SKY News AM Agenda (7)

14 May 2015


SUBJECT/S: Budget 2015; Government’s Family Package; Small Business

KIERAN GILBERT: This is AM Agenda. With me now, Parliamentary Secretary to the Opposition Leader, Jim Chalmers, and Liberal MP Craig Laundy. Gentlemen, good morning to you both.

Jim, you heard a lot of what Malcolm Turnbull had to say there, and Joe Hockey before him, saying that this is about a change of policy – that they want to put more money where you’re going to get more bang for your buck, essentially, in childcare. That makes sense doesn’t it in terms of the productivity agenda?

JIM CHALMERS, SHADOW PARLIAMENTARY SECRETARY TO THE LEADER OF THE OPPOSITION: I didn’t hear all of what Malcolm had to say in his interview, but when you look at this Budget in its entirety, the big hole in the middle of it is that it’s not a plan for the future. There are individual measures that we will support and we will take a constructive approach to those. But when you look at the thing in its entirety, it’s more of an election document than it is an economic plan for the future. It doesn’t say anything, for example, about some of the big challenges coming at us down the track. Things like digital disruption, and all those sorts of things that matter so much to job security, economic security, competitiveness and all of that. Individual measures get our support where they are fair and forward-looking and responsible. We’ll oppose those things that are not. But in its entirety, I think the big problem is that it’s not a plan for the future.

GILBERT: The PPL specifically, Craig Laundy. The Prime Minister referring to mainly public servants benefitting from the PPL, having access to two schemes. The Opposition Leader preferring to reference the nurse that treats you in emergency, that they are the public servants that are among the group that the Prime Minister are referring to.

CRAIG LAUNDY: Firstly, vested interests. You two blokes are new fathers. I’m the father of teenage kids, so I don’t get the [inaudible] on this at all.

CHALMERS: You are considerably older than us.

GILBERT: As you can see quite easily.

LAUNDY: The semantics of who it applies to and who it doesn’t. It was a policy that was in place. And the part that I think has been lost in this is that we’re talking about six months of what is a six year policy vision. It’s a $4.4 billion policy package that talks about the first six years of our children’s lives. We’re focussing on the six months of that which is the PPL component, but we’re completely missing the five and a half years that follow, which is where the productivity gains need to come to help address the structural budget deficit.

GILBERT: What about the nurse or the Woolies checkout person that Mr Shorten referred to before? They’re on not a lot of money anyway, and if they can get something to supplement the minimum wage scheme, why not?

LAUNDY: Look, I heard Nick Xenophon make a thoughtful contribution this morning talking about grandfathering this potentially. That is already in here. We’re talking about 1st of July 2017, and that’s been missed as well. Now that’s two years away and having a baby is nine months and six months afterwards, so we’re talking about fifteen months. So there’s still time and the commercial reality is that if agreements – and I heard Arthur Sinodinos say this yesterday – that if agreements need to be reworked, they will be reworked. But what we are saying is that we think that the policy that was in place, there are sensible savings that can be made and that money used in the other five and a half years of that first six years.

GILBERT: One of the points Malcolm Turnbull made in that interview was that he does not see the risk of the private sector pulling their schemes –

LAUNDY: I don’t either.

GILBERT: He believes that the private sector will be motivated to provide a better scheme to beat the minimum wage on offer by the taxpayer.

CHALMERS: I heard Malcolm Turnbull say that if you wanted the private sector to step in, you’d eliminate the public sector scheme, which sent a chill down my spine. I did hear that particular answer.

I think on what Craig said about the scheme itself, as a country we should encourage businesses – whether they be retailers or otherwise – we should encourage them to sit down and work out how we can get the best outcome for young mums in our workforce. And if that means adding on to the government’s scheme a corporate scheme as well, then we should be encouraging that.

GILBERT: But should taxpayers be part of a workplace negotiation? Shouldn’t that be done separately and then you have the safety net?

CHALMERS: No, because when people sit down and negotiate their working arrangements, as we know, they factor in Government entitlements. That’s just a normal part of the process. You look at the full suite of arrangements that someone’s entitled to. I think it’s great that some companies are looking to add to that.

I don’t include Craig in this, but I do think that some of the people on Craig’s side of politics should be ashamed of themselves. The Treasurer and the Families Minister agreeing that these things are rorts, and calling people frauds. We need to have a conversation about parenting in this country that goes beyond that kind of demonization. They should be ashamed of themselves. We should have a scheme that gives people the best chance to raise their kids.

One final point on what you said Craig about the families package. What’s in there for preschools is only a two year program. It’s one of the really short-sighted measures in there. You were talking about the first six years of a kid’s life. In that package, what you’ve done for preschools only last two years and the funding drops off again. And so –

LAUNDY: Yeah, and there’ll be further decisions taken down the path too.

CHALMERS: Why not just fund the thing throughout the forward estimates?

LAUNDY: You make decisions as you go, but what it does do, I mean the trial for nannies for example –

CHALMERS: Two years again. Two years.

LAUNDY: Yeah, but we’re trialling. We’re thinking outside the square. We’re trying to make it affordable, accessible. You’re talking about 85 per cent of the cap for going back to families on $65,000. Up to 50 per cent tapering at $170,000. There are a lot of new initiatives that have been missed in the semantics.

GILBERT: Can you just elaborate for me on why you think the corporate sector won’t pull their schemes. That’s the fear, that’s what Kate Carnell said.

LAUNDY: It’s the commercial reality. It’s the profit motive. I disagree with Kate, I don’t know if Kate has a business background. But the commercial reality is that you are vying for staff and you compete on pay and conditions. The other complication, Jim that I think has been missed here is that we’re talking about two schemes running side by side. But there’s a third component in this. In the private sector, a third to a half of this is funded by the taxpayer again because it’s tax-deductible. And that has been completely missed so far. So say you get $18,000 and you’re in a company structure, six of that is paid by the taxpayer because you get a tax deduction of 30 per cent. So there’s the nuanced arguments which all this can get tied down and bogged up in or you can talk about the whole package for six years.

GILBERT: We’ve only got a minute left, I just want to get both of your thoughts on this immediate reaction on the markets to the small business plan. Jim, your thoughts quickly on that?

CHALMERS: I think it’s great to see small business supported in this country. I couldn’t agree more that small business is worthy of our support. If we want a country that’s powered by aspiration and enterprise – as we do – then we’ve got to do all we can to support people who take risks in those small companies. That’s something that we’re very supportive of.

GILBERT: And there’s bipartisanship on that front, you’d welcome that?

LAUNDY: Early days in my electorate, but really good feedback on the ground so far. Coming from a small business, moving into a big business background, the more that you can do to support because that employment that spins off – that multiplier effect – is what we need again to address the structural budget deficit.

GILBERT: Alright gentlemen, we’re out of time. Jim and Craig Laundy, thanks so much.