SKY News AM Agenda (14)

June 02, 2016


SUBJECT/S: Liberals’ superannuation mess; National accounts

KIERAN GILBERT: This is AM Agenda. With me now, the Shadow Minister for Superannuation and Financial Services, Jim Chalmers, and Liberal Senator Zed Seselja. Gentlemen, good morning to you both. Jim, first to you on the superannuation debate. There has been various commentary around the place. One of the opinion pieces this morning Niki Savva in the Australia criticising. Of course, she's a former adviser to Peter Costello, but saying Labor in its economic approach is not being consistent with the Hawke-Keating era. Can you give us your sense of that analysis this morning?

JIM CHALMERS, SHADOW MINISTER FOR FINANCIAL SERVICES AND SUPERANNUATION: Look, Niki is not a well-known friend of the Labor Party, as you alluded to. She's a former Costello staffer. But having said that, we're very proud of our economic plan. We think if you want to boost productivity in this country you need to invest in infrastructure, you need a real NBN, you need to train your people and you need to get the energy mix right including by boosting renewable energy. So I think we've got a very substantial economic plan on the table. People know when the Turnbull Government says that they've got an economic plan, that's really just a plan to take money out of hospitals and schools and give it to big business. And I'm really confident that as people understand that fairly basic choice between the two plans that we'll be very competitive at the election.

GILBERT: On the transition-to-retirement incomes, this issue which has stumped a few people in recent days including the Foreign Minister, what's Labor's position on that? To take earnings in those transition-to-retirement income funds from zero to fifteen per cent.

CHALMERS: Well what we've said about the superannuation changes that were put on the table on Budget night a few weeks ago is that we won't make the Government's mistake by rushing to judgement on what are ten or so pretty drastic changes to superannuation which were dropped out with very little warning. So we're taking the time to consult on each of those measures. We want to make sure we approach it in a careful and consultative way which is what the Government hasn't done. And that's why we've got this revolt in the Liberal Party. Their superannuation policy is in tatters today, Kieran. You've got members of the Government saying that if they win the election they will fight to change their own Budget and their own superannuation policy. Even by the very low standards of chaos and division and dysfunction in the Liberal Party, that's a pretty extraordinary thing for the Liberal Party to say 'if you elect us, we will campaign against our own policy'.

GILBERT: Senator Seselja, it's all a bit messy is it not? To have some of your colleagues backgrounding journalists saying that they're not happy with it, that they're losing donations, that members are concerned?

ZED SESELJA: First I'll respond briefly to what Jim said. In terms of the best way to do these policies is to take it to an election, unlike what Jim and the Labor Party did when they made dozens of changes that they didn't talk about, in fact, they promised not to make any changes to superannuation. Of course they made multiple changes that they never took to the people. When it comes to our superannuation changes, Kieran, there's a number of points to make. One, I certainly don't accept that there's some sort of widespread backbench revolt, it's simply not true. I chair the backbench economics and finance committee, I talk to my colleagues often, and it's certainly not something I'm picking up, not even vaguely. There is no doubt though that there will be some people who do support the Liberal Party traditionally who have concerns. Now some of those people will have concerns because they will pay tax on an amount over $1.6 million if you're fortunate to have that in your superannuation account. I understand that those people won't be happy with that. But when you make decisions in the national interest, you have to look at the national interest rather than just the interests of some in the community. So whilst we value all in our community, we value those people who have done very well and have managed to put a lot into their superannuation, we have to make decisions in the national interest. So yes, there will always be some concerns for those who may lose out under the changes, but we think that they are fair and balanced changes and we're prepared to take them to the people.

GILBERT: Senator, a senior Coalition campaign source told me this morning that this is barely being mentioned in your research, in your focus groups during this campaign. Does that essentially endorse what you're saying, that there might be some traditional Liberal supporters who might be worried about this, but more broadly, while there's some Liberal MPs also reportedly concerned that this is not resonating across the vast bulk of the electorate?

SESELJA: I'll give you an example. Yesterday I was doorknocking in the southern part of my electorate in Gilmore. I spoke to some Liberal supporters who are pensioners and they expressed some concerns about their daughter who is coming close to retirement and they laughed when I said 'does she have more than $1.6 million in her account? No. Is she looking to put more than half a million dollars in non-concessional contributions?'. They knew that for her and for most people they know they weren't going to go anywhere near that. So, obviously, yes, those that are impacted on it, impacted by it will be concerned. I accept that. I understand their concerns. But we've had to make a series of decisions that are in the national interest and I think if you look at the totality of what we've done in super, not just some of the changed tax arrangements but greater flexibility for low income earners, fo r people 55-74, I think it's a very, very responsible reform and one that will broadly get the support of the Australian people.

GILBERT: Before we move on from this issue, Jim Chalmers, as the superannuation spokesman for Labor, do you see the merits of-- you talk about the drastic changes, but let's look at some of the elements. Do you see the merits of some of the Government's changes here, because they do seem to have the same practical effect as Labor's, for example, your taxing of earnings upward of $75,000. That seems to be comparable to what the result would be of having a cap of $1.6 million in the retirement nest eggs of the super funds.

CHALMERS: We've said all along Kieran that we think that the superannuation tax concessions are poorly-targeted, particularly at the top end. That's why we put our policy out more than a year ago so people could properly consider that going into the election. When we announced our policy that was fifteen months before an election. You compare that with the Government putting these drastic changes on the table at five minutes to midnight. I just want to make three very quick points. Zed said that they're taking this policy to the election. We don't know what policy they're taking to the election because sections of the Liberal Party don't support the policy. The real questions is whether Malcolm Turnbull walks it back before the election or after the election. Another example of him being led by the Party rather than leading it. The second point that you asked, Zed, about whether it's Liberal Party supporters who are locked in who are unhappy with this. Right up and down the income scale, particularly when it comes to those transition-to-retirement changes which don't just impact on people at the very top end, people are very concerned about it. I'm certainly picking up that concern. And when you do these big, drastic changes as they have with very little though or care or consultation or consideration, then it does diminish confidence in the superannuation system. The final point is that --

GILBERT: Will we have Labor's -- Yeah, sorry you carry on.

CHALMERS: The final point I wanted to make, Kieran, is that when David Speers broke this story yesterday on Sky, the main concern that people in the Liberal Party were identifying was the impact on donations. And doesn't it just say it all about the Liberal Party that they're not worried about getting the best possible policy outcome, they're worried about the impact on donations. I think that was a very revealing angle from the story that David broke yesterday.

SESELJA: Well, the fact that we're sticking with the policy suggests that's not true, Jim.

CHALMERS: Well, you don't know if you're sticking with the policy. You've got big parts of your backbench who don't want to stick with it and they're saying 'if you re-elect us, we'll fight to change it in the Party Room'.

SESELJA: That's not true Jim. That's simply not true.

CHALMERS: That may not be your view, Zed, but it's certainly the view that's being put to David Speers and others by your colleagues.

SESELJA: By one or two --

GILBERT: Jim Chalmers, will we have a final Labor position on the Government's superannuation policy before the election? Is that something that you're seeking to resolve before voters go to the polls?

CHALMERS: When people go to the polls in just over four weeks' time, David. They'll be in no doubt what our position on super is. We've already put our cards on the table more than a year ago about those poorly-targeted tax concessions at the top end. And people will have all the information they need to make an informed choice.

GILBERT: We saw the growth figures yesterday, Jim Chalmers, stronger than many had expected. It's a good news story for the Government, although there does seem quite a disparity between some areas of the country growing at five per cent per annum and others contracting. What do you make of that disparity right now? But overall it's obviously a good news story having that growth figure.

CHALMERS: It's certainly true that the headline number was better than people expected. But that 1.1 per cent figure leaned exclusively on net exports and it masked some other fairly serious challenges in the economy. For example, we've had eight consecutive quarters of declining living standards. We've got historically low income growth. We've got a whole series of other challenges. And what that analysis in the papers today shows is that for big pockets of the country, it's not a particularly exciting time in the economy right now. And when people hear the Prime Minister talk about how 'so far, so good' and all the rest of it, I think it shows how out of touch he is with what's going on around the country. When you look at that analysis in the papers today, the thirty seats, so one fifth of the seats in the country, where the economy is going backwards under the Liberal Party, half of those are in Queensland. So when they see Malcolm Turnbull pat himself on the back for that headline figure, I think it does show how out of touch he is with what's really going on in the economy. That's why we need a genuine economic plan, not just a plan to pull money out of schools and hospitals and give it to the top end of town.

GILBERT: Senator Seselja, your take on that research that shows there is quite a difference between particularly inner suburbs and areas to the more outer suburban electorates. That study quite telling in terms of the disparity there.

SESELJA: Well a couple of points, Kieran. Obviously, they are very good figures and I think we should be very encouraged and they show that a range of the policies that we've been putting in place are working. And it's not just this quarter. You look at overall over three per cent, much faster than the rest of the developed world. But also, 240,000 odd jobs in the past twelve months. So there's a number of indicators that show that our economic plan is working, and we need to continue that economic plan. On the specifics of the fact that there are disparities, you would prefer that all parts of Australia are growing strongly. I suspect if you were to look back in history, there's always a bit of difference between different parts of the country. And we need to be working hard to make sure all parts of Australia are going forward and growing jobs and growing the economy. That's what we're about. Jim talks about Queensland, we've got a very poor Queensland State Labor Government which is doing not much, and I suspect that's not helping. But just finally to the point, I agree with Jim on one point, that there are challenges and there are challenges in these figures. They are very encouraging, but they are also challenges in our economy. The last thing that you'd want to do is start taxing more and more and more. So if Labor were to come in, they're going to increase income tax, they're going to increase tax on small business, they're going to have a 50 per cent renewable energy target and a big tax on housing, people's main asset. Now what's that going to do for household expenditure? What's that going to do for economic confidence? I suspect that the risks we face will be severely exacerbated should there be a change of Government to a Shorten-led Labor Government.

GILBERT: Let's just finish up on the company tax issues, and Jim Chalmers, I will wrap up where I began in that report by, or that opinion piece by, Niki Savva today. Looking at the history of the Keating legacy and the fact that Hawke and Keating reduced the top marginal tax rate from sixty cents in the dollar to forty-seven. Now your Opposition, your Labor Party, wanting to lift that from forty-seven to forty-nine, pretty much on a permanent basis. How does that fit in with the Hawke-Keating record?

CHALMERS: Well I think in the context of a Government who has tripled the deficit over two years, you can't afford to do everything. You've got to pick what your priorities are. We've said that there's still a substantial deficit under this Government so we'll leave the deficit levy in place. We don't think it's appropriate, given the state that the Budget is in, to give somebody who is on a million dollars a year, a seventeen thousand dollar a year tax cut. That's not the nation's priority right now and nor is it the nation's priority to give a tax cut to multinational companies at the same time as we're pulling money out of hospitals and schools. So I think you do need to make choices. Malcolm Turnbull is choosing the big end of town over hospitals and schools and family budgets. We're confident in our position, we're happy to talk about it right up to election day and beyond.

GILBERT: Senator Seselja, just quickly, thirty seconds on that and the prospect that even if you win the election that the Senate might not let the cuts through.

SESELJA: Labor has not just gone away from the Keating legacy, they've even gone further left than Julia Gillard. Because Julia Gillard said if you're against cutting company tax, you're against economic growth. If you're against economic growth, you're against jobs. That's effectively where Labor has positioned themselves, to the left of Julia Gillard on economic policy. This is why not just conservative commentators but former Labor Treasurers are saying Labor is at war with business. And that is no way to govern the country.

GILBERT: We're out of time. Senator Seselja and Jim Chalmers, gentlemen, we'll talk to you soon. A quick break on AM Agenda.