SUBJECTS: Emissions trading, the Budget, cost of living, opinion polls, superannuation, asylum seekers, Hearts & Minds.
NEIL MITCHELL:
Now, Chris Bowen is Federal Treasurer. He's just released a book, Hearts and Minds: A Blueprint for Modern Labor, but he's right in the middle of various other issues developing at the moment. He's on the line now.
The Treasurer, Mr Bowen, good morning.
CHRIS BOWEN:
Good morning to you, Neil. How are you?
MITCHELL:
I'm well, thank you. Before we get to that, the - we've got word today that all work on NBN in Ballarat has stopped because of contractors haven't been paid. You heard anything about that?
BOWEN:
Look, your program mentioned it to my press secretary just before. We passed that on to Minister Albanese's office. I'm not aware of it. I know obviously there's been some issues around asbestos, but I'm not aware of that particular issue and Minister Albanese's office is looking into it. I'm sure they can give you an update later in the day.
MITCHELL:
Yeah. It's nothing to do with asbestos and I'm told…
BOWEN:
No, I understand…
MITCHELL:
…Western Australia and South Australia have got money problems as well, but I assume the Government's provided the money to pass on to the contractors, hasn't it?
BOWEN:
Well, look, I would assume so, but I'm just not aware of the issue. It was raised with me a few minutes ago. We passed it on to Minister Albanese's office and they said they'd have a look into it.
MITCHELL:
Alright. Appreciate that. We'll get on to his office, thank you very much.
BOWEN:
No worries.
MITCHELL:
Carbon tax. The change to the carbon tax, as previewed by the Prime Minister, is that an election promise or will you recall Parliament to debate it?
BOWEN:
Well, the timing will depend, obviously, on a whole lot of variables and the Prime Minister said he'll decide an election date and then have a talk to the Governor General and then announce that, which is the normal way these things are done – but clearly we've taken a decision to move to a floating price. Prime Minister and I said that yesterday. More details out in the next day or so. We've been working through it. We want to make sure it's done in a fiscally responsible way. That means making some changes elsewhere. We're not going to change the household assistance package, but we are going to make other changes which we'll announce in the next day or so.
We think this is a sensible move for the times. You look at the floating price, we think there does need to be a floating price to better reflect the world prices. We think there should be a price on carbon, but this is a sensible move for the times.
MITCHELL:
So I take that as an election promise.
BOWEN:
Well, look, as I said, timing is down to the Prime Minister's call. I mean, he wants to call an election, but we'll certainly, one way or another, either through the Parliament or through the election, be seeking a mandate to do this.
MITCHELL:
Okay. Four billion dollar black hole, right?
BOWEN:
No. I've said it's a significant cost with several billion dollars. I've seen all sorts of figures out there - $15 billion from Mr Hockey, et cetera – that's not right. But I'll be providing further updates. It is a significant cost.
MITCHELL:
But it's in the billions.
BOWEN:
Yes.
MITCHELL:
So how do you fix that? You either increase taxes or cut spending.
BOWEN:
Well, yep, we've had to make some decisions, which the Expenditure Review Committee has been working through, and I'll be announcing those when we announce the full package in the next day or so. It does mean a tough decision. You do have to make sure that you stick to your budget strategy, and that means offsetting savings elsewhere.
MITCHELL:
Okay. So does that mean that there will not be an increase in tax elsewhere, it will be a reduction in spending?
BOWEN:
I'll be making those announcements, Neil. It'll be a range of measures which we'll be making with the Prime Minister.
MITCHELL:
Could a - well, a range of measures, that means a mixture of tax increases and cutting spending.
BOWEN:
I'm not going to go into it today, Neil. With respect, that's an announcement for another day. We have said we'll offset it. That will mean some changes elsewhere. That's the responsible thing to do. It does mean some difficult decisions, but the underlying decision to go to a floating price I think is a sensible one because we're seeing the mining boom come to an end and we need to spur more investment in manufacturing and in services. The carbon price is low in Europe, it makes sense to match our price to theirs earlier.
MITCHELL:
But I have got it clear, there'll be a range of measures to make up these several billion dollars.
BOWEN:
Yep, that's right. That's 100 per cent right.
MITCHELL:
Okay. I'm a - and this will consumers, this change? This will make life easier for people at home?
BOWEN:
Yes, it will. I think so. I wouldn't overstate it as, you know, the be all and end all of cost of living. We've said that electricity prices are going up for a range of reasons, which the carbon price is only one and by far not the biggest, and that remains the case. It'll make a difference.
So if you look at, for example, a single income couple, so, you know, one of the parents is at work and they've got two children, say, three and eight, and where the wage earner earns around $75,000 a year, it'll mean an improvement to their cost of living in the year coming up of about $380 over the year. That, I'm sure, would be welcome. It's, as I say, not the be all and end all, but it's one step.
MITCHELL:
But what puzzles me for the past couple of years, the Government's been telling us it doesn't actually hurt consumers.
BOWEN:
Well, we've said that it's only a small impact on electricity prices compared to all the other impacts…
MITCHELL:
No, no, no. It's been - I've had a fight - debate with Greg Combet several times. It was all a Tony Abbott scare tactic that it was hurting consumers, and now your own side is saying hang on, we'll change it to help consumers. I mean, you can't have it both ways.
BOWEN:
Well, there's no doubt there has been a scare campaign on. No doubt about that.
MITCHELL:
Well, was it hurting consumers or not, the carbon tax?
BOWEN:
Well, no, I think in fairness, Neil, we have said that it does have an impact on electricity prices, but nowhere near what Mr Abbott has claimed. Nowhere near the scare campaign. We've said it has an impact around 10 per cent. That's, you know, about right. This change which we're making will make an improvement. Again, I'm not saying it's the be all and end all, but it will make an improvement in terms of helping people manage their cost of living pressures and help industry and business, which is a pretty important reason for us doing it now, as well.
MITCHELL:
Okay, the polls. Now, I don't know if you want to resort to the line that some of your colleagues have used in the past, but the polls today show very much a Labor back in the game, Prime Minister ahead of Tony Abbott in several areas. Do you feel that's the mood?
BOWEN:
Look, I certainly feel that we're very competitive, yes. I think the Australian people wanted a real contest in this election and I think we're giving Tony Abbott a real contest. We've got a long way to go yet. We're obviously focused on a whole range of policies and reforms that we're working through the Cabinet, but I do think we - this will be a competitive election, it'll be tight, and we'll be fighting very hard, and I think Kevin Rudd can win.
MITCHELL:
You still the underdog?
BOWEN:
Oh, look, if you look at the polls you'll see it's 50/50. That's tight. You know, as I say, there's a long way to go. It'll be tough for us.
MITCHELL:
Well, you're one of Kevin Rudd's key advisors. Has he told you when the election is?
BOWEN:
No. He'll tell the Governor General first, but he will seek our advice.
MITCHELL:
Has he done that yet?
BOWEN:
No, no. He's keeping, obviously, focused on the policy changes that we're making, and then he'll weigh up his options and he'll go and have a chat to the Governor General.
MITCHELL:
What's going to decide the election, do you reckon?
BOWEN:
I think there'll be a range of issues. I think it'll be a contest, Neil, about plans for the future. So we're running on not only our record, but we'll also be running on our positive plan for the economy. We've been very upfront with people and said look, the mining boom is coming to an end. This is a challenge. You're seeing Chinese growth come off. You're seeing Europe in a continued deep recession. All this has an impact on Australia.
Terms of trade, or what the world is prepared to pay us for what we make, are falling and that means careful economic management. Not cheap slogans, not negativity, not just a, you know, ads which are pretty negative. It means a positive plan for the future. It means working with industry and unions to lift our national competitiveness.
That's our program and I think that'll be the contest between frankly, from my point of view, our positive plans and Mr Abbott's pretty cheap slogans and negativity.
MITCHELL:
Not that you're being negative in accusing him of cheap slogans, are you?
BOWEN:
Oh, no.
MITCHELL:
No, no, no.
BOWEN:
I know - now Neil...
MITCHELL:
No, it's really positive.
BOWEN:
… I think most people would recognise that he's a pretty good politician, but if you look for a substantial plan, you'll be looking a long way, looking for a long time before you see one.
MITCHELL:
What about these superannuation companies that are talking about putting on extra fees to cope with your red tape?
BOWEN:
Yeah look, I've seen that and there are other companies I've noticed Westpac, particularly today, saying they're not doing that and they don't see any need to do that. The reforms that have been introduced will save superannuants over the long run a lot of money. So we've not only increased the superannuation guarantee from 9 to 12, but we've put in a lot of efficiencies, a lot of changes, and measures to reduce the eating away of superannuation over time by complex administration.
Now, I've seen some firms say that they're going to pass some of the administrative costs on to their customers or their members. I think that's, you know, that's a matter for them. It's unfortunate. Their members can have a look at what other firms are willing to do because I've seen Westpac out there saying they won't do it, industry funds saying they won't do it, so that's a matter for their members to look at and check and make sure that they're getting a good enough deal.
MITCHELL:
But this increase in the superannuation contribution, who do you expect to pay it?
BOWEN:
Well, the superannuation contribution is paid for by the employer. Obviously there's a big cost to Government, of course there's tax concessions as well, but you'll also see it factored into wage negotiations, which means the contribution comes from a combination of employers and employees over the years. That's what we found when we introduced the superannuation guarantee in the first place. Paul Keating did that and that's, I'm sure, what you'll see this time as well.
MITCHELL:
Now, an area you know well, asylum seekers. What's it - do you know what I costs us?
BOWEN:
Well, in total, I mean, it's a very expensive thing. It does cost a lot, regardless of how you do it. I mean, I hear these debates, people say we should abolish detention, it's a lot cheaper. It doesn't matter how you do it, it's expensive, because you get people arriving on our shores making asylum claims and then it's expensive to process those and there's measures of support that need to be put in place.
That's why I've always argued, and I've had arguments with people who say it's hard-hearted or not compassionate, I've always argued you need to have a pretty robust border protection system including offshore processing because that way you can actually take more refugees, but you can do it in a much more orderly, more efficient, cheaper, and fairer way.
MITCHELL:
Just on your book Hearts and Minds: A Blueprint for Modern Labor, I'm assuming we're not looking to best sellers with this are we?
BOWEN:
I doubt it. I don't think it's the Da Vinci Code or anything like that Neil but it's my contribution. When I was on the back bench I decided to pen a few things. It's not War and Peace, it's a slim volume but it's my ideas not only about the Labor Party but about policy, about Australia.
Some politicians shy away from writing books because things get used against you but I think this whole picture's about ideas, it should be about a contest. Not everybody will agree with everything in it, but I said some things about how I think the Labor Party should change and modernise.
MITCHELL:
In a broad sense you're talking about people's disenchantment with political parties aren't you?
BOWEN:
Yes, yes…
MITCHELL:
Do you think that might be all about trust?
BOWEN:
Partly. I also think it's about inclusiveness. I think it's about involving people in your process.
MITCHELL:
But have you ever seen politicians more on the nose than they are now?
BOWEN:
I think - yeah I think - I remember, I grew up in the days of Whitlam and Fraser and, you know, there's always been controversies and politicians have never been the most popular people in the world. I think that is the case. But I do think that political parties need to adjust and, you know, my political party can modernise and can involve people more and we need to be inclusive, we need to welcome people, small business people, managers, union, shop floor workers, students, retired people and give them a say and give them a say who our leaders should be, invite more people to our conferences. Because these days you can sit at home on Twitter or GetUp and you can have your say that way. It's not really enticing to go to the local hall on a cold night and go to a Labor Party meeting, or a Liberal Party meeting.
MITCHELL:
But if you look at the knifing of Kevin Rudd and then the knifing of Julia Gillard, if you look specifically at Labor, I don't think there's great trust across either party or either the main parties. But if you look at the knifing of Rudd and then the knifing of Gillard, that is exactly what's gone to undermine you, it seems a very nasty environment.
BOWEN:
And that's one of the reasons why both Kevin Rudd and I have proposed a big change to the way the leader's elected because…
MITCHELL:
Well, yeah after engineering the disappearance of Julia Gillard. It's a bit late. It's a bit like an armed robber objecting to armed robbery.
BOWEN:
Well I've been arguing for this reform for some time and I've put it in the book and Kevin Rudd's been in favour of it for some time and I do think it means - look, people out there in the community did say to me very strongly that they thought Kevin Rudd should return to the prime ministership. A very strong view and that they weren't very happy about the events that had gone on previously. And this reform means that if you vote for Kevin Rudd as Prime Minister, you'll know you'll get Kevin Rudd as Prime Minister. If you vote for Tony Abbott as Prime Minister, you may get Tony Abbott, you may get Malcolm Turnbull…
MITCHELL:
[Laughs].
BOWEN:
He says they're not changing their rules, okay. But it's actually more about the…
MITCHELL:
But you see the strangeness of this, I mean, you know, Kevin Rudd and yourself are both Gillard - are both Rudd people obviously, very - campaigning to change the system that you exploited to get rid of her.
BOWEN:
Well you deal with the rules in place at the time. That's the system and the rules were in place to say this is how you change leaders and yes, I argued for a change of leader and the majority of the Caucus voted for a change of leader.
MITCHELL:
Do you feel any guilt about that?
BOWEN:
No, politics is a rough and tumble business. In the end of the day you've got to put your loyalty to the party and your…
MITCHELL:
Oi, what about the people, what about the people of Australia?
BOWEN:
Well you've got to do what - yeah, and I…
MITCHELL:
Which comes first?
BOWEN:
Well the people come first, the country comes first, absolutely, but when you believe in the cause of Labor, you also believe it's in the best interest of Australia that we have a stronger Labor Government and therefore you can make tough decisions; and I took the view and the majority of Caucus took the view that Kevin Rudd was best placed to make the case for Labor and best placed to be Prime Minister.
MITCHELL:
Has he changed, really?
BOWEN:
Yeah look a lot's been said about this. I worked with Kevin pretty close in his first term as Prime Minister. I found him consultative and a good Prime Minister and a good manager of the Cabinet. Others have expressed a different view I understand and accept that. And in this term as Prime Minister he's been very consultative with his senior group, he's run all the issues past us, got our advice, calibrated his view accordingly, worked very well with the Ministry and the Cabinet, been talking to Caucus members. I think you'll find that's a pretty common view across the Caucus.
MITCHELL:
Are you a future leader?
BOWEN:
I doubt it. I doubt it, Neil. I think Kevin Rudd will be there for a long time. I certainly hope so, I believe he can win this election and I think he can lead the country for quite a while to come.
MITCHELL:
Thank you for your time.
BOWEN:
Good on you, Neil.