KEIRAN GILBERT:
Good morning and welcome to AM Agenda. Today we focus on the Government's review of the GST amid claims from WA and Queensland that they're getting a raw deal. The Prime Minister made the announcement yesterday in Perth.
JULIA GILLARD (Audio):
The growth in mining is increasing the discrepancy in the amount of revenue raised by States and Territories as well as making it more difficult to anticipate GST distribution between States and Territories from year to year. So we need a formula, a system, that better copes with growth.
GILBERT:
Joining me on the program this morning from the SKY News Centre, Parliamentary Secretary to the Treasurer David Bradbury and from Brisbane the Shadow Minister for Small Business Bruce Billson. Gentlemen, good morning to you both.
DAVID BRADBURY:
Good morning Kieran.
BRUCE BILLSON:
Good morning.
GILBERT:
David, with the GST review, someone has to miss out at the end of this. Which State or States will be getting less of the pot at the end of this review?
BRADBURY:
Well Kieran, we're not going to pre-judge the outcome of this review and I think that it would be entirely inappropriate for us to do that. But we have made a number of points and there are a number of things that we all know have lead to this review being initiated. The first point to make is that there are some incentives in place in the way which the Commonwealth Grants Commission divvies up the GST that do discourage States from undertaking economic reform and boosting their growth within their own State. Clearly, we want to ensure that there is total alignment between the incentives that are in place and the processes that are used to determine allocation of GST revenue and what is in the economic interest of the States and indeed as a consequence of that, the economic interests of the nation.
GILBERT:
But there has got to be a loser in all of this doesn't there? If you're going to reward economic growth and the States that are doing well, others are going to miss out. That is the bottom line here isn't it?
BRADBURY:
Well as I said Kieran, we do not want to pre-judge the outcome of a review that has just been initiated and there is a process for those that are heading this committee which are enquiring into these matters to go through. We think that there are important issues that need to be resolved, which is why we've set out a comprehensive terms of reference. There is a limited pie and the Treasurer has made it clear that we do not intend to increase the GST. That is not one of the matters that on the table of this review. But, not withstanding that, whether there are winners or losers, that is something we're not going to get into an argument about at this point in time. We want a process that engages the States that gives them an opportunity to put their case, we will work through this methodically and in the end we will be looking to make whatever changes are needed after that enquiry occurs.
GILBERT:
Okay, Bruce Billson the Liberal Premiers have been supportive of this announcement and yet Joe Hockey has come out this morning and late yesterday and been critical of it saying that the Treasurer should intervene now if he wants to make the changes. Doesn't it make sense to get a bipartisan committee like Nick Greiner and John Brumby to look at this in detail rather than rush off quickly and make the call?
BILLSON:
Well the interesting thing is you can understand the Premiers' sensing maybe an opportunity to increase their share of the GST revenue, but your opening question is absolutely right Kieran. If someone is going to gain, someone is going to lose. It was only fourteen months ago that the Grants Commission held a review into the distribution of the GST. If it is such a compelling issue, why didn't the Government last February take action on the review then? I think this is more about cryogenically freezing this discussion whilst there is another review undertaken so that any decision be pushed beyond the next election, tantalise the State Premiers that there might be some prospect of revenue growth for them and never talk about who is actually going to lose in making up that revenue growth and then hopefully the Labor tactic is to simply put it off to the other side of the next election.
GILBERT:
But Bruce, doesn't it again look like the Federal Coalition is showing opposition and taking an opposing stance for the sake of opposition here given that the Liberal Premiers are supporting it?
BILLSON:
I perfectly understand the Premiers' position Kieran. If I was a Premier and there were prospects to re-carve the cake and get a bigger piece, then certainly you'd want to give that a chance. But the reality is, it was only fourteen months ago when there was a Grants Commission review of this very subject, the distribution of the GST. Now, there has not been some enormous transformational change since last February that means all of that needs to start again. If there was a problem with the distribution and the Government had an inclination to do something about it, then it had all the opportunity to do it last February. This is a stalling tactic to freeze the issue until the other side of the next election recognising that it is a heart-felt issue. I mean Queensland ten years ago were getting around 100c in the $1 per capita raised here now they're getting back around 91c. The picture is quite different in Western Australia. But to reapportion that pie, someone is going to have to miss out and I suspect that's the conversation that the Government doesn't wish to have and doesn't wish to open up until the other side of the next election.
GILBERT:
Okay David Bradbury, what about that suggestion that you're putting this off, which the decision is going to be made by the end of 2013, beyond that if I could add to Bruce's criticism, what about the fairly blatant fact that the Prime Minister made the announcement in Perth in a State where Labor has struggled for many years and proving very unpopular in WA at the moment?
BRADBURY:
Well Kieran, which State would you have liked her to have made it in? This is…
GILBERT:
Doesn't it sort of indicate that it was for political purposes this announcement?
BRADBURY:
Well I think that is to assume a certain set of outcomes arising from this review. As I've said, we're not going to pre-judge what the outcome of this process will be. I think the point you made Kieran is spot on that when it comes to the Opposition. We see Joe Hockey here carping and whining and criticising. Even from what Bruce has just said and I've got to ask him the question, do you think there is a problem or not? The first question that needs to be asked is, is there a problem? Are we entirely happy with the current set of arrangements or not? And if not, how do we go about trying to get a better alignment of National and State priorities with the way in which the GST…
GILBERT:
Why not do it earlier though, David? Bruce is saying you're pushing it off if there is a problem then why not deal with it sooner? As he mentioned there was a review done recently by the Grants Commission.
BRADBURY:
And what was the outcome of that review? If we were going to simply allow this to be a matter that we were relying on the Grants Commission's advice, then there would be no need for this process. We think that it's important that we have a process that engages with all the States. In terms of timing of this, it's not going to effect that carve up of GST in the next two financial years but certainly we're looking at its impact beyond that. In terms of the election timing, that's obviously a matter that is still in play and will be in play right up until the day that the Prime Minister visits the Governor General but we are anticipating that there will be an election in 2013. So, I'm not sure that all of this talk about timing is making the point. The real issue as far as I can see, we've acknowledged that there is an issue there and I think that people that have seriously looked at this issue say that there are a couple of things that need to be addressed. One, to the extent that the Commonwealth Grants Commission might disadvantage a State because of the way in which they are performing well economically then that should be addressed. The second issue is that there needs to be greater predictability when it comes to the way we manage allocations for States. That has not been the case in the past, and we want to make sure that is the case.
GILBERT:
Okay, Bruce in answer to the question that David put I'll give you the opportunity to respond to that, do you think there is a problem and what about the suggestion that over time things even up? As you mentioned, Queensland was a receiver for many years when it wasn't doing so well and now, because of the balance of things, they are contributing to other States.
BILLSON:
Yeah and those arguments are perfectly valid and those trends that we see over a period of time must be taken into account. The Coalition is not hostile towards the idea of a review, but if there is a debate about the effort or the capacity for a particular State to raise their own revenue, whether there is some prosperity displacement in the current formula. I mean the insights and expertise of that are with the Grants Commission and they've done that review fourteen months ago. So, there hasn't been any transformational change in what's happened and the setting across the continent in that period of time, the question is, what was wrong with the Grants Commission process? They're the ones that have had to manage and understand and receive these representations from the States and Territories year in year out. They brought in that insight together in their own examination of this very subject last February. Is that work not of value or is the Government not happy with what the Grants Commission is doing in its area of expertise which is to take account of all the things David has been talking about?
BRADBURY:
So do you support the review or not Bruce? I'm a bit unclear…
BILLSON:
We're not hostile to the review, the perpetual review is not good policy…
BRADBURY:
Well what do you object to?
BILLSON:
Perpetual review is not a good policy. What I'm saying and what we've clearly said is that there is an argument for review and we're not hostile to that idea. We welcome the review, a need to re-examine the settings in the Grants Commission formula, our point is that this was done fourteen months ago. Was that not an adequate exercise?
GILBERT:
Gentlemen we're going to take a break just stay where you are, I want to get the thoughts of former Liberal leader John Hewson who of course famously tried to introduce the GST in the first place. John good to see you, what do you think about this review being conducted by Nick Greiner and John Brumby, the Liberal frontbencher there Bruce Billson suggesting and articulating what Joe Hockey is saying, the Grants Commission did a review fourteen months anyway.
*BREAK* Interview with John Hewson
GILBERT:
Welcome back to AM Agenda. With me on the program this morning from Brisbane the Shadow Minister for Small Business and from the SKY News Centre the Parliamentary Secretary to the Treasurer David Bradbury. David, the Opposition Leader Tony Abbott is going to give a speech to the Chamber of Commerce in Queensland today, arguing the case for welfare reform. One of the pieces of policy he wants introduced is in areas where there is full employment but there is unskilled labour, like picking fruit and so-on, that unemployment payments shouldn't be paid. What do you make of that suggestion?
BRADBURY:
I think there are a couple of points to make, Kieran. The first one is that this is not an agenda that is at all foreign to what the Government is currently doing and proposing to do into the future as well and that is when it comes to boosting workforce participation particularly where that is required to meet the challenges of skill shortages and labour shortages throughout the economy, that we are working very hard to develop policies on that front. The other point to make is that we are seeing here with Tony Abbott's proposals, which we're only seeing floated by I suspect he'll have something further to say on this. We're seeing him respond to what I think the focus groups are showing the Liberal Party and that is his ongoing negativity, negativity that has lead to, in the latest Newspoll, having a net satisfaction rating of -21% which is quite extraordinary, really does demand that he step up and provide some policy responses. I think it's interesting that we're here at the end of March and we're really talking about the first policy proposal, and we haven't seen any detail yet so I'm not even sure that it's worthy of that description, but we're talking about the first policy proposal of the year. So I think that's a damning indictment…
GILBERT:
Bruce Billson is this about Tony Abbott trying to be more positive, more proactive rather than always wanting to tear things down?
BRADBURY:
I wouldn't characterise that as what Tony Abbott has been doing. The Government's attitude is that if you don't agree with that they're doing, you're a wrecker. We heard David say before the break that there couldn't possibly be anything motivated by politics in the way the Grants Commission issue is being handled but of course, this is all about politics. This is just Labor Party 101. Tony Abbott has been committed, he's had policies in this area and we took a comprehensive suite of policies to the last election. This is an opportunity to present those and take them forward to highlight how the Government has got some enormous challenges here that they seem incapable of dealing with. There are more than half of people on disability support pensions that have treatable conditions and we should be doing all we can as a nation to support people's return and engagement in the workforce. The idea that able bodied people in regions of Australia where there is desperate need for people with unskilled labour when there are people there receiving unemployment benefits, we should do something about it. These are sensible, practical ideas. The best thing the Government could do is pick up these proposals that the Opposition has been advocating, recognise that there is some positive form there from the Coalition in these areas and see some of these initiatives included in the Budget.
GILBERT:
Another area that you've argued, a case for adopting your policies of course was border protection. David Bradbury, the East Timor Solution doesn't seem to be getting off the ground very effectively. There was no real mention of the East Timor approach in the Bali Conference in recent days and beyond that, the East Timor representative says that they don't want it there.
BRADBURY:
There will always be nay sayers that focus on the negatives in these matters. There were actually some really significant positives that came out of this meeting and I think that it's worth just reflecting on what they are. It's also reflecting on the fact that they are building on some other positives. We've always said that this is a big challenge for the Government, for the country and for the region. There are a lot of people engaged in people flows and people movements across our region. These are not problems that will be started or fixed in Australia, they will require regional co-operation. What came out of the Bali Process meeting is that, for the first time, we have regional partners signing up to work together for a regional co-operation framework. That was one of the objectives that our Ministers went to the meeting trying to secure. They always said, don't expect us to walk away from this meeting with a regional processing centre but we want to clear the way for further bilateral discussions with our partners so we can move towards a regional processing centre. I also make the point that the communiqué did make a reference to a regional processing centre, so it's not true to say there was no progress on that front. The other point I'd like to make is that when we look at this and the broader strategy, we can get caught up in the ‘stop the boats' rhetoric that we've heard all about but one of the things that this Government has done which is a really significant step forward has been the signing of a return agreement with Afghanistan. This is something that had not been done by any previous Government and for the first time we are now in a situation where asylum seeker applications are being rejected from Afghanistan and we will be in a position to be able to send those people back to Afghanistan. That was a significant step forward, as have been the other steps forward we've seen recently.
GILBERT:
Let's go to Bruce Billson. As David said there has been a mention of that regional processing centre idea, not of East Timor itself but of the broader regional co-operation. That is a step forward isn't it?
BILLSON:
I'm surprised David would mention the Afghanistan agreement where the Government is trying to claim that it is one thing and the Afghani's are saying ‘no it's not'. But let's put that to one side, the great thing about communiqués is that all the participating countries look for a line or two in there which they can take home to their domestic audience. That hardly leads to a committed, co-operative undertaking of the parties that are there particularly as it related to the regional processing centre. I felt like giving the East Timorese Vice Minister a hug as he was interviewed after this conference, the man is being stalked. These aren't talks with East Timor, this is Australia stalking East Timor. He wasn't saying no we don't want it here, he was pleading with the Government to stop harassing him over the subject. He made it quite clear that the people of East Timor aren't ready to cope with a facility of the size that is being discussed. They've got new challenges as a new nation with 1 million people ten years on, they'd look through the security fences of a detention centre with standards that are far higher than the living standards the East Timorese enjoy, he was pleading with Australia to back off and stop stalking them about this. You can spin this anyway you want, all you need to do is ring the President of Nauru, a country willing to take up a regional processing centre role and get on with it.
BRADBURY:
You going to give him a hug too?
BILLSON:
If that would be helpful, sure.
GILBERT:
Okay, you've both had your say we're going to wrap it up. Thanks Bruce and David, that's all for AM Agenda.