The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
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Wayne Swan

Deputy Prime Minister and Treasurer

3 December 2007 - 27 June 2013

15 March 2012

Interview with Jon Faine

ABC Radio, 774 Melbourne

SUBJECTS: Clive Palmer interview on 7.30; Tony Abbott Opposing Tax Cuts; Minerals Resource Rent Tax; Future Fund

FAINE:

The battle between the Gillard Government and the mining oligarchs continues. Last night Clive Palmer on ABC TV's 7.30 program claimed that it was unconstitutional for the Gillard Government to legislate for a carbon tax. This morning the federal Treasurer Wayne Swan is on the line to respond. Mr Swan, good morning to you.

TREASURER:

Good morning Jon, how are you going?

FAINE:

Have you got sound constitutional grounds for the proposed carbon tax?

TREASURER:

Too right we do.

FAINE:

What advice have you got that it's constitutional because Mr Palmer last night in this chat with Chris Uhlmann said that he thought it wasn't. Here's what he said on TV last night.

PALMER: Well, our advice is that the carbon tax in its current form is unconstitutional and that's recognised in the legislation itself where it says if it's found to be unconstitutional the Government will (inaudible) other acts. That's in the legislation. Now I think the constitution of Australia is much more important than any number of lawyers or Parliament trying to slip around it. The constitution sets out how it should be changed. How the states should vote; and the majority of Australians have a democratic right to vote.

UHLMANN: On what grounds is it unconstitutional?

PALMER: Well, the grounds are set out in legal advice and I'll be coming to the High Court.

FAINE:

Are you concerned Mr Swan?

TREASURER:

No, no this is just another example of Mr Palmer dressing up his self-interest as national interest and I think the whole interview last night was probably Exhibit A in my essay of Mr Palmer trying to exert undue influence on our political system through all the resources that he has gained in recent times from selling our non-renewable resources overseas.

FAINE:

Have you got crown law advice to say that it's on sound constitutional footing?

TREASURER:

Yes we've taken advice on…

FAINE:

Under which powers of the constitution?

TREASURER:

Well, I think there's a whole range of them but the Corporations Power would be one.

FAINE:

Foreign Affairs power.

TREASURER:

Well, any number. I'm not a constitutional lawyer but I do take advice from the Government's legal advisors and our advice is that it is constitutional.

FAINE:

And what does he mean do you think, when he says that if it's.. when it's found to be unconstitutional there are already provisions in the act to try and find other ways of imposing the tax?

TREASURER:

Look I haven't got the faintest idea what he's talking about and I think most Australians who would have watched the interview last night would be still scratching their head trying to understand what he was talking about as well.

FAINE:

So what are you saying? Bring it on.

TREASURER:

Well, I mean, Mr Palmer has been opposing carbon pricing. Mr Palmer has been going around the country opposing a resource rent tax which is absolutely vital to spreading the benefits of the resources boom to every corner of our economy and he's been dressing up his arguments as national interest arguments when they're just self-interest arguments from Mr Palmer. He wants to stop us spreading the benefits of the boom, particularly the revenue from the mining resource rent tax, to small businesses and other companies, particularly the ones that aren't in the fast lane of the resources boom like Mr Palmer. And that's precisely the point that I've been making and he proved that point completely on [730] last night.

FAINE:

As I was watching it I must say it reminded me of this moment from popular Australian culture.

DENNIS DENUTO: This is a blatant violation of the Constitution of the Commonwealth of Australia and when it comes to violations they don't come any bigger.

JUDGE: What section of the constitution has been breached?

DENNIS DENUTO: Section? What section – there is no one section. It's just the vibe of the thing.

FAINE:

That's of course from The Castle.

TREASURER:

Yes and Clive Palmer's got one hell of a vibe there's no doubt about that!

FAINE:

Am I the only one who sees the parallel? Do you see it?

TREASURER:

I do, absolutely. He's got a far bigger house though. I don't think he's too worried about the runway.

FAINE:

Ultimately the High Court are going to have to decide aren't they?

TREASURER:

Well, if he takes it to court. I mean, Mr Palmer is infamous for going around the country making all sorts of wild and extravagant statements and he's done it across a range of issues over a long period of time. And the fact is I think many Australians are pretty concerned about the behaviour of Mr Palmer and a number of others in our economy who've done really well out of our society and they then go on to make a whole series of arguments about how we shouldn't spread the opportunities of the mining boom to all the corners of our country and that's what really gets me upset.

FAINE:

Okay. Now the politics of this though is the other level of which it works. In a way it suits you, doesn't it? You're banging away pretending to be doing this for ordinary Australians and in a way he's helping you in your crusade, isn't he, your campaign?

TREASURER:

Well, I'd rather that Mr Palmer and Ms Rinehart and others didn't go around the country in the divisive way that they do go around the country seeking to exert undue influence on public policy making.

FAINE:

Yes, but it's not helping you in the polls, is it?

TREASURER:

I'd rather, as a country, that we came together and agreed on certain national goals and one of those is having a resource rent tax so that we can get fair value for the resources we own 100 per cent and which can only be mined once. I would like to think that those that have done very well out of the exploitation of our mineral resources joined the government in the objective of spreading the benefits of the mining boom right around the country, in particular to boost the superannuation savings of Australian workers to give them a bigger stake in the mineral wealth of our country, and to in particular give a tax cut particularly to small businesses, many of which are not in the fast lane of the resources boom.

FAINE:

A tax cut which you may not now be able to follow through on. Why are the Greens making it harder for you to run the country when they claim to be working with you.

TREASURER:

Well, first and foremost the Greens are supporting the instant asset write off which is a very significant tax cut for small businesses, 2.7 million [of them].

FAINE:

They're shafting you on the tax cuts.

TREASURER:

And they have indicated over a long period of time that they were not supportive of a general tax cut to business taxation. We have argued [for] that strongly for a couple of years and Mr Abbott last year said he supported those tax cuts but now he has changed his mind and is going to oppose a tax cut, an across the board tax cut to business, which is just really mind-boggling.

FAINE:

But Wayne Swan, we can't turn this into a conversation about Tony Abbott. He's your political opponent. He's always going to oppose what the Government is doing.

TREASURER:

Well, no hold on..

FAINE:

The Greens are supposed to be your allies. They're supposed to be working with you and they are working against you.

TREASURER:

No, sorry Jon, until last year Mr Abbott was saying that he was supporting the company tax cut. The Greens have never said that they were supporting the general company tax cut. That's the difference.

FAINE:

But the Greens are in a loose alliance with you.

TREASURER:

Well, no we have no agreement with the Greens on the general business tax cut but it has been our policy. It's one that we've taken to the people of Australia. We took it to them in the last election and we're determined to deliver it. And why are we determined to deliver it? Because it's really important that we can give some tax relief to thousands of businesses right around this country that aren't in the fast lane of the mining boom. That's the Government's policy. It's the one we took to the last election and it's the one that Mr Abbott supported until sometime this year or late last year.

FAINE:

But why let the Greens off the hook? They're supposed to be the ones helping you – well they did help you form Government. They're supposed to be helping you. You're never going to get help from Tony Abbott running the country but you are supposed to get help from the Greens running the country. That's why they're in a loose alliance with you.

TREASURER:

Well, the Greens have supported the tax cut to small business, the instant assets write off. Tony Abbott voted against that as well. That will go to 2.7 million small businesses. Now, Mr Abbott was supportive of a general tax cut to small business with the revenue from the MRRT. He's now changed his mind. So now we have the spectre in the Senate of Mr Abbott and the Greens voting down a general business tax cut.

FAINE:

On a separate issue, before we run out of time. Wayne Swan, you've just, as a Government, agreed to appoint leading business figure David Gonski as the head of the all-important Future Fund. It's $70 billion worth of our money invested and under stewardship. But it emerges this morning that in fact the Future Fund itself thought that former Treasurer, your predecessor, Peter Costello, should be the person appointed. But you didn't do it.

TREASURER:

Well, I think Jon, there was a range of views on the board but the Government's view was that Mr Gonski was the best person for the job. He has the strong support of the business community and I believe strong support on the board and we believe that that was the best decision for the future of the country and particularly for the fund.

FAINE:

But Peter Costello, a political opponent of yours, was highly recommended. Was it a political decision not to appoint him?

TREASURER:

Well, there was no formal recommendation for Mr Costello.

FAINE:

Nor was there one for Mr Gonski.

TREASURER:

That's true.

FAINE:

So you could choose between them.

TREASURER:

That's right and…

FAINE:

Was it a political objection that stopped Peter Costello's appointment?

TREASURER:

Well, I actually appointed, along with Lindsay Tanner, Peter Costello to the board of the Future Fund so I don't think you can make that argument.

FAINE:

But you didn't want him to chair it.

TREASURER:

No that's true. The Government chose Mr Gonski because we thought…

FAINE:

Why didn't you want Peter Costello when he was thought to be the better person?

TREASURER:

No, no sorry he wasn't thought to be the better person.

FAINE:

Well, some people thought he was.

TREASURER:

Well, I'm sure some people thought he was the better candidate but certainly the Government didn't think he was a better candidate and I think the overwhelming view of the business community would be that Mr Gonski is the better candidate.

FAINE:

Shouldn't something like the Future Fund be above petty politics?

TREASURER:

Well it is, and I've just explained to you why we appointed Mr Gonski. Mr Gonski is an outstanding Australian businessman. He is highly respected across the business community and in the community more broadly. He's a standout appointment for the board and I think there is general agreement on that and I think you've seen that reflected in the public commentary over the last couple of days.

FAINE:

Alright. So the other issue that came up in the Parliament yesterday in Question Time was Tony Abbott saying that the discovery of a cache of guns smuggled into Australia was another sign of the failure of the Gillard Government too. I think I remember hearing him say in Question Time that you couldn't stop the boats and you can't stop the guns.

TREASURER:

It was just a very big diversion from Tony Abbott's embarrassment at the fact that he's opposing company tax cuts. That's what that was all about. Nothing more and nothing less.

FAINE:

Well, if you've (inaudible) just finally on tax cuts. You can't get them through with support from the Greens because you haven't got it. You can't get it through now because you don't have support from the opposition. What are you going to do?

TREASURER:

Well, we're going to put a lot of pressure on the Liberal Party to vote for it. That's what we're going to do.

FAINE:

And when they don't?

TREASURER:

Well, we'll see what happens up in the Senate but I tell you what, there is going to be a lot of pressure on Mr Abbott and the Liberals over this issue. A hell of a lot of pressure.

FAINE:

Well, the pressure will be on you if you can't deliver.

TREASURER:

What we've done is we've got the legislation up in the Senate. They're going to pass the MRRT. Many people said that couldn't be done. It's going to be done. We're going to get the revenue stream. We're going to get through the tax cut to the 2.7 million small businesses and we're going to…

FAINE:

But you haven't got the numbers. How?

TREASURER:

The Greens are voting for the tax cut to 2.7 million small businesses. The Liberals are voting against it and when it comes to the vote on the general tax cut, we'll see if the Liberal Party maintains the stupidity of their current position.

FAINE:

If you can't – if you don't have the numbers you can't get it through and your whole argument falls over.

TREASURER:

No it doesn't fall over at all. For a very long time Jon, and you've been an observer of Federal politics for a long period of time, Governments have always had to get their legislation through the Senate in this country. There's nothing novel about that and there's nothing new about it.

FAINE:

And you're not on Clive Palmer's Christmas card list.

TREASURER:

No I don't think so. I might go back and watch The Castle again.

FAINE:

Well, you can send him a DVD copy of it and I think that might be about as much as you're going to get for each other.

TREASURER:

That's a good idea.

FAINE:

Thank you for your time this morning.

TREASURER:

Thank you.