SUBJECTS: Liberal Party, Pension, FuelWatch, Fuel Excise, Alco-pops
STEVE PRICE:
I think the Federal Opposition are in some state of confusion this morning. I'm going to talk in just a moment to Chris Bowen who is the Assistant Treasurer. He has accused Brendan Nelson of throwing money around like confetti at a wedding, in regard to Brendan Nelson's announcement that they'll cut the excise on fuel, making fuel come down by five cents a litre. Now, I'm just still amazed by what unfolded on this program this morning. Now, we received an email overnight and the Federal Member for McPherson who is also the Shadow Minister for Aging, Margaret May, she's going to launch next Wednesday, a petition and she says, quote, in this email to me 'which we be launched by all opposition members around Australia to increase the base pension rate'. Now there was no mention in Brendan Nelson's Budget in reply speech last night, at all, about the base pension rate. Now you would've thought if Coalition policy had changed to actively be going out there and arguing for an increase in the base pension rate the leader might know about it. But apparently not. Here's what Margaret May said to me when I asked her about this, this morning.
You say the leader will hear about it, you are the Shadow Minister for Aging…
MARGARET MAY:
Yes I am
STEVE PRICE:
You haven't told him?
MARGARET MAY:
I haven't told him about the petition we discussed this last night, my staff and I, but I think it's one way that we can get the message out there and I think…
STEVE PRICE:
Let me just be clear there, the opposition is now endorsing an increase in the base rate of the pension.
MARGARET MAY:
Yes. Absolutely.
STEVE PRICE:
But the leader doesn't know about it?
MARGARET MAY:
Well, the leader doesn't know that I'm putting that in a petition. A report that we supported, the unanimous report, said that the base rate of pension was not enough, I believe my leader will support me on this, I have discussed it with Brendan, what he doesn't know is that I'm releasing a petition, but I believe I will have the support of my leader, if I don't I will be very disappointed, but that's what I'm prepared to do Steve, because I think these people have been ignored.
STEVE PRICE:
But the whole thing seems confusing, the Federal opposition leader Brendan Nelson, when I was conducting that interview, was on air in Melbourne talking to Neil Mitchell who asked him about this issue…
BRENDAN NELSON:
Well I certainly think that the level of the pension at the moment is inadequate and I can only say to the pensioners that are listening to this, as I've been on a listening tour as you know, and one of the highest, constant theme I got was petrol. One of the things we're doing at the moment is going through, with a blank sheet essentially and writing our policy platform and I can assure you pensioners and carers will be at the top of our list.
Well I'm confused. Chris Bowen's the Assistant Treasurer, he's on the line, morning.
CHRIS BOWEN:
Good morning Steve.
STEVE PRICE:
Are you confused?
CHRIS BOWEN:
Absolutely. I mean this is just another sign of what's going on in the opposition. They are trying to be all things, to all people and they really don't stand for anything anymore. Brendan Nelson supported the tax on alco-pops, then he opposed it. We're not sure where he stands on means-testing of various things, he's still making up his mind about the luxury car tax, I mean they're just all over the shop.
Last night, they threw money around like confetti at a wedding, as you said, and suddenly, you've got to remember they were in office 20 weeks ago, they were the government of Australia 20 weeks ago, and since then they've discovered all these problems that they didn't know existed when they were in office for 11 years and it's all the new governments fault. I think Australian people will see through a lot of this.
STEVE PRICE:
Are you amazed that the Shadow Minister of Aging has endorsed a change in Liberal policy on the base rate of the pension and will circulate it in a petition next week nationwide and she says she has the support of all opposition members and yet the leader didn't mention it in his Budget reply speech.
CHRIS BOWEN:
Oh, it just beggars belief Steve. This is an opposition which is just out of control and just doesn't know what they're doing. Clearly the image is trying to be all things to all people and they're throwing their economic credibility out the window. We all want to do more for pensioners, but this is just not the way to go about it and they are just behaving, frankly, like school children.
STEVE PRICE:
Petrol, the retail price, Brendan Nelson says he would like to pull off the excise by five cents, you're looking, are you not, at your inquiry into petrol prices, about applying GST to the pre-excise price of petrol, which would indeed have the same effect?
CHRIS BOWEN:
Well what we've said is we've got the complete review of the tax system that Ken Henry, the secretary to the Treasury, is undertaking. I understand this has come out of the 2020 Summit and we've also asked that commission if they'll have a look at the way the GST and the excise interrelate with each other. A lot of people complain as you go around the community that the GST on petrol is really a tax on a tax. Now, in an ideal world, you'd be able to fix that and one of the things the commission will look at is, are we able to fix that. Now last night, what Brendan Nelson did, was …
STEVE PRICE:
Now would that be, roughly five cents a litre?
CHRIS BOWEN:
Well now when you look at it, the excise is 38 cents a litre, GST is ten, so if you look at it in that sense, you're looking at about four cents a litre. Now last night, on his own calculations, Brendan Nelson said he'd spend $1.8 billion, well that's $2 billion a year over the period of the Budget that brings us to $8 billion, reducing the tax on petrol. Now we all want to reduce the tax on petrol, we all want to reduce petrol prices, we got a series of measures we've got in place to reduce petrol prices.
But what Brendan Nelson didn't do last night was explain how he's going to pay for that. If you're just going to cut tax, but you don't have any other savings measures, and indeed Steve, he's opposing savings measures which we've put in the Budget because we need to build a bigger surplus to put downward pressure on interest rates, he raided the surplus, the surplus is effectively being attacked by Brendan Nelson, so well done Dr. Nelson. You take a bit of money off the petrol price, which might be gobbled up tomorrow, if OPEC decides to put the petrol price up more and the volatility of Australian petrol prices, we could see petrol prices going up and down 15 cents a week…
STEVE PRICE:
But what he's doing to you is, he's throwing down the gauntlet that says, 'look the government's not going to do anything about petrol, I will.'
CHRIS BOWEN:
But we are doing things. We've done more in six months than they did in 12 years. Dr. Nelson should get behind our FuelWatch scheme, which only costs $20 million over four years and which the experience in Western Australia shows puts downward pressure on petrol prices by about 2 cents a litre, but much more importantly than even that, the difference between the cheapest and the most expensive petrol, in Sydney today for example, would be 10 or 15 cents a litre. So if you've got every service station in the city on a website and you know exactly what the price is and that price is locked in for 24 hours and you've got 24 hours notice, in effect, of what the price will be, then you can decide where you buy your petrol and you can really get better value for money and if motorists will get more bang for their buck and the taxpayers won't be paying as much as for Dr. Nelson's and Mr. Turnbull's new grandiose scheme.
STEVE PRICE:
Just on alco-pop, in your Budget papers, you have that as a tax saving. That's really a tax is it? The increase in the excise on alco-pop's you've calculated it forward to 2010 and I'm doing this off the top of my head, but it goes from, I think, $69 million currently, up to something like $690 million, you're putting that in as a saving, that's a new tax.
CHRIS BOWEN:
Oh we've never hidden the fact that's a tax increase, we've been very open and honest about it, the whole way through.
STEVE PRICE:
So it is a tax increase, but also how can you argue that's going to decrease the incidence of binge-drinking if you're calculating that these things will continue to be sold in big numbers?
CHRIS BOWEN:
Well the Treasury analysis, and we have to base these things on all of the best analysis, the Treasury analysis is that there will be 43 million bottles less of these things sold, in one year, because of this tax change, because of this tax increase. Now will this tax increase alone deal with binge-drinking, no it wont, but this is one of several measures on binge drinking and Dr. Nelson is being very irresponsible when he says 'well this is just a tax increase so therefore we'll oppose it'.
Now, what we've done is increase the tax on alco-pops, to the same level as spirits, the same level in equivalent alcohol, so it's just basically, if you like, levelled the playing field and said well these are the drinks that young people in particular…
STEVE PRICE:
The boss of Coca Cola said this morning, if you're serious about that, he said to me an hour ago, you would increase the excise on cask wine and beer.
CHRIS BOWEN:
Well that's not on out agenda at the moment, we're not interested in taxes across the board.
STEVE PRICE:
Well why not?
CHRIS BOWEN:
Well because the evidence is that these are the things that young people in particular are particularly focussing on…
STEVE PRICE:
You don't think that anyone goes and binge drinks on cask wine?
CHRIS BOWEN:
Well of some of us do, but it's not a tax increase across the board. Here we have a situation where these things are taxed less than other alcohol. Does that make any sense, really? If you have scotch and coke, but it's in a can together, then you pay less tax, than if you bought them separately.
STEVE PRICE:
What it's doing out on the street though, they've got evidence out this morning, is sales of 750ml bottles of scotch or bundaberg rum are up. And bottle shops are just marketing it that way, selling cheaper litres of coke.
CHRIS BOWEN:
Of course there are going to be different consequences across the board as you make these serious tax changes, but this is one of many measures. Now Steve, this is a big problem in the community, not only parents, in my electorate in Western Sydney, I've had school principals talking to me about this for a long time saying they've never seen binge-drinking so bad in their school. This is public, private, across the board, raising it with me, it's a big issue. Every parent knows what an issue it is and they're the things that weren't very popular, when I was a teenager, when you were a teenager, but they're big now so when the circumstances change, you have to change your policy accordingly.
Dr. Nelson was completely irresponsible on both counts last night. The petrol tax and the alco-pops. He's really sold-out his credibility for some short-term populism.
STEVE PRICE:
Good to talk to you, thanks for your time
CHRIS BOWEN:
Good on you Steve.