SUBJECTS: Malcolm Fraser's resignation from the Liberal Party, Resource Super Profits Tax, Government's Stronger and Fairer Superannuation Reforms, Julie Bishop gaffe on Australian passports.
FRAN KELLY:
Financial Services Minister, Chris Bowen, and the Manager of Opposition Business in the House, Christopher Pyne, join us now. Good morning to you both.
CHRISTOPHER PYNE:
Good morning, Fran. Good morning, Chris.
CHRIS BOWEN:
Morning, Christopher and Fran.
KELLY:
Christopher Pyne, to you first. Malcolm Fraser resigned from the Liberal Party. What's your reaction to that?
PYNE:
Well, I think it's a sad day. I'm a fan of Malcolm Fraser's. I liked his Prime Ministership and the fact that he rid us of the Whitlam Government in 1975, which apart from the Rudd Government is one of the worst governments Australia's ever had. So I have a soft spot for Malcolm. I like the fact that Malcolm's always been there to say it as he sees it and I think in your introduction when you said it was a long time coming, I think that's probably true. It's disappointing but he's still a great figure of Australian politics, a living Australian treasure, and I'm sorry that he's decided to go.
KELLY:
It's an indictment of the direction of your party, isn't it, of the modern Liberal Party under Tony Abbott at the moment?
PYNE:
No, it's not. Malcolm Fraser's been critical of the Liberal Party for probably about 20 years, if you go back in history…
KELLY:
But he didn't resign until now.
PYNE:
…through one leader and another, Malcolm hasn't always liked the direction of the Liberal Party. He didn't like it particularly when he was in Parliament. Of course, he famously launched a very public and scathing attack on John Gorton when he was the Prime Minister, so Malcolm's always been prepared to put his views forthrightly and I'm sorry to see him go, but I still regard him as a great Australian and a good liberal. And them's the breaks, as they say.
KELLY:
It's a difference between the parties, isn't it, Chris Bowen? It's hard to imagine a former Labor Prime Minister ever quitting.
BOWEN:
Well, I guess it is, but I think, Fran, that there's been almost a 60-year battle in the Liberal Party of Australia between conservatives and liberals, and it is now a Liberal Party in name only.
PYNE:
What rubbish.
BOWEN:
The conservatives have not only won the battle, they've distributed salt on the fields of liberalism. And I argued, I think almost two years ago, in an article that the true small 'l' Liberal Party in Australia is now the Labor Party. And small 'l' liberals, if they want to succeed in the Liberal Party, have to cloak themselves in conservatism and move to the right. And I think that when you consider some of the great small 'l' liberals of history, Missen and Chaney, and people who thrived under Malcolm Fraser, they would not be comfortable, not only in John Howard's Government, but in Tony Abbott's Liberal Party. And I think one of the reasons Malcolm Turnbull was turfed out of the leadership was because he tried to take the Liberal Party back to liberalism and he failed, and the Liberal Party dealt with him.
KELLY:
Christopher, is that true?
BOWEN:
And they should probably rename themselves the Conservative Party.
PYNE:
Well, Fran, Chris Bowen would say that because the Labor Party are trying to get small 'l' liberal votes, but the one example I'll give you is that Tony Abbott and the Liberal Party has the more generous paid parental leave scheme than the Labor Party.
KELLY: That's true, Chris Bowen.
PYNE:
The paid parental leave scheme is a more generous scheme for working women than the Labor Party, introduced by Tony Abbott. We are still the party of both liberals and conservatives. We have in amongst our ranks, in senior positions, people like me, George Brandis, Julie Bishop, Joe Hockey, Malcolm Turnbull. I mean, the list is endless of small 'l' liberals and conservative liberal leaning people who are in the Liberal Party and in the senior roles in the party.
KELLY:
Okay.
PYNE:
Colin Barnett, the Premier of Western Australia, another good example. I mean, Will Hodgman, the Premier of the -
BOWEN:
[laughs]
PYNE:
Was very briefly, almost the Premier of Tasmania, Leader of the Opposition in Tasmania.
KELLY:
Okay.
PYNE:
This is too simplistic an issue for, too simplistic an analysis by Chris Bowen, quite frankly.
KELLY:
Alright. Let's move on.
PYNE:
It's a much more complicated issue.
KELLY:
I'm sure there was nothing simplistic about Malcolm Fraser's thought processes as he went to this move.
Chris Bowen, Tony Abbott's pitch to his Party Room reportedly yesterday was - and we've heard him say this, in fact, in the Parliament in his Budget Reply Speech - that if you want to beat the Government's mining super profits tax, then you've got to throw out the Government. Now, Andrew Forrest from Fortescue Minerals was saying the same thing yesterday in an interview. He said someone on the Government's consultation committee for this tax said the only way you'll be able to change the tax is to change the Government. These are high stakes for you with this tax, aren't they?
BOWEN:
Well, we're committed to the tax.
KELLY:
It's become a test of your Government.
BOWEN:
Well, we're committed to this because it's important for the future of the nation. It's important to introduce a more equitable tax system, one which means that Australians get their fair share of the minerals under the ground. We're not backing away from what we think is a very important long term economic reform, a reform which funds a massive boost to the retirement incomes of Australians, which funds a corporate tax cut across the board. We're proposing a corporate tax cut across the board; the Opposition's proposing a corporate tax increase.
So we think this is very important. In terms of the consultation, you don't need me to tell you, Fran, we've said it ad nauseum. There's a consultation process going on about the implementation details. That's always the case.
KELLY:
Some would say it's the wrong way around, that you should have had that consultation before you launched the tax.
BOWEN:
Well, of course, there was a lot of consultation as part of the independent tax review itself. I mean, they -
KELLY:
Well, the miners said they just weren't asked.
BOWEN:
Well, we have a different view and the independent tax review has a very different view of those conversations. But look, whenever you have any substantial tax reform, you always have consultation about the implementation and the details. That's the way it's been for every substantial tax reform from living memory and this tax is no different.
KELLY:
Okay.
BOWEN:
But it is important. It is important in terms of the long term economic reform, and long term is never easy, never uncontroversial, and you can rely on the Opposition to go the cheap political route and not support long term substantial reform.
KELLY:
I think it's true to say that long, difficult reform is never easy. It takes a concerted sales effort, a lot of commitment from the Government. I would say it's not helped by claims that confuse or mislead. I just want to hear, let's hear a claim made by the Prime Minister, Kevin Rudd, in the Parliament this week about the super profits tax and its link to the rise in the superannuation guarantee.
[Grab] RUDD: Because if the Leader of the Opposition blocks this RSPT, he will be denying workers an increase in super from nine per cent to 12 per cent. He will be denying a worker on about average earnings an additional $108,000 a year.
KELLY:
Now, Chris Bowen, that's not true, is it? The mining profits tax is not going to pay for that lift in the superannuation guarantee from nine per cent to 12 per cent. Employers will pay that.
BOWEN:
No, it will, Fran, and this -
KELLY:
Why?
BOWEN:
Because when you increase the amount of money in superannuation by going from nine to 12, you increase the size of the tax concessions because superannuation in Australia attracts tax concessions. So by going from nine to 12, you actually have a substantial hit on the Budget bottom line which needs to be funded through the Resource Super Profits Tax.
And can I say, the Liberal Party now accepts this because they have said they will oppose the increase in nine to 12 and they will take the savings out of the increase in the tax concessions. So they've changed their position. They now accept that it does have an impact on the Budget bottom line, and when it goes to 12 per cent the impact on the Budget bottom line will be $3.6 billion a year.
KELLY:
Okay.
BOWEN:
So there is a very, very clear link, Fran, and that relates to nine to 12. That's not to mention our return of the tax concession for low income earners - anybody under $37,000 gets their superannuation tax back - and our catch up for over-50s, all funded through the Resource Super Profits Tax.
KELLY:
Alright. Christopher Pyne, your turn. What happens to the Liberal Party's position if, through this consultation, the miners are convinced. There's some adjustment, the miners are convinced. Tony Abbott says the next election rises and falls on this. If the miners say yes to the Government, that's your whole election pitch, isn't it?
PYNE:
Well, Fran, there's a couple of things to comment on. Number one is the total falsehood that the mining tax is in any way linked to the superannuation increase from nine to 12 per cent.
KELLY:
We just heard Chris Bowen deal with that.
PYNE:
Well, Chris Bowen would say anything, Fran.
BOWEN:
Oh, do you deny the Budget paper? The Budget paper: $3.6 billion.
PYNE:
No, you've had a good run. Do you deny that $20 billion is being levied on small business and business generally to pay for the increase of nine to 12 per cent? $20 billion is being levied on small business and business in general to pay for the nine to 12 per cent. You completely managed to leave that out of that extraordinary explanation you put before, which you think will fool the Australian people. But I can tell you, when small businesses start paying nine to 12 per cent, they'll know exactly who's paying for the super increase.
KELLY:
Don't we know from past experience that it ends up being the workers themselves who pay, that it's, you know, offset with wage increases or forgoing them?
PYNE:
Well, the Rudd Government needs to deal with that, doesn't it, Fran? I mean, these are the other unintended consequences that the Rudd Government never actually thinks about when they introduce any of their policies. This mining tax is a dagger aimed at the heart of the Australian economy. You've described it as, Chris Bowen described it this morning as a reform. The Labor Party thinks that a great big new tax on mining is a reform.
KELLY:
Well, Chris -
PYNE:
That is the slacker's way out, as usual, from Labor. They've run into Budget problems, they've spent too much money, they've borrowed too much money, they have a massive deficit. They've thought, 'What we'll do is we'll slap another great big tax on an industry in the country that we think is unpopular with the public. What they don't understand is that the Australian public know that the mining industry is the basis for our extraordinary standard of living, and if the mining industry packs up and decides not to invest, not to expand Olympic Dam or Prominent Hill or the iron ore projects in Western Australia, then all of our standards of living will suffer as a consequence.
KELLY:
Alright.
BOWEN:
Twenty prominent economists dealt with that this morning. Twenty prominent economists.
PYNE:
Theoretically. Let's deal with John Ralph, Twiggy Forrest, Marius Kloppers, Terry McCrann …
KELLY:
Okay.
PYNE:
Are all of these people liars or ignorant? Are they all liars or ignorant?
BOWEN:
Twenty prominent economists and you just want to ignore them, eminent economists backing in the Government.
KELLY:
Okay, you two. I'm going to stop you there because this is a perfect example, I think, of what's going on in the political debate at the moment. You two basically shouting at each other and the public can't make any sense of it. What is the public supposed to make of this debate because it's hard to get a clear sales pitch from either of you that isn't directly contradictory?
PYNE:
Well, our sales pitch is very clear, Fran, and that is if you elect a Coalition Government we will stop the mining tax.
KELLY:
Okay. Chris Bowen, yours? I mean, you started this, you should be able to sell a clear line, and I think the public, clearly the polls show they're not convinced. What's wrong with your sales pitch?
BOWEN:
Well, we never expected it to be uncontroversial. We always knew that there would be a very well resourced campaign against it. We knew that the mining lobby would probably take out ads, and that there'd be claim and counterclaim. But I think the Australian people are interested in this debate. They're interested in getting a fair share out of the minerals beneath Australia's ground. They're interested in the boost to Australia's retirement income, which despite Chris' sophistry, is very clearly linked, and the Liberal Party has accepted is very clearly linked to the Resource Super Profits Tax. They're interested in the corporate tax reductions.
I mean, Chris, in this very studio a few weeks ago, talked about big business and how they can afford a tax slug and, you know, two per cent tax was appropriate and we were backing big business against the little guy, and he has the temerity to accuse us of populism.
KELLY:
Okay.
BOWEN:
Now, we do have, Fran, a difficult job in explaining a big reform but we knew that. But the big reform's in the national interest and we're not going to shy away from it.
KELLY:
Alright. Christopher Pyne?
PYNE:
Our pitch remains the same, Fran. If you vote for a Coalition Government, we will stop the mining tax.
KELLY:
Yeah, we got that.
BOWEN:
Is that written down, scripted, or is that just another press remark?
PYNE:
Your sales pitch, you know, couldn't sell a vacuum cleaner.
KELLY:
Okay. Let's go to one last issue before we leave you today. Christopher Pyne, Julie Bishop: she's the Shadow Foreign Affairs Spokesperson. She's come out and basically revealed intelligence secrets, hasn't she? Is that appropriate? Is she an appropriate person to be in this portfolio?
PYNE:
Look, Julie Bishop has put out a statement on that matter which deals with it.
KELLY:
Well, did you hear her?
PYNE:
I have nothing further to add to that.
KELLY:
Well, we heard it this morning.
PYNE:
I haven't seen the interview, no.
KELLY:
You haven't heard it?
PYNE:
No, I didn't see the interview.
KELLY:
Do you want to hear it?
BOWEN:
I'd like to. Let's go for it, Fran.
PYNE:
If you want to put it on. You're in charge of the microphone. You've got the button.
KELLY:
Alright. I wasn't planning to replay this, but I think we've got it. Let's have a listen.
[Grab] JULIE BISHOP: But it would be naïve to think that Israel is the only country in the world that has used forged passports, including Australian passports, for security operations.
INTERVIEWER:
What, we do?
BISHOP: Yes.
INTERVIEWER:
We use, our intelligence agencies forge passports for use in foreign operations?
BISHOP:
Our Australian passports have been used. I said Australian passports have been used by other countries. Has Australia forged passports before? You'll have to ask the Foreign Minister.
INTERVIEWER:
Well, what do you think? I mean, you've been in Government before. You'd have a fair clue of these things.
BISHOP:
I believe that it has occurred, but I wasn't the Foreign Minister at the time.
KELLY:
Christopher Pyne, 'I believe that it has occurred'. Was that appropriate? Did she go too far?
PYNE:
Well, Julie Bishop has put out a statement about that matter which deals with it and really, I don't have anything further to add. She's an excellent Shadow Foreign Minister. She'll be the Foreign Minister in a Coalition Government, hopefully by the end of this year, and I have a great deal of support for Julie. Labor will do anything, of course, to try and distract everybody from the great big new tax on mining and they've been trying to do it all week, including timing the expulsion of the Israeli diplomat for this -
BOWEN:
Oh, you've got to be kidding.
KELLY:
Okay. So just let me get this clear: you support Julie Bishop staying in that job, that portfolio, until the election.
PYNE:
Absolutely. Of course I do. Julie Bishop is the Deputy Leader and an excellent Shadow Foreign Minister, and a much better Foreign Minister in Government than Stephen Smith could ever have been.
BOWEN:
Well, this is very serious. This is a pattern of behaviour on Julie Bishop's behalf of making outlandish statements and then denying she ever said it. And this is a very serious national security matter. There's a longstanding convention that neither side of politics comments on the operation of our intelligence agencies, which means Bishop has breached and then denied breaching - and it's clearly on tape - and I think, frankly, it shows the risk that would be incumbent in her becoming the Foreign Minister of Australia in an Abbott Government.
KELLY:
Okay, but at the moment she's only the Shadow Foreign Minister. Isn't Labor going for broke on this because it wants a distraction from the mining tax?
BOWEN:
Well, she's the alternative Foreign Minister, Fran. She is the alternative Foreign Minister and she may be the Foreign Minister by the end of the year, as Christopher rightly points out. So this is a very serious matter, and when you're the Foreign Minister or the Treasurer or the Prime Minister, what you say counts. Whether it's under pressure, whether it's in an interview, you need to be able to keep your cool and to say what you mean, and not to say something which you can then say, 'Oh well, sorry, I said it under pressure'.
KELLY:
Alright.
BOWEN:
This is a very important matter and it shows, frankly, that very senior members of the Opposition frontbench are not up to the job and they are not ready for government.
KELLY:
Alright. Chris Bowen, it was your week for the final word, so that's it. Christopher Pyne and Chris Bowen, thank you so much for joining us.
PYNE:
It's a great pleasure.
BOWEN:
It's always fun, thanks, Fran.