation. So what it requires is every level of government to do their bit. It does require local government to have really good local planning, to approve development applications quickly, if they're complying development applications it does require greater density around transport hubs, it does require state governments to do their fair share and the Federal Government to do what it can, and the best thing we can do at a federal level is to not have a crazy tax system that privileges investors buying their tenth home, over people trying to buy their first home.

GLOVER: Chris Berg, you say it's mainly a supply issue, but many people say in Sydney, every time a new property comes on the market, there's not one investor queueing to buy, there's twenty, and therefore, if you increase supply and twenty houses go on, then there's still twenty investors. People are so hungry because the system has made it so advantageous.

BERG: Well I think the system has made it advantageous because the prices are so high and it seems like there's no, it's a good bet on the housing market at the moment because it doesn't look like state governments, local governments or federal governments are going to act, in whatever way they're going to to resolve the problem. But fundamentally -

GLOVER: But they could, they could change the negative gearing rules. Not wipe it out but change it.

BERG: Yeah, so fundamentally, the problem as I see it is that we're not building enough, and Tanya agrees, that we're not building as many houses as there is population increase. The consequences of that -

PLIBERSEK: And investors trying to get into the market. It's both things, you can't deny that it's both.

BERG: Look I think the most fundamental issue is that we're not building enough supply to meet the demand. I think most of that is a population increase, but we can certainly disagree on the tax issue.

PLIBERSEK: Well, you know, in the last three years in New South Wales, there's been a 61 per cent increase in the residences bought by investors. I mean, that is, it's not one market, you know, there'll be different parts of Sydney that are doing differently, if you look at prices in WA and Queensland and even Darwin where the mining boom's coming off, the prices aren't growing as quickly. But we, if we want to be a global city, we need to be a global city where people who work here can afford to live here. So -

BERG: Well look I'm ok with Melbourne being the global city, that's not a big problem.

PLIBERSEK: And you've got the same problems in Melbourne, you had a 16 per cent increase, we've had 19 per cent and you've 16 per cent, something like that. But you know, I'm a home owner, I'm hoping my house price gone up, I'm also a mother of three children, and I want them to be able to live within driving distance of me so I can go an interfere in their lives as much as I choose when they're adults.

GLOVER: And without them asking us for money to buy the house, importantly. Margy Osmond?

OSMOND: Well, I live in one of those four suburbs that were in the research that are the ones that have got 10 000 plus.

GLOVER: So, as dense as New York, basically.

OSMOND: Yeah, and it's fabulous. So I mean, I think if there's a positive to come out of this, and you know if you look at busy bay and all the other ones that are on the list of falling into that category, I've noticed a dramatic change in the kinds of people who buy into the area over the last five or six years. Loads more families are buying into those high rises because there are great big parks, so they can go and have their green space but still be relatively close to town and not have the huge commute. So for me, if there's a positive out of this whole debate at the moment, and I wouldn't want to speculate on what the answer is, but if there's a positive out of the debate, it's that it might stimulate a different way of thinking about how we live. Why don't we have density over railway stations, with schools in those high rises and hospitals and aged care and all sorts of things? So if nothing else Richard, you know, living in one of those spaces myself, I'm hoping that we see some more innovative thinking around what equals a home.

GLOVER: Well certainly people are voting with their feet, much to the surprise, I think, of the New South Wales department of education, who've been rather surprised by the fact that a lot of people, with families, school aged children, are living in the apartments there. They're choosing that ahead of a house on the edge of town.

OSMOND: Absolutely, because instead of a, you know, two hour commute they've got a 20 minute commute. Well, it's a no brainer isn't it?

GLOVER: Alright. Monday Political Forum. Tanya Plibersek, Margy Osmond and Chris Burg. The Chandelier of Stars. The ABC with a bit of help from Professor Brian Cox tomorrow launches Star Gazing Live with the intention of encouraging Australians to look upwards. What's the time you've best been able to appreciate the night sky? Margy Osmond?

OSMOND: It's not here in Australia so don't shoot me.

GLOVER: That's alright!

OSMOND: North of England, Hadrian's Wall in the middle of nowhere on a deep winter night, the sky was amazing, it just seemed to go forever. And quite different to the Australian sky.

GLOVER: So as the person from the Tourism and Transport Forum, you're promoting the tourism artefact of another country.

OSMOND: No, that was before I saw the light, literally, and I think if I was going to go sky gazing here, beyond being out in the middle of absolutely nowhere, one of those Sounds of Silence dinners out at Uluru, under the stars, black tie, bit of champagne, I could live with that.

GLOVER: Chris Berg when have you seen the stars?

BURG: Most recently, we have a trampoline and we have a tent over the trampoline. My five year old and I, on one of the warmer nights this summer, we stayed out overnight in the tent, on the trampoline. It was bloody awful, it was so cold.

GLOVER: Have you got a big snake problem in Melbourne?

BURG: No, no, no. It was just sad and cold, but he thought it was very, very fun.

GLOVER: Why has the tent got to be on the trampoline, why can't it be on the ground?

BURG: Well that's what we had. The trampoline came with a tent for some reason. So we put it on and we tried it out, and the five year old loved it but oh god.

GLOVER: We're with Tanya Plibersek, Margy Osmond and Chris Berg, who's from Melbourne. May well explain everything. Tanya Plibersek, when have you looked up and seen the stars?

PLIBERSEK: Well my lovely father was a real autodidact, and one of the things that he loved was astronomy, and so he used to drag us out of bed quite often at three or four in the morning and take us down to Cronulla beach and make us watch the stars, whatever astral event was happening. And so I have very vivid memories of being dragged out of bed to see things like Halley's Comet.

GLOVER: With your siblings?

PLIBERSEK: Yeah with my brothers and mum and dad who [inaudible] why are you doing this to us dad.


PLIBERSEK: All of that. He loved listening to Fred Watson who, of course, is a regular on the ABC and he went to see Fred Watson at the Greenpoint observatory near our home in Oyster Bay, and he went to see him at the Australia Museum and so, I think, and I grew up watching Cosmos with Carl Sagan, I mean, I've had a lot of this forced upon me over the years and I think it's made me very curious about the universe, the cosmos, and I hope a little bit able to imagine just how tiny a speck we are, in the -

GLOVER: And my favourite quote, and I can't remember who it was who said it, is that moment where you lie on your back, and you look up to the stars and you realise how very small they are.


We're out of time but thank you to Chris Berg in Melbourne, thanks Chris.

BERG: Thank you.

GLOVER: Chris Berg is a Senior Fellow at the Institute of Public Affairs in Melbourne. Margy Osmond, of course, Chief Executive Officer of the Tourism and Transport Forum, thank you.

OSMOND: Entirely my pleasure, and I got a CD from Alan Jones.

PLIBERSEK: She did, she tried to pretend it was for her mum.

GLOVER: That old trick

PLIBERSEK: Also called Margy!

GLOVER: And Tanya Plibersek is the Deputy Labor Leader and Member for Sydney, thank you very much.