Minister for Financial Services, Superannuation and Corporate Law
9 June 2009 - 14 September 2010
Parliament House, Canberra
Friday, 14 May 2010
SUBJECTS: Budget Reply, Tony Abbott's $10,000 stay-at-home proposal, ASIC market supervision regulations, Resources Super Profits Tax, National Broadband Network.
Well, last night some things were clear: it was clear that we've had three replies to Rudd Budgets and last night's was the most important and the weakest. Last night all we got from Tony Abbott was half an hour of negativity, half an hour of thought bubbles, half an hour of sound bites. No plan for Australia's future, no plan to bring in a Budget surplus.
All we got from Tony Abbott last night was a scheme to bring back WorkChoices. All we got from Tony Abbott last night was a scheme to deny Australian businesses, particularly small businesses, a tax cut; to deny a boost to the retirement incomes of Australians, to dent a boost to the superannuation of Australians. Those things were clear last night.
This morning it's clear that Tony Abbott wanted to go on a cash splash, wanted to give $10,000 out to stay-at-home mums in an unfunded, uncosted policy. He had to be restrained by his Shadow Cabinet. It reminds me of the claim by one of his former Cabinet colleagues that Tony Abbott would often come up with grand plans but no costing, no funding and he didn't get economics, didn't get public finances.
Tony Abbott had a chance last night to lay out a plan for the future. He failed it miserably. We had half an hour of jokes and one liners, but no plan for the future.
I'm more than happy to take some questions.
The new rules for ASIC on financial services markets: is it true that individual brokers will be able to be fined under these new rules?
ASIC has put out revised regulations which go with the transfer of supervision from the Australian Securities Exchange to ASIC, as the Government announced previously, and there are changes there which change the nature of the way that they'll be enforced. There'll be some transition, of course, and the transfer of supervision won't occur until I'm absolutely satisfied that it will occur smoothly and in a way that won't disrupt markets.
Was there evidence in the markets that there was a need to do that, to fine brokers?
Well, this has been developed by ASIC based on their consultations, based on their views of what the market needs. They are the corporate regulator and we respect what the corporate regulator thinks is appropriate and necessary.
Minister, can I ask you, talking about clarity, are you able to provide any clarity on when the mining tax would actually be legislated? Would it be something that should be perhaps out in draft legislative form before the election to avoid, sort of, confusion? If it's going to be a central election issue, shouldn't the miners have more clarity ahead of that?
Well, there's a deal of consultation to go on the implementation details. The Treasurer's made it clear that it won't be introduced until it's ready, and we will take that under advice from our consultation panel when it's ready for draft legislation. But we wouldn't do so until it's ready and that depends largely on how the consultation process goes.
How long will that consultation process be?
Well, that's a matter for the consultation. It depends how much progress is made, and I'm not in a position to provide any further guidance on timing until that consultation process is more advanced.
What do you make of the claims from miners that this tax is going to actually jeopardise their programs and their projects?
Well, there's of course modelling which shows that when you reduce the corporate tax rate and you make changes to mining tax – many of which have been called for by the mining lobby for as long as I can remember and can I say were rightly called for by the mining lobby for as long as I can remember – encourage exploration, encourage some activities which are difficult and risky, then over the medium to long term you will see an increase in mining activity.
Now, you're going to see a lot of claims, going to see a lot of counter-claims when any big tax change is introduced. You're going to see that; that happens from time to time. It happened, of course, when the Hawke Government introduced the Petroleum Resource Rent Tax. We saw the same claims then, and of course that tax has led to the biggest investment in Australian history in Gorgon. So we stand by our modelling; we stand by the advice of the Treasury and we stand by the view that this will increase mining activity over the medium to long term.
Tony Abbott says the public service numbers have expanded by, I think, 20,000 by the Rudd Government. What's wrong with cutting back on some numbers and finding some savings there?
This isn't a saving, it's a sound bite. Public service numbers increased in the last three years of the Howard Government three times more than they have over the last three years. This just shows Tony Abbott lacks a policy. The last refuge of an Opposition without a credible savings plan is to come up with a sound bite about sacking public servants.
Now, we have a spending cap. We have an efficiency dividend. We have mechanisms to ensure that services are being delivered as efficiently as possible. We had no details from Tony Abbott last night, no detailed costings, no details about which agencies would have which impact, just a simple sound grab to say, 'I know what we can do, we can sack public servants'. I mean, we would have been laughed out of the building if we'd tried to bring in a Budget Reply with half an hour of sound bites and no costed and funded policies.
But Abbott's got a point, doesn't he, because the Budget's in a very different place than it was when Howard was expanding the public sector?
No, he doesn't have a point, because he's got a sound bite, not a policy. He simply said, 'We'll sack public servants'. That's not a way back to surplus, that's not a path to surplus. You need to make some tough decisions, you can't simply say, 'Well, I'll just not replace anybody' [inaudible], that just doesn't make any sense. You don't run the public service that way.
You can have an efficiency dividend, which we have. You can have a spending cap, which we have. But you have sensible policies which enable the public service to deliver the services Australians need and want.
And he was asked this morning, Mr Abbott was asked this morning for more detail and he was all over the shop. No detail about how this would work; no detail about which agencies would be affected; no detail about how the military might expand, whether the military would be able to expand or not. He simply hasn't thought it through because he doesn't understand public finance and doesn't understand economics.
Has Mr Abbott's decision to scrap the broadband network if elected make it harder for you to pass legislation [inaudible]?
Well, of course Mr Abbott's opposition on this makes it harder for the Parliament to pass it. He's just shown last night; Mr Abbott's shown last night that he has no plan for the future. He's only about the past. No plan for broadband. I mean, broadband is so important for productivity and competitiveness, so important for young people studying in areas which don't have fast internet speeds.
We have said from Opposition, we've said in Government, we need much faster broadband and we've acknowledged that it will take some time to roll out but we have a plan for the future. Mr Abbott simply has none. His plan last night was all about ripping out broadband, ripping up e-health, going back to the future. He simply has no plan for Australia, and that's particularly disappointing for an alternative Prime Minister.
How are consultations going with the Greens and [inaudible] getting that legislation passed?
Well, you'd need to put that question to Senator Conroy. I'm not involved in the negotiations. Senator Conroy, as the portfolio Minister, would be having discussions with crossbenchers. I'm not in a position to comment on those. That's a question for him.